UNIFLEX — Audit Report / Information 2022

Oct 25, 2022

UNIFLEX TECHNOLOGY INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

AND INDEPENDENT AUDITORS' REPORT DECEMBER 31,2022 AND 2021

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

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UNIFLEX TECHNOLOGY INC. AND SUBSIDIARIES

DECEMBER 31, 2022 AND 2021 CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REPORT

TABLE OF CONTENTS

Contents 1. Cover Page 2. Table of Contents 3. Representation Letter 4. Independent Auditors' Report 5. Consolidated Balance Sheets 6. Consolidated Statements of Comprehensive Income 7. Consolidated Statements of Changes in Equity 8. Consolidated Statements of Cash Flows 9. Notes to the Consolidated Financial Statements (1) HISTORY AND ORGANISATION (2) THE DATE OF AUTHORIZATION FOR ISSUANCE OF CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION (3) APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS (4) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (5) CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY (6) DETAILS OF SIGNIFICANT ACCOUNTS (7) RELATED PARTY TRANSACTIONS (8) PLEDGED ASSETS (9) SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS (10) SIGNIFICANT DISASTER LOSS (11) SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE (12) OTHERS (13) SUPPLEMENTARY DISCLOSURES (14) SEGMENT INFORMATION

Page

1 2 3 4 ~ 9 10 ~ 11 12 13 14 ~ 15 16 ~ 56 16 16 16 ~ 17 18 ~ 27 27 ~ 28 28 ~ 43 43 ~ 45 46 46 46 46 46 ~ 54 54 ~ 55 55 ~ 56

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Representation Letter

In connection with the Consolidated Financial Statements of Affiliated Enterprises of UNIFLEX TECHNOLOGY INC. AND SUBSIDIARIES (the “Consolidated FS of the Affiliates”), we represent to you that, the entities required to be included in the Consolidated FS of the Affiliates as of and for the year ended December 31, 2022 in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” are the same as those required to be included in the Consolidated Financial Statements of UNIFLEX TECHNOLOGY INC. AND SUBSIDIARIES (the “Consolidated FS of the Group”) in accordance with International Financial Reporting Standard 10. Additionally, the information required to be disclosed in the Consolidated FS of Affiliates is disclosed in the Consolidated FS of the Group. Consequently, UNIFLEX TECHNOLOGY INC. AND SUBSIDIARIES do not prepare a separate set of Consolidated FS of Affiliates.

Very truly yours,

UNIFLEX TECHNOLOGY INC. AND SUBSIDIARIES By

Tseng Tzyy-Jang February 20,2023

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of Uniflex Technology Inc.

Opinion

We have audited the accompanying consolidated balance sheets of Uniflex Technology Inc. and its subsidiaries (the “Group”) as at December 31, 2022 and 2021, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2022 and 2021, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for Opinion

We conducted our audits of the consolidated financial statements in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountants of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of the most significance in our audit of the Group’s 2022 consolidated financial statement. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Group’s 2022 consolidated financial statements are stated as follows:

Valuation of allowance for inventory valuation losses

Description

Refer to Note 4 (12) for accounting policy on inventory valuation, Note 5 (2) for accounting estimates and assumption uncertainty in relation to inventory valuation, and Note 6 (4) for a description of allowance for inventory valuation losses. As at December 31, 2022, the Group’s inventory and allowance for valuation loss amounted to NT$310,920 thousand and NT$136,407 thousand, respectively.

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The Group is primarily engaged in the manufacturing and sales of various kinds of printed circuit boards and other related products. As the inventories of such products are subject to rapid changes in science and technology and are susceptible to market price volatility, there is a high risk of inventory losses due from market value decline or obsolescence. The Group’s inventories are measured at the lower of cost and net realisable value. Inventory that is over certain age and individually identified as obsolete or damaged inventory is measured at net realisable value, which is calculated based on historical data on the inventory turnover. The net realisable value which was used in the individual identification and valuation of allowance for inventory valuation losses, involved subjective judgment and uncertainty of estimation. The Group’s inventory and allowance for inventory valuation losses are significant to the consolidated financial statements. We identified the valuation of allowance for inventory valuation loss as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

1. Assessed the reasonableness of policies and procedures related to the provision of allowance for inventory valuation losses based on our understanding of the Group’s operations and the characteristics of its industry and consistently applied in all periods.

2. Review the Group's internal control process of inventory management and participate in the annual inventory count in order to assess the effectiveness of the classification of obsolete inventory and internal control over obsolete inventory.

3. Verify the logical appropriateness of the inventory statement used to evaluate to confirm that the information in the statements is consistent with its policies.

4. Verify if the market basis for measuring the net realisable value is consistent with the Group's policies, randomly check if the selling prices and net realisable values of individual inventories are calculated correctly, and recalculated and evaluated the reasonableness of allowance for inventory valuation losses.

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Impairment assessment of Property, Plant and Equipment

Description

Refer to Note 4 (16) for accounting policy on impairment assessment of non-financial assets, and Note 5 (2) for accounting estimates and assumption uncertainty in relation to the impairment assessment of property, plant and equipment.

As at December 31, 2022, the property, plant and equipment amounted to NT $2,966,324 thousand, constituting 31% of consolidated total assets. The accumulated depreciation and accumulated impairment amounted to NT $2,364,073 thousand and NT $58,000 thousand, respectively.

The Group applies the value-in-use model to evaluate the recoverable amount of the aforesaid property, plant and equipment. When determining the cash flows for future operations, it considered the forecasted sales growth rate by its outlook for future operations and calculated the weighted average capital cost rate as the discount rate.

Since the impairment assessment process involves subjective judgments and may lead to inappropriate accounting estimates, which is also an area where judgment must be exercised during the audit process, we identified the impairment assessment of property, plant and equipment as a key audit matter.

How our audit addressed the matter

In addition to testing the accuracy of the calculation of the recoverable amount of the assets assessed by the Group as impaired on the balance sheet date, we performed the following audit procedures:

1. Obtain the Group’s form for self-assessment on impairment of property, plant and equipment for the cash generating unit.

2. Assess the reasonableness of the sales growth rate used by the management in estimating the cash flows for future operations and compare it with historical data and industry trends.

3. Verify if the weighted average capital cost rate used by the management, including assumptions such as the risk-free rate of return and risk premium, is consistent with the current situation of the Group and the industry, and re-execute and verify the calculation.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of Uniflex Technology Inc. as at and for the years ended December 31, 2022 and 2021.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in

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accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditors' responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the generally accepted auditing standards in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the generally accepted auditing standards in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a

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material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

1. Evaluate the overall presentation, structure, and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

2. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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

Chou, Hsiao-Tzu Wu, Han-Chi

For and on behalf of PricewaterhouseCoopers, Taiwan February 20, 2023

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

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

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UNIFLEX TECHNOLOGY INC.

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(3) 6(3) 6(3) and 7 6(4) and 8 6(2) 6(5)(7) and 8 6(6) and 8 6(5)7	December 31,2022 AMOUNT % $ 272,913 16 3,050 - 624,284 35 1,587 - 6,374 - 174,513 10 44,032 3 1,126,753 64 - - 544,251 31 22,528 1 4,468 - 50,649 3 9,758 1 1,705 - 633,359 36 $ 1,760,112 100	December 31,2021	December 31,2021
		AMOUNT $ 272,913 3,050 624,284 1,587 6,374 174,513 44,032 1,126,753 - 544,251 22,528 4,468 50,649 9,758 1,705 633,359 $ 1,760,112	AMOUNT $ 110,822 5,049 975,784 1,607 15,159 224,314 49,503 1,382,238 - 753,531 25,507 6,162 53,261 22,763 1,433 862,657 $ 2,244,895	%
Current assets 1100 Cash and cash equivalents 1150 Notes receivable, net 1170 Accounts receivable, net 1180 Accounts receivable - related parties 1200 Other receivables 130X Inventories 1479 Other current assets - others 11XX Total current assets Non-current assets 1517 Financial assets at fair value through other comprehensive income - non- current 1600 Property, plant and equipment 1755 Right-of-use assets 1780 Intangible assets 1840 Deferred income tax assets 1915 Prepayments for equipment 1990 Other non-current assets - others 15XX Total non-current assets 1XXX Total assets				5 - 44 - 1 10 2
				62
				- 34 1 - 2 1 -
				38
				100

(Continued)

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UNIFLEX TECHNOLOGY INC.

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity

December 31,2022 December 31,2021 Notes AMOUNT % AMOUNT % 6(8) and 8 $ 304,049 17 $ 77,670 3 - - 1 - 209,478 12 421,455 19 7 - - 64 - 6(9) and 7 209,430 12 257,845 12 3,615 - 3,300 - 6(10) and 8 125,080 7 235,226 11 5,862 1 4,240 - 857,514 49 999,801 45 6(10) and 8 305,278 17 385,923 17 6(21) 32 - - - 3,850 - 6,914 - 45 - 45 - 309,205 17 392,882 17 1,166,719 66 1,392,683 62 6(12) 1,561,448 89 1,561,448 70 6(13)(14) 395 - 395 - 6(14) ( 889,851) ( 51) ( 623,350) ( 28) ( 78,599) ( 4) ( 86,281) ( 4) 593,393 34 852,212 38 9 11 $ 1,760,112 100 $ 2,244,895 100

Current Liabilities 2100 Short-term borrowings 2150 Notes payable 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2280 Lease liabilities - current 2320 Long-term liabilities, current portion 2399 Other current liabilities - others 21XX Total current liabilities Non-current liabilities 2540 Long-term borrowings 2570 Deferred income tax liabilities 2580 Lease liabilities - non-current 2670 Other non-current liabilities - others 25XX Total non-current liabilities 2XXX Total liabilities Equity attributable to owners of the parent Share capital 3110 Share capital - common shares Capital surplus 3200 Capital surplus Retained earnings 3350 Accumulated deficit Other equity 3400 Other equity interest 3XXX Total equity Significant contingent liabilities and unrecognised contract commitments Significant events after the balance sheet date 3X2X Total liabilities and equity

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

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UNIFLEX TECHNOLOGY INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars, except earnings per share amount)

Item

Year ended December 31 2022 2021 Notes AMOUNT % AMOUNT % 6(15) and 7 $ 1,669,509 100 $ 2,241,589 100 6(4)(19)(20) and 7 ( 1,666,475) ( 100 ) ( 1,981,478 ) ( 89) 3,034 - 260,111 11 6(19)(20) ( 76,199) ( 4 ) ( 74,802 ) ( 3 ) ( 126,184) ( 8 ) ( 143,512 ) ( 6 ) ( 75,959) ( 4 ) ( 86,609 ) ( 4 ) 1,028 - ( 9,707 ) ( 1 ) ( 277,314) ( 16 ) ( 314,630 ) ( 14 ) ( 274,280) ( 16 ) ( 54,519) ( 3 ) 6(16) 538 - 222 - 6(17) 10,298 - 13,944 1 6(7)(18) 12,889 1 ( 21,345 ) ( 1 ) ( 15,223) ( 1 ) ( 17,757 ) ( 1 ) 8,502 - ( 24,936 ) ( 1 ) ( 265,778) ( 16 ) ( 79,455 ) ( 4 ) 6(21) ( 723) - ( 5,452 ) - ($ 266,501) ( 16 ) ($ 84,907 ) ( 4 ) $ - - $ - - - - - - 9,603 - ( 3,171 ) - 6(21) ( 1,921 ) - 635 - 7,682 - ( 2,536 ) - $ 7,682 - ($ 2,536 ) - ($ 258,819 )( 16 ) ($ 87,443 ) ( 4 ) ($ 266,501) ( 16 ) ($ 84,907 ) ( 4 ) ($ 258,819) ( 16 ) ($ 87,443 ) ( 4 ) 6(22) ($ 1.71) ($ 0.54 ) 6(22) ($ 1.71) ($ 0.54 )

4000 Sales revenue 5000 Operating costs 5900 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Impairment gain (loss) determined in accordance with IFRS 9 6000 Total operating expenses 6900 Operating loss Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7000 Total non-operating income and expenses 7900 Loss before income tax 7950 Income tax expense 8200 Loss for the year 8316 Unrealised gain or loss from investments in equity instruments measured at fair value through other comprehensive income 8310 Other comprehensive income (loss) that will not be reclassified to profit or loss Components of other comprehensive income (loss)that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8399 Income tax related to items that may be reclassified 8360 Components of other comprehensive loss that will be reclassified to profit or loss 8300 Total Other comprehensive income(loss) for the year 8500 Total comprehensive loss for the year Loss attributable to: 8610 Owners of the parent Comprehensive income attributable to: 8710 Owners of the parent 9750 Basic earnings per share 9850 Diluted earnings per share

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

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UNIFLEX TECHNOLOGY INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

Year 2021 Balance at January 1,2021 Loss for the year Other comprehensive loss for the year Total comprehensive loss for the year Capital surplus used to cover accumulated deficits Balance at December 31, 2021 Year 2022 Balance at January 1, 2022 Loss for the year Other comprehensive income for the year Total comprehensive income (loss) for the year Balance at December 31, 2022	Notes			Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent	Equity attributable to owners of the parent		Total
			Share Capital - commonstock	Capital	surplus		Accumulated deficit	Otherequity interest
				Capital surplus , additional paid-in capital	Capital surplus - Recognised value of changes in equity of ownership of subsidiaries			Financial statements translation differences of foreignoperations	Unrealised gains (losses) from financial assets measuredat fair value through other comprehensive income
			$1,561,448 - - - - $1,561,448 $1,561,448 - - - $1,561,448	$ 54,894 - - - ( 54,894) $ - $ - - - - $ -		$ 395 - - - - $ 395 $ 395 - - - $ 395	( $ 593,337) ( 84,907) - ( 84,907) 54,894 ( $ 623,350) ( $ 623,350) ( 266,501) - ( 266,501) ( $ 889,851)	( $ 48,987) - ( 2,536) ( 2,536) - ( $ 51,523) ( $ 51,523) - 7,682 7,682 ( $ 43,841)	( $ 34,758) - - - - ( $ 34,758) ( $ 34,758) - - - ( $ 34,758)	$ 939,655 ( 84,907) ( 2,536) ( 87,443) - $ 852,212 $ 852,212 ( 266,501) 7,682 ( 258,819) $ 593,393

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

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UNIFLEX TECHNOLOGY INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Loss before tax Adjustments Adjustments to reconcile profit (loss) Depreciation expense (including right-of- use assets) Amortisation Expected impairments loss (gain) Interest expense Interest income Gain on disposals of property, plant and equipment Impairment loss on non-financial assets Changes in operating assets and liabilities Changes in operating assets Notes receivable, net Accounts receivable Accounts receivable - related parties Other receivables Inventories Other current assets - Others changes in operating liabilities Notes payable Accounts payable Accounts payable - related parties Other payables Other current liabilities Cash inflow generated from operations Interest received Interest paid Net cash flows from operating activities

Notes YearendedDecember31 2022 2021 ( $ 265,778 ) ( $ 79,455) 6(19) 204,901 248,876 6(19) 1,764 2,451 ( 1,028 ) 9,707 15,223 17,757 6(16) ( 538 ) ( 222) 6(18) ( 872 ) ( 788) 6(7)(18) 58,000 - 1,999 ( 4,215) 352,471 ( 169,186) 20 10,557 8,785 ( 2,268) 49,801 ( 33,772) 5,471 ( 14,497) ( 1 ) - ( 211,977 ) 53,953 ( 64 ) ( 4,475) ( 49,331 ) 29,327 1,622 ( 1,290) 170,468 62,460 538 222 ( 14,766) ( 17,788) 156,240 44,894

(Continued)

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UNIFLEX TECHNOLOGY INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of property, plant, and equipment Proceeds from disposal of property, plant, and equipment Acquisition of intangible assets Increase in prepayments for equipment Decrease in refundable deposits Net cash outflow from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Repayments of short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Repayments of the principal portion of lease liabilities Net cash outflows from financing activities Effects of foreign exchange translations Net increase (decrease)in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year

Notes Year ended December 31 2022 2021 6(23) ( $ 30,217 ) ( $ 48,291 ) 2,929 21,075 - ( 1,241 ) ( 22,119 ) ( 18,324 ) 272 694 ( 49,135 ) ( 46,087 ) 6(24) 445,162 430,565 6(24) ( 218,551 ) ( 446,295 ) 6(24) - 560,456 6(24) ( 190,791 ) ( 637,566 ) 6(24) ( 4,126 ) ( 4,309 ) 31,694 ( 97,149 ) 23,292 ( 1,538 ) 162,091 ( 99,880 ) 110,822 210,702 $ 272,913 $ 110,822

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

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UNIFLEX TECHNOLOGY INC. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

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

1. HISTORY AND ORGANISATION

Uniflex Technology Inc. (the “Company”) and its subsidiaries (the “Group”) were incorporated on November 19, 1990 The Company is primarily engaged in the manufacturing, processing, and sales of various printed circuit boards and electronic components. On August 19, 1999, the Company merged with Qiaosheng Industrial Co., Ltd.; on June 30, 2006, the Company merged with Shengtai Technology Co., Ltd. and Uniflex Dasheng Electronics Co., Ltd.; on June 30, 2014, the Company merged with Yaan Industrial Co., Ltd., after which the Company operates as a surviving company. The Company’s common stock was listed on the Taiwan Stock Exchange on December 15, 2015.

2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These consolidated financial statements were authorised for issuance by the Board of Directors on February 20, 2023.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

• (1)Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by the FSC effective from 2022 are as follows:

New Standards, Interpretations and Amendments Amendments to IFRS 3,‘Reference to the conceptual framework’ Amendments to IAS 16, ‘Property, plant and equipment - proceeds before Intended use’ Amendments to IAS 37, ‘Onerous contracts - cost of fulfilling a contract’ Annual Improvements to IFRS Standards 2018-2020	Effective date by International Accounting Standards Board
	January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2022

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

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

New standards, interpretations and amendments endorsed by the FSC effective from 2023 are as follows:

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	Effective date by International
New Standards, Interpretations and Amendments	Accounting Standards Board
Amendments to IAS 1, ‘Disclosure of accounting policies’	January 1, 2023
Amendments to IAS 8, ‘Definition of accounting estimates’	January 1, 2023
Amendments to IAS 12, ‘Deferred tax related to assets and	January 1, 2023
liabilities arising from a single Transaction’

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

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

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

IFRSs as endorsed by the FSC are as follows:
	Effective date by
	International
	Accounting Standards
New Standards,Interpretations and Amendments	Board
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of	To be determined
assets between an investor and its associate or joint venture’	by International
	Accounting
	Standards Board
Amendments to IFRS 16, ‘Lease liability in a sale and leaseback’	January 1, 2024
IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IFRS 17, ‘Insurance Contracts’	January 1, 2023
Amendments to IFRS 17, ‘Initial application of IFRS 17 and IFRS	January 1, 2023
9－comparative information’
Amendments to IAS 1, ‘Classification of liabilities as current or	January 1, 2024
non-current’
Amendments to IAS 1, ‘Non-current Liabilities with Covenants’	January 1, 2024

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

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(1)Compliance statement

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

(2)Basis of preparation

• A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:

• (a)Financial assets at fair value through profit or loss.

• (b)Financial assets at fair value through other comprehensive income.

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

(3)Basis of consolidation

• A. Basis for preparation of consolidated financial statements:

• (a)All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.

• (b)Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

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

• (d)If changes in the Company’s shares in subsidiaries do not result in loss in control

~18~

(transactions with non-controlling interest), transactions shall be considered as equity transactions, which are transactions between owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity.

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

• B. Subsidiaries included in the consolidated financial statements:

Name of investor Name of subsidiary Main business activities The Company Uniflex Investment Limited Holding company The Company Uniflex Group Limited Holding company Uniflex Investment Limited Uniflex Technology (JiangSu) Limited (Uniflex (JiangSu) Production and sales of Flexible printed circuit board	Ownership(%) December 31, 2022 December 31, 2021 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%	Description

• C. Subsidiaries not included in the consolidated financial statements: None.

• D. Adjustments for subsidiaries with different balance sheet dates: None.

• E. Significant restrictions:

Cash and short-term deposits amounting to $26,370 deposited in Mainland China are under local foreign exchange control which restricts the capital to be remitted outside the borders (except for normal dividend distribution).

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

• (4)Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan dollars, which is the Company’s functional and the Group’s presentation currency.

~19~

• A. Foreign currency transactions and balances

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

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

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

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

• B. Translation of foreign operations

• (a)The operating results and financial position of all the company entities and associates that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

  • i.Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

  • ii.Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

  • iii.All resulting exchange differences are recognised in other comprehensive income.

• (b)When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Group retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

(5)Classification of current and non-current items

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

• (a)Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;

~20~

• (b)Assets held mainly for trading purposes;

• (c)Assets that are expected to be realised within twelve months from the balance sheet date;

• (d)Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

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

• (a)Liabilities that are expected to be settled within the normal operating cycle;

• (b)Liabilities arising mainly from trading activities;

• (c)Liabilities that are to be settled within twelve months from the balance sheet date;

• (d)Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(6)Cash equivalents

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

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

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

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Group measures the financial liabilities at fair value. All related transaction costs are recognised in profit or loss. The Group subsequently measures these financial liabilities at fair value with any gain or loss recognised in profit or loss.

(8)Financial assets at fair value through other comprehensive income

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:

• (a)The objective of the Group’s business model is achieved both by collecting contractual cash flows and selling financial assets; and

• (b)The assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognized and derecognized using trade date accounting.

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• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value:

• (a)The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

• (b)Except for the recognition of impairment loss, interest income and gain or loss on foreign exchange which are recognised in profit or loss, the changes in fair value of debt instruments are taken through other comprehensive income. When the financial asset is derecognised, the cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss.

(9)Accounts and notes receivable

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

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

(10) Impairment of financial assets

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

(11) Derecognition of financial assets

The Group derecognises a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

(12) Inventories

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

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(13) Property, plant and equipment

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

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

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

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

Buildings and structures 10~50 years Machinery and equipment 3~7 years Leased assets 5~10 years Other facilities 2~5 years

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

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

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of fixed payments, less any lease incentives receivable;

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

• C. At the commencement date, the right-of-use asset is stated at cost comprising the amount of the initial measurement of lease liability;

The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the

~23~

lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.

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

(15) Intangible assets

Intangible assets are computer software stated at cost and amortized on a straight-line basis over its estimated useful life of 3 to 5 years.

(16) Impairment of non-financial assets

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

(17) Borrowings

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

• B. Expenses paid at the time of the establishment of the borrowing line shall be recognized in the transaction cost of borrowing when it is likely to be partially or fully withdrawn, and recognized in the adjustment of effective interest rate when deferred to the time of the occurrence of the withdrawal; when it is unlikely to be partially or fully withdrawn, the expenses shall be recognized in prepayments and amortized during the relevant period of the line.

(18) Accounts and notes payable

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

• B. The short-term accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(19) Derecognition of financial liabilities

A financial liability is derecognised when the obligation specified in the contract is either discharged or cancelled or expires.

~24~

(20) Offsetting of financial instruments

Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

• (21) Employee benefits

• A. Short-term employee benefits

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

• B. Pensions

Defined contribution plans

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

• C. Employees’ and directors’ remuneration

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

- (22) Employee share based payment

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

(23) Income Tax

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

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group and its

~25~

subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

• C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. Deferred tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

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

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

(24) Share capital

• A. Common shares are classified as equity. The incremental cost directly attributable to the issuance of new shares or stock options is included in the net amount after deduction of income tax as a deduction from the price in equity.

• B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

(25) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are resolved by the Company’s shareholders. Cash dividends are recorded as liabilities; stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance.

~26~

(26) Revenue recognition

• A. The Group manufactures and sells various printed circuit boards and related products of electronic components. Sales are recognised when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer to sell the products, and there is no occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.

• B. A receivable is recognized when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due

(27) Operating segments

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

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

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

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

None.

(2)Critical accounting estimates and assumptions

A. Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Group must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Group evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation.

As of December 31, 2022, the carrying amount of inventories was $174,513.

• B. Assessment on impairment of tangible assets

~27~

During the assessment of impairment process, the Group relies on subjective judgment and determines the independent cash flow, asset useful life and possible future gains and losses of a specific asset group based on the asset usage mode and industry characteristics. Any changes in economic conditions or changes in estimates brought about by the Group's strategies may cause significant impairment in the future.

At December 31, 2022, the Group’s property, plant and equipment net of impairment loss, amounted to $544,251.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1)Cash and cash equivalents

Cash: Cash on hand and petty cash Demand and checking accounts deposits Cash equivalents-including repurchased bonds	December 31,2022 $ 165 56,947 215,801 $ 272,913	December 31,2021 $ 175 110,647 - $ 110,822	December 31,2021 $ 175 110,647 - $ 110,822
			$ 110,822

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

• B. The Group has no cash and cash equivalents pledged to others.

(2)Financial assets at fair value through other comprehensive income

Item Non-current items: Equity instruments Unlisted stocks Debt instrument: Ordinary corporate bonds Subtotal Valuation adjustments	December 31,2022 December 31,2021 $ 25,666 $ 25,666 9,092 9,092 34,758 34,758 ( 34,758) ( 34,758) $- $-	December 31,2022 December 31,2021 $ 25,666 $ 25,666 9,092 9,092 34,758 34,758 ( 34,758) ( 34,758) $- $-
		$ 25,666 9,092 34,758 ( 34,758) $-

• A. The Group has elected to classify equity instruments that are considered to be strategic investments and debt instrument as financial assets at fair value through other comprehensive income. As at December 31, 2022 and 2021, the fair values of these investments were both $0.

• B. As at December 31, 2022 and 2021, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s holdings measured at fair value through other comprehensive income were both $0.

• C. The Group has no financial assets at fair value through other comprehensive income pledged

~28~

to others as collateral.

• D. Information relating to credit risk of financial assets at fair value through other comprehensive income is provided in Note 12

(3)Accounts and notes receivable, net

Notes receivable Accounts receivable Less: Allowance for bad debts	December 31,2022 Non-related party Related party $ 3,050 $- $627,503 $ 1,587 ( 3,219) - $624,284 $ 1,587	December 31,2022 Non-related party Related party $ 3,050 $- $627,503 $ 1,587 ( 3,219) - $624,284 $ 1,587	December 31,	2021 Related party $- $ 1,607 - $ 1,607
	Non-related party $ 3,050 $627,503 ( 3,219) $624,284		Non-related party $ 5,049 $988,218 ( 12,434) $975,784

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• A. The ageing analysis of accounts are not receivable that were past due but not impaired is as follows:

Not past due Up to 30 days 31 to 90 days 91 to 180 days Over 181 days		December 31, 2022 Accounts receivable Notes receivable $592,150 $ 3,050 23,003 - 10,592 - 3,314 - 31 - $629,090 $ 3,050	December 31, 2022 Accounts receivable Notes receivable $592,150 $ 3,050 23,003 - 10,592 - 3,314 - 31 - $629,090 $ 3,050	December 31, 2021	December 31, 2021
		Accounts receivable $592,150 23,003 10,592 3,314 31 $629,090		Accounts receivable Notes receivable $972,150 $ 5,049 11,788 - 3,102 - 214 - 2,571 - $989,825 $ 5,049
					$ 5,049 - - - - $ 5,049

The above ageing analysis was based on past due date.

• B. As at December 31, 2022 and 2021, accounts and notes receivable were all from contracts with customers. And as of January 1, 2021, the balance of receivables from contracts with customers amounted to $714,833.

• C. Information relating to credit risk of accounts and notes receivable are provided in Note 12(2).

• D. As at December 31, 2022 and 2021, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s accounts receivable was $624,284 and $975,784, respectively.

(4)Inventories

Inventories
December 31,2022 Cost Allowance for valuation loss Raw materials $ 93,702 ($ 19,885) Work in progress 76,305 ( 30,880) Finished goods 138,960 ( 84,837) Merchandisc 1,953 ( 805) Total $ 310,920 ($ 136,407)	December 31,2022
		Allowance for valuation loss ($ 19,885) ( 30,880) ( 84,837) ( 805) ($ 136,407)	Book value $ 73,817 45,425 54,123 1,148 $ 174,513

Raw materials Work in progress Finished goods Merchandisc Total			December 31,2021
	Cost		Allowance for valuation loss	Book value $ 100,752 72,050 47,814 3,698 $ 224,314
	$ 111,860 99,512 124,844 3,700 $ 339,916		($ 11,108) ( 27,462) ( 77,030) ( 2) ($ 115,602)

The cost of inventories recognised as expense for the year:

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Cost of goods sold Loss on decline in market value (gain from price recovery) Scrap loss Revenue from sale of scraps Low capacity utilization		Years ended December 31 2022 2021 $ 1,502,195 $ 1,925,017 20,433 ( 31,997) 39,906 25,527 ( 11,186) ( 60,995) 115,127 123,926 $ 1,666,475 $ 1,981,478	Years ended December 31 2022 2021 $ 1,502,195 $ 1,925,017 20,433 ( 31,997) 39,906 25,527 ( 11,186) ( 60,995) 115,127 123,926 $ 1,666,475 $ 1,981,478	Years ended December 31 2022 2021 $ 1,502,195 $ 1,925,017 20,433 ( 31,997) 39,906 25,527 ( 11,186) ( 60,995) 115,127 123,926 $ 1,666,475 $ 1,981,478
		2022 $ 1,502,195 20,433 39,906 ( 11,186) 115,127 $ 1,666,475
				$ 1,925,017 ( 31,997) 25,527 ( 60,995) 123,926 $ 1,981,478

1. For the year ended December 31, 2021, the Group actively handled the loss on decline in market value and slow-moving inventory, resulting in a gain from price recovery.

2. As at December 31, 2022 and 2021, the inventory were pledged to others as collateral were $40,812 and $131,433, respectively.

(5)Property, plant and equipment

January 1 Cost Accumulated depreciation At January 1 Additions Disposals Transfer Depreciation charge Impairment loss Net exchange differences At December 31 December 31 Cost Accumulated depreciation and impairment			2022				Total
	Land $ 132,495 - $ 132,495 $ 132,495 - - - - - - $ 132,495 $ 132,495 - $ 132,495	Buildings and structures $ 769,536 ( 501,649) $ 267,887 $ 267,887 3,962 - 1,399 ( 37,801) 1,967 $ 237,414 $ 777,143 ( 539,729) $ 237,414	Machinery and equipment $1,902,631 ( 1,576,473) $ 326,158 $ 326,158 21,342 ( 2,057) 15,290 ( 154,511) ( 58,000) 1,073 $ 149,295 $1,881,346 ( 1,732,051) $ 149,295	Office equipment $ 355 - $ 355 $ 355 1,127 - ( 585) - - 2 $ 899 $ 899 - $ 899		Others facilities $ 169,727 ( 143,091) $ 26,636 $ 26,636 5,622 - 40 ( 8,171) - 21 $ 24,148 $ 174,441 ( 150,293) $ 24,148
							$2,974,744 ( 2,221,213) $ 753,531
							$ 753,531 32,053 ( 2,057) 16,144 ( 200,483) ( 58,000) 3,063
							$ 544,251
							$2,966,324 ( 2,422,073) $ 544,251

January 1 Cost Accumulated depreciation At January 1 Additions Disposals Transfer	2021
	Land Buildings and structures Machinery and equipment $ 132,495 $ 764,784 $1,947,679 - ( 461,571) ( 1,455,798) $ 132,495 $ 303,213 $ 491,881 $ 132,495 $ 303,213 $ 491,881 - 3,060 43,155 - - ( 19,960) - 3,631 6,075	Office equipment $ 1,233 - $ 1,233 $ 1,233 2,681 - ( 3,559)	Others facilities $ 171,515 ( 139,376) $ 32,139 $ 32,139 2,939 ( 327) ( -	Total $3,017,706 ( 2,056,745) $ 960,961 $ 960,961 51,835 20,287) 6,147

~31~

Depreciation charge Net exchange differences At December 31 December 31 Cost Accumulated depreciation	- - $ 132,495 $ 132,495 - $ 132,495	( 41,546) ( 471) $ 267,887 $ 769,536 ( 501,649) $ 267,887	( 194,476) ( 517) $ 326,158 $1,902,631 ( 1,576,473) $ 326,158	- - $ 355 $ 355 - $ 355	( 8,105) ( 10) $ 26,636 $ 169,727 ( 143,091) $ 26,636	( 244,127) ( 998)	( 244,127) ( 998)
							$ 753,531
							$2,974,744 ( 2,221,213) $ 753,531

• A. Impairment information about the property, plant and equipment is provided in Note 6(7).

• B. Information about the property, plant and equipment that were pledged to others as collateral is provided in Note 8.

• C. As of December 31, 2022 and 2021, the amount prepaid by the Group for the purchase of equipment amounted to $9,758 and $22,763, respectively (listed as ‘Prepayments for equipment’ in the balance sheet of non-current assets).

• －

• (6)Leasing arrangements lessee

• A. The Group leases various assets including land, buildings, machinery and business vehicles. Rental contracts are typically made for periods of 1 to 10 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

• B. The lease period of premises and machinery leased by the Group shall not exceed 12 months, and the assets under lease of low value are machinery. In addition, as of December 31, 2022 and 2021, the Group's lease payments for short-term lease commitments were $3,168 and $6,580, respectively.

• C. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land Buildings Transportation equipment (Business vehicles)	December 31,2022 December 31,2021 Carryingamount Carryingamount $ 15,062 $ 15,294 6,937 10,080 529 133 $ 22,528 $ 25,507	December 31,2022 December 31,2021 Carryingamount Carryingamount $ 15,062 $ 15,294 6,937 10,080 529 133 $ 22,528 $ 25,507	December 31,2022 December 31,2021 Carryingamount Carryingamount $ 15,062 $ 15,294 6,937 10,080 529 133 $ 22,528 $ 25,507
			$ 15,294 10,080 133 $ 25,507

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Land Buildings Transportation equipment (Business vehicles)	Years ended December 31 2022 2021 Depreciation expenses Depreciation expenses $ 448 $ 437 3,883 3,886 87 426 $ 4,418 $ 4,749	Years ended December 31 2022 2021 Depreciation expenses Depreciation expenses $ 448 $ 437 3,883 3,886 87 426 $ 4,418 $ 4,749
		2021
		Depreciation expenses
		$ 437 3,886 426 $ 4,749

• D. For the years ended December 31, 2022 and 2021, the additions to right-of-use assets were $1,239 and $0, respectively.

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

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on leases of low-value assets	Years ended December 31
	2022 2021 $ 157 $ 202 3,168 6,580 158 386

• F. For the years ended December 31, 2022 and 2021, the Group’s total cash outflow for leases were $7,609 and $11,477, respectively.

(7)Impairment of non-financial assets

The Group recognised impairment loss for the years ended December 31, 2022 was $58,000. Details of such loss are as follows:

Year ended December 31, 2022 Year ended December 31, 2021

Impairment loss: Machinery	Recognized in profit or loss Recognized in other comprehensive income $ 58,000 $-	Recognized in profit or loss Recognized in other comprehensive income $- $-

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(8)Short-term borrowings

Short-term borrowings
Type of borrowings Bank borrowings Credit borrowings Secured borrowings Type of borrowings Bank borrowings Credit borrowings Secured borrowings		December 31, 2022 Interest rate range Collateral $ 184,049 2.08%~3.65% None 120,000 2.04% Land and plant $ 304,049 December 31,2021 Interest rate range Collateral $ 50,000 1.55% None 27,670 1.23% Land and plant $ 77,670

The Group's unused borrowing line is as follows:

Floating interest rate Due within one year (9)Other payables Salary and bonus payable Mold expense payable Payable on machinery and equipment Import and export expenses payable Outsourcing expense payable Repair expense payable Others (10) Long-term borrowings Bank secured borrowings Bank credit borrowings Non-bank business borrowings Less: current portion Interest rate range	December 31, 2022 December 31, 2021 $ 172,858 $ 305,707 December 31, 2022 December 31, 2021 $ 84,953 $ 115,662 16,224 24,713 12,022 10,186 7,721 8,217 7,136 10,862 5,986 7,560 75,388 80,645 $ 209,430 $ 257,845 December 31, 2022 December 31, 2021 $ 331,945 $ 348,612 57,000 137,000 41,413 135,537 ( 125,080) ( 235,226) $ 305,278 $ 385,923 2.23%~3.7911% 1.45%~3.7911%	December 31, 2022 December 31, 2021 $ 172,858 $ 305,707 December 31, 2022 December 31, 2021 $ 84,953 $ 115,662 16,224 24,713 12,022 10,186 7,721 8,217 7,136 10,862 5,986 7,560 75,388 80,645 $ 209,430 $ 257,845 December 31, 2022 December 31, 2021 $ 331,945 $ 348,612 57,000 137,000 41,413 135,537 ( 125,080) ( 235,226) $ 305,278 $ 385,923 2.23%~3.7911% 1.45%~3.7911%	December 31, 2022 December 31, 2021 $ 172,858 $ 305,707 December 31, 2022 December 31, 2021 $ 84,953 $ 115,662 16,224 24,713 12,022 10,186 7,721 8,217 7,136 10,862 5,986 7,560 75,388 80,645 $ 209,430 $ 257,845 December 31, 2022 December 31, 2021 $ 331,945 $ 348,612 57,000 137,000 41,413 135,537 ( 125,080) ( 235,226) $ 305,278 $ 385,923 2.23%~3.7911% 1.45%~3.7911%	December 31, 2022 December 31, 2021 $ 172,858 $ 305,707 December 31, 2022 December 31, 2021 $ 84,953 $ 115,662 16,224 24,713 12,022 10,186 7,721 8,217 7,136 10,862 5,986 7,560 75,388 80,645 $ 209,430 $ 257,845 December 31, 2022 December 31, 2021 $ 331,945 $ 348,612 57,000 137,000 41,413 135,537 ( 125,080) ( 235,226) $ 305,278 $ 385,923 2.23%~3.7911% 1.45%~3.7911%	December 31, 2022 December 31, 2021 $ 172,858 $ 305,707 December 31, 2022 December 31, 2021 $ 84,953 $ 115,662 16,224 24,713 12,022 10,186 7,721 8,217 7,136 10,862 5,986 7,560 75,388 80,645 $ 209,430 $ 257,845 December 31, 2022 December 31, 2021 $ 331,945 $ 348,612 57,000 137,000 41,413 135,537 ( 125,080) ( 235,226) $ 305,278 $ 385,923 2.23%~3.7911% 1.45%~3.7911%
					$ 348,612 137,000 135,537 ( 235,226) $ 385,923 1.45%~3.7911%

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• A. In August 2015, the Group signed a five-year joint credit agreement with 11 banks, including the Bank of Taiwan, with a total amount of NT $1,800,000, including a medium-term secured loan of NT $600,000 and a medium-term unsecured loan of NT $1,200,000. In February 2016, the Group actually appropriated funds for the purchase of machinery and equipment and ancillary facilities, and increase of medium-term operating working capital. The Group has obtained an approval letter for a one-year extension of the unsecured loans of NT $800,000 in the aforementioned credit case. The Group promises that during the duration of this credit case, the semi-annual consolidated financial statement reviewed by the accountant and the annual consolidated financial statement reviewed by the accountant shall maintained the specific financial ratios (current ratio, debt ratio, interest coverage ratio, etc.). The Group has obtained an exemption letter issued by Bank of Taiwan and other joint credit banking groups, exempting the Group from its liability under the joint credit contract for the first half of 2020 and the consolidated financial statement ratio for 2020. The Group repaid the aforesaid joint loan in full on July 9, 2021 and terminated the joint loan contract on July 15, 2021.

• B. In July and November 2019, the Group obtained long-term financing of $42,500 and $45,000 from IBT Leasing Co., Ltd. and Chai Lease Finance Co., Ltd. by way of repurchase of inventory after sales, respectively. The term of all contracts was 2 years, and monthly maturing notes were issued for repayment from August and December 2019. For the information on the guarantee provided by the Group with inventory, please refer to Note 6 (4). On May 25, and November 11, 2021, the Group fully repaid the loans from IBT Leasing Co., Ltd. and Chai Lease Finance Co., Ltd.

• C. In May 2021, the Group obtained a long-term financing of $80,000 and $50,000 from IBT Leasing Co., Ltd. and CDC Finance & Leasing Corp.by way of repurchasing inventory after sale, respectively. The contract period was 2.5 years and 2 years, respectively, and monthly matured notes were issued for repayment from June 2021. For the information on the guarantee provided by the Group with inventory, please refer to Note 6 (4).

• D. In July 2021, the Group obtained long-term financing of $30,000 and $42,500 from FCB Leasing Co., Ltd. and Taichung Bank Leasing Corporation Limited in the form of inventory repurchase, respectively. The term of both contracts was 2 years, and notes due on a monthly basis have been issued for repayment since August 2021. For the information on the guarantee provided by the Group with inventory, please refer to Note 6 (4). On December 30, 2021 and May 20, 2022, the Group fully repaid the loans from FCB Leasing Co., Ltd. and Taichung Bank Leasing Corporation Limited.

• E. In August 2021, the Group signed a twelve-year, a three-year and an one-year credit contract with The Shanghai Commercial & Savings Bank, Ltd.,Chung Li Branch(SCSB), with a total amount of NT $350,000 and US $3,000, including a guaranteed long-term loan of NT $300,000 and a medium-term loan of NT $50,000 and an export O/A of US $3,000 actually allocated from August to December 2021 to purchase machinery and facilities and supplement the medium-term working capital.

The above-mentioned credit contracts were signed with SCSB in August 2022 to change the credit line, from the original total amount of NT$350,000 and US$3,000 to NT$350,000 and

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US$4,000.

• F. In March 2022, the Group signed an extended medium-term credit line of NT $132,000 with Chang Hwa Bank (CHB).

(11) Pensions

• A. The Company have a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. On September 20, 2010, the Taichung County Government issued a letter agreeing that the company no longer has any employees who are eligible for the retirement pension system of the Labor Standards Law and agreed to cancel the account in accordance with Article 8 of the Regulations for the Allocation and Management of the Workers' Retirement Reserve Funds in accordance.

• B. Effective July 1, 2005, the Company have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount not less than 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment. The pension costs under defined contribution pension plans of the Group for the years ended December 31, 2022 and 2021 were $10,539 and $11,030, respectively.

• C. Pensions plans of Subsidiaries:

Uniflex Technology (JiangSu) shall contribute pension insurance at a fixed monthly rate of the total salaries of local employees in accordance with the pension insurance system stipulated by the government of the People's Republic of China. The pension of each employee shall be arranged by the government under the overall management, and there shall be no further obligations in addition to the monthly contribution. For the year ended December 31, 2022 and 2021, the pension costs recognized by Uniflex (JiangSu) under the above pension plan were $30,560 and $17,366, respectively. The other subsidiaries have no employees.

(12) Share capital

• A. As of December 31, 2022, the Company's authorized capital was $4,500,000, consisting of 450,000 thousand shares of ordinary stock, and the paid-in capital was $1,561,448 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected. For the years ended December 31, 2022 and 2021, numbers of the Company’s ordinary shares outstanding were both 156,145 thousand shares.

• B. On November 17, 2020, the Board of Directors resolved to issue 30,000 thousand of new shares for capital increase at a price of NT $11.5 per share. The capital increase base date is set at December 21, 2020 and the capital increase case has been registered on January 12, 2021.

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(13)Capital surplus

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

(14) Retained earnings/(accumulated deficit)

• A. In accordance with the Articles of Incorporation, the current year’s earnings, if any, should first be used to pay all taxes and offset prior years’ operating losses, then 10% of the remaining amount shall be set aside as legal reserve; however, this is not required if total legal reserve equals total paid-in capital. After setting aside a special reserve in accordance with related laws and competent authority, the appropriation of the remaining earnings, along with the accumulated unappropriated earnings, shall be retained or distributed resolved by the shareholders.

• B. The Company’s dividend policy is as follows: The Company shall, in consideration of the Company's business environment and dividend distribution policy, take into account the Company’s current and future investment environment, capital needs, domestic and foreign competition, and capital budget and other factors, along with shareholders’ interests and the balance between dividends and long-term financial plans of the Company. Pursuant to existing regulations, the Board of Directors prepares an earnings distribution proposal every year and submits it to the shareholders for approval. Issuance of dividends to shareholders, of which dividends paid in case are 10% to 100% of the total dividend and dividends paid in stocks are 0% to 90% of the total dividend.

• C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

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

• (b)When the IFRSs were first adopted, the special surplus reserve set aside in accordance with the Official Letter No. 1010012865 issued by the FSC on April 6, 2012 was reversed at the original proportion when the Company subsequently used, disposed of or reclassified the related assets. If the aforesaid related assets are investment property, the part of the land is reversed at the time of disposal or reclassification, and the part other than the land is reversed gradually during the use period.

• E. It was resolved by the shareholders' meeting of the Company on June 17, 2022 and August 20, 2021, respectively to not distribute dividends to shareholders because the after-tax losses for

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the year ended December 31, 2022 and 2021.

• F. As of December 31, 2022, the Company's accumulated loss has reached one-half of the paidin capital, and in accordance with Article 211 of the Company Act, the Board of Directors shall report to the most recent board of shareholders.

• (15)Operating Revenue

The main business of the Group is the manufacturing, processing and sale of various printed circuit boards, which can be classified in a single product category. The Group derives revenue from the transfer of goods and services over time and at a point in time in the following geographical areas:

following geographical areas:
Taiwan Mainland China	Years ended December 31
	2022 $ 394,048 1,275,461 $ 1,669,509	2021
		$ 612,375 1,629,214 $ 2,241,589

(16)Interest income

Interest income
Interest income from bank deposits	Years ended December 31
	2022 $ 538	2021 $ 222

(17) Other income

Other income
Government grants income Other income - Others	Years ended December 31 2022 2021 $ 7,596 $ 5,948 2,702 7,996 $ 10,298 $ 13,944
	2022 $ 7,596 2,702 $ 10,298

(18) Other gains and losses

Other gains and losses	Other gains and losses
Net currency exchange gains(losses) Impairment loss on non-financial assets (note) Gains on disposal of property, plant and equipment Others
	2022 $ 70,193 ( 58,000) 872 ( 176) $ 12,889

Note: Please refer to Note 6 (7) for the impairment loss on non-financial assets of the Group.

(19)Expenses by nature

Expenses by nature
By feature Bynature		2022			2021
	Operation Costs	Operation Expenses	Total	Operation Costs	Operation Expenses	Total
Employee benefit expense	$504,495	$172,291	$676,786	$569,773	$182,460	$752,233
Depreciation charges on on property, plant and equipment (including right-of-use assets)	198,770	6,131	204,901	244,167	4,709	248,876

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Amortization charges on intangible assets	498	1,266	1,764	583	1,868	2,451

(20)Employee benefit expense

Employee benefit expense
Salary expense Labor and health insurance fees Pension costs Directors’ remuneration Other personnel expenses	Years ended December 31
	2022 $ 553,627 46,543 41,099 1,930 33,587 $ 676,786	2021 $ 633,268 42,717 28,396 1,960 45,892 $ 752,233

• A. In accordance with the Articles of Incorporation of the Company, the profits in the current year from the Company, the employees’ compensation shall be distributed1% to 20%, and the directors’ remuneration shall be distributed not higher than 2%; however, if the Company still has a accumulated loss, it shall be used to cover the loss first.

• B. For the years ended December 31, 2022 and 2021, the Company did not accrue employees’ compensation and directors’ and superviors’ remuneration due to the loss before tax. Information about employees’ compensation and directors’ remuneration of the Company as resolved at the meeting of Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(21)Income Tax

• A. Income tax expense

• (a)Components of income tax expense:

Components of income tax expense:
Current tax: Current tax on profits for the year Tax on undistributed surplus earnings Prior year income tax under estimation Total current tax Deferred tax: Origination and reversal of temporary differences Income tax expense	Years ended December 31 2022 2021 $ - $ - - - - - - - 723 5,452 $ 723 $ 5,452
	2022 $ - - - - 723 $ 723

(b)Income tax related to other comprehensive income:

Exchange difference of foreign operations	Years ended December 31, 2022 2021 $ 1,921 ($ 635)	Years ended December 31, 2022 2021 $ 1,921 ($ 635)
		2021
		($ 635)

• B. Reconciliation between income tax expense and accounting profit:

Income tax calculated by applying statutory rate to profit before tax	Years ended December 31	Years ended December 31
	2022 2021 ($ 53,156) ($ 15,891)	2021

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Effect of amount not allowed to recognise under regulations Taxable loss not recognised as deferred tax assets Temporary difference not recognised as deferred tax assets Income tax expense		13,509 36,564 3,806	( 9,463) 25,021 5,785 $ 5,452
		$ 723

• C. Amounts of deferred tax assets or liabilities as a result of temporary differences are as follows:

Deferred tax assets: - Temporary difference: Allowance for bad debts expenses Allowance for inventory valuation losses Exchange difference of foreign operations Unrealised for sales of discounts and allowances Unrealised for exchange loss - Deferred tax liabilities: Unrealised for exchange gains Deferred tax assets: - Temporary difference: Allowance for bad debts expenses Allowance for inventory valuation losses Exchange difference of foreign operations Unrealised for sales of discounts and allowances
	January 1 $ 28,929 11,056 12,881 190 205 $ 53,261 $- $- $ 53,261
	January 1 Recognised in profit or loss Recognised in other comprehensive income $ 28,051 $ 878 $ - 17,839 ( 6,783) - 12,246 - 635 245 ( 55) -
		$ - - 635 -

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Unrealised for exchange loss - Deferred tax liabilities: Unrealised for exchange gains	- $ 58,381 ($ 303) ($ 303) $ 58,078	205 ($ 5,755) $ 303 $ 303 ($ 5,452)	- $ 635 $- $- $ 635	205
				$ 53,261
				$-
				$-
				$ 53,261

D. Expiration dates of unused tax losses and amounts of unrecognised deferred tax assets of the Company and the Company’s subsidiaries are as follows:

December 31, 2022

			December 31, 2022
				Unrecognised	Expiry
Year	incurred	Amount filed/	assessed Unused amount	deferred tax assets	year
2016		201,350	201,350	40,270	2026
2017		182,948	182,948	36,590	2027
2018		193,610	193,610	38,722	2028
2019		376,896	376,896	75,379	2029
2020		271,541	271,541	54,308	2030
2021	(Filed)	127,580	127,580	25,516	2031
2022	(Estimated)	182,819	182,819	36,564	2032
			December 31, 2021

Year incurred Amount filed/ assessed 2016 201,350 2017 182,948 2018 193,610 2019 376,896 2020 271,541 2021 (Estimated) 125,106	Unused amount Unrecognised deferred tax assets Expiry year 201,350 40,270 2026 182,948 36,590 2027 193,610 38,722 2028 376,896 75,379 2029 271,541 54,308 2030 125,106 25,021 2031

~41~

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

Deductible temporary differences	December 31, 2022 $ 81,026	December 31, 2021
		$ 63,772

• F. The Company’s income tax returns through 2020 have been assessed and approved by the Tax Authority.

(22) Earnings (loss) per share

Earnings (loss) per share
Basic loss per share Loss attributable to ordinary shareholders of the parent Basic loss per share Loss attributable to ordinary shareholders of the parent	Year ended December 31,2022 Amount after tax Weighted average number of ordinary shares outstanding (shareinthousands) Loss per share (in dollars) ($ 266,501) 156,145 ($ 1.71) Year ended December 31,2021 Amount after tax Weighted average number of ordinary shares outstanding (share in thousands) Loss per share (in dollars) ($ 84,907) 156,145 ($ 0.54)
	Amount after tax ($ 84,907)	Weighted average number of ordinary shares outstanding (share in thousands) 156,145

(23) Supplemental cash flow information

Investing activities with partial cash payment:

Purchase of property, plant, and equipment Add: Opening balance of payable on equipment Less: Ending balance of payable on equipment Cash paid during the year	Years ended December 31 2022 2021 $ 32,053 $ 51,835 10,186 6,642 ( 12,022) ( 10,186) $ 30,217 $ 48,291

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(24)Changes in liabilities from financing activities

At January 1 Changes in cash flows from financing activities Impact of changes in foreign exchange rate Changes in other non-cash items At December 31 At January 1 Changes in cash flows from financing activities Impact of changes in foreign exchange rate Changes in other non-cash items At December 31			2022	2022
		Short-term borrowings $ 77,670 226,611 ( 232) - $ 304,049	Long-term borrowings $ 621,149 ( 190,791) - - $ 430,358 2021		Lease liabilities $ 10,214 ( 4,126) - ( 1,377 $ 7,465	Liabilities from financing activities-gross
		(				$ 709,033 31,694 232) 1,377
						$ 741,872
			Long-term borrowings $ 698,259 ( 77,110) - - $ 621,149		Lease liabilities $ 13,658 ( 4,309) - ( 865 $ 10,214	Liabilities from financing activities-gross $ 805,575 ( 97,149) 258) 865
						$ 709,033

7.RELATED PARTY TRANSACTIONS

(1)Names of related parties and relationship

Names of related parties

Unimicron Technology Corp. (Unimicron) Taiwan Surface Mounting Technology Corp. (TSMT) Unimicron Technology (Shenzhen) Corp. Qun Hong Technology Inc.

Unifley Technology (KunShan) Inc.

Unimicron Technology (Kunshan) Corp.

Advance Materials Corp.

Regent Manner Limited

APM Communication, Inc.

Maruwa Corporation

Directors, independent directors, general managers and deputy general managers, etc.

Relationship with the Company

The parent company of the Company's corporate director

A former corporate director of the Company (Note 1)

Unimicron’s subsidiary

Unimicron’s subsidiary

Unimicron’s subsidiary

Unimicron’s subsidiary

Unimicron is a director of the company

TSMT’s subsidiary (Note 1)

Same chairman.

Investee held by the Unimicron’s second-tier subsidiary

Directors and key management of the Company

~43~

• Note 1: The Company held a shareholders' meeting on August 20, 2021 for the re-election of directors. Since TSMT did not become a director after the re-election and had lost significant influence. Thus, starting from September 2021, TSMT and its subsidiary, Regent Manner Limited, are no longer related parties of the Company.

(2)Significant related party transactions

A. Operating Revenue

Sales of goods: Regent Manner Limited Other related parties	Year ended December 31	Year ended December 31	Year ended December 31
	2022 $ - 3,989 $ 3,989		2021
			$ 165,800 28,639 $ 194,439

The transaction of the Group's sales to the above-mentioned, which price lists in force and terms that would be available to third parties, and the payment terms are 90 to 120 days after monthly billing.

B. Operating costs

Purchase of goods: Other related parties Related parties with a significant impact on the Group Outsourcing expense: Related parties with a significant impact on the Group Other related parties		Year ended December 31	Year ended December 31
			2022

The Group's purchase and outsourcing expense in transactions with the above-mentioned, which price lists in force and terms that would be available to third parties, and the payment terms are 120 days after monthly billing.

C. Accounts receivable

December 31, 2022 December 31, 2021

Accounts receivable: Other related parties	$ 1,587	$ 1,607

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D. Accounts payable

December 31, 2022 December 31, 2021

Accounts payable: - Other related parties $ $ 64 December 31, 2022 December 31, 2021 Other payables: outsourcing expense Other related parties $ 12 $ 106

December 31, 2022 December 31, 2021

E. Property Transactions

(a)Acquisition of property, plant, and equipment

Other related parties	Year ended December 31	Year ended December 31	Year ended December 31
	2022 $ 724		2021
			$-

(b)Disposal of property, plant and equipment:

(3)	2022 Disposal proceeds Other related parties $ 822 Key management compensation			Year ended December 31	Year ended December 31	Year ended December 31
			2022	Gain on disposal $ 297	2021 Disposal proceeds Gain on disposal $- $-
						Gain on disposal
						$-

Short-term employee benefits	Year ended December 31	Year ended December 31
	2022 $ 16,702	2021
		$ 11,612

~45~

8. PLEDGED ASSETS

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

Pledged asset Inventories Property, plant and equipment - Land - Building - Machinery and equipment Right-of-use assets	Book value December 31,2022 December 31,2021 Nature ofpledge $ 40,812 $ 131,433 Guaranteed borrowings line 132,495 132,495 Guaranteed borrowings line 157,105 251,316 〃 15,658 69,094 〃 - 15,294 〃

1. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT

COMMITMENTS

Capital expenditure contracted for at the balance sheet date but not yet incurred is as follows:

Property, plant and equipment		December 31, 2022 $ 11,669		December 31, 2021 $ 26,148

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

1. On February 20, 2023, the Board of Directors of the Company proposed that no surplus will be distributed due to the after-tax loss for the year ended December 31, 2022.

2. On February 20, 2023, the board of directors of the Company resolved to reduce capital by $889,851 to cover the loss of capital to improving the financial structure and future operational development needs of the Company. As of February 20, 2023, the resolution had not yet approved by the shareholders' meeting.

3. In response to the Company's capital needs, the Group obtained a one to two year credit line with a number of leasing companies and a number of banks for a total amount of NT $476,000 and RMB $50,000, which was approved by the board of directors on February 20, 2023.

12. OTHERS

(1)Countermeasures to improve operational and financial conditions

The Group will focus on the development of new technologies and diversified high-margin products in the future through the adjustment of product portfolios, the discontinuation of lossmaking products, while actively controlling costs and expenses, adjusting the personnel and cutting down various expenditures to enhance the profitability.

(2)Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal

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capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

(3)Financial instruments

A. Financial instruments by category

Financial instruments by category
Financial assets Financial assets at amortised cost Cash and cash equivalents Notes receivable Accounts receivable (including related parties) Other receivables Guarantee deposits paid Financial liabilities Financial liabilities at amortised cost: Short-term borrowings Notes payable Accounts payable (including related parties) Other accounts payable (including related parties) Long-term borrowings (including current portion) Lease liabilities	December 31, 2022 $ 272,913 3,050 625,871 6,374 1,705 $ 909,913 $ 304,049 - 209,478 209,430 430,358 $ 1,153,315 $ 7,465	December 31, 2021
			$ 110,822 5,049 977,391 15,159 1,433 $ 1,109,854 $ 77,670 1 421,519 257,845 621,149 $ 1,378,184 $ 10,214

B. Financial risk management policies

• (a)The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk.

• (b)Risk management is carried out by a central financial department (Group financial) under policies approved by the Board of Directors. Group treasury identifies, evaluates, and hedges financial risks in close co-operation with the Group’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments, and non-derivative financial instruments, and investment of excess liquidity.

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• C. Significant financial risks and degrees of financial risks

• (a)Market risk

Foreign exchange risk

• i.The Group operates internationally and is exposed to exchange rate risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to the USD and RMB. Exchange rate risk arises from future commercial transactions and recognised assets and liabilities.

• ii.Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency.

• iii.The Group holds investments in a number of foreign operations and its net assets are exposed to foreign currency translation risks.

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

(Foreign currency: functional currency) Financial assets Monetary items USD : NTD USD : RMB Financial liabilities Monetary items USD : NTD USD : RMB RMB : NTD	December31,2022 Foreign currency amount (in Thousands) Exchange rate Bookvalue (NTD) $ 18,943 30.70 $ 581,550 707 6.9696 21,705 1,094 30.70 33,586 1,141 6.9696 35,028 1,538 4.4048 6,775

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December 31, 2021

	December 31, 2021
(Foreign currency: functional currency) Financial assets Monetary items USD : NTD USD : RMB Financial liabilities Monetary items USD : NTD USD : RMB RMB : NTD	Foreign currency amount (in Thousands) Exchange rate Book value(NTD) $ 34,908 27.67 $ 965,904 1,548 6.3695 42,833 2,336 27.67 64,637 3,049 6.3695 84,365 2,412 4.3441 10,478

• v.The total exchange (loss) gain, including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2022 and 2021, amounted to $70,193 and ($19,210), respectively.

• vi.Analysis of foreign currency market risk arising from significant foreign exchange variation:

(Foreign currency: functional currency) Financial assets Monetary items USD : NTD USD : RMB Financial liabilities Monetary items USD : NTD USD : RMB RMB : NTD	Year ended December 31,2022	Year ended December 31,2022
		Sensitivity analysis
	Degree of variation Effect on profit or loss Effect on other comprehensive income 1% $ 5,816 $ - 1% 218 - 1% 336 - 1% 350 - 1% 68 -

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Year ended December 31,2021

(Foreign currency: functional currency) Financial assets Monetary items USD : NTD USD : RMB Financial liabilities Monetary items USD : NTD USD : RMB RMB : NTD		Sensitivity analysis
	Degree of variation Effect on profit or loss Effect on other comprehensive income 1% $ 9,659 $ - 1% 428 - 1% 646 - 1% 844 - 1% 105 -

Price risk

• i.The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.

• ii.The Group’s investments in equity securities comprise shares issued by the domestic or foreign companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, other components of equity would have increased/decreased by $257, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

Cash flow and fair value Interest rate risk

• i.The Group has short-term borrowings with floating interest rates. Due to the borrowings period is short, it is predicted that there will be no significant market risks.

• ii.The Group’s interest rate risk mainly arising from long-term borrowings issued at variable rates expose the Group to cash flow interest rate risk which is partially offset by cash and cash equivalents held at variable rates. During 2022 and 2021, the Group’s borrowings at variable rate were mainly denominated in New Taiwan dollars.

• iii.If the borrowing interest rate of New Taiwan dollars had increased/decreased by 0.1% with all other variables held constant, profit before tax for the years ended December 31, 2022 and 2021 would have increased/decreased by $389 and $486, respectively. The main factor is that changes in interest expense result in floating-rate borrowings.

(b)Credit risk

• i.Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based

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on the agreed terms, and the contract cash flows of debt instruments, at fair value through other comprehensive income.

• ii.The Group manages their credit risk taking into consideration the entire group’s concern. For banks and financial institutions that conduct transactions, only those with an investment grade or higher can be accepted as trading partners. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by general manager. The utilization of credit limits is regularly monitored. The major credit risk comes from the credit risk of wholesale and retail customers and includes receivables that have not yet been collected.

• iii.The Group adopts following assumptions under IFRS 9, If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

• iv.The Group adopts the assumptions under IFRS 9, the default occurs when the contract payments are past due over 90 days.

• v.The Group classifies customers’ accounts receivable in accordance with credit rating of customer. The Group applies the simplified approach to estimate expected credit loss under the provision matrix basis.

• vi.The indicators used by the Group to determine the investment in debt instruments as credit impairment are as follows:

• (A) the issuer is in significant financial difficulty or is likely to go into bankruptcy or be subject to other financial restructuring;

• (B) the issuer's financial difficulty has caused the active market of the financial asset to disappear;

• (C) the issuer delays or failed to repay the interest or principal;

• vii.The Group used the forecast ability of Taiwan Institute of Economic Research boom observation report to adjust historical and timely information to assess the default possibility of accounts receivable (including related parties). As of December 31, 2022 and 2021, the provision matrix is as follows:

December 31, 2022 Expected loss rate Total book value Loss allowances	Not Past Due 0.03%~0.5% $592,150 $ 702	Up to 30 days past due 0.03%~20% $23,003 $ 165	31 to 90 days past due	91 to 180 days ~~past due~~ 0.03%~100% $ 3,314 $ 668	Over 180 days past due 100% $ 31 $ 31	Total
			0.03%~20% $10,592 $ 1,653			$629,090 $ 3,219

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December 31, 2021 Expected loss rate Total book value Loss allowances	Not Past Due 0.03%~5% $972,150 $ 6,880	Up to 30 days past due 31 to 90 days past due 91 to 180 days past due Over 180 days past due Total 0.03%~20% 0.03%~20% 0.03%~100% 100% $11,788 $ 3,102 $ 214 $2,571 $989,825 $ 2,149 $ 620 $ 214 $2,571 $ 12,434

viii.As of December 31, 2022 and 2021, movements in relation to the Group applying the simplified approach to provide loss allowance for accounts receivable is as follows:

At January 1 Provision for impairment Reversal of impairment loss Amounts written off due to irrecoverable debt Effect of foreign exchange At December 31 At January 1 Provision for impairment Amounts written off due to irrecoverable debt ( Effect of foreign exchange ( At December 31	2022 Accounts receivable $ 12,434 18,687 ( 19,715) ( 8,244) 57 $ 3,219 2021 Accounts receivable $ 3,726 9,707 993) 6) $ 12,434

(c)Liquidity risk

i.Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs. Such forecasting takes into consideration of the compliance with balance sheet ratio targets and external regulatory and legal requirements.

• ii.The surplus cash held by each operating unit will be invested in the surplus capital in interest-bearing demand deposits, time deposits or other cash equivalents when it exceeds the demand of liquidity, and the instrument selected has an appropriate maturity date or sufficient liquidity to respond to the above forecast and provide sufficient allowance.

iii.The Group's unused amount of loan limit is listed as follows:

Floating interest rate Due within one year		December 31, 2022 $ 172,858		December 31, 2021
				$ 305,707

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• iv.The table below analyses the Group’s non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

December 31, 2022 Less than 1year Non-derivative financial liabilities: Short-term borrowings $ 306,376 Accounts payable (including related parties) 209,478 Other payables (including related parties) 209,430 Lease liability 3,746 Long-term borrowings (including current portion) 132,827 December 31, 2021 Less than 1year Non-derivative financial liabilities: Short-term borrowings $ 77,946 Notes payable 1 Accounts payable (including related parties) 421,519 Other payables (including related parties) 257,845 Lease liability 3,445 Long-term borrowings (including current portion) 241,347

Between 1year and 5years Over 5 Years $ - $ - - - - - 4,242 - 162,687 207,508 Between 1year and 5years Over 5 Years $ - $ - - - - - - - 7,054 - 206,798 231,772

(4)Fair Value Information

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

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

• Level 2:Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

• Level 3: Unobservable input of the asset or liability.

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• B. Financial instruments not measured at fair value.

• The carrying amounts of cash and cash equivalents, notes receivable, accounts receivable, other receivables, short-term borrowings, accounts payable and other payables are approximate to their fair values.

• C. The related information of financial instruments , measured at fair value by level on the basis of the nature, characteristics and risks of the assets at December 31, 2022 and 2021 are as follows:

• (a)The related information of natures of the assets is as follows:

(As of December 31, 2022 and 2021, no such case is recorded in the accounts)

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

When assessing non-standard and low-complexity financial instruments, for example, debt instruments without active market, interest rate swap contracts, foreign exchange swap contracts and options, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.

• D. For the years ended December 31, 2022 and 2021, there was no transfer between Level 1 and Level 2.

13. SUPPLEMENTARY DISCLOSURES

(1)Significant transactions information

• A. Loans to others: None.

• B. Provision of endorsements and guarantees to others: Please refer to table 1.

• C. Holding of marketable securities at the end of the period: Please refer to table 2.

• D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: None.

• E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.

• F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.

• G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 3.

• H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 4.

• I. Significant inter-company transactions during the reporting periods: Please refer to table 5.

(2)Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 6.

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(3)Information on Investments in Mainland China

• A. Basic information: Please refer to table 7.

• B.Significant transactions, either directly or indirectly through a third areas, with investee companies in the Mainland China:

• (a)Purchase amount and percentage and ending balance and percentage of payables: Please refer to Note 13 (1) 7.

• (b)Sales amount and percentage and ending balance and percentage of receivables: Please refer to Note 13 (1) 7.

• (c)Property transaction amounts and gains and loss arising from them: None.

• (d)Balance and purpose of provision or endorsements/guarantees or collaterals at December 31,2022: None.

• (e)Maximum balance, ending balance and interest rate range and total amount of interest during the year ended and at December 31,2022: None.

• (f) Other significant transactions that affected the gains and losses or financial status for the period, i.e. rendering/receiving of service: None.

• (4)Major shareholders information

Major shareholders information: Please refer to Table 8.

14. SEGMENT INFORMATION

(1)General Information

The Group operates business only in a single industry. The Board of Directors, who allocates resources and assesses performance of the Group as a whole, has identified that the Group has only one reportable operating segment.

(2)Measurement of segment information

The accounting policies for the operating department of the Company are the same as the summary of significant accounting policies described in Note 4 to the consolidated financial statements. The chief operating decision-maker evaluates each operating segment by their operating profit.

(3)Segment Information

The segment information provided to the chief operating decision-maker for the reportable segments is as follows:

Revenue from external customers Segment income (loss) Segment income (loss), including: Depreciation and amortization	Years ended December 31 2022 2021 $ 1,669,509 $ 2,241,589 ($ 274,280) ($ 54,519) $ 206,665 $ 251,327	Years ended December 31 2022 2021 $ 1,669,509 $ 2,241,589 ($ 274,280) ($ 54,519) $ 206,665 $ 251,327
	2022 $ 1,669,509 ($ 274,280) $ 206,665
		($ 54,519)
		$ 251,327

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(4)Reconciliation for segment income (loss)

Sales between departments are conducted on a fair dealing basis. The external revenues reported to the chief operating decision-maker is measured in a manner consistent with that in the statement of comprehensive income.

A reconciliation of reportable segment income or loss to the income/(loss) before tax from continuing operations for the years ended December 31, 2022 and 2021 is provided as follows:

Reportable operating segments income (loss) Undistributed amount: Non-operating income Net loss before tax from continuing operations	Years ended	December31
	2022 ($ 274,280) 8,502 ($ 265,778)	2021 ($ 54,519) ( 24,936) ($ 79,455)

(5)Information on products and services

The Company and its subsidiaries manufacture, process and sell multilayer and flexible printed circuit boards, which are deemed as a single product.

(6)Geographical information

Geographical information for the years ended December 31, 2022 and 2021 is as follows:

Taiwan Mainland China	Years ended December 31	Years ended December 31	Years ended December 31	Years ended December 31
	2022 Revenue Non-current assets $ 394,048 $ 413,036 1,275,461 169,674 $ 1,669,509 $ 582,710		2021
	Revenue $ 394,048 1,275,461 $ 1,669,509		Revenue $ 612,375 1,629,214 $ 2,241,589	Non-current assets $ 618,859 190,537
				$ 809,396

(7)Major customer information

Major customer information for the years ended December 31, 2022 and 2021 is as follows:

Years ended December 31

Company D Company C Company E Company B	2022 Revenue Ratio $ 462,395 28% 284,199 17% 190,919 11% 156,141 9%	2021
	Revenue $ 462,395 284,199 190,919 156,141	Revenue $ 705,137 231,130 268,970 206,195	Ratio
			31% 10% 12% 9%

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Uniflex Technology Inc. and subsidiaries Provision of endorsements and guarantees to others Year ended December 31, 2022

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

Number (Note 1) 0	Endorser/guarantor UNIFLEX TECHNOLOGY INC.	Partybeingendorsee/guarantee Limit on endorsements/guarantees provided for a single party (Note 3) Company name Relationship with the endorser/ guarantor (Note 2) Uniflex Technology (JiangSu) Limited 2 $ 1,186,786	Maximum outstanding endorsement/ guarantee amount as of December 31,2022
		Company name Uniflex Technology (JiangSu) Limited
			$ 53,414

Outstanding endorsement/ guarantee amount at December 31, 2022 Actual amount drawn down Amount of endorsements/ guarantees secured with collateral Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/ guarantor company Ceiling on total amount of endorsements/ guarantees provided (Note 3) $ 52,858 $ - $ - 8.91 $ 1,186,786	Provision of endorsements/ guarantees by parent company to subsidiary Y	Provision of endorsements/ guarantees by subsidiary to parent company Provision of endorsements/ guarantees to the party in Mainland China Footnote N Y

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

(1) The Company is ‘0’.

(2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories; fill in the number of category each case belongs to:

• (1) Having business relationship.

(2) The endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary.

(3) The endorsed/guaranteed company owns directly and indirectly more than 50% voting shares of the endorser/guarantor parent company.

(4) The endorser/guarantor parent company owns directly and indirectly more than 90% voting shares of the endorsed/guaranteed company.

(5) Mutual guarantee of the trade made by the endorsed/guaranteed company or joint contractor as required under the construction contract.

(6) Due to joint venture, all shareholders provide endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

• (7) Joint guarantee of the performance guarantee for pre-sold home sales contract as required under the Consumer Protection Act.

Note 3: The calculation of the capital loans of the Company and its subsidiaries and the individual items and the total amount shall be in accordance with the "Endorsement/Guarantee Operation Procedures" stipulated by the Company and its subsidiaries.

(1) The total amount of the external endorsements/guarantees provided the Company shall be lower than 200% of the Company’s net worth.

(2) The endorsement/guarantee provided the Company for a single enterprise shall be lower than 200% of the Company’s net worth .

(3) In the case of an endorsement/guarantee due to the business relationship, it shall not exceed the total amount of transactions with the Company in the most recent year.

Table 1, Page 1

Uniflex Technology Inc. and subsidiaries

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) December 31, 2022

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Securitiesheld by UNIFLEX TECHNOLOGY INC UNIFLEX TECHNOLOGY INC UNIFLEX TECHNOLOGY INC	Marketable securities MARUWA CORPORATION's bonds Umt Technology Corp. Pomiran Metalization Research Co., Ltd.	Relationship with the securities issuer Companies invested by the parent company of any corporate director of the Company None None	General ledger account Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current	As of December 31, 2022	As of December 31, 2022	Footnote Fair value $ - - -
				Number of Shares/ (in thousands shares) Book value - $ - - - 6 -	Ownership(%)
					- 19.83 0.02

Table 2, Page 1

Table 3

Uniflex Technology Inc. and subsidiaries

Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more Year ended December 31, 2022

Expressed in thousands of NTD (Except as otherwise indicated)

Transaction Description and reasons of difference in transaction terms compared to third party transactions	Notes accounts receivable(payable)

Purchaser/seller UNIFLEX TECHNOLOGY INC Uniflex Technology (JiangSu) Limited	Counterparty Relationship with the counterparty Uniflex Technology (JiangSu) Limited The Company’s second-tier subsidiary UNIFLEX TECHNOLOGY INC The Company’s parent company	Purchases (sales) Amount Purchase 874,075 (Sales) ( 874,075)	Percentage of total purchases (sales) (%) Credit term Unit price 79 Collection of payments based on capital needs (Note 1) ( 93) Collection of payments based on capital needs (Note 1)	Credit term (Note 1) (Note 1)	Balance Percentage oftotalnotes /accounts receivable (payable) (%) Footnote ( 596,660) ( 99) 596,660 95

Note 1: The transaction price is negotiated by both parties, and the terms of collection and payment are determined according to the Company's capital needs.

`

Table 3, Page 1

Uniflex Technology Inc. and subsidiaries

Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more Year ended December 31, 2022

Table 4

Year ended December 31, 2022
Table 4 Creditor Counterparty Relationship with the counterparty Balance as at December 31, 2022 Turnover rate Uniflex Technology (JiangSu) Limited UNIFLEX TECHNOLOGY INC The Company’s parent company 596,660 0.92		Expressed in thousands of NTD (Except as otherwise indicated) Overdue receivables Amount collected subsequent to the balance sheet date Allowance for doubtful accounts Amount Action taken - - 69,535

Table 4, Page 1

Uniflex Technology Inc. and subsidiaries Significant inter-company transactions during the reporting periods Year ended December 31, 2022

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

Number. (Note 1) 2 2	Companyname Counterparty Relationship (Note 2) Uniflex Technology (JiangSu) Limited UNIFLEX TECHNOLOGY INC 2 Uniflex Technology (JiangSu) Limited UNIFLEX TECHNOLOGY INC 2	Transactions
		General ledger account Amount Transaction terms Sales revenue 874,075 〃 Accounts receivable 596,660 〃	Percentage of consolidated total operating revenues or total assets(Note 3)
			52.36% 33.82%

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

• (1) Parent company is ‘0’.

• (2) The subsidiaries are numbered in order starting from ‘1’.

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

• (1) Parent company to the subsidiary.

• (2) Subsidiary to the parent company.

• (3) Subsidiary to subsidiary.

• Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount base on period-end of consolidated total operating revenues for income statement accounts.

Table 5, Page 1

Uniflex Technology Inc. and subsidiaries Information on investees Year ended December 31, 2022

Table 6

Expressed in thousands of NTD (Except as otherwise indicated)

Investor UNIFLEX TECHNOLOGY INC UNIFLEX TECHNOLOGY INC	Investee Location Uniflex Investment Limited British Virgin Islands Uniflex Group Limited British Virgin Islands	Main business activities	Initial Investment amount Shares held as at December 31, 2022 Net profit (loss) of the investee for the year ended December31, 2022 Investmen tincome (loss) recognized by the Company for the year ended December31, 2022 Footnote Balance as at December 31,2022 Balance as at December 31,2021 Number of shares Ownership Book value $ 967,050 $ 967,050 22,517 100% $ 654,274 ($ 19,770) ($ 19,770) (Note 1) 10,518 10,518 1,100 100% - - - (Note 1)
		Holding Company Holding Company

Note 1: It is recognized based on the evaluation for financial statements audited by the parent company's CPAs in Taiwan.

Table6 , Page 1

Uniflex Technology Inc. and subsidiaries Information on Investment in Mainland China Year ended December 31, 2022

Table 7

Expressed in thousands of NTD

(Except as otherwise indicated)

Investee in Mainland China	Main business activities Manufacture and sale of electronic parts Production and sales of FPC	Paid-in Capital $ 37,147 921,000	Investment method (Note 1) Accumulate d Amount of remittance from Taiwan to Mainland China as of January 1,2022 (3) $ 7,368 (2) 803,767	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December 31, 2022 Accumulate d amount of remittance from Taiwan to Mainland China as of December 31,2022 Net income of investee for the year ended December 31,2022 Remitted to Mainland China Remitted back to Taiwan $ - $ - $ 7,368 $ - - - 803,767 ( 19,508)	Ownership held by the Company (direct or indirect) Investment income (loss) recognized by the Company for the year ended December 31,2022 Book value of investments in Mainland China as of December 31, 2022 Accumulated amount of investment income remitted back to Taiwan as of December 31,2022 Footnote 19.83 $ - $ - $ - (Note 2) 100.00 ( 19,508) 652,003 - (Note 3)
Unipoint Technology (KunShan) Corp. Uniflex Technology (JIangSu) Limited

Companyname Uniflex Technology Inc.	Accumulated Amount of remittance from Taiwan to Mainland China as of December 31, 2022 Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA) Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA $ 1,029,078 $1,029,078 (Note 4)

Table 7, Page 1

• Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:

• (1) Directly invest in a company in Mainland China

• (2) Through investing in an existing company in the third area, which then invested in the investee in Mainland China. (invested companies in third regions: Uniflex Investment Limited and Uniflex Group Limited)

• (3) Others

• Note 2: It has been assessed that it is impossible for Unipoint Technology(KunShan) Corp. to actually operate, and the Company has recognized the full amount as an investment loss Note 3: Uniflex (JiangSu) is recognized based on the evaluation for financial statements audited by the parent company's CPAs in Taiwan.

• Note 4: The Company met the scope of operation made by the headquarter, thus, no limit was applicable on the Company's investments in Mainland China in accordance with "Regul Governing the Permission of Investment or Technical Cooperation in Mainland Area" effective August 1, 2008.

Table 7, Page 2

Uniflex Technology Inc. and subsidiaries Information on Major Shareholders

December 31, 2022

Table 8

Unit: share

(Except as otherwise indicated)

Name of Major Shareholders Hsin Yang Investment Corp. Taiwan Surface Mounting Technology Corp. Unimicron Technology Corp.	Shares
	Number of Shares Ownership (%) 25,307,736 16.20% 17,331,519 11.09% 15,586,822 9.98%

Table 8, Page 1