WELLELL - Interim / Quarterly Report 2023

Stock symbol: 4106

Wellell Inc. and Subsidiaries

Consolidated Financial Statements With Independent Auditors’ Review Report

For the Six Months Ended June 30, 2023 and 2022

Address: No. 9, Minsheng St., Tucheng Dist., New Taipei City Telephone No: (02)2268-5568

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

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Item I.Cover II.Table of Contents III.Independent Auditors’ Review Report IV.Consolidated Balance Sheet V.Consolidated Statements of Comprehensive Income VI.Consolidated Statement of Change in Equity VII.Consolidated Statements of Cash Flows VIII.Notes to the Consolidated financial statements (I) Organization and business (II) Financial statements authorization date and authorization process (III) Application of new standards, amendments, and interpretations (IV) Summary of Significant Accounting Policies (V) Significant accounting judgments, estimations, assumptions, and sources of estimation uncertainty (VI) Details of significant accounting items (VII) Related Party Transactions (VIII) Pledged Assets (IX) Significant contingent liabilities and unrecognized contract commitments (X) Significant disaster loss (XI) Significant Events (XII) Others (XIII) Additional Disclosure 1. Information on significant transactions 2. Information on investees 3. Information on investment in Mainland China 4. Information on major shareholders (XIV) Segment information	Pages
	1 2 3 4 5 6 7 8 8 8～9 10～12 12 12～27 27～35 36 36 36 36 36 37～42 40～41 41 42 42～44

Item
I.Cover
II.Table of Contents
III.Independent Auditors’ Review Report
IV.Consolidated Balance Sheet
V.Consolidated Statements of Comprehensive Income
VI.Consolidated Statement of Change in Equity
VII.Consolidated Statements of Cash Flows
VIII.Notes to the Consolidated financial statements
(I)
Organization and business
(II)
Financial statements authorization date and authorization process
(III)
Application of new standards, amendments, and interpretations
(IV)
Summary of Significant Accounting Policies
(V)
Significant accounting judgments, estimations, assumptions, and sources
of estimation uncertainty
(VI)
Details of significant accounting items
(VII)
Related Party Transactions
(VIII) Pledged Assets
(IX) Significant contingent liabilities and unrecognized contract
commitments
(X)
Significant disaster loss
(XI)
Significant Events
(XII)
Others
(XIII) Additional Disclosure
1. Information on significant transactions
2. Information on investees
3. Information on investment in Mainland China
4. Information on major shareholders
(XIV) Segment information

Pages

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3
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10～12
12
12～27
27～35
36
36
36
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37～42
40～41
41
42
42～44

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Independent Auditors’ Review Report

Wellell Inc. and Subsidiaries:

Introduction

We have reviewed the consolidated balance sheet of Wellell Inc. and its subsidiaries prepared on June 30, 2023 and 2022, the consolidated comprehensive income statement covering the periods of April 1 to June 30, 2023 and 2022, and January 1 to June 30, 2023 and 2022, the consolidated statements of change in equity, the consolidated statements of cash flows, and the notes to the consolidated financial statements (including a summary of significant accounting policies) covering the periods of 2023 and 2022 as of June 30 of the respective fiscal year. It is the management’s responsibility to prepare consolidated financial statements that are present fairly pursuant to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IAS 34, “Interim Financial Reporting” as endorsed and issued into effect by the Financial Supervisory Commission. Our responsibility is to make a conclusion on the consolidated financial statements according to our review results.

Scope

We performed the review pursuant to the TWSRE 2410, “Review of Financial Information Performed by the Independent Auditor of the Entity”. When reviewing consolidated financial statements, we have made inquiries, primarily of persons responsible for financial and accounting matters, and performed analytical and other review procedures. The review is substantially less in scope than an audit and consequently does not enable the auditor to obtain assurance that the auditor would become aware of all significant matters that might be identified in an audit and that accordingly no audit opinion is expressed.

Conclusion

According to our review results, we are not aware of any material respects in which the aforementioned consolidated financial statements were not prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and IAS 34, “Interim Financial Reporting” as endorsed and issued into effect by the Financial Supervisory Commission that are not able to present fairly the consolidated financial position of Wellell Inc. and its subsidiaries as of June 30, 2023 and 2022, and the results of the consolidated financial performance for the period of April 1 to June 30, 2023 and 2022, and the period of January 1 to June 30, 2023 and 2022, and the consolidated cash flows for the period of January 1 to June 30, 2023 and 2022.

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KPMG. Taipei, Taiwan, R.O.C.

Certified Public Accountants:

Certified and Jin-Guan-Cheng-Shen-Zi No. Approved No. of : 1040003949 the Securities Jin-Guan-Cheng-Liu-Zi No. Competent 0960069825 Authority: August 9, 2023

Notes to Readers

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

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

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with Standards on Auditing as of June 30, 2023 and 2022 Wellell Inc. and Subsidiaries

Consolidated Balance Sheet

June 30, 2023, December 31, 2022, and June 30, 2022

Unit: New Taiwan Dollars in thousands

2023.6.30 Amount ％ $ 462,725 14 108,036 3 18,097 1 562,276 18 25,005 1 444,230 14 40,801 1 859 -	2022.12.31 Amount ％ 445,280 15 105,162 3 16,065 - 491,942 15 29,118 1 552,506 17 36,098 1 1,145 -	2023.6.30 Amount % $ 224,577 7 43 - 123,407 4 274,718 8 52,587 2 16,814 1 27,372 1 13,455 -	2022.12.31 Amount % 295,357 9 566 - 174,493 5 210,431 7 33,539 1 16,154 1 30,276 1 10,261 -	2022.6.30
				Amount % 420,535 13 - - 208,595 7 211,381 7 30,914 1 14,846 - 41,563 1 8,781 -
1,662,029 52	1,677,316 52	732,973 23	771,077 24	936,615 29
15,000 - 19,190 1 726,549 23 60,980 2 672,967 21 44,964 1 15,778 - 769 -	- - 19,165 1 736,063 23 67,438 2 650,513 21 40,169 1 15,862 - 768 -	116,481 4 9,246 - 35,827 1 1,074 - 35,092 1	121,265 4 9,993 - 42,399 2 1,043 - 33,959 1	116,751 4 8,661 - 42,933 1 5,439 - 32,050 1
		197,720 6	208,659 7	205,834 6
		930,693 29	979,736 31	1,142,449 35
		1,009,116 31	1,009,116 31	1,009,116 31
		345,635 11	345,635 11	345,635 11
1,556,197 48	1,529,978 48	311,210 10 252,634 8 518,622 16	294,712 9 252,634 8 519,306 16	294,712 9 252,634 8 436,678 14
		1,082,466 34	1,066,652 33	984,024 31
		(153,948) (5)	(200,139) (6)	(268,400) (8)
		2,283,269 71 4,264 -	2,221,264 69 6,294 -	2,070,375 65 5,617 -
		2,287,533 71	2,227,558 69	2,075,992 65
$ 3,218,226 100	3,207,294 100	$ 3,218,226 100	3,207,294 100	3,218,441 100

(For details please refer to the attached consolidated balance sheets notes) Manager: Li, Yung Chuan

Chairman of the board: Li, Yung Chuan

Accounting Director: Wang, Wei Chuan

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with auditing standards Wellell Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

April 1 - June 30, 2023 and 2022, and January 1 - June 30, 2023 and 2022

Unit: New Taiwan Dollars in thousands

April to June, 2023 Amount ％ $ 703,610 100 414,942 59	April to June, 2023 Amount ％ $ 703,610 100 414,942 59	April to June, 2022 Amount ％ 680,136 100 413,232 61	April to June, 2022 Amount ％ 680,136 100 413,232 61	January to June, 2023 Amount ％ 1,403,375 100 817,342 58	January to June, 2023 Amount ％ 1,403,375 100 817,342 58	January to June, 2022 Amount ％ 1,275,529 100 760,535 60	January to June, 2022 Amount ％ 1,275,529 100 760,535 60
Amount $ 703,610 414,942		Amount 680,136 413,232		Amount 1,403,375 817,342		Amount 1,275,529 760,535
288,668	41	266,904	39	586,033	42	514,994	40
94,597 88,179 38,977 370	13 13 5 -	87,247 80,661 39,370 566	13 12 6 -	193,540 190,760 79,986 (918)	14 13 6 -	177,361 160,592 75,621 (1,112)	14 12 6 -
222,123	31	207,844	31	463,368	33	412,462	32
66,545	10	59,060	8	122,665	9	102,532	8
995 63 10,691 (3,258)	- - 1 -	539 88 9,474 (2,216)	- - 1 -	1,969 98 22,047 (7,001)	- - 1 -	1,253 88 9,428 (4,177)	- - - -
8,491	1	7,885	1	17,113	1	6,592	-
75,036 24,030	11 4	66,945 15,397	9 2	139,778 37,877	10 3	109,124 26,414	8 2
51,006	7	51,548	7	101,901	7	82,710	6
2,116 -	- -	(2,647) -	- -	25 -	- -	(1,178) -	- -
2,116	-	(2,647)	-	25	-	(1,178)	-
28,186 -	4 -	(47,509) -	(7) -	43,824 -	3 -	(14,517) -	(1) -
28,186	4	(47,509)	(7)	43,824	3	(14,517)	(1)
30,302	4	(50,156)	(7)	43,849	3	(15,695)	(1)
$ 81,308	11	1,392	-	145,750	10	67,015	5
$ 50,858 148	7 -	51,674 (126)	7 -	101,589 312	7 -	82,352 358	6 -
$ 51,006	7	51,548	7	101,901	7	82,710	6
$ 83,523 (2,215)	11 -	1,642 (250)	- -	147,780 (2,030)	10 -	66,586 429	5 -
$ 81,308	11	1,392	-	145,750	10	67,015	5
$	0.50		0.51		1.01		0.82
$	0.50		0.51		1.00		0.81

(For details please refer to the attached consolidated balance sheets notes) Manager: Li, Yung Chuan

Chairman of the board: Li, Yung Chuan

Accounting Director: Wang, Wei Chuan

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

Reviewed only, not audited in accordance with auditing standards Wellell Inc. and Subsidiaries

Consolidated Statement of Change in Equity

From January 1 to June 30, 2023 and 2022

Unit: New Taiwan Dollars in thousands

Equity attributable to owners of the parent company

Capital	Capital Reserve		Retained	Earnings		Total Other Equities	Total Other Equities	Total Other Equities	Total equity attributable to owners of the parent company	Non-controlling interests	Total equity 2,064,290
						Financial statements translation differences of foreign operations	Unrealized Valuation Gains or Losses on Financial Assets Measured at Fair Value through Other Comprehensive Income	Total
		Statutory reserves	Special reserves	Undistributed Retained Earnings	Total
$ 1,009,116	345,635	284,311	178,568	494,106	956,985	(258,393)	5,759	(252,634)	2,059,102	5,188 - 5,188 358 71 429 - - - 5,617 6,294 312 (2,342) (2,030) - - 4,264
-	-	-	-	188	188	-	-	-	188		188
1,009,116	345,635	284,311	178,568	494,294	957,173	(258,393)	5,759	(252,634)	2,059,290		2,064,478
- -	- -	- -	- -	82,352 -	82,352 -	- (14,588)	- (1,178)	- (15,766)	82,352 (15,766)		82,710 (15,695)
-	-	-	-	82,352	82,352	(14,588)	(1,178)	(15,766)	66,586		67,015
- - -	- - -	10,401 - -	- 74,066 -	(10,401) (74,066) (55,501)	- - (55,501)	- - -	- - -	- - -	- - (55,501)		- - (55,501)
$ 1,009,116	345,635	294,712	252,634	436,678	984,024	(272,981)	4,581	(268,400)	2,070,375		2,075,992
$ 1,009,116	345,635	294,712	252,634	519,306	1,066,652	(209,197)	9,058	(200,139)	2,221,264		2,227,558
- -	- -	- -	- -	101,589 -	101,589 -	- 46,166	- 25	- 46,191	101,589 46,191		101,901 43,849
-	-	-	-	101,589	101,589	46,166	25	46,191	147,780		145,750
- -	- -	16,498 -	- -	(16,498) (85,775)	- (85,775)	- -	- -	- -	- (85,775)		- (85,775)
$ 1,009,116	345,635	311,210	252,634	518,622	1,082,466	(163,031)	9,083	(153,948)	2,283,269		2,287,533

(For details please refer to the attached consolidated balance sheets notes)

Chairman of the board: Li, Yung Chuan

Manager: Li, Yung Chuan

Accounting Director: Wang, Wei Chuan

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with auditing standards Wellell Inc. and Subsidiaries

Consolidated Statements of Cash Flows

From January 1 to June 30, 2023 and 2022

Unit: New Taiwan Dollars in thousands

January to June, 2023 Cash flow from operating activities: Profit before Tax current period $ 139,778 Adjustment items: Income and expenses item Depreciation 36,426 Amortization 9,217 Gain on Reversal of Expected Credit Impairment (918) Interest Expense 7,001 Interest Income (1,969) Dividend Income - Profit or loss from disposal and obsolesce of property, plants and equipment 919 Property, plants and equipment reclassified as expenses 57 Property, plants and equipment reclassified as intangible assets 2,234 Total Incomes and Expenses 52,967 Changes of assets and liabilities relating to operating activities: Increase (Decrease) of Notes Receivable (2,032) Decrease (Increase) of Accounts Receivable (69,607) Decrease of Other Receivable 3,871 Decrease (Increase) of Inventories 108,276 Increase in prepayments (7,641) Decrease (increase) of Other Current Assets 286 Increase of Other Non-current Assets (1) Total Net changes of assets relating to operating activities 33,152 Decrease of Notes Payable (523) Decrease (Increase) of Account Payable (51,086) Decrease of Other Payables (including related parties) (21,460) Decrease of Other Current Liabilities (including related parties) (2,904) Increase of Net defined benefit liabilities 31 Increase (Decrease) of Other Non-Current Liabilities 1,133 Total Net changes of liabilities relating to operating activities (74,809) Total Net changes of assets and liabilities relating to operating activities (41,657) Total adjustments 11,310	January to June, 2023 $ 139,778	January to June, 2022 109,124
	36,426 9,217 (918) 7,001 (1,969) - 919 57 2,234	38,706 9,002 (1,112) 4,177 (1,253) (88) 29 - -
	52,967	49,461
	(2,032) (69,607) 3,871 108,276 (7,641) 286 (1)	931 (85,970) 3,044 (56,289) (4,872) (748) -
	33,152	(143,904)
		(34) 2,972 (59,226) (11,811) 78 (199)
	(74,809)	(68,220)
	(41,657)	(212,124)
	11,310	(162,663)

(For details please refer to the attached consolidated balance sheets notes)

Chairman of the board: Manager: Accounting Director: Li, Yung Chuan Li, Yung Chuan Wang, Wei Chuan

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with auditing standards Wellell Inc. and Subsidiaries

Consolidated Statements of Cash Flows (continued)

From January 1 to June 30, 2023 and 2022

Unit: New Taiwan Dollars in thousands

January to June, 2023 Cash inflow (outflow) from operating $ 151,088 Interest received 2,256 Dividends received - Interest paid (7,029) Income Taxes Paid (21,468) Cash Inflow (outflow) from operating activities 124,847 Cash flow from investing activities: Acquisition of Financial assets at amortized cost (17,874) Investment in real estate properties, plants and equipment (15,413) Disposal of property, plants and equipment 552 Decrease (Increase) of Refundable Deposits 84 Investment in intangible assets (2,979) Cash outflow from investing activities (35,630) Cash flow from financing activities: Application for short-term borrowings 355,633 Repayment of short-term borrowings (431,003) Repayment of long-term borrowings (1,590) Repayment of principal portion of the lease (8,830) Net Cash Inflow (outflow) from financing activities (85,790) Net effect of changes in foreign currency exchange rates on cash and cash equivalent 14,018 Increase (Decrease) of cash and cash equivalents – current period 17,445 Cash and cash equivalents at beginning of year 445,280 Cash and cash equivalents at the end of year $ 462,725	January to June, 2023 $ 151,088 2,256 - (7,029) (21,468)		January to June, 2022
			(53,539) 1,403 88 (4,289) (10,198)
	124,847		(66,535)
	(17,874) (15,413) 552 84 (2,979)		(5,434) (14,417) 578 (492) (1,684)
	(35,630)		(21,449)
	355,633 (431,003) (1,590) (8,830)		756,836 (688,558) (12,962) (8,578)
	(85,790)		46,738

			776
	17,445 445,280		(40,470) 493,227
	$ 462,725		452,757

(For details please refer to the attached consolidated balance sheets notes) Chairman of the board: Manager: Accounting Director: Li, Yung Chuan Li, Yung Chuan Wang, Wei Chuan

Manager: Accounting Director: Li, Yung Chuan Wang, Wei Chuan

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Wellell Inc. and Subsidiaries Notes to the Consolidated financial statements For the Six Months Ended June 30, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, except as otherwise indicated)

I. Company History

Wellell Inc. (referred as “the Company” hereafter) was authorized to set up by the Ministry of Economic Affairs in March, 1990, and merged with Ya-Tai Industrial Limited on August 31, 1998. the Company was approved to be listed in TPEx in August, 2001 and traded in January, 2002 by the Securities and Futures Commission, Ministry of Finance (name changed to the Securities and Futures Bureau of the Financial Supervisory Commission, abbreviated as Securities and Futures Bureau). the Company was approved by the Securities and Futures Bureau to be listed on TWSE in October, 2004. the Company and its subsidiaries (referred as “the consolidated company” hereafter) are primarily engaged in the business of manufacturing and sale of medical supplies, import, and export as well as agency services.

II. Financial Statements Authorization Date and Authorization Process

The consolidated financial reports were approved for release by the Board of Directors on August 9, 2023.

III. Application of new standards, amendments, and interpretations

(I) The impact from adopting new standards and Interpretations as approved by FSC for release and amendment

The consolidated company has adopted following new amendments to IFRSs since January 1, 2023, with the potential impact described below:

Amendment to IAS 12, “Deferred tax related to assets and liabilities arising from a single transaction”

This amendment restricts the scope of recognition exemption. An entity does not apply the initial recognition exemption for transactions that give rise to equal taxable and deductible temporary differences but recognizes equal deferred income tax assets and deferred income tax liabilities. This change in accounting policy makes the deferred income tax assets, deferred income tax liabilities, and retained earnings as of January 1, 2022, increase by NT$7,338 thousand, NT$7,150 thousand, and NT$188 thousand, respectively, and those as of December 31, 2022, increase by NT$9,886 thousand, NT$9,703 thousand, and NT$183 thousand, respectively. It also leads to an increase of NT$9 thousand in income tax expenses for January 1 to June 30, 2022. There is not any material effect on the basic earnings per share, diluted earnings per share, and the statement of cash flows.

Other

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Following new amendments to the standards have also been effective since January 1, 2023, but have no material effect on the consolidated financial statements:

‧ Amendments to IAS 1 on “Disclosure of Accounting Policies”
‧ Amendments to IAS 8 on “Definition of accounting estimates”
(II) Standards and interpretation newly released by IASB but not yet endorsed by FSC:

The standards and interpretations issued and amended by the International Accounting Standards Board (IASB) but not been advised by the FSC may affected to the Consolidated Company:

pany:
Newly announced or amended standards Amendments to IAS 1 “Classification of Liabilities as Current or Non-Current”	Major amendments Under IAS 1, a liability is classified as current if the enterprise does not have an unconditional right to defer settlement for at least 12 months after the reporting period. The amendment removes the requirement that the right should be unconditional and instead requires that the right must exist at the end of the reporting period and must be material. The amendment clarifies how an enterprise should classify liabilities that are settled by the issuance of its own equity instruments (e.g., convertible bonds).	Effective date of IASB announcement
		January 1, 2024

The consolidated company continues to assess the impact of the above standards and interpretations on its financial position and result of operation. The relevant impact will be disclosed after completion of the assessment.

The consolidated company expected that the following new publish and amendment to the standards would not cause significant influence to the consolidated financial statement.

‧Amendments to IFRS 10 and IAS 28 on “Sale or Contribution of assets between an Investor and its Associate or Joint Venture”
‧Amendments to IFRS 17 “Insurance Contracts” and IFRS 17
‧The amendments to IAS 1 “Classification of Liabilities with Covenants”
‧ The amendments to IFRS 17, “Comparative information for initial application of IFRS 17 and IFRS 9
‧The amendments to IFRS 16 “Lease Liabilities for Leasebacks”

Amendments to IAS 7 and IFRS 7 - Supplier Finance Arrangements

Amendments to IAS 12 - International Tax Reform - Pillar Two Model Rules

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Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

IV. Summary of Significant Accounting Policies

(I) Statement of Compliance

The consolidated financial statements are prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as the “Preparation Guidelines”) and the IAS 34, “Interim Financial Reporting” as endorsed and issued into effect by the Financial Supervisory Commission. The accompanying quarterly consolidated financial statements do not include all required information that should be disclosed in annual consolidated financial statements in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers as well as IFRSs, IASs, IFRICs, SIC, and announcements (hereinafter referred to as the “IFRSs” endorsed by FSC) endorsed and issued into effect by FSC.

Except as described below, the significant accounting policies adopted in the consolidated financial statements are the same as those used in the consolidated financial statements for the year 2022. Please refer to Note 4 to the 2022 Consolidated Financial Statements for related information.

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Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

(II) Basis of Consolidation

1. Subsidiaries included in the consolidated financial statements.

Name of investor	Main business activities Name of subsidiary	Percentage of Ownership 2023.6.30 2022.12.31 2022.6.30 Description	Percentage of Ownership 2023.6.30 2022.12.31 2022.6.30 Description	Percentage of Ownership 2023.6.30 2022.12.31 2022.6.30 Description
		2023.6.30	2022.12.31
The Company 〃〃〃〃〃〃〃〃〃〃 Apex Global Investment Ltd. 〃〃 ComfortPro Investment Corp. Max Delight Holdings Limited Apex Medical Respiratory Ltd. 〃〃〃 Wellell UK Limited	Apex Global Investment Ltd. Investment on businesses engaging in manufacturing Wellell America Corp. Sales of medical supplies Apex Medical S.L. Sales of medical supplies Sturdy Industrial Co., Ltd Manufacturing and Sales of medical supplies Apex Medical Global Cooperatie UA Investment on businesses engaging in manufacturing Wellell India Private Limited Sales of medical supplies Wellell (Thailand) Ltd. Sales of medical supplies Apex Medical Respiratory Ltd. Investment on businesses engaging in manufacturing Wellell Germany GmbH Investments in various production businesses and leasing business APEX MEDICAL CORP. Sales of medical supplies Wellell Taiwan Corp. Sales of medical supplies ComfortPro Investment Corp. Investment on businesses engaging in manufacturing Max Delight Holding Limited. Investment on businesses engaging in manufacturing Wellell India Private Limited Sales of medical supplies Apex (Kunshan) Medical Corp. Manufacturing and Sales of medical supplies Wellell (Kunshan) Co., Ltd Sales of medical supplies Wellell UK Limited Sales of medical supplies SLK Vertriebs GmbH Sales and leasing of medical supplies SLK Medical GmbH Sales and leasing of medical supplies Wellell France S.A.S. Sales of medical supplies Westmeria Healthcare Ltd. Sales and leasing of medical supplies	100% 100% 100% 100% - % 99.82% 49% 100% 100% 100% 100% 100% 100% 0.18% 100% 100% 100% 100% 100% 100% 100%	100% 100% 100% 100% - % 99.82% 49% 100% 100% 100% - % 100% 100% 0.18% 100% 100% 100% 100% 100% 100% 100%	100% 100% (Note 1) 100% 100% 100% (Note 2) 99.82% (Note 1, 3) 49% (Note 1) 100% 100% (Note 1) 100% - % (Note 4) 100% 100% 0.18% (Note 1, 3) 100% 100% 100% (Note 1) 100% 100% 100% (Note 1) 100%

Note 1: Apex Medical USA Corp., Apex Medical Corp. India Private Ltd., Apex Medical (Thailand) Co., Ltd., Apex Medical Ltd., Apex Medical France and Apex Medical Investment GmbH to follow the Group’s branding strategies changed their names to Wellell America Corp., Wellell India Private Limited, Wellell (Thailand) Ltd., Wellell UK Limited, Wellell France S.A.S. and Wellell Germany GmbH in 2022.

Note 2: The liquidation process was completed on September 5, 2022.

Note 3: The Company directly and indirectly holds 100% equity interests in Wellell India Private Limited. Note 4: The Company invested in the establishment of Wellell Taiwan Corp. on March 17, 2023, and the

～ 11 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

relevant statutory establishment and registration procedures have been completed.

Subsidiaries not included in the consolidated financial statements: None.

(III) Employee benefit

The “defined benefit plan - pension” for the interim period is calculated using the actuarially determined pension cost rate as of the prior year's reporting date, based on the beginning to the end of the current period, adjusted for significant market fluctuations, significant reductions, repayments, or other significant one-time events after that reporting date.

(IV) Income Taxes

The consolidated company measures and discloses the income tax expenses for the interim period in accordance with the Appendix B12 of IAS 34, “Interim Financial Reporting”.

The income tax expenses is measured at the profit before income tax for the interim reporting period multiplying the management's best estimate of the effective tax rate for the full year.

Income tax expense recognized directly in equity or other comprehensive income is measured at the tax rates that are expected to apply when the related assets and liabilities are realized or settled, based on the temporary differences between their carrying amounts for financial reporting purposes and their tax bases.

V. Significant accounting judgments, estimations, assumptions and sources of estimation uncertainty

The preparation of the consolidated financial statements shall be in conformity with the preparation guidelines and the IAS 34, “Interim Financial Reporting” endorsed by FSC and management is required to make judgments, estimates and assumptions that will affect the application of the accounting policies and the amount reported on assets, liabilities, revenues and expenses. Actual results may differ from the estimates.

Critical judgements made by the management for adopting accounting policies when preparing the consolidated financial statements and key sources of estimation uncertainty are the same as Note 5 to the 2022 Consolidated Financial Statements.

VI. Details of significant accounting items

Except as described below, there are no material differences between the description of critical accounts and those in the consolidated financial statements for the year 2022. Please refer to Note 6 to the 2022 Consolidated Financial Statements for related information.

～ 12 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

(I) Cash and cash equivalents

2023.6.30 Cash on hand $ 1,514 Checks and demand deposits 418,772 Time Deposit 25,691 Cash in transit 16,748 Cash and cash equivalents listed on the Consolidated Statements of Cash Flows $ 462,725	2023.6.30 $ 1,514 418,772 25,691 16,748	2022.12.31 1,316 415,499 26,441 2,024	2022.6.30 1,446 438,430 12,881 -
		445,280	452,757

As of June 30, 2023, December 31, 2022, and June 30, 2022, the cash and cash equivalent of the consolidated company were not provided as loan guarantee or litigation collateral to a financial institute or court.

(II) Financial assets measured with amortized cost

Current Domestic investment Time deposit with original maturity date for more than 3 months Pledged time deposit certificate Foreign investment Time deposit with original maturity date for more than 3 months Total Non-current Domestic investment Pledged time deposit certificate	2023.6.30 $ 69,500 - 38,536	2022.12.31 50,500 15,000 39,662	2022.6.30 75,500 - 35,521
	$ 108,036	105,162	111,021
	$ 15,000	-	15,000

The consolidated company assessed the holding of these assets to maturity to collect contract cash-flow and the cash-flow from the financial asset is all for principal payment and outstanding principal generated interest. Thus they were reported as financial assets measured at amortized cost.

As of June 30, 2023, December 31, 2022, and June 30, 2022, the amortized cost financial assets of the consolidated company had been provided to financial institutions as collateral for guarantees, please refer to Note 8.

～ 13 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

(III) Notes Receivable and Accounts Receivable

Notes receivable - from business operation Accounts Receivable Less: Loss Allowance Accounts Receivable, net	2023.6.30 $ 18,097 568,484 (6,208)	2022.12.31 16,065 499,065 (7,123)	2022.6.30 19,063 444,289 (4,792) 458,560
	$ 580,373	508,007

The consolidated company adopted the simplified method to estimate credit loss of all notes and accounts receivable, e.g. adopting the lifetime expected credit loss measurement method. For measurement purposes, the notes and accounts receivable are classified per the common credit risk characteristic of customers’ ability to pay the total amount due under contract terms and included as prospective information. The analysis for expected credit loss on notes and accounts receivable of the Company is as below:

	2023.6.30	Loss Allowance Lifetime Expected Credit Loss 1,211 115 7 21
Carrying Amount of Notes Receivable and Accounts Receivable $ 155,723 1,627 28 58	Weighted Average Expected Credit Loss Rate
	2022.12.31 0.78% 7.07% 25% 36.21%
$ 157,436		1,354
		Loss Allowance Lifetime Expected Credit Loss 1,340 748 21 13 26
Carrying Amount of Notes Receivable and Accounts Receivable $ 133,528 6,537 49 21 26	Weighted Average Expected Credit Loss Rate
	1.00% 11.44% 42.86% 61.90% 100%
$ 140,161		2,148

～ 14 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

Not Overdue Overdue Less Than 60 Days Over 61-90 Days Over 91-180 Days Total		2022.6.30	Loss Allowance Lifetime Expected Credit Loss 508 356 46 10 920
	Carrying Amount of Notes Receivable and Accounts Receivable $ 96,891 4,093 99 15	Weighted Average Expected Credit Loss Rate
		0.52% 8.70% 46.46% 66.67%
	$ 101,098

The consolidated company analysis for expected credit loss on notes and accounts receivable other than the Company is as below:

Credit Rating Grade		2023.6.30	Loss Allowance Lifetime Expected Credit Loss - 4,854
	Carrying Amount of Notes Receivable and Accounts Receivable $ 424,291 4,854	Weighted Average Expected Credit Loss Rate
Low Risk Those Who Have Financial Difficulties Total Credit Rating Grade		- 100% 2022.12.31
	$ 429,145		4,854
			Loss Allowance Lifetime Expected Credit Loss - 4,975
	Carrying Amount of Notes Receivable and Accounts Receivable $ 369,994 4,975	Weighted Average Expected Credit Loss Rate
Low Risk Those Who Have Financial Difficulties Total		- 100%
	$ 374,969		4,975

～ 15 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

Credit Rating Grade		2022.6.30	Loss Allowance Lifetime Expected Credit Loss - 3,872
	Carrying Amount of Notes Receivable and Accounts Receivable $ 358,382 3,872	Weighted Average Expected Credit Loss Rate
Low Risk Those Who Have Financial Difficulties Total		- 100%
	$ 362,254		3,872

The consolidated company’s aging analysis for notes and accounts receivable other than the Company is as below:

Not Overdue Overdue Less Than 60 Days Over 61-90 Days Over 91-180 Days Over 181-365 Days Over 366 days	2023.6.30	2022.6.30 340,279 15,013 1,714 4,492 756 -
	$ 429,145 374,969	362,254

The consolidated company changes to the statement of loss allowance for notes and accounts receivable are as below:

Beginning balance Gain on reversal of impairment loss Amount Written off due to amount not recovered Foreign exchange translation gain and loss Ending balance	2023 January to June
	$ 6,208 4,792

As of June 30, 2023, December 31, 2022, and June 30, 2022, no notes receivable and accounts receivable of the consolidated company pledged as collateral.

～ 16 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

(IV) Other Receivable and Overdue Receivable

Other Receivable Overdue Receivable Less: Loss Allowance	2023.6.30 $ 25,005 16,087 (16,087)	2022.12.31 29,118 16,563 (16,563)	2022.6.30 20,558 16,563 (16,563)
	$ 25,005	29,118	20,558

The consolidated company changes to the statement of loss allowance for other receivable and overdue receivable are as below:

Beginning balance Amount Written off due to amount not recovered Ending balance	2023 January to June
	$ 16,087 16,563

Please refer to Note 6 (17) for information on other credit risks

(V) Inventories

Finished goods Work in Process Raw Materials Products	2023.6.30 $ 16,987 53,192 78,753 295,298	2022.12.31 23,851 98,364 114,924 315,367	2022.6.30 38,364 134,533 141,311 299,125
	$ 444,230	552,506	613,333

Inventory valuation loss (or gain from inventory price recovery) recognized when measuring the inventory at lower of cost or net realizable value for the period from January 1 to June 30, 2023 and 2022, are NT$23,574 thousand and NT$3,631 thousand respectively, and are both recognized as costs of sales.

On June 30, 2023, December 31, 2022, and June 30, 2022, no inventory of the consolidated company is pledged as collateral.

(VI) Property, plants and equipment

Land $ 280,312	Buildings and constructions	Machinery Equipment 33,868	Others assets 51,022	Total 726,549
	361,347 366,610 369,278
$ 279,492		32,279	57,682	736,063
$ 278,235		30,727	46,279	724,519

There is not any significant purchase, disposal, impairment recognition, or reversal in the

～ 17 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

property, plant, and equipment of the consolidated company for the period from January 1 to June 30, 2023 and 2022. For depreciation in current period, please refer to Note 12. Other related information please refer to Note 6 (6) to the 2022 Consolidated Financial Statements.

As of June 30, 2023, December 31, 2022, and June 30, 2022, details of the consolidated company's property, plant and equipment pledged as collateral for loans and financing facilities, please refer to Note 8.

(VII) Intangible Assets

Carrying amount: June 30, 2023 December 31, 2022 June 30, 2022	Goodwill $ 523,696	Computer Software 8,897	Other intangible assets 140,374	Total 672,967
	$ 503,395	7,403	139,715	650,513
	$ 494,353	7,668	142,941	644,962

There is not any significant purchase, disposal, impairment recognition or reversal in the intangible assets of the consolidated company for the period from January 1 to June 30, 2023 and 2022. For amortization in current period, please refer to Note 12. Other related information please refer to Note 6 (7) to the 2022 Consolidated Financial Statements.

(VIII) Short-term notes

The detail of short-term borrowings of the consolidated company is as follows:

2023.6.30 $ 101,299 123,278	2023.6.30 $ 101,299 123,278	2022.12.31 34,650 260,707	2022.6.30 61,667 358,868
$ 224,577		295,357	420,535
$ 904,572		829,877	752,597
	1.725%~6.12%	1.30%~5.59%	0.90%~2.72%

1. New borrowings and repayments

For the period from January 1 to June 30, 2023 and 2022, new borrowings amounted to NT$355,633 thousand and NT756,836 thousand, respectively, and repayments amounted to NT$431,003 thousand and NT$688,558 thousand, respectively. For interest expenses, please refer to Notes 6 (16). For other related information, please refer to Note 6 (8) to the 2022 consolidated financial statements.

2. Collaterals for bank loans

For detail on assets used by the consolidated company as mortgage to guarantee borrowing from the bank or as the funding credit to the bank please refer to Note 8.

(IX) Long-term borrowings

～ 18 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

The detail of long-term borrowings of the consolidated company is as follows:

2023.6.30

Currency	Interest rate range	Maturity Date	Amount $ 129,936 (13,455)
Euro	1.97%~3.92% 2023.2.21~2037.6.30 2022.12.31
			$ 116,481
			$ -
			Amount $ 131,526 (10,261)
Currency	Interest rate range	Maturity Date
Euro	1.97%~3.92%	2023.2.21~2037.6.30 2022.6.30
			$ 121,265
			$ -
			Amount $ 125,532 (8,781)
Currency	Interest rate range	Maturity Date
Euro	1.97%~3.92%	2023.2.21~2037.6.30
			$ 116,751
			$ -

For detail on assets used by the consolidated company as mortgage to guarantee borrowing from the bank please refer to Note 8.

(X) Employee benefit

1. Defined benefit plan

Since there has not been any significant market fluctuations, significant reductions, repayments, or other significant one-time events after the prior year’s reporting date, the consolidated company adopted the actuarially determined pension costs as of December 31, 2022 and 2021 to measure and disclose the pension costs for the interim period.

Detail of pensions reported as expenses by the consolidated company were as follows:

～ 19 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

Operating costs Operating Expenses Operating Expenses	2023 April to June $ - 16	2022 April to June	2022 January to June - 78
	$ 16	39 28	78

2. Defined contribution plans

The Consolidated Company's pension costs and expenses under the Defined Pension Contribution Plan were as follows and were contributed to the Bureau of Labor Insurance:

Operating costs Operating Expenses	2023 April to June $ 2,766 4,922	2022 April to June	2022 January to June 4,929 9,071
	$ 7,688	7,125 15,287	14,000

(XI) Income Taxes

Detail of the consolidated company’s income tax expenses is as follows:

2023 April to June Tax expenses in current period $ 23,092 Expense of deferred income tax (benefit) 938 Income tax expenses $ 24,030	2023 April to June Tax expenses in current period $ 23,092 Expense of deferred income tax (benefit) 938 Income tax expenses $ 24,030	2022 April to June	2022 January to June 22,029 4,385
	$ 24,030	15,397 37,877	26,414

As of 2021, all tax returns by the Company, subsidiary - Sturdy Industrial and Apex Medical have been authorized by the tax collection authority.

(XII) Capital and other equity interests

For the period from January 1 to June 30, 2023 and 2022, there is not any material changes in consolidated company’s in capital and capital surplus. Please refer to Note 6 (12) to the 2022 Consolidated Financial Statements for related information.

1. Retained Earnings

Under the Articles of Incorporation of the Company, the earnings, if any, shall be

～ 20 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

distributed after close of the year as follows:

(1) Pay for income taxes.
(2) Restore cumulative losses.
(3) Set aside 10% as a legal reserve, except if the statutory reserve has reached the amount as capital of the Company then it is not bound by this statue.
(4) Have the special reserve appropriated or revered in accordance with applicable laws and regulations or competent authority.
(5) The Board of Directors should add the remainder with the accumulated undistributed earnings from previous years and submit a proposal to the shareholders’ meeting for them to agree the distribution of earnings.

If the above distribution of shareholders' bonus is made in the form of cash payment, the Board of Directors shall be authorized to make such proposal with the presence of at least two-thirds of the directors and the approval of a majority of the directors present, and report to the shareholders' meeting.

Dividend policy of the Company is as follows:

Dividend policy of the Company, set up by the Board of Directors, is to match with the development of business scale, investment plan while taking into account the capital expenditure and internal and external environmental changes of the Company. The Board of Directors initiated the earning distribution plan and submitted it to the shareholders’ meeting for their resolution to distribute the earnings. Earning may be distributed in the form of cash or shares, provided, however, that shares dividends distributed in respect of any fiscal year shall not exceed 50 percent of earnings distributed.

2. Earnings Distribution

The Company’s board of directors meeting on March 29, 2023, resolved the proposal of 2022 earnings distribution, and the shareholders’ meeting resolved to distribute earnings of 2021 on June 20, 2022. The dividends distributed to the owners are as follows:

Cash	2022 Allotment rate (dollar) Amount $ 0.85 85,775	2021 Allotment rate (dollar) Amount 0.55 55,501
	Allotment rate (dollar)	Allotment rate (dollar)
	$ 0.85	0.55

～ 21 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

Other equity (net of tax)

Financial statements translation differences of foreign operations	Unrealized Valuation Gains or Losses on Financial Assets Measured at Fair Value through Other Comprehensive Income	Total (200,139) 25 46,166
$ (209,197) - 46,166	9,058 25 -
$ (163,031)	9,083	(153,948)
Financial statements translation differences of foreign operations	Unrealized Valuation Gains or Losses on Financial Assets Measured at Fair Value through Other Comprehensive Income	Total (252,634) (1,178) (14,588)
$ (258,393) - (14,588)	5,759 (1,178) -
$ (272,981)	4,581	(268,400)

～ 22 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

(XIII) Earnings per share

The consolidated company’s basic EPS and diluted EPS are calculated as follows:

2023 April to June $ 50,858	2022 April to June	2022 January to June 82,352
100,912	100,912 100,912	100,912
$ 0.50	0.51 1.01	0.82
2023 April to June $ 50,858	2022 April to June	2022 January to June 82,352
$ 50,858	51,674 101,589	82,352
100,912 112	100,912 100,912 133 498	100,912 404
101,024	101,045 101,410	101,316
$ 0.50	0.51 1.00	0.81

～ 23 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

(XIV) Revenue from Contracts with Customers

Details of Revenue

2023 April to June $ 201,293 23,496 22,569 30,421 134,495 35,211 256,125	2023 April to June $ 201,293 23,496 22,569 30,421 134,495 35,211 256,125	2022 April to June	2023 January to June 356,908 63,717 50,930 61,475 269,444 76,039 524,862	2022 January to June 300,810 117,815 74,313 71,656 211,717 56,373 442,845
		188,820 55,834 31,810 35,684 108,798 29,468 229,722
$ 703,610		680,136	1,403,375	1,275,529
$ 310,563 181,167 211,880		292,143 202,113 185,880	679,037 337,936 386,402	613,000 311,704 350,825
$ 703,610		680,136	1,403,375	1,275,529
			2022.12.31 16,065 499,065 (7,123)	2022.6.30 19,063 444,289 (4,792)
	$ 580,373		508,007	458,560

2. Contract Balance

Please Refer to Note 6 (3) for Accounts Receivable and its’ Impairment.

(XV) Remuneration to employees and the directors

According to the Article of Incorporation of the Company as approved by the Board of Directors, if the Company has profits, it shall appropriate 5% ~ 15% as remuneration to

～ 24 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

employees and not more than 2% as remuneration to the directors. If the company has accumulated losses, the profit earned shall be reserved to make up the losses. Recipients entitled to receive shares or cash distributed as employee remunerations include employees of controlled companies and subordinate companies meeting certain requirements.

The Company’s remuneration to employees and Directors are estimated using the profit before tax and before netting of the remuneration in each period to multiply a designated percentage specified in the Article of Incorporation. The distribution would be recorded as operating costs or operating expenses of each period. Any difference between amount actually distributed and the estimate is treated as change of accounting estimate, and is recognized as profit or loss in the next year.

Detail of the abovementioned estimations are as follows:

Remuneration to employee Remuneration to Directors	2023 April to June $ 4,300 990	2022 April to June	2022 January to June 5,750 1,200
	$ 5,290	3,800 11,340	6,950

For the years 2022 and 2021, the Company appropriated NT$15,634 thousand and NT$9,429 thousand for employees' remuneration and NT$3,518 thousand and NT$2,121 thousand for directors' remuneration, respectively, which were not different from the actual distribution amounts. The relevant information can be found on the MOPS.

(XVI) Non-operating income and expenditures

1. Interest Income

Details of interest income of the consolidated company as follows:

Bank deposits interest other interest Income Interest Income	2023 April to June $ 981 14	2022 April to June	2022 January to June 1,236 17
	$ 995	539 1,969	1,253

～ 25 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

2. Other Income

Details of other income of the consolidated company as follows:

Dividend Income Rental income Commission income Other Income	2023 April to June $ - - 63	2022 April to June	2022 January to June 88 - -
	$ 63	88 98	88

3. Other Profits and Losses

Details of other profits and losses of the consolidated company, as follows:

Loss on Disposal of Property, Plant and Equipment Foreign exchange (loss) gain Others Net of Other Gains and Losses	2023 April to June $ (587) 3,972 7,306	2022 April to June	2022 January to June (29) (5,609) 15,066
	$ 10,691	9,474 22,047	9,428

4. Financial Costs

Details of financial costs of the consolidated company as follows:

Lease liabilities interest amortization Bank Borrowings Financial Costs	2023 April to June $ (235) (3,023)	2022 April to June	2022 January to June (416) (3,761)
	$ (3,258)	(2,216) (7,001)	(4,177)

(XVII) Financial Instruments

Except for the following, there were no significant changes in the fair value of and the exposure to credit risk, liquidity risk, and market risk due to the consolidated company's financial instruments. For related information, please refer to Note 6 (17) to the 2022 Consolidated Financial Statements.

～ 26 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

Foreign exchange risk
(1) Risk Exposure of Exchange Rate Risk

Financial assets and liabilities of the consolidated company that are exposed to significant foreign currency exchange rate risk are as follows:

	2023.6.30	NTD 104,662 144,132 4,214 4,449 34,005 149,237 19,651 NTD 123,393 125,219 11,720 2,195
Foreign currency	Exchange rate
$ 3,361 4,263 107 1,039 1,092 4,414 499	31.1400 33.8100 39.3800 4.2820 31.1400 33.8100 39.3800 2022.12.31
Foreign currency	Exchange rate
$ 4,018 3,827 316 498	30.7100 32.7200 37.0900 4.4080 2022.12.31
Foreign currency $ 1,487 5,282 618	Exchange rate	NTD
	30.7100 32.7200 37.0900	45,666 172,827 22,922

～ 27 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

Financial assets Monetary item USD Euro GBP RMB Financial liability Monetary item USD Euro GBP		2022.6.30	NTD 129,549 90,076 6,096 7,808 84,910 135,844 10,172
	Foreign currency	Exchange rate
	$ 4,359 2,901 169 1,759 2,857 4,375 282	29.7200 31.0500 36.0700 4.4390 29.7200 31.0500 36.0700

The consolidated company’s exchange rate risk is mainly from cash and cash equivalents, accounts receivable and other receivables, short-term borrowings, accounts payable and other payables denominated in foreign currency and the foreign exchange gain or loss upon translation to NTD. On June 30, 2023 and 2022, when NTD depreciated against USD, Euro, GBP and RMB by 2% and on the condition that all other factors remained the same, the net income before tax for the period from January 1 to June 30, 2023 and 2022, of the consolidated company would increase or decrease by NT$1,091 thousand and NT$52 thousand, respectively. Analyses of these two periods adopted the same basis.

Since the consolidated company has a wide variety of functional currencies, it adopts the aggregated exposures of the exchange gains and losses information of the monetary items. The gain (losses) on foreign currency exchange (including realized and unrealized) for the period from January 1 to June 30, 2023 and 2022, were NT$3,363 thousand and NT$ (5,609) thousand, respectively.

2. Information on fair value

(1) Category and fair value of the financial instruments

The consolidated company through the financial assets measured at fair value and Financial Assets Measured at fair value through other comprehensive income as measured at fair value on a recurring basis. All kinds of carrying value and fair value of financial assets and liabilities (Including information on the level of fair value, financial instruments not measured by fair value but with carrying value reasonably approximates to the fair value, as well as the rental liability, so no fair value information is required to

～ 28 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

be disclosed in accordance of rules) are listed as follows:

		2023.6.30	2023.6.30	Total 19,190
Carrying Amount $ 19,190		Fair Value
	Level 1 -	Level 2 -	Level 3 19,190
462,725 123,036 580,373 25,005	- - - -	- - - -	- - - -	- - - -
1,191,139	-	-	-	-
$ 1,210,329	-	-	19,190	19,190
$ 224,577 129,936 123,450 274,718 52,641	- - - - -	- - - - -	- - - - -	- - - - -
$ 805,322	-	-	-	-

～ 29 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

		2022.12.31	2022.12.31	Total 19,165
Carrying Amount $ 19,165		Fair Value
	Level 1 -	Level 2 -	Level 3 19,165
445,280 105,162 508,007 29,118	- - - -	- - - -	- - - -	- - - -
1,087,567	-	-	-	-
$ 1,106,732	-	-	19,165	19,165
$ 295,357 131,526 175,059 210,431 58,553	- - - - -	- - - - -	- - - - -	- - - - -
$ 870,926	-	-	-	-

～ 30 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

		2022.6.30	2022.6.30	Total 14,688
Carrying Amount $ 14,688		Fair Value
	Level 1 -	Level 2 -	Level 3 14,688
452,757 126,021 458,560 20,558	- - - -	- - - -	- - - -	- - - -
1,057,896	-	-	-	-
$ 1,072,584	-	-	14,688	14,688
		2022.6.30		Total - - - - -
Carrying Amount $ 420,535 125,532 208,595 211,381 57,779		Fair Value
	Level 1 - - - - -	Level 2 - - - - -	Level 3 - - - - -
$ 1,023,822	-	-	-	-

～ 31 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

(2) Knowhow to measure fair value of financial instruments that are not measured with fair value.

The methodology and assumptions the consolidated company uses to estimate the financial instruments not measured at fair value are as follows:

Financial liabilities measured with amortized cost

If there is a closing report or quotation to make the deal available, the price for the transaction just closed recently and the quotation price can be used as a basis to estimate the fair value. If there is no market price for reference, the valuation method shall be used for the estimate. The estimate and assumption used for valuation is the fair value estimated by present value of cash flow.

(3) Know how to evaluate the fair value for financial assets measured at fair value.
(3.1) Non-derivative financial instruments

If quoted prices in active markets are available, they are used as fair value. Market prices announced by major exchanges are bases for fair value of the equity instruments listed in the market.

For financial instruments held by the consolidated company, if quoted prices in active market are available, their fair values are listed in accordance with categories they belong to and their natures as follows:

As mutual fund beneficiary certificates are financial assets with standard terms and conditions and traded in an active market, their fair value is determined referencing the quoted price in the active market.

Except for the above-mentioned financial instruments with an active market, the fair value of the remaining financial instruments is obtained by the valuation techniques. Fair value obtained through the valuation techniques may be referenced to the current available fair value, discount cash flow method or valuation techniques of other financial instruments of similar natures and features, including value obtained through market information calculation model on the consolidated balance sheet.

(3.2) Derivative Financial Instruments

Valuated according to the valuation model widely accepted by the market users. The structured interest rate derivative financial instruments are based on appropriate pricing models or other valuation methods.

(4) Quantitative Information of Fair Value Measurement for the Significant Unobservable Inputs (the third level)

The consolidated company fair value measurement classified as the third level is

～ 32 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

financial assets measured at fair value through other comprehensive income – equity security investment.

The consolidated company’s fair value is classified as the third level provided with single significant unobservable input. The equity instrument investment without an active market only is provided with multiple significant unobservable inputs. The significant unobservable inputs of equity instrument investments without an active market are independent from each other, so no interrelationship exists.

The quantitative information of the significant unobservable inputs is listed as below:

Item	Technique Valuation Analogy Listed and Over-the- counter Company Law	Significant Unobservable Inputs	Relationship Between Significant Unobservable Input and Fair Value
Financial Assets Measured at Fair Value Through Other Comprehensive Income - Equity Instrument Investment Without an Active Market		‧Discount for lack of marketability (25% as of 2023.6.30, 2022.12.31 and 2022.6.30)	‧The higher the discount for lack of marketability is, the lower the fair value is.

(5) From January 1 to June 30, 2023 and January 1 to June 30, 2022, there is no transfer in the fair value hierarchy of the financial assets.

(XVIII) Financial risk management

The consolidated company’s financial risk management objectives and policies are not significantly different from those disclosed in Note 6 (18) to the 2022 Consolidated Financial Statements.

(XIX) Capital Management

The consolidated company’s capital management objectives, policies, and procedures are the same as those disclosed in the 2022 Consolidated Financial Statements. In addition, there were no significant changes to the aggregate quantitative information of the capital management items from those disclosed in the 2022 consolidated financial statements. Relevant information please refer to Notes 6 (19) in the 2022 consolidated financial statements.

～ 33 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

VII. Related Party Transactions

(I) Names and relationships of related parties

The related parties who are involved in the transactions with the consolidated company during the period covered by these consolidated financial statements are as follows: Names of related parties Relation with the consolidated company Studio88 Design Corp. Its President and the Chairman of the Company are first-degree relatives Wen Chuan Investment Development Its President is the spouse of the Chairman Co., Ltd of the Company Li, Chao Yi The individual and the Chairman of the Company are first-degree relatives

(II) Significant transactions with the related parties
Accounts payable from related parties

The details of the consolidated company’s accounts payable from the related parties is as follows:

Items listed in the account Category of the related parties	2023.6.30 $ 39	2022.12.31 2022.6.30 30 29
Other Payable - Related Party Other related parties

Other transactions

	Operating	Expenses	2022 January to June 15,000 88	Other Income (Listed as Other Profits and Losses) 2023 April to June 2022 April to June 2023 January to June 2022 January to June - - - - - - 11 11	Other Income (Listed as Other Profits and Losses) 2023 April to June 2022 April to June 2023 January to June 2022 January to June - - - - - - 11 11	Other Income (Listed as Other Profits and Losses) 2023 April to June 2022 April to June 2023 January to June 2022 January to June - - - - - - 11 11	Other Income (Listed as Other Profits and Losses) 2023 April to June 2022 April to June 2023 January to June 2022 January to June - - - - - - 11 11	Other Income (Listed as Other Profits and Losses) 2023 April to June 2022 April to June 2023 January to June 2022 January to June - - - - - - 11 11	Other Income (Listed as Other Profits and Losses) 2023 April to June 2022 April to June 2023 January to June 2022 January to June - - - - - - 11 11
2023 April to June	2022 April to June	2023 January to June				2022 April to June	2023 January to June
$ - 134	12,500 88	- 217		- -		- -	- 11
$ 134	12,588	217	15,088	-		-	11		11
			Receipts in advance (Listed as Other Current Liabilities) 2023.6.30 2022.12.31 2022.6.30 $ 11 23 -
			2023.6.30		2022.12.31
			$ 11		23			-

～ 34 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

(III) Transactions regarding key management

Remuneration to Key management includes:

Short term employee benefits Benefits after resignation	2023 April to June	2022 April to June 2023 January to June 2,152 6,755 72 144	2022 January to June 6,952 180
	$ 3,646 81
	$ 3,727	2,224 6,899	7,132

VIII. Pledged Assets

The book value of the pledged assets of the consolidated company is as follows:

Assets	Objectives of the pledged assets	2023.6.30 $ 15,000 279,815 156,950 9,124	2022.12.31 15,000 279,492 158,526 11,190	2022.6.30 15,000 278,235 157,034 8,211
Time deposit certificate (financial assets measured with amortized cost) Land Building and construction, net Transportation vehicles, net	Export bill negotiation facility Bank Borrowings Bank Borrowings Bank Borrowings
		$ 460,889	464,208	458,480

IX. Significant contingent liabilities and unrecognized contract commitments

As of June 30, 2023, December 31, 2022, and June 30, 2022, the credit card guarantee applied

by the consolidated company to the bank for the use of credit cards in its operation amounted to NT$1,500 thousand.

X. Significant Disaster Loss: None.

XI. Significant Events: None.

～ 35 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

XII. Others

Employee benefits, depreciation, depletion and amortization expenses are summarized by their

functions in the table below:

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By Function 2023 2022
April to June April to June
Included Included Included Included
Total Total
By Nature in in in in
Operating Operating Operating Operating
Costs Expenses Costs Expenses
Employee Benefit Expenses
Salary Expenses 36,309 118,092 154,401 42,576 91,452 134,028
Labor Insurance and 3,850 9,033 12,883 3,546 7,658 11,204
Health Insurance Expenses
Pension Fund Expenses 2,766 4,938 7,704 2,545 4,619 7,164
Remuneration to - 2,189 2,189 - 1,881 1,881
Directors
Other Employee Benefit 2,427 3,771 6,198 2,068 3,342 5,410
Expenses
Depreciation 8,505 9,408 17,913 10,606 8,799 19,405
Amortization 2 4,743 4,745 12 4,494 4,506
By Function January to June, 2023 January to June, 2022
Included Included Included Included
Total Total
By Nature in in in in
Operating Operating Operating Operating
Costs Expenses Costs Expenses
Employee Benefit Expenses
Salary Expenses 77,340 229,878 307,218 83,485 206,548 290,033
Labor Insurance and 7,519 17,782 25,301 6,936 15,509 22,445
Health Insurance Expenses
Pension Fund Expenses 5,350 9,965 15,315 4,929 9,149 14,078
Remuneration to - 4,508 4,508 - 3,690 3,690
Directors
Other Employee Benefit 4,651 7,213 11,864 4,438 6,826 11,264
Expenses
Depreciation 18,033 18,393 36,426 21,233 17,473 38,706
Amortization 5 9,212 9,217 24 8,978 9,002
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～ 36 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

XIII. Additional Disclosure

(I) Information on significant transactions

Consolidated company as required by Regulations Governing the Preparation of Financial Reports by Securities Issuers of January 1 to June 30, 2023, information of significant transaction that should be disclosed is as follows:

Loan to others:

Unit: New Taiwan Dollars in thousands

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Maximum Nature Amount of Reason for Guarantee Limit on Maximum
No. making the Company loan Borrower General accountLedger Related Party outstanding during the balance Period balance Ending drawn downamount Actual Interest rangerate (NoteLoanof 6) transactions borrowerswith the short term financingbusiness Allowancefor bad debt Name Value granted to a single ploan arty financinglimit of fund
1 ComfortPro Apex Other Yes 40,005 38,538 38,538 - 2 - Operation - No - 128,273 256,546
Investment (Kunshan) Receivable turnover
Corp.(Note Medical (RMB9,000) (RMB9,000) (RMB9,000)
1) Corp.
1 ComfortPro Wellell Other Yes 11,844 11,834 11,834 - 2 - Operation - No - 128,273 256,546
Investment France Receivable turnover
Corp. (Note S.A.S (EUR350) (EUR350) (EUR350)
1)
2 Apex Medical Wellell Other Yes 28,764 28,739 28,739 1 2 - Operation - No - 380,173 760,346
Respiratory Germany Receivable turnover
Ltd.(Note 2) GmbH (EUR850) (EUR850) (EUR770)
2 Apex Medical Wellell Other Yes 20,304 20,286 20,286 - 2 - Operation - No - 380,173 760,346
Respiratory France Receivable turnover
Ltd.(Note 2) S.A.S (EUR600) (EUR600) (EUR600)
2 Apex Medical Wellell Other Yes 15,570 15,570 15,570 2 2 - Operation - No - 380,173 760,346
Respiratory America Receivable turnover
Ltd.(Note 2) Corp. (EUR500) (EUR500) (EUR500)
3 Apex Global Wellell Other Yes 16,920 16,905 16,905 - 2 - Operation - No - 173,599 347,198
Investment France Receivable turnover
Ltd.(Note 3) S.A.S (EUR500) (EUR500) (EUR500)
3 Apex Global Wellell UK Other Yes 19,690 19,690 19,690 - 2 - Operation - No - 173,599 347,198
Investment Limited Receivable turnover
Ltd.(Note 3) (GBP500) (GBP500) (GBP500)
4 SLK Vertriebs Wellell Other Yes 16,243 16,229 16,229 1 2 - Operation - No - 93,373 186,745
GmbH(Note Germany Receivable turnover
4) GmbH (EUR480) (EUR480) (EUR480)
----- End of picture text -----

Note 1: ComfortPro Investment Corp. according to the “operation procedures for lending to others”, the amount of lending of funds to a 100%-owned subsidiary of the Group shall not exceed 100% of the amount of the net worth of the company; also the amount of each lending of funds should not exceed 50% of the net worth of the company.
Note 2: Apex Medical Respiratory Ltd. according to the “Operation procedures for lending to others,” when providing loans to the wholly-owned subsidiary of the Group, the amount of such financing facility shall not exceed 100% of the amount of the net worth of the lending enterprise; also the amount lent to each individual should not exceed 50% of the net worth of the company.
Note 3: In the case of Apex Global Investment Limited lending the fund to a 100% owned subsidiary of the Group, in accordance with its “Operation procedures for lending to others”, the total amount of such lending shall not exceed 100% of the net value of the company; also the amount lent to each individual should not exceed 50% of the net worth of the company.
Note 4: SLK Vertriebs GmbH, according to the “Operation procedures for lending to others,” when providing loans to the wholly-owned subsidiary of the Group, the amount of such financing facility shall not exceed 100% of the amount of the net worth of the lending enterprise; also the amount lent to each individual should not exceed 50% of the net worth of the company.
Note 5: 1. Transaction with others. 2. short-term financing facility is necessary.
Note 6: The above transactions were eliminated when the consolidated financial reports were prepared.

～ 37 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

2. Endorsement/guarantee provided for others:

Unit: New Taiwan Dollars in thousands

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Endorsed/Guaranteed Endorsement Endorsement
Name of Party Endorsemen Maximum Endorsement Percentage of /Guarantee /Guarantee Attributed
Company t/Guarantee Endorseme Endorsemen Actual /Guarantee Accumulated Maximum Attributable Attributable to the
Provided nt/Guarant t/Guarantee amount Endorsement/Gua Endorsement/ to the Parent to the Endorseme
No. Relatio Limit to Amount
ment/GuEndorse Name of the Company nship Single of Current ee Balance Period EndBalance at drawn down collateralized rantee Amount to Net Financial Guarantee Amount Provided to Company Provided to Subsidiary nt/Guarantee for the
arantee (Note 4) Enterprise Period by assets Statement the the Parent China Area
Subsidiary Company
0 Wellell Wellell Germany 2 1,141,635 207,778 207,593 151,152 - 9.09% 1,141,635 Y N N
Inc. GmbH(Note 2) (EUR6,140) (EUR6,140) (EUR4,471)
0 Wellell Wellell America 2 1,141,635 46,710 46,710 7,162 - 2.05% 1,141,635 Y N N
Inc. Corp. (Note 3) (USD1,500) (USD1,500) (USD 230)
----- End of picture text -----

Note 1: The endorsement/guarantee for outsiders cannot exceed 50% of the net worth of the period. The endorsement/guarantee for a single enterprise cannot exceed 25% of the net worth of the period. But the endorsement/guarantee for the Company directly or indirectly hold 100% voting shares cannot exceed 50% of the net worth of the period.
Note 2: The Board of Directors approved the Company providing endorsement/guarantee to the 100% held subsidiary, Wellell Germany GmbH GmbH, within 6.14 million euros.
Note 3: The Board of Directors approved the Company providing endorsement/guarantee to the 100 % held subsidiary, Wellell America Corp., within 1.5 million US dollars.
Note 4: There are 7 types of relationships between guarantor and guarantee as below. Marking the type is sufficient:
Business related companies.
Over 50% voting shares directly or indirectly held by the Company.
Companies directly or indirectly have more than 50% of the voting shares.
Over 90% voting shares directly or indirectly held by the Company.
Mutual guarantee by peers or mutual builders per contract term based on contract constructions.
Company endorsed/guaranteed by all shareholders per share proportions for a mutual investment relationship.
Escrow joint guarantee between peers for pre-sold house contract under Consumer Protection Act.
The status of holding securities at the end of period (not including the portions by the

invested subsidiaries, related parties and joint ventures):

Unit: New Taiwan Dollars in thousands / thousand shares

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Maximum
End of Period
Relationship with shares held
Securities held by Category and name of securities the securities issuer General Ledger Accounts [Numbers of ] shares Carrying Amount % of shares held Fair Value investment for capital Remark
in this period
Wellell Inc. G Innings Medical Ltd. No Financial Assets through 900 16,045 18.95 % 16,045 18.95%
Other Comprehensive
Income measured at Fair
Value - Non-current
Wellell Inc. MAGnet No Financial Assets through - 3,145 5.00 % 3,145 5.00%
Other Comprehensive
Income measured at Fair
Value - Non-current
----- End of picture text -----

Marketable securities acquired or disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital: None.
Acquisition of individual real estate properties at costs of at least NT$300 million or 20% of the paid-in capital: None.
Disposal of individual real estate properties at prices of at least NT$300 million or 20% of

～ 38 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

the paid-in capital: None.

Total purchases from or sales to related parties of at least NT$100 million or 20% of the paid-in capital: None.
Accounts receivable from related parties of at least NT$100 million or 20% of the paid-in capital: None.
Whether engaging in the transaction of derivative instruments: None.
Business relationship between the parent and subsidiaries and status of the important transactions:

Unit: New Taiwan Dollars in thousands

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Status of transactions
Relationshi
p with % of total
No. Name of counterparty Party transacted with related parties Account Amount Terms of transactions revenues or total consolidated
assets
0 Wellell Inc. Apex Medical S.L. 1 Sales revenues 81,751 The sales price is 5.83%
comparatively lower than
the general customers due
to larger sales volumes.
0 Wellell Inc. APEX MEDICAL CORP. 1 Sales revenues 28,287 The same as those 2.02%
provided to the non-related
parties
0 Wellell Inc. Wellell France S.A.S. 1 Sales revenues 39,757 The same as those 2.83%
provided to the non-related
parties
0 Wellell Inc. Wellell UK Limited 1 Sales revenues 23,269 The same as those 1.66%
provided to the non-related
parties
0 Wellell Inc. Wellell Taiwan Corp. 1 Sales revenues 14,241 The same as those 1.01%
provided to the non-related
parties
1 Apex (Kunshan) Medical Corp. Wellell Inc. 2 Sales revenues 71,285 The sales price is 5.08%
comparatively lower than
the general customers due
to larger sales volumes.
1 Apex (Kunshan) Medical Corp. APEX MEDICAL CORP. 3 Sales revenues 42,866 The same as those 3.05%
provided to the non-related
parties
1 Apex (Kunshan) Medical Corp. Wellell (Kunshan) Co., Ltd 3 Sales revenues 23,216 The same as those 1.65%
provided to the non-related
parties
0 Wellell Inc. Apex Medical S.L. 1 Accounts 83,688 The collection term is 180 2.60%
Receivable days after the monthly cut-
off day
0 Wellell Inc. Wellell France S.A.S. 1 Accounts 40,983 The payment term is 180 1.27%
Receivable days after bill of lading
date.
0 Wellell Inc. Sturdy Industrial Co., Ltd 1 Other 32,430 According to regulations 1.00%
Receivable
3 ComfortPro Investment Corp. Apex (Kunshan) Medical 3 Other 38,538 In accordance with the 1.20%
Corp. Receivable contract
----- End of picture text -----

Note 1. The number is filled out as follows:

1.0 Representing Parent Company.
The subsidiary is numbered in the sequence of Arabic numerals starting from 1.

Note 2: The category of relationship with counterparty is marked as follows:

Parent to subsidiary.
Subsidiary to parent.
Subsidiary to subsidiary.
Note 3: For business relationships between the parent company and the subsidiary, only information of sales and accounts receivable are disclosed. The corresponding purchases and accounts payable

～ 39 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

are not addressed again. Note 4: The above transactions were eliminated when the consolidated financial reports were eliminated.

(II) Information on investees:

The information of reinvestment business of the consolidated company for January 1 to June 30, 2023 is as follows (not including investment to Mainland China):

Unit: NTD in thousand/USD in thousand

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Initial investment Shares held as at the end of Investment
amount period Maximum income
shares held Net income (loss)
Name of investor Investee Name Location operating Major items current End of period End of last year (thousand)shares [Percentage] Carrying Amount investment period in this or of investee for this period recognized company for the by the Remark
period
The Company Apex Global Investment British Virgin Investment on 354,319 354,319 10,534 100% 346,314 100% 6,385 6,385 [Subsidiary]
Ltd. Islands, businesses
Tortola engaging in
manufacturing
〃 Wellell America Corp. U.S.A., Sales of medical 16,564 16,564 50 100% (9,561) 100% (2,478) (2,478) 〃
California, supplies
Orange
〃 Apex Medical S.L. Spain, Vizcaya Sales of medical 4,855 4,855 - 100% 282,873 100% 43,194 43,194 〃
supplies
〃 Sturdy Industrial Co., LtdTaiwan Manufacturing 328,294 328,294 10,000 100% 305,114 100% 5,551 5,633 〃
and sales of
medical
supplies
〃 Wellell India Private India, Delhi Sales of medical 27,741 27,741 6,458 99.82% 879 99.82% (370) (370) 〃
Limited supplies
〃 Wellell (Thailand) Ltd. Thailand Sales of medical 2,271 2,271 245 49% 1,537 49% 612 300 〃
supplies
〃 Apex Medical United Kingdom Investment on 691,344 780,354 7,180 100% 728,168 100% (3,513) (3,513) 〃
Respiratory Ltd. businesses
engaging in
manufacturing
〃 Wellell Germany GmbH Germany Investments in 92,610 92,610 25 100% 68,733 100% 2,486 2,486 〃
Dortmund various
production
businesses and
leasing business
The Company APEX MEDICAL Taiwan Sales of medical 1,000 1,000 100 100% 16,501 100% 14,585 14,585 [Subsidiary]
CORP. supplies
〃 Wellell Taiwan Corp. Taiwan Sales of medical 30,000 - 3,000 100% 29,334 100% (666) (666) 〃
supplies
Apex Global ComfortPro Investment Republic of Investment on 297,731 297,731 9,100 100% 256,546 100% (3,493) (3,493) 〃
Investment Ltd. Corp. Mauritius, businesses
Port Louis engaging in
manufacturing
〃 Max Delight Holding Apia, Samoa Investment on 8,686 8,686 270 100% 47,611 100% 9,880 9,880 〃
Limited businesses
engaging in
manufacturing
〃 Wellell India Private India, Delhi Sales of medical 55 55 12 0.18% 2 0.18% (370) (1) 〃
Limited supplies
Apex Medical Wellell UK Limited United Kingdom Sales of medical 767,718 767,718 - 100% 277,178 100% (7,284) (7,284) 〃
Respiratory Ltd. supplies
〃 SLK-Vertriebs Germany Sales and 391,891 391,891 1,048 100% 407,410 100% 17,793 11,328 〃
Dortmund leasing of
medical
supplies
〃 SLK-Medical Germany Sales and 22,549 22,549 25 100% 34,431 100% 574 248 〃
Dortmund leasing of
medical
supplies
〃 Wellell France S.A.S. France, Sales of medical 394 394 - 100% (16,589) 100% (6,652) (6,652) 〃
Ecouflant supplies
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～ 40 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

Note 1: The above transactions were eliminated when the consolidated financial reports were prepared. Note 2: The liquidation process was completed on September 5, 2022.

(III) Information regarding investment in Mainland China:

1. Information on investment in Mainland China:

Unit: NTD in thousand/USD in thousand

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----- Start of picture text -----

Amount remitted or Accumulate Accumula
Accumulated investment amount d amount of Investment ted
Maximum Book
amount of remitted back for remittance Net income Ownership shares held income (loss) value of amount of
Mainland ChinaInvestee in Major operating items Paid-in capital Investmmethodent from Taiwan beginning of remittance this periodfor the Remitting tothe current Remitting peback riod China as of Taiwan to the end of Mainland from of investee for this period held by the Company (direct or indirect) investment period in this or Company for recognized the period (Note 2) by the ts as of the investmenend of the period investmenback as of the end of t income remitted
the period the period
Apex Medical Manufacturing 23,352 (I) 23,239 - - 23,239 - -% - % - - -
(Shanghai) Corp. and Sales of (USD710) (USD710) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1)
medical supplies
Apex (Kunshan) Manufacturing 231,103 (I) 231,103 - - 231,103 (2,127) 100.00% 100.00% (3,483) 198,417 -
Medical Corp. and Sales of (USD7,100) (USD7,100)
medical supplies
Kunshan Co Wei Manufacturing 25,316 (I) 25,487 - - 25,487 - -% - % - - -
Plastic Product and sales of plastic (USD842) (USD842) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1)
Corp. products
Wellell Sales of medical 8,041 (I) 8,041 - - 8,041 9,879 100.00% 100.00% 9,879 29,860 -
(Kunshan) Co., Ltd supplies (USD250) (USD250)
----- End of picture text -----

Note: Investment methods can be classified as follows: (I): Investment by 100% owned subsidiary set up in the third area. Note 1: Shanghai Apex was liquidated in February 2013; Kunshan Kewei was liquidated in February 2016. Note 2: The above transactions were eliminated when the consolidated financial reports were prepared.

2. Maximum amount to invest in Mainland China:

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----- Start of picture text -----

Accumulated amount of Limit of the
Investment Amounts
Remittance from Taiwan to Investment
approved by Investment
Mainland China as of the end Commission, MOEA to
Commission, MOEA
of the period invest in Mainland
China
287,870 287,870 1,369,962
(US$8,902 thousand) (US$8,902 thousand)
----- End of picture text -----

3. Significant transactions with the invested companies in Mainland China:

For the significant transactions conducted with investees in Mainland China directly or indirectly for January 1 to June 30, 2023 (eliminated when preparing consolidated statements). Please refer to the explanations in “relevant information of the significant transactions” in the consolidated financial statements.

～ 41 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

(IV) Information on major shareholders

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----- Start of picture text -----

Shares % of shares
shareholding
Name of major shareholders held
CDIB Capital Growth Partners 11,526,000 11.42%
Ya Sheng Investment Development Co. 10,566,760 10.47%
Ya Shin Investment Development Co. 10,561,732 10.46%
National Development Fund, Executive Yuan 6,000,000 5.94%
----- End of picture text -----

Note: (1) The information of the major shareholders in this table is based on the TDCC's last business day of the end of each quarter. Counting the shareholders who exceed more than 5% of the total number of common stock and special stock of the company that has been non-physical registration (include treasury stock). The share capital indicated in the company's financial statement and the actual amount of non-physical registration delivered may be different due to the different counting basis.

(2) If the above-mentioned document was shareholders deliver to trust, the trustee should open up a trust account to show the individual trustee. When insiders who hold more than 10% of the shares report their shareholdings by the Securities and Exchange Act, their shareholdings should include shares hold under their name and shares under a trust in which they have the right to decide the use of the trust property. Please refer to the Market Observation Post System for insider shareholding reporting information.

XIV. Segment Information

The consolidated company is mainly engaged in the manufacture, import, export as well as sales of medical supplies. The company is operating in just one industry and all sales department of the medical supplies and associated activities were used as a whole as basis for decision making and performance evaluation. As a consequence, the operating segments and reportable segments are divided by regions:

The consolidated company operating departments and adjustment are listed below:

April to June, 2023

Europe $ 476,176 89,164	America 66,204 3,283	Asia	Adjustment and elimination
		161,230 120,689	- (213,136)
$ 565,340	69,487	281,919	(213,136)
$ 67,471	12,426	38,136	(42,997)

～ 42 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

	April to June, 2022	April to June, 2022	April to June, 2022	Total 680,136 -
Europe $ 455,721 90,186	America 79,726 73,255	Asia	Adjustment and elimination
		144,689 36,198	- (199,639)
$ 545,907	152,981	180,887	(199,639)	680,136
$ 40,836	10,111	40,262	(24,264)	66,945
	January to June, 2023			Total 1,403,375 -
Europe $ 940,683 182,299	America 130,830 13,146	Asia	Adjustment and elimination
		331,862 209,306	- (404,751)
$ 1,122,982	143,976	541,168	(404,751)	1,403,375
$ 118,930	22,849	71,620	(73,621)	139,778
	January to June, 2022			Total 1,275,529 -
Europe $ 827,989 195,002	America 159,865 73,255	Asia	Adjustment and elimination
		287,675 164,540	- (432,797)
$ 1,022,991	233,120	452,215	(432,797)	1,275,529
$ 58,563	7,810	90,956	(48,205)	109,124

As the assets/liabilities measures of the consolidated company’s reportable segments

～ 43 ～

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

were not provided for operational decision making, the measures of assets/liabilities were not disclosed.

～ 44 ～

AI assistant

WELLELL — Interim / Quarterly Report 2023

52381_rns_2023-12-25_ae177f3a-3341-4fa8-a6a2-8e6ed8ceaed2.pdf

Wellell Inc. and Subsidiaries

Consolidated Financial Statements With Independent Auditors’ Review Report

Table of Contents

Independent Auditors’ Review Report

Wellell Inc. and Subsidiaries:

Introduction

Scope

Conclusion

Notes to Readers

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with Standards on Auditing as of June 30, 2023 and 2022 Wellell Inc. and Subsidiaries

Consolidated Balance Sheet

June 30, 2023, December 31, 2022, and June 30, 2022

Unit: New Taiwan Dollars in thousands

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with auditing standards Wellell Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

April 1 - June 30, 2023 and 2022, and January 1 - June 30, 2023 and 2022

Unit: New Taiwan Dollars in thousands

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

Reviewed only, not audited in accordance with auditing standards Wellell Inc. and Subsidiaries

Consolidated Statement of Change in Equity

From January 1 to June 30, 2023 and 2022

Unit: New Taiwan Dollars in thousands

Equity attributable to owners of the parent company

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with auditing standards Wellell Inc. and Subsidiaries

Consolidated Statements of Cash Flows

From January 1 to June 30, 2023 and 2022

Unit: New Taiwan Dollars in thousands

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with auditing standards Wellell Inc. and Subsidiaries

Consolidated Statements of Cash Flows (continued)

From January 1 to June 30, 2023 and 2022

Unit: New Taiwan Dollars in thousands

Wellell Inc. and Subsidiaries Notes to the Consolidated financial statements For the Six Months Ended June 30, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, except as otherwise indicated)

I. Company History

II. Financial Statements Authorization Date and Authorization Process

III. Application of new standards, amendments, and interpretations

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

IV. Summary of Significant Accounting Policies

(I) Statement of Compliance

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

(II) Basis of Consolidation

1. Subsidiaries included in the consolidated financial statements.

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

(III) Employee benefit

(IV) Income Taxes

V. Significant accounting judgments, estimations, assumptions and sources of estimation uncertainty

VI. Details of significant accounting items

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

(VI) Property, plants and equipment

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

(VII) Intangible Assets

1. New borrowings and repayments

2. Collaterals for bank loans

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

(X) Employee benefit

1. Defined benefit plan

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

2. Defined contribution plans

(XI) Income Taxes

(XII) Capital and other equity interests

1. Retained Earnings

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

2. Earnings Distribution

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

(XIII) Earnings per share

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

(XIV) Revenue from Contracts with Customers

2. Contract Balance

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

1. Interest Income

Wellell Inc. and Subsidiaries Consolidated financial statement Notes (continued)

2. Other Income

WELLELL Interim / Quarterly Report 2023