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01.04 2021

Conducts asset impairment at approximately NT3.96 billion, which has no significant impact on the operations and cash position of the company.

1.Date of occurrence of the event:2021/01/04

2.Company name:Epistar Corporation

3.Relationship to the Company (please enter ”head office” or

”subsidiaries”):head office

4.Reciprocal shareholding ratios:N/A

5.Cause of occurrence:

The Board of the company resolved today to conduct the impairment of assets

at approximately NT3.96 billion which has no significant impact on the

operations and cash position of the Company.


The Company and Lextar Electronics Corp. (hereinafter referred to as Lextar)

will jointly form ENNOSTAR Inc. (stock code: 3714) on January 6, 2021,

considering the R&D and manufacturing of new display technologies such as

mini-LED and micro-LED are the essential business in the future, the Board

of Directors meeting of the company was convened today to discuss the 2020

assessment test results of asset impairment per future business plans.

The assets which acquired by the company in 2014 from Formosa Epitaxy

Incorporation was mainly for the production of LED product which currently

is in a highly competitive situation, and the chance is very low to

switching that production line to manufacture the high-quality mini-LED

and micro-LED. After the company conducted the asset impairment test

according to the IFRS 36, the board of directors agreed to deduct all the

NT$3.18 billion of goodwill from the acquisition of Formosa Epitaxy

Incorporation and other related fixed assets by NTD350 million as

impairments of the assets. In addition, the client Unity Opto Technology

Co., Ltd. pledge the equity of their reinvestment company to the company

as collateral for accounts receivable but the deterioration of its operating

conditions was led to the impairment of accounts receivable. The amount

is approximately NTD430 million after assessing the impairment loss of

the pledged assets of accounts receivable.

The impairment amount of the assets resolved by the Board of directors

meeting of the company is approximately NTD3.96 billion and it impacts the

2020 EPS of the company by NTD3.7. The asset impairment has no significant

impact on the operations and cash position of the company, the financial

structure of the company is healthy with the cash and cash equivalent of

the company is NTD6.51 billion and the debt ratio is 26.3% by the end of

September 2020.

In addition to continuing to optimize the existing LED product portfolio,

the management team will strengthen the investment in the area of mini-LED,

micro-LED displays, smart sensing, and automotive applications. After

several years of hard work, mass sales of mini-LED will begin from this

year and the operations revenue of this year is expected to grow

substantially compared to last year.

7.Any other matters that need to be specified:

It does not affect the adjustment of the share exchange ratio of the shares

holding company with the company and the Lextar.