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.
6.Countermeasures:
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.