1.Date of occurrence of the event:2014/05/07

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.Name of the reporting media:N/A

6.Content of the report:N/A

7.Cause of occurrence:

Background:

Revenue of Epistar Group was NTD 6.24 billion in the first quarter of 2014,

an increase of 44.3% from NTD 4.32 billion for the first quarter of 2013 and

an increase of 2.4% from NTD 6.09 billion for the fourth quarter of 2013.

Gross margin for the Group was 15.2% for the first quarter of 2014, an

increase of 8.9% from 6.3% for the first quarter of 2013 and an increase

of 2.1% from 13.1% for the fourth quarter of 2013. Both Revenue and operating

income showed an increasing trend.

Due to the subsequently measurement of convertible corporate bonds made in

accordance with IFRS and that call options exercised by certain bondholders

in the first quarter of 2014, the losses of NTD 1.32 billion was reported

in the first quarter of 2014. As a result, a net loss of  NTD 0.85 billion

was recognized for the first quarter of 2014.

The following details with respect to the losses of convertible corporate

bonds are illustrated:

(1)Conversion options, call options and put options embedded in convertible

corporate bonds were stated at fair value at the balance sheet date, and

losses of NTD 0.88 billion were recognized in the first quarter of 2014.

The losses were primarily due to that the closing prices of the Company

increased from NTD 57.4 dollar on December 31, 2013 to NTD 73.1 dollar

on March 31, 2014. The valuation losses didn’t result in any cash outflow.

(2)Certain bondholders of the Company’s third oversea unsecured convertible

corporate bonds exercised call options in  2014, and the Group redeemed

bonds at the par value. As a result, losses of NTD0.44 billion were

recognized. The losses didn’t result in any additional cash outflow.

If the above facts were excluded, the Group’s profit for the first quarter

of 2014 would be NTD 0.47 billion.

8.Countermeasures:None

9.Any other matters that need to be specified:None