Exhibit 99.2



ADVANCED CHIP ENGINEERING TECHNOLOGY INC.

UNAUDITED FINANCIAL STATEMENTS

SEPTEMBER 30, 2009

AS REQUIRED UNDER RULE 3-09 UNDER REGULATION S-X



---

Advanced Chip Engineering Technology Inc.

BALANCE SHEET

September 30, 2009

(Expressed in New Taiwan Dollars)

Unaudited



|                                               |  |        |  |                    |                |  
|---------------------------------------------- |  | ------ |  | ------------------ | -------------- | -
|                                               |  | Note   |  | September 30, 2009 |               
|                                               |  | Amount | 
|ASSETS:                                        |  |        |  |                    |                |  
|Current Assets                                 |  |        |  |                    |                |  
|Cash and cash in bank                          |  | 2,3    |  | $                  | 676,158        |  
|Notes receivable, net                          |  |        |  |                    |               |  
|Accounts receivable, net                       |  | 2,4    |  |                    | 23,689,495     |  
|Other financial assets                         |  | 5,17   |  |                    | 2,269,415      |  
|Inventories, net                               |  | 2,6    |  |                    | 25,288,539     |  
|Restructed assets-current                      |  | 18     |  |                    | 100,000        |  
|Prepayments and other current assets           |  |        |  |                    | 21,542,108     |  
|                                               |  |        |  |                    |                |  
|Total Current Assets                           |  |        |  |                    | 73,565,715     |  
|                                               |  |        |  |                    |                |  
|Property, Plant and Equipment                  |  | 2,7    |  |                    |                |  
|Cost                                           |  |        |  |                    |                |  
|Land                                           |  |        |  |                    | 136,183,400    |  
|Buildings and facilities                       |  |        |  |                    | 474,776,423    |  
|Machinery and equipment                        |  |        |  |                    | 1,159,786,988  |  
|Transportation equipment                       |  |        |  |                    | 453,887        |  
|Office equipment                               |  |        |  |                    | 29,782,649     |  
|Leasehold improvements                         |  |        |  |                    | 6,743,425      |  
|Other equipment                                |  |        |  |                    | 13,018,989     |  
|                                               |  |        |  |                    |                |  
|Total Cost                                     |  |        |  |                    | 1,820,745,761  |  
|Less: Accumulated depreciation                 |  |        |  |                    | (637,311,455   | )
|Accumulated impairment                         |  |        |  |                    | (101,709,257   | )
|payment for equipment                          |  |        |  |                    | 18,226,451     |  
|                                               |  |        |  |                    |                |  
|Net Fixed Assets                               |  |        |  |                    | 1,099,951,500  |  
|                                               |  |        |  |                    |                |  
|Intangible Assets                              |  |        |  |                    |                |  
|Computer software                              |  | 2      |  |                    | 4,849,714      |  
|                                               |  |        |  |                    |                |  
|Other Assets                                   |  |        |  |                    |                |  
|Refundable deposits                            |  |        |  |                    | 480,000        |  
|                                               |  |        |  |                    |                |  
|Total Assets                                   |  |        |  | $                  | 1,178,846,929  |  
|                                               |  |        |  |                    |                |  
|LIABILITIES AND STOCKHOLDERS EQUITY:          |  |        |  |                    |                |  
|Current Liabilities                            |  |        |  |                    |                |  
|Short-term loans                               |  | 8      |  | $                  | 39,884,150     |  
|Notes payable                                  |  |        |  |                    | 556,500        |  
|Accounts payable                               |  |        |  |                    | 17,526,723     |  
|Accounts payable-related party                 |  |        |  |                    | 12,900,000     |  
|Payable on equipment                           |  |        |  |                    | 19,443,796     |  
|Current protion of long-term loans             |  | 9      |  |                    | 57,291,422     |  
|Accrued expenses and other current Liabilities |  | 17     |  |                    | 45,903,015     |  
|                                               |  |        |  |                    |                |  
|Total Current Liabilities                      |  |        |  |                    | 193,505,606    |  
|                                               |  |        |  |                    |                |  
|Long-term loans Liabilities                    |  |        |  |                    |                |  
|Long-term loans                                |  | 9      |  |                    | 113,113,234    |  
|                                               |  |        |  |                    |                |  
|Other Liabilities                              |  |        |  |                    |                |  
|Deposites received                             |  |        |  |                    | 0              |  
|                                               |  |        |  |                    |                |  
|Total Liabilities                              |  |        |  |                    | 306,618,840    |  
|                                               |  |        |  |                    |                |  
|Stockholders Equity                           |  |        |  |                    |                |  
|Capital-common stock                           |  | 11     |  |                    | 2,237,959,810  |  
|Accumulated deficits                           |  |        |  |                    | (1,365,731,721 | )
|                                               |  |        |  |                    |                |  
|Total Stockholders Equity                     |  |        |  |                    | 872,228,089    |  
|                                               |  |        |  |                    |                |  
|Total Liabilities and Stockholders Equity     |  |        |  | $                  | 1,178,846,929  |  
|                                               |  |        |  |                    |                |  

The accompanying notes are an integral part of the financial statements



1



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Advanced Chip Engineering Technology Inc.

STATEMENT OF INCOME

FOR THE NINE MONTHS ENDED September 30, 2009

(Expressed in New Taiwan Dollars)

Unaudited



|                                                       |  |      |  |        |              |  
|------------------------------------------------------ |  | ---- |  | ------ | ------------ | -
|                                                       |  |      |  | 2009   |             
|                                                       |  | NOTE |  | Amount |             
|Operating Revenues                                     |  |      |  | $      | 128,392,003  |  
|Cost of Goods Sold                                     |  |      |  |        | 237,486,060  |  
|                                                       |  |      |  |        |              |  
|Gross profit                                           |  |      |  |        | (109,094,057 | )
|                                                       |  |      |  |        |              |  
|                                                       |  |     
|Operating expenses                                     |  |      |  |        |              |  
|Selling expenses                                       |  |      |  |        | 2,762,787    |  
|Administrative and general expenses                    |  |      |  |        | 16,179,958   |  
|Research and development expenses                      |  |      |  |        | 18,549,974   |  
|                                                       |  |      |  |        |              |  
|Total operations expenses                              |  |      |  |        | 37,492,719   |  
|                                                       |  |      |  |        |              |  
|Operating Loss                                         |  |      |  |        | (146,586,776 | )
|                                                       |  |      |  |        |              |  
|                                                       |  |     
|Non-operating income and gains                         |  |      |  |        |              |  
|Interest income                                        |  |      |  |        | 2,385        |  
|Gain on disposal of property, plant and equipment      |  |      |  |        | 1,000,000    |  
|Foreign exchange gain, net                             |  |      |  |        | 1,853,207    |  
|Rental revenue                                         |  |      |  |        | 0            |  
|Other non-operating revenue                            |  |      |  |        | 246,530      |  
|                                                       |  |      |  |        |              |  
|Total non-operating income and gains                   |  |      |  |        | 3,102,122    |  
|                                                       |  |      |  |        |              |  
|                                                       |  |     
|Non-operating expenses and losses                      |  |      |  |        |              |  
|Interest expense                                       |  |      |  |        | 4,950,432    |  
|Loss on disposal of property, plant and equipment      |  |      |  |        | 52,782,442   |  
|Foreign exchange loss, net                             |  |      |  |        | 2,057,566    |  
|Other non-operating expenses                           |  |      |  |        | 29,849       |  
|                                                       |  |      |  |        |              |  
|Total non-operating expenses and losses                |  |      |  |        | 59,820,289   |  
|                                                       |  |      |  |        |              |  
|Net loss before income tax                             |  |      |  |        | (203,304,943 | )
|Income tax benefit (expense)                           |  | 2,14 |  |        | 0            |  
|                                                       |  |      |  |        |              |  
|Net loss                                               |  |      |  |        | (203,304,943 | )
|                                                       |  |      |  |        |              |  
|Net loss per sharebasic and diluted                   |  |      |  |        | (0.91        | )
|                                                       |  |      |  |        |              |  
|Shares used in per share calculationbasic and diluted |  |      |  |        | 223,795,981  |  
|                                                       |  |      |  |        |              |  

The accompanying notes are an integral part of the financial statements.



2



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Advanced Chip Engineering Technology Inc.

STATEMENT OF SHAREHOLDERS EQUITY

(Expressed in New Taiwan Dollars)

Unaudited



|                             |        |              |        |                    |               |  |       |                |   |  |   |              
|---------------------------- | ------ | ------------ | ------ | ------------------ | ------------- |  | ----- | -------------- | - |  | - | -------------
|                             |        | Common Stock |        | AccumulatedDeficit |               |  | Total
|                             | Shares |              | Amount |                    |              
|Balances, December 31, 2008  |        | 223,795,981  |        | $                  | 2,237,959,810 |  | $     | (1,162,426,778 | ) |  | $ | 1,075,533,032
|Net loss                     |        |             |        |                    |              |  |       | (203,304,943   | ) |  |   |              
|                             |        |              |        |                    |               |  |       |                |   |  |   |              
|Balances, September 30, 2009 |        | 223,795,981  |        | $                  | 2,237,959,810 |  | $     | (1,365,731,721 | ) |  | $ | 1,075,533,032
|                             |        |              |        |                    |               |  |       |                |   |  |   |              

The accompanying notes are an integral part of the
financial statements.



3



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Advanced Chip Engineering Technology Inc.

STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED September 30, 2009

(Expressed in New
Taiwan Dollars)

Unaudited



|                                                                                            |  |      |              |  
|------------------------------------------------------------------------------------------- |  | ---- | ------------ | -
|                                                                                            |  | 2009 |             
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                       |  |      |              |  
|Net income                                                                                  |  | $    | (203,304,943 | )
|Adjustments to reconcile net income to net cash provided by (used in) operating activities: |  |      |              |  
|Depreciation                                                                                |  |      | 120,935,696  |  
|Amortization                                                                                |  |      | 2,690,979    |  
|Loss on disposal of property, plant and equipment                                           |  |      | 51,782,442   |  
|Prepayment for equipment transferred to expenses                                            |  |      | 689,440      |  
|Changes in operating assets and liabilities:                                                |  |      |              |  
|Decrease (increase) in:                                                                     |  |      |              |  
|Notes receivable                                                                            |  |      | 2,052,591    |  
|Accounts receivable                                                                         |  |      | (10,885,910  | )
|Other financial assets                                                                      |  |      | (384,214     | )
|Inventories                                                                                 |  |      | (1,826,945   | )
|Prepayments and other current assets                                                        |  |      | (1,677,772   | )
|Increase (decrease) in:                                                                     |  |      |              |  
|Notes payable                                                                               |  |      | (16,208      | )
|Accounts payable                                                                            |  |      | 6,634,243    |  
|Accrued expenses and other current Liabilities                                              |  |      | (12,348,834  | )
|                                                                                            |  |      |              |  
|Net cash provided by operating activities                                                   |  |      | (45,659,435  | )
|                                                                                            |  |      |              |  
|                                                                                            | 
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                       |  |      |              |  
|Acquision of property, plant and equipment                                                  |  |      | (4,411,211   | )
|Proceeds from disposal of property, plant and equipment                                     |  |      | 51,000,000   |  
|Decrease (Increase) in payable on equipment                                                 |  |      | (32,138,914  | )
|Decrease (Increase) intangible assets                                                       |  |      | (285,000     | )
|                                                                                            |  |      |              |  
|Net cash used in investing activities                                                       |  |      | 14,164,875   |  
|                                                                                            |  |      |              |  
|                                                                                            | 
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                       |  |      |              |  
|Increase (Decrease) in short-term loans                                                     |  |      | 6,990,870    |  
|Increase (Decrease) in accounts payablerelated party                                       |  |      | 12,900,000   |  
|Increase (Decrease) in long-term loans                                                      |  |      | (11,234,804  | )
|Decrease in deposits received                                                               |  |      | 0            |  
|                                                                                            |  |      |              |  
|Net cash provided by/(used in) financing activities                                         |  |      | 8,656,066    |  
|                                                                                            |  |      |              |  
|Net increase in cash and cash in bank                                                       |  |      | (22,838,494  | )
|Cash and cash in bank at beginning of year                                                  |  |      | 23,514,652   |  
|                                                                                            |  |      |              |  
|Cash and cash in bank at end of year                                                        |  | $    | 676,158      |  
|                                                                                            |  |      |              |  
|Supplement disclosure of cash flow information:                                             |  |      |              |  
|Interest paid during the year (excluding capitalized interest)                              |  | $    | 4,912,648    |  
|                                                                                            |  |      |              |  
|Income tax paid                                                                             |  | $    | 0            |  
|                                                                                            |  |      |              |  
|Non-cash investing and financing activities:                                                |  |      |              |  
|Capital reduction and capital surplus transferred to offset accumulated deficits            |  | $    | 0            |  
|                                                                                            |  |      |              |  
|Current portion of long-term loans payable                                                  |  | $    | 57,291,422   |  
|                                                                                            |  |      |              |  

The accompanying notes are an integral part of the financial statements.



4



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Advanced Chip Engineering Technology Inc.

Notes to Financial Statements

For the nine months ended 30 September 2009

(Expressed in New
Taiwan Dollars, Unless Otherwise Specified)



|1. | ORGANIZATION AND OPERATIONS
|-- | ---------------------------

Advanced Chip Engineering Technology Inc. (the company) was incorporated under the company Law of the Republic of China in May 2000. The companys major business activity is to engage in the business of testing and
assembling service, manufacturing and selling integrated circuit. As of September 30, 2009, the Company had 98 employees.



|2. | PRINCIPAL ACCOUNTING POLICIES
|-- | -----------------------------

The financial statements of the Company are in conformity with generally accepted accounting principles of the Republic of China. The financial reports are composed at the historical cost; the summarization of important account policy and
the measurements are as follows:



| | (1). | Current/Non current Assets and Liabilities
| | ---- | ------------------------------------------

Assets to be used up or consumed within one year are classified as current. Liabilities to be redeemed, paid or settled within one year are classified as current. All other assets and liabilities are
classified as non current.



| | (2). | Cash and Cash in bank
| | ---- | ---------------------

Cash
include cash, petty cash and cash in bank.



| | (3). | Allowance for doubtful accounts
| | ---- | -------------------------------

Allowance for doubtful accounts is provided according to the evaluation of the collection of ending balance of notes receivable and accounts receivable.



| | (4). | Inventories
| | ---- | -----------

Inventories are
stated at the lower of cost or net realizable value. Inventory write-downs are made on an item-by-item basis, except where it may be appropriate to group similar or related items. Net realizable value is the estimated selling price of inventories
less all estimated costs of completion and necessary selling costs.



| | (5). | Financial assets carried at cost
| | ---- | --------------------------------

Investments in which the Company does not exercise significant influence and that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are carried at their original cost, such as
non-publicly traded stocks and mutual funds. The costs of mutual funds and non-publicly traded stocks are determined using the weighted-average method. If there is objective evidence which indicated that a financial asset is impaired, a loss is
recognized. A subsequent reversal of such impairment loss in not allowed.

The accounting treatment for cash dividends and
stock dividends arising from financial assets carried at cost is the same as that for cash and stock dividends arising from available-for-sale financial assets.



| | (6). | Fixed assets and depreciation
| | ---- | -----------------------------

Fixed assets are states at cost less accumulated depreciation. Major renewals and betterments are capitalized while maintenance and repairs are expensed currently. Interest incurred in connection with the purchase or construction of fixed
assets is capitalized. When fixed assets are sold or disposed of,



5



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Advanced Chip Engineering Technology Inc.

Notes to Financial Statements

For the nine months ended 30 September 2009

(Expressed in New Taiwan
Dollars, Unless Otherwise Specified)



their cost and related accumulated depreciation are removed from the accounts. Any resulting loss is charged to non-operating expenses while gain is credited to non-operating income. Depreciation
is provided on the straight-line method over the useful lives. Economic lives of major property and equipment are the following:



|                         |  |                                     |  |           
|------------------------ |  | ----------------------------------- |  | ----------
|Buildings and facilities |  | 5-50 years Transportation equipment |  | 2-5 years 
|Machinery                |  | 2-5 years Leased assets             |  | 3-50 years
|Office equipment         |  | 2-5 years Other equipment           |  | 3-5 years 



| | (7). | Deferred Charges
| | ---- | ----------------



| | a. | Refundable deposits are the factory deposits.
| | -- | ---------------------------------------------



| | b. | Deferred charges mainly consist of computer software cost and moulds are amortized by the straight-line method over one to five years.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------



| | (8). | Pension
| | ---- | -------

The pension mechanism
under the Act is deemed a defined contribution plan. Pursuant to the Act, the Company has made monthly contribution equal to 6% of each employees monthly salary to employees pension accounts. For employees under defined contribution
pension costs are recorded based on the actual contributions made to employees individual pension accounts during their service periods.



| | (9). | Impairment
| | ---- | ----------

When an indication
of impairment of asset (fixed assets, equity method investments, technology cooperation assets and deferred expenses) is identified, any excess of the carrying amount of an asset over its recoverable amount is recognized as a loss. If the
recoverable amount increases in a future period, the amount previously recognized as impairment would be reversed and recognized as a gain. However, the adjusted amount may not exceed the carrying amount that would have been determined, net of
amortization, had no impairment loss been recognized.



| | (10). | Revenue
| | ----- | -------

Revenue is recognized
when the earning process is almost completed; and is realized or may be realized.



| | (11). | Foreign Currency Transactions
| | ----- | -----------------------------

Foreign-denominated transactions are recorded at rates as transactions occur. Foreign exchange gain and loss on settlement of foreign-denominated assets and liabilities and those of year-end adjustment to foreign-denominated assets and
liabilities by the spot rates then are included in current earnings.



| | (12). | Income Taxes
| | ----- | ------------

The Company
adopted the SFAS No. 22, Accounting for income taxes to make inter- and intra-period income tax allocation. Tax effects of significant deductible and taxable temporary differences, unused investment tax credits, and operating loss
carry forwards are treated as deferred tax assets and liabilities. Classification of deferred tax asset and liability as current or non-current is based on the underlying assets and liabilities and the estimated time of realization. Valuation
allowance is provided for deferred tax assets by assessing whether it is more likely than not such assets will realize. Adjustments to prior years income taxes are reflected as current income taxes.



6



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Advanced Chip Engineering Technology Inc.

Notes to Financial Statements

For the nine months ended 30 September 2009

(Expressed in New Taiwan
Dollars, Unless Otherwise Specified)



If
properties acquired meet the criteria of Statute for Upgrading Industries, investment tax credits from automatic machinery acquisition and R&D expenditures are accounted for as a deductible item to estimated income tax payable and
recognized currently.

The 10% surtax on undistributed earnings is reported as current expense on the date of the annual
stockholders meeting declaring distribution of earnings.

The R.O.C. government enacted the Alternative Minimum Tax Act
(the AMT Act), which became effective on January 1, 2006. The alternative minimum tax (AMT) imposed under the AMT Act is a supplemental tax levied at a rate of 10% which is payable if the income tax payable determined pursuant to the Income Tax
Law is below the minimum amount prescribed under the AMT Act. The taxable income for calculating the AMT includes most of the income that is exempted from income tax under various laws and statutes. The Company has considered the impact of the AMT
Act in the determination of its tax liabilities.



| | (13). | Earnings per share
| | ----- | ------------------

Basic EPS is
calculated by dividing net income by the weighted-average number of outstanding common shares.



| | (14). | Employee bonus and remunerations to directors and supervisors
| | ----- | -------------------------------------------------------------

The ARDF issued Interpretation 2007-052 on March 16, 2007 that requires companies to recognize bonuses paid to employees, directors and supervisors as compensation expenses or liabilities due to
the unpaid compensation beginning January 1, 2008. If the bonus decided by the stockholders meeting is different from the estimated amount, the difference is recognized as net income or loss for the next period.



|3. | Cash and Cash in bank
|-- | ---------------------



|                                     |  |                   |        
|------------------------------------ |  | ----------------- | -------
|                                     |  | September 30,2009
|Cash on hand                         |  | $                 | 47,002 
|Saving accounts and Foreign currency |  |                   | 629,156
|Time deposits                        |  |                   |       
|                                     |  |                   |        
|Total                                |  | $                 | 676,158
|                                     |  |                   |        



|4. | Accounts Receivable, Net
|-- | ------------------------



|                                  |  |                   |           
|--------------------------------- |  | ----------------- | ----------
|                                  |  | September 30,2009
|Accounts receivable               |  | $                 | 20,076,585
|Accounts receivable-related party |  |                   | 3,612,910 
|                                  |  |                   |           
|Total                             |  | $                 | 23,689,495
|                                  |  |                   |           



7



---

Advanced Chip Engineering Technology Inc.

Notes to Financial Statements

For the nine months ended 30 September 2009

(Expressed in New Taiwan
Dollars, Unless Otherwise Specified)



|5. | Other Financial assets
|-- | ----------------------



|                      |  |                   |          
|--------------------- |  | ----------------- | ---------
|                      |  | September 30,2009
|Return tax receivable |  | $                 | 2,233,627
|Interest receivable   |  |                   | 190      
|Other receivable      |  |                   | 35,598   
|                      |  |                   |          
|Total                 |  | $                 | 2,269,415
|                      |  |                   |          



|6. | Inventories, Net
|-- | ----------------



|                                                              |  |                   |             |  
|------------------------------------------------------------- |  | ----------------- | ----------- | -
|                                                              |  | September 30,2009 |            
|Finished goods                                                |  | $                 | 5,607,267   |  
|Work in process                                               |  |                   | 9,803,771   |  
|Raw materials and supplies                                    |  |                   | 20,699,785  |  
|Less: Allowance for inventory market decline and obsolescence |  |                   | (10,822,284 | )
|                                                              |  |                   |             |  
|Total                                                         |  | $                 | 25,288,539  |  
|                                                              |  |                   |             |  



|7. | Fixed assets
|-- | ------------



|                         |  |                    |               |                         |   |              |                       |  |   |              |   |  |   |              
|------------------------ |  | ------------------ | ------------- | ----------------------- | - | ------------ | --------------------- |  | - | ------------ | - |  | - | -------------
|                         |  | September 30, 2009
|Asset                    |  | Cost               |               | Accumulateddepreciation |   |              | Accumulatedimpairment |  |   | Book value  
|Land                     |  | $                  | 136,183,400   |                         | $ |             |                       |  | $ | (32,667,900  | ) |  | $ | 103,515,500  
|Building and facilities  |  |                    | 474,776,423   |                         |   | (95,105,697  | )                     |  |   | (3,455,100   | ) |  |   | 376,215,626  
|Machinery and equipment  |  |                    | 1,159,786,988 |                         |   | (508,411,359 | )                     |  |   | (65,586,257  | ) |  |   | 585,789,372  
|Transportation equipment |  |                    | 453,887       |                         |   | (453,887     | )                     |  |   |             |   |  |   |             
|Office equipment         |  |                    | 29,782,649    |                         |   | (20,992,469  | )                     |  |   |             |   |  |   | 8,790,180    
|Other equipment          |  |                    | 13,018,989    |                         |   | (5,604,618   | )                     |  |   |             |   |  |   | 7,414,371    
|Leased equipment         |  |                    | 6,743,425     |                         |   | (6,743,425   | )                     |  |   |             |   |  |   |             
|Construction in progress |  |                    | 1,115,702     |                         |   |             |                       |  |   |             |   |  |   | 1,115,702    
|Prepayment for equipment |  |                    | 17,110,749    |                         |   |             |                       |  |   |             |   |  |   | 17,110,749   
|                         |  |                    |               |                         |   |              |                       |  |   |              |   |  |   |              
|                         |  | $                  | 1,838,972,212 |                         | $ | (673,311,455 | )                     |  | $ | (101,709,257 | ) |  | $ | 1,099,951,500
|                         |  |                    |               |                         |   |              |                       |  |   |              |   |  |   |              



|8. | Short-term Loans
|-- | ----------------



|                   |  |                    |            
|------------------ |  | ------------------ | -----------
|                   |  | September 30, 2009
|Secured bank loans |  | $                  | 39,884,150 
|                   |  |                    |            
|                   |  | $                  | 39,884,150 
|                   |  |                    |            
|Interest rates     |  |                    | 2.40%-2.55%
|                   |  |                    |            



8



---

Advanced Chip Engineering Technology Inc.

Notes to Financial Statements

For the nine months ended 30 September 2009

(Expressed in New Taiwan
Dollars, Unless Otherwise Specified)



|9. | Long-term loans payable
|-- | -----------------------



|                      |  |                    |  |                |   |  |                    |             |  
|--------------------- |  | ------------------ |  | -------------- | - |  | ------------------ | ----------- | -
|                      |  | Period             |  | Interest rates |   |  | September 30, 2009 |            
|Secured bank loans    |  | 90.07.30-101.07.30 |  | 3.660          | % |  | $                  | 119,404,656 |  
|Equipment loans       |  | 97.04.15-103.04.15 |  | 3.532          | % |  |                    | 51,000,000  |  
|                      |  |                    |  |                |   |  |                    |             |  
|Total long-term loans |  |                    |  |                |   |  |                    | 170,404,656 |  
|Less: Current portion |  |                    |  |                |   |  |                    | (57,291,422 | )
|                      |  |                    |  |                |   |  |                    |             |  
|                      |  |                    |  |                |   |  | $                  | 113,113,234 |  
|                      |  |                    |  |                |   |  |                    |             |  

10. Pensions

The Company has a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees for services provided prior to July 1, 2005, and employees who choose to
remain under the defined benefit plan subsequent to the enforcement of the Labor Pension Act (the Act) on July 1, 2005. Under the defined benefit plan, two units are accrued for each year of service for the first 15 years and one
unit is accrued for each additional year thereafter, subject to a maximum of 45 units. Pensions paid upon retirement are based on the number of units accrued and the average monthly salaries and wages of the last six months prior to retirement. The
Company contributes monthly an amount equal to 2% of the employees monthly salaries and wages to the retirement fund deposited with Bank of Taiwan.

Effective July 1, 2005, under the Act, the Company has established a funded defined contribution pension plan. Under the Act, current employees have the option to be covered under the defined
contribution plan. The Company contributes monthly an amount based on 6% of the employees monthly salaries and wages to the employees individual pension accounts at the Bureau of Labor Insurance. Benefits accrued are portable upon a
change of employment. Pensions are paid by monthly installments or in lump sum based on the accumulated balances of the employees individual pension accounts.



|11. | Common Stock
|--- | ------------

As of
September 30, 2009, the Companys authorized and issued common stock amounted to $3,000,000,000 and $2,237,959,810, represented by 300,000,000 shares (including 6,400,000 shares for technology know-how and 30,000,000 shares reserved for
the exercise of employee stock options in the future) and 223,795,981 shares (including 1,806,093 shares for technology know-how), respectively, at par of $10.



|12. | Capital Reserve
|--- | ---------------

The
R.O.C. Company Law requires that capital reserve shall be exclusively used to offset accumulated deficits or to increase capital and shall not be used for any other purpose. However, all or part of capital reserve arising from paid-in capital in
excess of par value on issuance of common stock and donations can be capitalized once a year, provided that the Company has no accumulated deficits.



9



---

Advanced Chip Engineering Technology Inc.

Notes to Financial Statements

For the nine months ended 30 September 2009

(Expressed in New Taiwan
Dollars, Unless Otherwise Specified)



|13. | Retained Earnings (Accumulated Deficits)
|--- | ----------------------------------------

The Companys articles of incorporation provides that net income, after deducting previous years losses and the appropriation of 10% legal reserves, may be appropriated or distributed
proportionately as follows:



| | A. | 84% as dividend paid to stockholders;
| | -- | -------------------------------------



| | B. | 1% as remuneration for directors and supervisors;
| | -- | -------------------------------------------------



| | C. | 15% as employee bonuses.
| | -- | ------------------------

Distributions of stockholders dividends and employee bonuses may be in cash or in the form of common shares or a combination of both, subject to the resolution adopted by the Board of Directors and the approval of the stockholders.

As of December 31, 2009, the Company reported accumulated deficits and consequently there was no earnings available for
distribution.



|14. | Income Tax
|--- | ----------



| | 1. | For the year ended September 30, 2009 and 2008, income tax calculation was shown below:
| | -- | ---------------------------------------------------------------------------------------



|                                             |  |      |             |  
|-------------------------------------------- |  | ---- | ----------- | -
|                                             |  | 2009 |            
|Income tax calculated per statutory tax rate |  | $    |            |  
|Tax effect of permanent differences          |  |      |            |  
|Tax effect of investment tax credits         |  |      |            |  
|Tax effect of loss carryforwards             |  |      | (49,479,302 | )
|10% tax on unappropriated earnings           |  |      |            |  
|Tax effect of valuation allowance            |  |      | 49,479,302  |  
|                                             |  |      |             |  
|Income tax expense                           |  |      |            |  
|Less: Prepaid and withholding taxes          |  |      |            |  
|                                             |  |      |             |  
|Income tax refundable                        |  | $    |            |  
|                                             |  |      |             |  



| | 2. | Deferred tax assets and liabilities:
| | -- | ------------------------------------



|                                        |  |                    |              |  
|--------------------------------------- |  | ------------------ | ------------ | -
|                                        |  | September 30, 2009 |             
|Deferred income tax assets  current    |  | $                  | 16,758,555   |  
|Deferred income tax assets  noncurrent |  |                    | 771,082,627  |  
|Valuation allowance                     |  |                    | (787,841,182 | )
|                                        |  |                    |              |  
|Total                                   |  | $                  |             |  
|                                        |  |                    |              |  



10



---

Advanced Chip Engineering Technology Inc.

Notes to Financial Statements

For the nine months ended 30 September 2009

(Expressed in New Taiwan
Dollars, Unless Otherwise Specified)



| | 3. | Details of temporary differences, loss carryforwards and investment tax credits resulting in deferred income tax assets and liabilities are as follows:
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------



|                       |        |                    |               |  |   |              |  
|---------------------- | ------ | ------------------ | ------------- |  | - | ------------ | -
|                       |        | September 30, 2009 |              
|                       | Amount |                    | Tax effect    | 
|Current items:         |        |                    |               |  |   |              |  
|Investment tax credits |        | $                  |               |  | $ | 16,758,555   |  
|Valuation allowance    |        |                    |               |  |   | (16,758,555  | )
|                       |        |                    |               |  |   |              |  
|                       |        |                    |               |  | $ |             |  
|                       |        |                    |               |  |   |              |  
|Noncurrent items:      |        |                    |               |  |   |              |  
|Loss carryforwards     |        | $                  | 2,599,244,234 |  |   | 649,811,058  |  
|Investment tax credits |        |                    |               |  |   | 121,271,569  |  
|Valuation allowance    |        |                    |               |  |   | (771,082,627 | )
|                       |        |                    |               |  |   |              |  
|                       |        |                    |               |  | $ |             |  
|                       |        |                    |               |  |   |              |  



| | 4. | As of September 30, 2009, investment tax credits consisted of the following:
| | -- | ----------------------------------------------------------------------------



|          |  |                          |  |                   |             |                    |   |                  |  |     
|--------- |  | ------------------------ |  | ----------------- | ----------- | ------------------ | - | ---------------- |  | ----
|Generated |  | Qualifying items         |  | Total tax credits |             | Unused tax credits |   | Expiration years
|2005      |  | Research and development |  | $                 | 11,313,463  |                    | $ | 11,313,463       |  | 2009
|          |  | Machinery and equipment  |  |                   | 5,445,092   |                    |   | 5,445,092        |  | 2009
|          |  |                          |  |                  
|2006      |  | Research and development |  |                   | 21,615,529  |                    |   | 21,615,529       |  | 2010
|          |  | Machinery and equipment  |  |                   | 2,944,894   |                    |   | 2,944,894        |  | 2010
|          |  |                          |  |                  
|2007      |  | Research and development |  |                   | 32,306,277  |                    |   | 32,306,277       |  | 2011
|          |  | Machinery and equipment  |  |                   | 41,862,931  |                    |   | 41,862,931       |  | 2011
|          |  |                          |  |                  
|2008      |  | Research and development |  |                   | 16,070,646  |                    |   | 16,070,646       |  | 2012
|          |  | Machinery and equipment  |  |                   | 6,471,292   |                    |   | 6,471,292        |  | 2012
|          |  |                          |  |                   |             |                    |   |                  |  |     
|          |  |                          |  | $                 | 138,030,124 |                    | $ | 138,030,124      |  |     
|          |  |                          |  |                   |             |                    |   |                  |  |     



| | 5. | As of December 31, 2009, losses available to be carried forward are as follows:
| | -- | -------------------------------------------------------------------------------



|                              |  |                          |  |                                      |  |   |              
|----------------------------- |  | ------------------------ |  | ------------------------------------ |  | - | -------------
|Year in which losses incurred |  | Expirationyears          |  | Losses availableto be carriedforward
|2003                          |  | (Approved)               |  | 102                                  |  | $ | 425,581,419  
|2004                          |  | (Approved)               |  | 103                                  |  |   | 282,706,776  
|2005                          |  | (Approved)               |  | 104                                  |  |   | 356,310,536  
|2006                          |  | (Approved)               |  | 105                                  |  |   | 357,841,847  
|2007                          |  | (Approved)               |  | 106                                  |  |   | 469,851,650  
|2008                          |  | (Filed)                  |  | 107                                  |  |   | 503,647,063  
|2009                          |  | (Expected filing amount) |  | 108                                  |  |   | 203,304,943  
|                              |  |                          |  |                                      |  |   |              
|                              |  |                          |  |                                      |  | $ | 2,599,244,234
|                              |  |                          |  |                                      |  |   |              



11



---

Advanced Chip Engineering Technology Inc.

Notes to Financial Statements

For the nine months ended 30 September 2009

(Expressed in New Taiwan
Dollars, Unless Otherwise Specified)



| | 6. | Stockholders Imputation Tax Credit Account and Tax Rate:
| | -- | ---------------------------------------------------------



|                                            |  |                    |                |  
|------------------------------------------- |  | ------------------ | -------------- | -
|                                            |  | September 30, 2009 |               
|Undistributed retained earnings             |  | $                  | (1,365,731,721 | )
|                                            |  |                    |                |  
|Stockholders imputation tax credit account |  | $                  |               |  
|                                            |  |                    |                |  
|The expected creditable ratio               |  |                    |               |  
|                                            |  |                    |                |  



|15. | Labor cost, Depreciation and Amortization:
|--- | ------------------------------------------



|                   |                               |                                       |                               |  |       |            |  |   |            
|------------------ | ----------------------------- | ------------------------------------- | ----------------------------- |  | ----- | ---------- |  | - | -----------
|                   |                               | For the year ended September 30, 2009
|                   | Included in cost ofgoods sold |                                       | Included in operatingexpenses |  | Total
|Personnel Expenses |                               | $                                     | 34,067,512                    |  | $     | 19,900,784 |  | $ | 53,968,296 
|Depreciation       |                               |                                       | 116,374,223                   |  |       | 4,561,473  |  |   | 120,935,696
|Amortization       |                               |                                       | 278,386                       |  |       | 2,412,593  |  |   | 2,690,979  



|16. | Going Concern
|--- | -------------

As of
September 30, 2009, the Company has incurred continuous losses with accumulated deficits of $1,365,731,721 and negative cash flows from operations, which raise substantial doubt about the Companys ability to continue as a going concern.
Based on the resolution of Board of Directors on January 20, 2009, the Company has determined to raise funds through disposing assets and look for opportunity to merge with another company. Effective September 30, 2009, Aptos Design Lab
Inc. (ADL) acquired 195,796,920 shares or 87.5% of the total shares outstanding of 223,795,981 in a stock for stock exchange consisting of 1 share of ADL stock for 10 shares of ACET stock.



|17. | Related party transactions
|--- | --------------------------



| | A. | Name and relationship with other parties are as follows:
| | -- | --------------------------------------------------------



|                                                     |  |                                                          
|---------------------------------------------------- |  | ---------------------------------------------------------
|Name of related party                                |  | Relationship with the Company                            
|King Yuan Electronics Co., Ltd. (KYEC)             |  | The chairman of the Company is KYECsvice-chairman (Note)
|                                                     | 
|Silicon Storage Technology, Inc. (SST)             |  | An equity investor of the Company                        
|                                                     | 
|SST International Limited                            |  | A subsidiary of SST                                      
|                                                     | 
|Silicon Storage Technology Taiwan Ltd.(SST Taiwan) |  | A subsidiary of SST International Limited                



12



---

Advanced Chip Engineering Technology Inc.

Notes to Financial Statements

For the nine months ended 30 September 2009

(Expressed in New Taiwan
Dollars, Unless Otherwise Specified)



| | B. | Significant Transactions with Related Parties:
| | -- | ----------------------------------------------



| | (1). | Accounts Receivable
| | ---- | -------------------



|                                |        |                    |           |  |      
|------------------------------- | ------ | ------------------ | --------- |  | -----
|                                |        | September 30, 2009
|                                | Amount |                    | %        
|Silicon Storage Technology, Inc |        | $                  | 3,612,910 |  | 15.25
|                                |        |                    |           |  |      
|Total                           |        | $                  | 3,612,910 |  | 15.25
|                                |        |                    |           |  |      



| | (2). | Other Receivables (shown as other financial assets):
| | ---- | ----------------------------------------------------



|            |        |                    |        |  |     
|----------- | ------ | ------------------ | ------ |  | ----
|            |        | September 30, 2009
|            | Amount |                    | %     
|SST Taiwan. |        | $                  | 15,459 |  | 0.68
|            |        |                    |        |  |     



| | (3). | Other Payables (shown as accrued expenses and other current liabilities):
| | ---- | -------------------------------------------------------------------------



|                                |        |                    |           |  |      
|------------------------------- | ------ | ------------------ | --------- |  | -----
|                                |        | September 30, 2009
|                                | Amount |                    | %        
|Silicon Storage Technology, Inc |        | $                  | 8,160,746 |  | 17.78
|                                |        |                    |           |  |      



|18. | Pledged Assets
|--- | --------------



|                                                     |  |                    |               |                        |                                  
|---------------------------------------------------- |  | ------------------ | ------------- | ---------------------- | ---------------------------------
|Account                                              |  | September 30, 2009 |               | Subject of collaterals
|Time deposits (shown in Restricted assetscurrent) |  | $                  | 100,000       |                        | Custom duties and short-term loan
|Land (including leased assets)                       |  |                    | 103,515,500   |                        | long-term loans                  
|Buildings and facilities (including leased assets)   |  |                    | 376,215,626   |                        | long-term loans                  
|Machinery and equipments                             |  |                    | 585,789,372   |                        | Short-term and long-term loans   
|Leased equipment                                     |  |                    |              |                        | Short-term loans                 
|                                                     |  |                    |               |                        |                                  
|Total                                                |  | $                  | 1,065,620,498 |                        |                                  
|                                                     |  |                    |               |                        |                                  



|19. | Commitments and Contingencies : Nil.
|--- | ------------------------------------



|20. | Significant Catastrophic Losses: Nil.
|--- | -------------------------------------



|21. | Significant Subsequent Events
|--- | -----------------------------

The Company had a fire on October 2, 2009. The estimated loss is 560 million dollars. Fortunately, the machinery, equipment and other items are insured. The claims review procedure will be processed after the insurance company
conducts the field survey. After the assessment, amount of claims should be approximately equivalent to the amount of loss.



13



---

Advanced Chip Engineering Technology Inc.

Notes to Financial Statements

For the nine months ended 30 September 2009

(Expressed in New Taiwan
Dollars, Unless Otherwise Specified)



|22. | Others :
|--- | --------



| | A. | Fair Value of Financial Instruments
| | -- | -----------------------------------



|                                                          |            |                    |             |  |   |            
|--------------------------------------------------------- | ---------- | ------------------ | ----------- |  | - | -----------
|                                                          |            | September 30, 2009
|                                                          | Book Value |                    | Fair Value 
|Non-derivative financial instruments                      |            |                    |             |  |   |            
|Financial Assets                                          |            |                    |             |  |   |            
|Financial assets with fair value equal to book value      |            | $                  | 27,215,068  |  | $ | 27,215,068 
|Financial liability                                       |            |                    |             |  |   |            
|Financial liabilities with fair value equal to book value |            |                    | 123,314,184 |  |   | 123,314,184
|Long-term loans (including current portion)               |            |                    | 170,404,656 |  |   | 170,404,656



| |  | The methods and assumptions used to measure the fair value of financial instruments are summarized below:
| |  | ---------------------------------------------------------------------------------------------------------

Financial assets / liabilities with fair value equal to book value: The carrying amounts of these assets / liabilities approximate fair
values due to their short maturities. This applies to cash and cash equivalents, notes and accounts receivable, refundable deposits, short-term loans, notes and accounts payable.

Long-term loans: Fair value is estimated based on the discounted future cash flows. Discount rate is determined based on the Companys
credit adjusted borrowing rate on long-term loans, which approximate the floating interest rates. Accordingly, the carrying values of the long-term loans approximate their fair values.



| | B. | Information on financial assets and liabilities with fair value interest rate risk
| | -- | ----------------------------------------------------------------------------------



| |  | As of September 30, 2009, the financial assets with fair value risk due to the change of interest amounted to $0. The Company has no financial liabilities with
fair value risk due to the change of interest as of September 30, 2009. As of September 30, 2009, the financial assets with cash flow risk due to the change of interest amounted to $629,156; the financial liabilities with cash flow risk
due to the change of interest amounted to $210,288,806.
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | C. | Procedure of financial risk control and hedge
| | -- | ---------------------------------------------



| |  | In order to identify, evaluate and manage market risk, credit risk, liquidity risk and cash flow risk, the Company has established a risk management program and carried
out procedures to monitor the fluctuations of exchange rate and interest rate, as well as implement credit controls over its transaction counterparties.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | By considering factors such as changes in economic environment, competition, market value risks, and liquidity requirement, the Company adjusts related positions of
financial assets and liabilities in order to optimize its risk exposure, maintain liquidity and centrally manage all market risks.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | D. | Information on significant financial risks
| | -- | ------------------------------------------



| | a. | Market risk
| | -- | -----------

The Company
entered into financial instrument agreements with maturities shorter than one year. Therefore, the market risk is considered to be minimal.



14



---

Advanced Chip Engineering Technology Inc.

Notes to Financial Statements

For the nine months ended 30 September 2009

(Expressed in New Taiwan
Dollars, Unless Otherwise Specified)



| | b. | Credit risk
| | -- | -----------

The
counterparties of the financial instruments are related parties and reputable companies, with which the Company has established long-term relationships. Thus, the Company believes that its exposure to potential default risk is low.



| | c. | Liquidity risk
| | -- | --------------

The
Company entered into financial instrument agreements with maturities shorter than one year. However, the Company has experienced continuous losses and may not have sufficient working capital for its daily operations. Please refer to Note 16 for
further responses proposed by management.



| | d. | Cash flow interest rate risk
| | -- | ----------------------------

The Company entered into financial instrument agreements with maturities shorter than one year. Therefore, the Companys exposure to cash flow interest rate risk is considered low.

Long-term liabilities are primarily issued at floating interest rates, which are not exposed to significant cash flow interest rate risk.



|23. | US GAAP Reconciliation
|--- | ----------------------

The accompanying financial statements have been prepared in conformity with, Business Entity Accounting Law, Regulation on Business Entity Accounting Handling and accounting principles generally accepted in the
Republic of China (ROC GAAP), which differ in certain material respects from generally accepted accounting principles in the United States (US GAAP). Such differences involve methods for measuring the amounts shown in the
financial statements, as well as additional disclosures required by US GAAP.

The following is a summary of the material
adjustments to net income and shareholders equity, which would be required in reconciling the significant differences between ROC GAAP and US GAAP:

Reconciliation of net loss:



|                                    |  |                                           |              |  
|----------------------------------- |  | ----------------------------------------- | ------------ | -
|                                    |  | For the ninemonths endedSeptember 30,2009 |             
|                                    |  | (Unaudited)                               |             
|Net loss as reported under ROC GAAP |  | $                                         | (203,304,943 | )
|US GAAP adjustments:                |  |                                           |              |  
|Compensated absences                |  |                                           | 1,085,466    |  
|Employee stock option               |  |                                           | 2,420,602    |  
|                                    |  |                                           |              |  
|Total US GAAP adjustments           |  |                                           | 3,506,068    |  
|Taxation effect                     |  |                                           |             |  
|                                    |  |                                           |              |  
|Net loss under US GAAP              |  | $                                         | (199,798,875 | )
|                                    |  |                                           |              |  



15



---

Advanced Chip Engineering Technology Inc.

Notes to Financial Statements

For the nine months ended 30 September 2009

(Expressed in New Taiwan
Dollars, Unless Otherwise Specified)



Reconciliation of stockholders equity:



|                                                      |  |                                           |            
|----------------------------------------------------- |  | ----------------------------------------- | -----------
|                                                      |  | For the ninemonths endedSeptember 30,2009
|                                                      |  | (Unaudited)                              
|Total stockholders equity as reported under ROC GAAP |  | $                                         | 872,228,089
|US GAAP adjustments:                                  |  |                                           |            
|Defined benefit pension plan                          |  |                                           | 2,782,276  
|Taxation effect                                       |  |                                           |           
|                                                      |  |                                           |            
|Stockholders equity under US GAAP                    |  | $                                         | 875,010,365
|                                                      |  |                                           |            

Movement in stockholders equity in
accordance with US GAAP:



|                                               |  |                                           |               |  
|---------------------------------------------- |  | ----------------------------------------- | ------------- | -
|                                               |  | For the ninemonths endedSeptember 30,2009 |              
|                                               |  | (Unaudited)                               |              
|Balance at beginning of year                   |  | $                                         | 1,077,229,842 |  
|Issuance of common stock for cash              |  |                                           |              |  
|Net loss under US GAAP                         |  |                                           | (199,798,875  | )
|Employee stock option  amortized compensation |  |                                           | (2,420,602    | )
|Defined benefit pension plan                   |  |                                           |              |  
|                                               |  |                                           |               |  
|Balance at end of year                         |  | $                                         | 875,010,365   |  
|                                               |  |                                           |               |  

The balance sheet accounts under US GAAP is as follows:



|                                           |  |                   |              
|------------------------------------------ |  | ----------------- | -------------
|                                           |  | September 30,2009
|                                           |  | (Unaudited)      
|Current Assets                             |  |                   |              
|Cash and cash equivalents                  |  | $                 | 676,158      
|Notes and accounts receivable, net         |  |                   | 23,689,495   
|Other financial assets                     |  |                   | 2,369,415    
|Inventories                                |  |                   | 25,288,539   
|Restricted assets  current                |  |                   | 100,000      
|Prepayments and other current assets       |  |                   | 21,542,108   
|                                           |  |                   |              
|                                           |  |                   | 73,565,715   
|                                           |  |                   |              
|Property, plant and equipment              |  |                   | 1,082,840,751
|Intangible assets                          |  |                   | 4,849,714    
|Refundable deposits                        |  |                   | 480,000      
|Other assets                               |  |                   | 19,893,025   
|                                           |  |                   |              
|Total Assets                               |  | $                 | 1,181,629,205
|                                           |  |                   |              
|Currents liabilities                       |  | $                 | 193,505,606  
|Long-term and other liabilities            |  |                   | 113,113,234  
|                                           |  |                   |              
|Total Liabilities                          |  |                   | 306,618,840  
|Total Stockholders Equity                 |  |                   | 875,010,365  
|                                           |  |                   |              
|Total Liabilities and Stockholders Equity |  | $                 | 1,181,629,205
|                                           |  |                   |              



16



---

Advanced Chip Engineering Technology Inc.

Notes to Financial Statements

For the nine months ended 30 September 2009

(Expressed in New Taiwan
Dollars, Unless Otherwise Specified)



Cash and cash flow statements

Under ROC GAAP, all certificates of deposit are classified as cash and
cash equivalents. Under US GAAP, cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less. Summarized cash flow information under
US GAAP would be presented as follows:



|                                                    |  |                                           |             |  
|--------------------------------------------------- |  | ----------------------------------------- | ----------- | -
|                                                    |  | For the ninemonths endedSeptember 30,2009 |            
|                                                    |  | (Unaudited)                               |            
|Net cash used in operating activities               |  | $                                         | (43,238,833 | )
|Net cash used in investing activities               |  |                                           | (14,164875  | )
|Net cash provided by (used in) financial activities |  |                                           | (6,235,464  | )
|                                                    |  |                                           |             |  
|Net decrease in cash and cash equivalents           |  |                                           | (22,838,494 | )
|Cash and cash equivalents at beginning of the year  |  |                                           | 23,514,652  |  
|                                                    |  |                                           |             |  
|Cash and cash equivalents at the end of the year    |  | $                                         | 676,158     |  
|                                                    |  |                                           |             |  

Comprehensive income

Comprehensive income under ROC GAAP for the nine months ended September 30, 2009 are summarized as follows:



|                                         |  |                                           |              |  
|---------------------------------------- |  | ----------------------------------------- | ------------ | -
|                                         |  | For the ninemonths endedSeptember 30,2009 |             
|                                         |  | (Unaudited)                               |             
|Net loss                                 |  | $                                         | (203,304,943 | )
|Other comprehensive income, net of taxes |  |                                           |              |  
|Net actuarial gain not recognized        |  |                                           | 0            |  
|                                         |  |                                           |              |  
|Comprehensive loss                       |  | $                                         | (203,304,943 | )
|                                         |  |                                           |              |  

The significant accounting policies for the reconciliation from ROC GAAP to US GAAP are as follows:



| | (1) | Compensated absences
| | --- | --------------------



| |  | Under ROC GAAP, the Company is not required to accrue for unused employees vacation leave at the end of each year. However, under US GAAP, SFAS No. 43,
Accounting for Compensated Absences, it is required for an employer to accrue a liability for employees compensation for future absences if all of the following conditions are met: i) the employers obligation relating to
employees rights to receive compensation for future absences is attributable to employees services already rendered, ii) the obligation relates to rights that vest or accumulate, iii) payment of the compensation is probable,
and iv) the amount can be reasonably estimated. Accordingly, under US GAAP, unused vacation that can be carried over to the next year has to be accrued for at each balance sheet date to properly record the expense in the period in which
the employee provided the services.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



17



---

Advanced Chip Engineering Technology Inc.

Notes to Financial Statements

For the nine months ended 30 September 2009

(Expressed in New Taiwan
Dollars, Unless Otherwise Specified)



| | (2) | Stock-based payment  employee compensation plan
| | --- | ------------------------------------------------



| | A. | In 2006, the Company was authorized to issue employee stock options. The total number of options to be granted under the plan is equivalent to 30,000,000 shares of the
Companys common stock, and all options were granted to employees in 2007. Under ROC GAAP, the Company applies the intrinsic value method to recognize the difference between the fair value of the stock and the exercise price of its employee
stock option as compensation expense over the requisite service period, if any, and pro forma information regarding net loss is required as if the Company had accounted for the employee stock options under the fair value method.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | B. | For computing the fair value of options granted, we use the Black-Scholes option-pricing model with input assumptions of expected volatility, expected life, expected
dividend rate and expected risk-free rate of return. We applied the historical volatility based on the historical stock price volatility over the historical time period commensurate with the expected term of the employee stock option of similar
listed companies. The expected term is based on expected holding period. We estimated dividend yield by historical experience. Besides, we used the yield of Taiwan Government Bond with the contract term equal to the expected term of the share
options as our risk-free interest rate pursuant to SFAS No. 123 (R), which required entities based in jurisdiction outside the United States to use the implied yield of zero-coupon government bonds currently available in the market where the
shares are primarily traded when estimating the risk-free interest rate. The fair value of the Companys stock options used to compute the 2009 compensation expense is the estimated present value at grant date using the Black-Scholes option
pricing model with the following weighted average assumptions:
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                          |  |                  
|----------------------------------------- |  | -----------------
|Volatility                                |  | 52.11% ~ 55.19%  
|                                          |  |                  
|Risk-free interest rate                   |  | 3.84% ~ 4.54%    
|                                          |  |                  
|Expected holding period                   |  | 2.96 ~ 3.11 years
|                                          |  |                  
|Dividend yield                            |  | 0%               
|                                          |  |                  
|Note: No options granted in 2008 and 2009 |  |                  



| | (3) | Pension
| | --- | -------



| |  | Under ROC GAAP, net periodic pension costs of defined benefit pension plan are recognized in accordance with actuarial calculations. Under US GAAP, a defined
benefit pension plan is accounted for pursuant to SFAS 87, Employers Accounting for Pension and No. 158 (effective for the Company in its fiscal year ending after December 15, 2006 with early adoption encouraged),
Employers Accounting for Defined Benefit Pension and Other Postretirement Plans  an amendment of FASB Statements No. 87, 88, 106, and 132(R), which requires the recognition of the overfunded or underfunded status of a
defined benefit pension plan as an asset or liability and changes in the funded status to be recognized through other comprehensive income, net of tax. Unrecognized gains and losses, prior service costs, or transition assets and liabilities as
components of net periodic benefit cost of the period in accordance with SFAS No. 87 are now recognized as a component of accumulated other comprehensive income.
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Advanced Chip Engineering Technology Inc.

Notes to Financial Statements

For the nine months ended 30 September 2009

(Expressed in New Taiwan
Dollars, Unless Otherwise Specified)



| | (4) | Prepayment of property, plant and equipment
| | --- | -------------------------------------------



| |  | Under ROC GAAP, prepayment of property, plant and equipment is presented as part of property, plant and equipment.
| |  | ------------------------------------------------------------------------------------------------------------------



| |  | Under US GAAP, prepayment of property, plant and equipment should be presented as other assets.
| |  | -----------------------------------------------------------------------------------------------



| | (5) | Technology know-how
| | --- | -------------------



| |  | In years 2000 and 2002, the founders of the Company contributed their technology know-how in exchange for the Companys stock. Under ROC GAAP, the Company recorded
the technology know-how based on a valuation report with corresponding entries to common stock and additional paid-in capital. The technology know-how was amortized over its estimated economic life using the straight-line method.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Under US GAAP, Staff Accounting Bulletin (SAB) Topic 5-G, Acquisition of Assets from Promoters and Stockholders in Exchange for Common Stock, states
that transfers of nonmonetary assets to a company by its promoters or stockholders in exchange for stock prior to or at the time of the companys initial public offering normally should be recorded at the transferors historical cost
basis determined under generally accepted accounting principles.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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