LPL LG Display Co Ltd

Securities Act Rule 801 (Rights Offering)

Securities Act Rule 802 (Exchange Offer)

Exchange Act Rule 13e-4(h)(8) (Issuer Tender Offer)

Exchange Act Rule 14d-1(c) (Third Party Tender Offer)

Exchange Act Rule 14e-2(d) (Subject Company Response)

Filed or submitted in paper if permitted by  Regulation S-T Rule 101(b)(8)

Home Jurisdiction Documents

The following document is attached as an exhibit to this Form CB/A:

Exhibit number

Description

Further amends the Prospectus dated January 18, 2024 (which was originally furnished as Exhibit 99.1 to Form CB filed with the Securities and Exchange Commission (the “SEC”) on January 18, 2024), as previously amended by Amendment No. 1 to Prospectus dated January 24, 2024 (which was previously furnished as Exhibit 99.1 to Form CB/A filed with the SEC on January 24, 2024).

Not applicable

Informational Legends

The following document is attached as an exhibit to this Form CB/A:

Exhibit number

Description

Incorporated by reference to the Company’s Report on Form 6-K furnished to the Securities and Exchange Commission on March 4, 2024.

Not applicable

Not applicable

LG Display Co., Ltd. filed with the Securities and Exchange Commission a written irrevocable consent and power of attorney on Form F-X on January 18, 2024.

Not Applicable

IMPORTANT INFORMATION

This rights offering is made for the securities of a foreign company. The offer is subject to the disclosure requirements of a foreign country that are different from those of the United States. Financial statements included in the document, if any, have been prepared in accordance with foreign accounting standards that may not be comparable to the financial statements of United States companies.

It may be difficult for you to enforce your rights and any claim you may have arising under the federal securities laws, since the issuer is located in a foreign country, and some or all of its officers and directors may be residents of a foreign country. You may not be able to sue the foreign company or its officers or directors in a foreign court for violations of the U.S. securities laws. It may be difficult to compel a foreign company and its affiliates to subject themselves to a U.S. court’s judgment.

The following is an English translation of the original Korean language document. This English translation has been prepared solely for informational purposes only and has been furnished to the U.S. Securities and Exchange Commission in compliance with Rule 801 under the U.S. Securities Act of 1933, as amended (the “Securities Act”). This translation is not an offer or invitation to make an offer for the purchase of any securities. If there exist any discrepancies between the original Korean language document and this English translation, the original Korean language document will prevail.

The share rights and the common shares of LG Display Co., Ltd. (the “Company”) issuable upon the exercise of such share rights have not been registered under the Securities Act, or any state securities laws. No securities of the Company may be offered or sold in the United States or to, or for the benefit of, U.S. persons absent registration or an applicable exemption from such registration requirements. The Company is relying on applicable exemptions from registration requirements in connection with the transactions contemplated in this document. This document is neither an offer to sell nor a solicitation of an offer to buy any of the Company’s securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.

Holders of American Depositary Shares (“ADSs”) representing ownership interest in the common shares of the Company, which are listed on the New York Stock Exchange, as of the Record Date (as defined below) will be afforded the opportunity to participate in the rights offering. Citibank, N.A., as the depositary of the Company’s ADS facility, will provide separate instructions in English to eligible ADS holders with detailed terms and conditions for the exercise of the ADS rights.

Report Subject to Amendment: Prospectus

Date of Initial Submission of Report Subject to Amendment: January 18, 2024

Reasons for Amendment: determination of the Definitive Subscription Price

Details of Amendment: please see Items 1 through 7 as described below

(Unit: KRW, Shares)

Type of

Securities    

Common shares

Whether underwritten (arranged)   

Whether public offering for listing of equity securities, etc. is done

Underwritten

Underwriter (Manager)          

Consideration for
Underwriting

Joint Lead Manager

Joint Lead Manager

Joint Lead Manager

Joint Lead Manager

Subscription Date     

Payment Date

Date of Public

Notice of

Subscription

Date of Public

Notice of

Allocation

Record Date for

Allocating Share

Rights

Short-Selling Transaction Period during which Subscription hereunder is Prohibited

Start date

Expected Use of Proceeds

Item

Amount

Matters regarding Share Rights

Securities subject to preemptive rights

—

Matters regarding the Seller

Holder

Relationship with the
Company

Number of

securities held

prior to the sale

Number of

securities sold

Number of

securities held

after the sale

—

—

—

—

—

Redemption Request Right of General Public Subscribers

Reason for the grant of the
right

Investors entitled to exercise
the right

Number of securities for
which the right is
exercisable

Exercise period

Exercise price

—

—

—

—

—

Other Matters

1) The joint lead managers for the paid-in capital increase through general public offering of unsubscribed shares after allocation to existing shareholders of the Company are Korea Investment & Securities Co., Ltd., NH Investment & Securities Co., Ltd., KB Securities Co., Ltd. and Daishin Securities Co., Ltd.

2) The subject paid-in capital increase is on the “stand-by underwriting” basis, under which the joint lead managers shall subscribe for the unsubscribed shares resulting from general public offering of shares that remain unsubscribed after the Share Rights (as defined below) offering to existing shareholders. For details of the subscription method and subscription price, please refer to “Chapter 1. Matters Regarding the Offering or Sale – I. General Matters Regarding the Offering or Sale – 5. Matters Regarding Underwriting, etc.”

3) The above offering price and various expenses for issuance, which have been calculated based on the First Indicative Subscription Price (as defined below), may be subject to change in the future. The definitive amounts are scheduled to be determined three (3) trading days prior to the first date of subscription by existing shareholders.

4) The above subscription dates refer to the subscription dates for existing shareholders, and the subscription dates for the general public offering are March 11, 2024 and March 12, 2024 (two (2) business days). A public notice of subscription for general public offering is scheduled to be posted on the websites of the Company and the joint lead managers on March 8, 2024.

5) Subscription for the general public offering in Korea is available at the head office and branches of each of the joint lead managers (Korea Investment & Securities Co., Ltd., NH Investment & Securities Co., Ltd., KB Securities Co., Ltd. and Daishin Securities Co., Ltd.), as well as at their websites and HTS and MTS. However, under Article 9(2)7 of the Regulation on Securities Underwriting Business, Etc., if the total number of the shares to be allocated to high-yield and high-risk investment trusts and general public subscribers is not more than 5,000 shares (based on the par value per share of KRW 5,000), or if the total public offering amount is not more than KRW 100 million, the joint lead managers may subscribe therefor for their own account without allowing subscription through a general public offering.

6) Under Article 180-4 of the Financial Investment Services and Capital Markets Act and Article 208-4 (1) of the Enforcement Decree thereof, no person who engaged the short-selling of, or entrusted the short-selling of, any shares of the Company from December 19, 2023 to February 29, 2024 may subscribe in this proposed offering, and pursuant to Article 429-3(2) of the above act, a fine may be imposed for any acquisition of shares in violation thereof. However, acquisition of shares may be permitted as an exception if it falls under Article 208-4(2) of the Enforcement Decree thereof and Article 6-34 of the Regulation on Financial Investment Business and does not impede the establishment of a fair offering price.

7) In case of correction of descriptions herein due to a change in important matters in the course of examination of this public disclosure form by the Financial Supervisory Service (“FSS”), there may occur a change in the timetables described in this document.

8) The effectiveness of the related registration statement does not confirm that the descriptions herein are true or correct, or represent the government’s guarantee or approval of the value of the subject securities. Accordingly, the responsibility for the investment in the subject securities falls solely on the shareholders and investors.

9) The various expenses for issuance will be paid out of the funds of the Company.

Type of
Securities

Par Value

Offering (or Sale)
Price per Share

Total Offering (or Sale)
Amount

Offering (or Sale)
Method

Common shares

Whether underwritten (arranged)   

Whether public offering for listing of equity securities, etc. is done

Underwritten

Underwriter (Manager)          

Consideration for
Underwriting

Joint Lead Manager

Joint Lead Manager

Joint Lead Manager

Joint Lead Manager

Subscription Date     

Payment Date

Date of Public

Notice of

Subscription

Date of Public

Notice of

Allocation

Record Date for

Allocating Share

Rights

Short-Selling Transaction Period during which Subscription hereunder is Prohibited

Start date

December 19, 2023

Expected Use of Proceeds

Item

Amount

Matters regarding Share Rights

Securities subject to preemptive rights

—

Matters regarding the Seller

Holder

Relationship with the
Company

Number of securities held
prior to the sale

Number of securities sold

Number of securities held
after the sale

—

—

—

—

—

Redemption Request Right of General Public Subscribers

Reason for the grant of the
right

Investors entitled to exercise
the right

Number of securities for
which the right is
exercisable

Exercise period

Exercise price

—

—

—

—

—

1) The joint lead managers for the paid-in capital increase through general public offering of unsubscribed shares after allocation to existing shareholders of the Company are Korea Investment & Securities Co., Ltd., NH Investment & Securities Co., Ltd., KB Securities Co., Ltd. and Daishin Securities Co., Ltd.

2) The subject paid-in capital increase is on the “stand-by underwriting” basis, under which the joint lead managers shall subscribe for the unsubscribed shares resulting from general public offering of shares that remain unsubscribed after the Share Rights (as defined below) offering to existing shareholders. For details of the subscription method and subscription price, please refer to “Chapter 1. Matters Regarding the Offering or Sale – I. General Matters Regarding the Offering or Sale – 5. Matters Regarding Underwriting, etc.”

3) The above offering price refers to the Definitive Subscription Price (as defined below).

4) The above subscription dates refer to the subscription dates for existing shareholders, and the subscription dates for the general public offering are March 11, 2024 and March 12, 2024 (two (2) business days). A public notice of subscription for general public offering is scheduled to be posted on the websites of the Company and the joint lead managers on March 8, 2024.

5) Subscription for the general public offering in Korea is available at the head office and branches of each of the joint lead managers (Korea Investment & Securities Co., Ltd., NH Investment & Securities Co., Ltd., KB Securities Co., Ltd. and Daishin Securities Co., Ltd.), as well as at their websites and HTS and MTS. However, under Article 9(2)7 of the Regulation on Securities Underwriting Business, Etc., if the total number of the shares to be allocated to high-yield and high-risk investment trusts and general public subscribers is not more than 5,000 shares (based on the par value per share of KRW 5,000), or if the total public offering amount is not more than KRW 100 million, the joint lead managers may subscribe therefor for their own account without allowing subscription through a general public offering.

6) Under Article 180-4 of the Financial Investment Services and Capital Markets Act and Article 208-4 (1) of the Enforcement Decree thereof, no person who engaged the short-selling of, or entrusted the short-selling of, any shares of the Company from December 19, 2023 to February 29, 2024 may subscribe in this proposed offering, and pursuant to Article 429-3(2) of the above act, a fine may be imposed for any acquisition of shares in violation thereof. However, acquisition of shares may be permitted as an exception if it falls under Article 208-4(2) of the Enforcement Decree thereof and Article 6-34 of the Regulation on Financial Investment Business and does not impede the establishment of a fair offering price.

7) In case of correction of descriptions herein due to a change in important matters in the course of examination of this public disclosure form by the Financial Supervisory Service (“FSS”), there may occur a change in the timetables described in this document.

8) The effectiveness of the related registration statement does not confirm that the descriptions herein are true or correct, or represent the government’s guarantee or approval of the value of the subject securities. Accordingly, the responsibility for the investment in the subject securities falls solely on the shareholders and investors.

9) The various expenses for issuance will be paid out of the funds of the Company.

Information on the offering (or sale)

Type of Shares  

Offering (or Sale) Method

Registered common shares

Basis for the calculation of the first indicative subscription price

u   First Indicative Subscription Price (KRW 10,070) =

Number of
Days   

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

One-month VWAP (A)

One-week VWAP (B)

Closing price on December 15, 2023 (C)

Arithmetic mean of A, B and C (D)

Estimated base share price [Min (C, D)]

Discount Rate

Indicative
Subscription
Price = 

Any amount less than the quotation unit of the Company’s common shares shall
be rounded up, and if the resulting amount is less than the par value, the par
value shall be the estimated subscription price.

Information on the offering (or sale)

Type of Shares  

Offering (or Sale) Method

Registered common shares

Basis for the calculation of the first indicative subscription price

u   First Indicative Subscription Price (KRW 10,070) =

Number of
Days

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

[(A)+(B)+(C)]/3

The lower of C and D

   Discount Rate]

Basis for the calculation of the second indicative subscription price

Number of

Days

1

2

3

4

5

One-week VWAP (A)

Closing price on February 29, 2024 (B)

Arithmetic mean of A and B (C)

Estimated base share price [Min (B, C)]

Discount Rate

Number of Days

1

2

3

Three trading days VWAP

Discount Rate

60% of the Definitive Base Share Price

Category

First Indicative Subscription Price

Second Indicative Subscription Price

60% of the Definitive Base Share Price

Definitive Subscription Price = Max {Min [First Indicative Subscription Price per New Share, Second Indicative Subscription Price per New Share], 60% of the Definitive Base Share Price}

The estimated total offering price in this document is not definitive, and will be finalized as the definitive subscription price is computed three(3) trading days prior to the date of subscription. Also, please note that the estimated subscription price may be changed as and when the subscription price per share is determined later.

Category

Gross proceeds (A)

Offering expenses (B)

Net proceeds [A - B]

Breakdown of offering expenses

Category

Basis of Calculation

Issue contribution

Underwriting fee

Standard code issuance fee for Share Rights

Listing fee

Issuance registration fee

Registration tax

Local education tax

Other expenses

Total

Use of Proceeds

Use of Proceeds

Funds for

facility

investment

415,900

Detailed plans for use of proceeds

(Unit: KRW 100 millions)

Priority

Use of funds

Details

Detailed plans for use of the funds for working capital

Details of financing through offer or sale

Amount of proceeds

Category

Gross proceeds (A)

Offering expenses (B)

Net proceeds [A - B]

Breakdown of offering expenses

(Unit: KRW)

Category

Basis of Calculation

Issue contribution

Underwriting fee

Standard code issuance fee for Share Rights

Listing fee

Issuance registration fee

Registration tax

Local education tax

Other expenses

Total

Use of Proceeds

Use of Proceeds

Funds for facility
investment

415,900

Detailed plans for use of proceeds

(Unit: KRW 100 millions)

Priority

Use of funds

Details

Detailed plans for use of the funds for working capital

Employee Stock Ownership Association: March 6, 2024

Existing Shareholders: March 6, 2024 – March 7, 2024

General Subscription: March 11, 2024 – March 12, 2024

A. Registration Statement

E-Document: Data Analysis, Retrieval and Transfer System of the Financial Services Commission (Financial Supervisory Service) g http://dart.fss.or.kr

B. Prospectus

E-Document: Data Analysis, Retrieval and Transfer System of the Financial Services Commission (Financial Supervisory Service) g http://dart.fss.or.kr

Physical Document:

LG Display Co., Ltd. g LG Twin Towers, 128 Yeouidae-ro, Youngdeungpo-gu, Seoul, Korea

Korea Investment & Securities Co., Ltd. g 88 Euisadangdae-ro, Youngdeungpo-gu, Seoul, Korea

NH Investment & Securities Co., Ltd. g 108 Yeouidae-ro, Youngdeungpo-gu, Seoul Korea

KB Securities Co., Ltd. g 50 Yeouinaru-ro, Youngdeungpo-gu, Seoul, Korea

Daishin Securities Co., Ltd. g 343 Samildae-ro, Jung-gu, Seoul, Korea

The effectiveness of this prospectus does not constitute an acknowledgment by the government that the statements in this prospectus are true or accurate, nor does it endorse or approve the value of these securities, and the statements are subject to change prior to the subscription date.

Key Investment Risks

Category

Details

A. Risk of increasing uncertainty due to economic fluctuations in Korea and abroad

Countries around the world have seen solid growth in their private spending since the end of the COVID-19 pandemic thanks to the reopening of China and considerable job creations in major advanced economies. Nonetheless, such growth has been slowing down due to, among other things, increasing financial instability, geopolitical risks and undermined investment sentiment caused by monetary tightening, and the possibility of further considerable delay in economic recovery in Korea and abroad in the future cannot be ruled out. In the display industry in which the Company is engaged, the product demand in downstream industries is affected by consumer sentiment depending on economic fluctuations. The Company’s overseas sales accounted for approximately 96.8% of its total sales in the first nine months of 2023. As the Company is heavily dependent on exports given the nature of the industry in which the Company is engaged, global economic fluctuations in the future will have considerable effects on the sales and profitability of the Company. There are uncertainties in trend in the recovery of global and domestic economies, which are exposed to various downside risks, such as uncertainties in the monetary policies of central banks around the world, continuing inflation and geopolitical divisions. As further delays in the economic recovery in Korea and abroad may have negative effects on the sales performance of the Company, which is heavily dependent on overseas sales, investors are advised to make their investment decision after engaging in an ongoing monitoring of market conditions and volatility in the financial markets in Korea and abroad.

B. Risks involved in the slowdown in the growth of downstream industries (including the television, IT and mobile industries)

The display panel business in which the Company is engaged is directly affected by the business conditions of the industries of electronic products, including televisions, laptops, monitors and smartphones, which constitute downstream industries of such business. Demands for IT products, such as televisions and smartphones, increased after the emergence of the COVID-19 pandemic in 2020. However, the global demand for televisions began to decline in the second half of 2021 when COVID-19 preventive measures were relaxed. The sales volume in the global television markets, which continually grown since 2017, decreased by approximately 5.3% in 2021 from the previous year and further decreased in 2022 by approximately 5% from the previous year due to the extension of the replacement cycle of electronic products following the pandemic-created demand for such products. In 2023, the sales volume in the global television markets is expected to continue to decrease slightly from the previous year due to factors such as a decrease in the demand for televisions in Europe caused by the protracted war between Russia and Ukraine and uncertainties in the global economy. Recently, OLED panels have been replacing LCD panels in the display industry, leading to the expansion of the OLED-panel market and the emergence of new demands mainly for small-and mid-sized OLED panels. However, the growth of the display industry has been slowing down following a decrease in the demands for downstream products caused by global economic recession. In addition, given that electronic products, such as televisions and smartphones, have already been significantly popularized around the world, a failure to release new products applying new technologies in the market may result in a continued decrease in the demands for downstream industries. Investors are advised to note that, in such case, there is a possibility that the growth of the display panel industry in which the Company is engaged may slow down, leading to decreases in the Company’s revenue and operating profits, among others. Due to a delay in the demand recovery in downstream industries as a result of such prolonged global economic downturn, the Company has experienced a decline in revenue and operating losses for six consecutive quarters from the second quarter of 2022 through the third quarter of 2023. The cumulative operating loss on a consolidated basis for the last six quarters amounted to approximately KRW 4.8 trillion, and as the Company cannot predict the timing of demand recovery in the downstream industries at this point, the Company cannot assure you that the trend of weak profitability will not continue.

C. LCD panel price fluctuation risk

In the display panel industry, prices of LCD panels fluctuate periodically depending on various factors affecting their supply and demand, which directly impacts the change in the profitability of the display panel manufacturer. The prevalence of non-face-to-face activities, including remote working and online education, caused by the COVID-19 pandemic from 2020 has helped increase the demands for IT devices, such as laptops, and an increase in the sales volume of large-sized and high-resolution televisions prompted by a surge in the hours spent on indoor activities, among other factors, has led to an increase in the demand for display panels and a dramatic increase in their prices. However, due to an increase in the supply following aggressive facility expansions by Chinese manufacturers along with a decline in the demands for IT products, the prices of LCD panels began to drop. While there have been signs of a recovery in the industry in the first half of 2023 when major suppliers adjusted their capacity utilization rates and the demand for television manufacturers increased, a delay in the global economic recovery has undermined the recovery of the overall demand, leading to a decrease in the prices of LCD panels from October 2023 with the expectation that the prices would continue to drop in the future. Such fluctuations in the prices of LCD panels caused by various factors affecting the supply and demand in the market and decreased demand due to a delay in the global economic recovery may have negative effects on the profitability of the Company.

D. Risks of intensifying competition following Chinese manufacturers’ supply expansion

While Korean manufacturers, including the Company, are enjoying large market shares in the global display panel market, a rapid increase in the market shares of Chinese manufacturers has been intensifying competition in the display panel market. Korean manufacturers currently achieve higher profitability than their Chinese competitors by producing high value-added display products, including OLED display panels. However, Chinese manufacturers are investing heavily in small- and medium-sized OLED display panels with the support of the Chinese government. In the smartphone OLED market, the ongoing trade dispute between the United States and China has led to a wave of “patriotic consumption” in China, which has led to an increase in the sales of smartphones manufactured in China and adoption of OLED panels for such smartphones. As such, Chinese panel manufacturers are expected to expand their supplies through support by the Chinese government, among other factors, which is likely to further intensify competition in the display panel industry and result in an oversupply. This may have negative effects of the profitability of the Company by causing a drop in its selling prices and its market share of display panels.

E. Risks related to exchange rate fluctuations

As the Company’s overseas sales account for a high proportion of its total sales, its business structure is closely tied to exchange rate fluctuations and global economic trends. As exchange rate fluctuations affect foreign currency-related gains and losses, if the exchange rate volatility increases due to factors such as monetary policies of major economies and global economic uncertainties, such increased volatility may have negative effects on the profitability of the Company. In addition, due to the nature of the Company’s business, in which sales are primarily conducted in U.S. dollars, a sharp increase in the exchange rate (a depreciation in the value of the Korean won) may increase the Company’s sales in Korean won, but may weaken the Company’s price competitiveness compared to overseas companies and ultimately reduce the Company’s export volume. The Company recorded a loss of approximately KRW 379.8 billion in foreign currency-related gains and losses included in accumulated financial profit and losses and other non-operating income and expenses as of September 30, 2023. The volatility of the Company’s foreign currency-related gains and losses may increase as global financial markets and exchange rates become more volatile due to inflation and the direction of monetary policy in the United States, among other reasons. In connection with currency risk management, the Company adopts policies to ensure that its net exposure is kept to a manageable level by buying or selling foreign currencies at spot rates when it is necessary to address short-term imbalances. In respect of monetary assets and liabilities denominated in foreign currencies, the Company manages currency risks by continually managing its foreign currency positions and measuring the currency risks and, if necessary, using derivatives such as currency forwards and currency swaps. However, despite the Company’s such efforts, there remain possibilities of sudden exchange rate fluctuations caused by an unexpected change in the global economic trend, the modification of the domestic monetary policy, favorable and unfavorable circumstances in Korea and abroad, among others. Investors are advised to take into consideration that a sudden exchange rate fluctuation caused by such factors may lead to difficulties in the Company’s ability to manage its currency risks.

F. Risks of new investment relating to the OLED industry

In 2022, the size of the global OLED panel market (based on the sales amount) recorded USD 42.4 billion and is expected to decrease by approximately 4.2% to record USD 40.6 billion in 2023. However, by 2024, the size of the global OLED panel market is expected to grow by 7.9% to record USD 43.8 billion, due to the gradual recovery and diversifying application of OLED panels in IT and automotive products, in addition to televisions and smartphones. In the long term, the OLED panel market is expected to grow to record approximately USD 52.9 billion by 2027, and the large-sized OLED market for which the Company has market dominance is also expected to continue growing to record approximately USD 14.4 billion by 2027. The Company is proceeding with investments in small- and mid-sized and large OLED manufacturing facilities to meet the demand in the high value-added OLED market. Given the nature of the display industry that requires large costs at the initial stage, it is difficult for new participants to enter the market and accordingly, market-leading companies such as the Company are at an advantage to have a competitive edge based on their advanced technology and the stabilization of its yield rate over their competitors. However, in the short term, such new investments may increase the burden of depreciation costs on the Company and have negative effects on its profitability until initial stage productions become stabilized. In addition, the sales of the Company may decrease temporarily as it reduces its production of LCD television panels due to the restructuring of its business structure, and the increase in profits of the Company against the costs for new investments may be delayed depending on the penetration rate of OLED and the growing pace of the OLED market. In particular, as the Company had recorded operating losses for six consecutive quarters from the second quarter of 2022 to the third quarter of 2023, it has increasingly relied on external financing for its capital investment activities. As of the date of submission of this prospectus, the Company does not have any additional plans for large-scale financing activities other than this proposed offering and the syndicated loan. The Company intends to manage its liquidity and total borrowings at a level of refinancing such borrowings at their maturity, and as a result, the amount of the Company’s total borrowings is not expected to deviate significantly from the current level. However, investors should consider that if the Company’s profitability continues to decline in the future due to, among other reasons, a slowdown in demand in the downstream industries, the Company may continue to engage in additional external financing, which may affect the Company’s financial stability.

G. Risks related to new technology and research and development (“R&D”) personnel

The electronic parts industry is an advanced technology-based industry requiring sophisticated technological capabilities. Therefore, it is necessary to secure technological superiority and pioneer advantage in the new market through continued R&D activities and aggressive investment. If the Company fails to timely respond to technological changes in the industry, it may lose its competitiveness in the market. The Company has already secured a number of key personnel with outstanding experience in the display industry, and it protects its core technologies by keeping certain know-hows that could be copied by competitors as trade secrets and registering other core technologies as patents. The Company’s consolidated R&D expenditures in the first nine months of 2023 were approximately KRW 1,828 billion, which is 1.3% lower compared to the figures for the same period in the previous year, and the ratio of the Company’s R&D expenditures to its revenue was approximately 13.1%. The Company intends to continue its R&D activities to the extent that it does not materially impair the financial stability of the Company. However, R&D expenses may increase further in the future in order for the Company to maintain its business competitiveness. Although the Company expects to increase its revenue and profitability in the mid-to-long term through continued R&D activities, investors should take into consideration that R&D activities may not directly lead to profitability.

H. Risks related to the environment and safety management

The Company has installed and operates various types of prevention facilities to minimize the emission of environmental pollutants generated in its production process. With respect to air and water pollutants, the Company sets and manages its internal standard lower than the permitted levels under the regulatory emission standards. However, despite such company-wide efforts to prevent environmental pollution, stricter environmental regulations may cause the Company to fail to comply with environmental regulations in the future. If environmental laws and regulations become stricter, the Company may have to implement additional measures such as the need to purchase additional pollution prevention equipment, which may result in significant legal and regulatory compliance costs. In the case of any violation of laws or regulations relating to safety and health or environmental protection, or any spreading perception that the Company has failed to properly respond to the public’s increasing concerns about safety and health or environment, the Company’s operating activities and financial position, among others, may be adversely affected.

I. Risks related to changes in domestic market demand due to government policy

Display panels, which represent a core competitiveness that drives the innovation of the information and communication technology (“ICT”) market, are playing increasingly important roles, and accordingly, competitors from various countries have been making increasingly aggressive efforts to foster capabilities in this sector. As such, the Ministry of Trade, Industry and Energy (“MOTIE”) announced in May 2023 an “Innovation Strategy for Display Industry,” which aims to facilitate the development of new super-gap technologies in order to reclaim Korea’s global top position in the global display market by 2027 through joint efforts by the private and public sectors. Under the draft amendment to the Enforcement Decree of the Act on Restriction on Special Cases Concerning Taxation, which currently classifies semiconductors, rechargeable batteries and vaccines as national strategic technologies, the Korean government will add display technology to such list and provide tax benefits to manufacturers of display panels. However, in the event of a delay in such government support policies, a decrease in the size of government support notwithstanding the Korean government’s current plan or an unexpected economic recession despite such government support policies, the Company’s R&D and investment activities may not expand.

J. Risks related to making timely product delivery and meeting customer requirements

The Company’s principal business consists of the R&D, manufacturing and sales of products utilizing display technologies including OLED and TFT-LCD. As the Company’s products are supplied to customers on a project-to-project basis under the Company’s order-based business model, the Company’s sales fluctuate depending on the Company’s ability to provide timely supply of its products. The Company has historically prioritized enhancing the quality of its products and making timely product deliveries, and it has been able to maintain a stable cooperative relationship with its customers by meeting their timing requirements and product specifications. However, if the Company is unable to meet the level of the timing and quality requirements of its customers, the contractual volume of future customer orders may decrease, which in turn could adversely affect the Company’s sales. In addition, investors should consider that the Company’s profitability may be adversely affected due to rising costs as a result of, among other things, increased costs related to quality improvement, facility investment and R&D expenses, as well as increased burden of fixed costs due to lower utilization rates.

A. Risks related to the Company’s revenue and profitability

In the first nine months of 2023, the Company recorded consolidated revenue of approximately KRW 13,934.9 billion, with its operating loss at approximately KRW 2,641.9 billion and its net loss at approximately KRW 2,627.3 billion. The Company’s revenue decreased by 26.1% compared to the same period of the previous year, while its operating loss and net loss increased by 118.5% and 138.5%, respectively. Such changes were primarily due to a delay in the improvement of the downstream demand, which in turn reflected, among other things, a continued economic slowdown and increased geopolitical risks, such as those from the Russia-Ukraine war and the Israel-Palestine dispute. As a result, the Company has recorded operating losses for six consecutive quarters from the second quarter of 2022 to the third quarter of 2023, and the Company may continue to experience weak profitability as it is unable to predict at this time as to when demand from downstream industries will recover in light of the global economic downturn. In addition, the Company generates a significant portion of its sales from a limited number of customers, and accordingly, any changes in the product strategies of such customers may significantly impact the Company’s sales. The Company intends to diversify its customer base by acquiring new customers through continued technology development. Despite the Company’s efforts at expanding its profitability through product and cost competitiveness, the Company’s sales and operating results may deteriorate in case of decreasing display panel prices or a decrease in its market share due to, among others, a delay in the recovery of the global economy and the demand in the downstream industries or intensifying competition among global competitors.

B. Risks related to selling and administrative expenses, R&D expenses and non-operating income and expenses

The Company’s consolidated selling and administrative expenses and R&D expenses in the first nine months of 2023 were KRW 2,123.2 billion, down by 9.8% compared to the corresponding period of the previous year, and the proportion of such expenses to the Company’s revenue increased to 15.2% in the first nine months of 2023 from 12.5% in the corresponding period of the previous year. If competition in the LCD and OLED display markets further intensify, such expenses may further increase due to, among other reasons, aggressive marketing. The Company also cannot assure you that R&D expenses may significantly increase due to changes in external factors, such as new products and technological trends. Furthermore, the Company holds large amounts of foreign currency-denominated assets and liabilities, which is an important factor for non-operating income and expenses (such as foreign currency gains and losses) and net profit of the Company. Investors should note that the Company’s profitability may be adversely affected by external factors that cannot be controlled by the Company. Meanwhile, in December 2022, the Company ceased the production of LCD television panels in Korea and classified its large OLED panel division as a separate cash-generating unit. For such separate cash-generating unit, the Company caused an evaluation of any sign of impairment in asset value. By reflecting conservative market prospects, such as sluggish downstream demand, the Company recognized an impairment loss of KRW 1,330.5 billion as other non-operating expenses. If, there is a material change in the future in the Company’s business portfolio, such as complete withdrawal from the LCD panel business, additional impairment loss relating to such development may be recognized.

C. Risks related to the Company’s financial stability

On a consolidated basis, the total borrowings of the Company as of September 30, 2023 amounted to KRW 17,556.4 billion, representing a 16.5% increase from December 31, 2022. The continued operating loss weakened the Company’s cash generating abilities. Due to sluggish demand for panels from the global economic slowdown and the Company’s investments to maintain its competitiveness in the area of small- and mid-sized OLEDs, among other factors, the Company’s liabilities-to-equity ratio as of September 30, 2023 was 322.2%, which was 106.9 percentage points higher than as of December 31, 2022. In particular, the Company’s liabilities-to-equity ratio as of December 31, 2022 was approximately five times higher than the industry average of 44.4% for the electronics, audiovisual, and communication equipment industry according to the Bank of Korea’s Corporate Management Analysis (2022), and the Company’s current ratio and total borrowings-to-assets ratio were also inferior compared to the industry average of 151.0% and 11.7%, respectively. Such figures primarily reflected the increase in the Company’s external borrowings for investments related to OLED panels due to a deterioration in its liquidity position caused by a decline in the profitability of the Company’s operations, as well as the continued high interest rate environment. However, the Company’s capacity to repay its borrowings is expected to be maintained at an adequate level, considering, among other factors, its superior technological capabilities and market leadership position, its cash generating power based on its profitability-focused product portfolio, and its creditworthiness. Meanwhile, the Company is making further strategic investments, such as the expansion of its existing production lines and construction of new production facilities, in order to increase its production capacity for large-sized OLED panels and small- and mid-sized OLED panels and development of new technologies. Due to the characteristics of the Company’s business sector, the Company faces pressures to make further investments in technological advances and the strengthening of its competitiveness. Accordingly, if the Company’s profitability deteriorates as a result of intensifying competition, the Company’s cash flow and financial stability could be negatively affected.

D. Risks related to the Company’s cash flows

The Company has continued to make investments for the purpose of constructing new production facilities and developing new technologies, among others, in order to proactively respond to technological changes in the display industry and maintain a leading market share and a competitive advantage of its products over its competitors. On a consolidated basis, the Company’s acquisition of property, plant and equipment in the first nine months of 2023 amounted to KRW 2,765.3 billion, which represented a 28.1% decrease from KRW 3,845.1 billion for the first nine months of 2022. While the level of the Company’s capital investment has decreased as it primarily focused on making essential investments in the ordinary course of business and investments for the Company’s transition to an order-based business model, the Company’s acquisition of property, plant and equipment may increase again in the future, as the Company is expected to make continued investments in production facilities to secure competitive advantage in light of the characteristics of the display panel industry. The Company’s total cash flows from operating activities on a consolidated basis increased in 2021, but has since continually declined until the third quarter of 2023. The Company recorded a negative cash flow of KRW 316.3 billion from its operating activities on a consolidated basis in the first nine months of 2023, as the Company’s profit-generating power weakened. In order to improve its financial stability, the Company aims to enhance its profitability by increasing the sales volume of small- and medium-sized OLED panels, minimizing inventory by adjusting utilization rates and reducing the scale of its capital expenditures. However, it may be difficult to reduce borrowings to a meaningful level in the short term due to the Company’s ongoing large-scale capital expenditures that exceed its operating cash flow levels. Accordingly, liquidity risks may materialize if improvement in the Company’s cash flows is delayed. Despite fluctuations in its profitability resulting from deteriorations in the market conditions, from 2020 to the third quarter of 2023, the Company has maintained approximately KRW 3.1 trillion in cash and cash equivalents at on average as of the end of each period, through its financing activities and execution of appropriate levels of capital investment while leveraging its solid cash-generating power. Nevertheless, if the level of competition further intensifies and/or the market prices further decline due to mismatches in supply and demand conditions in the display panel market, such events may cause a deterioration in the Company’s cash-generating power and further pressures to make additional investments, which in turn may have an adverse effect on the Company’s cash flows and financial stability.

E. Risks of a decline in credit rating due to a deterioration in financial stability

Korea Ratings Co., Ltd. (“KR”), Korea Investors Service Inc. (“KIS”) and NICE Investors Service Co., Ltd. (“NICE”) revised the credit rating of the Company from A+/Negative to A0/Stable on May 11, 2023, May 18, 2023 and May 19, 2023 respectively. Main grounds for such credit rating revisions were (i) the weakening of the Company’s capacity to generate profits due to a continued slowdown in the display panel industry, (ii) a decline in the Company’s financial stability following its conversion into an OLED-oriented business structure, in part due to its capital investment requirements and (iii) the expectation that it would be challenging to improve the Company’s business performance and substantially reduce its borrowings in the short term. If the Company’s ability to generate operating cash continues to be weaker, or if the Company’s financial indicators such as the EBITDA margin and net borrowings-to-assets ratio continue to worsen, the Company’s credit ratings may further be downgraded. A downgrading of the Company’s credit ratings may have negative effects on its financial stability, including an increase in its financing costs and the weakening of its ability to procure additional financing. Investors are advised to continually monitor the Company’s credit ratings before making an investment.

F. Risks related to inventory

The lifecycle of products in the industries of electronics products and IT devices, which constitute primary downstream industries of the Company’s business, is continuing to decrease due to rapid technological advancements. Furthermore, depending on changes in the demand in the downstream industries, the resulting impact on the demand for relevant components tends to be amplified by two to three times. As of September 30, 2023, the Company’s inventory on a consolidated basis amounted to KRW 3,348.5 billion, an increase of 16.6% compared to December 31, 2022, which was mainly attributable to the Company’s proactive expansion of its inventory levels to meet the year-end demand. The Company’s inventory turnover ratio was 10.2 times, 8.9 times, 8.0 times and 6.2 times in 2020, 2021, 2022 and the first nine months of 2023, respectively, which was lower than the industry average inventory asset turnover ratio of 8.9 times in 2022, mainly due to decreased sales as a result of slowdown in downstream industries. The Company seeks to manage its inventory levels efficiently by strengthening its global supply chain management and engaging in production based on the expected customer order levels. The Company is transitioning its business structure to an order-based business model, and accordingly, it plans to align its production levels with the production plans for downstream products of its major customers in order to prevent overinvestment in inventory. However, sudden changes in the downstream industries resulting in differences between planned and actual production volumes may nevertheless lead to an increase in the Company’s inventory levels and a further decline in the Company’s inventory turnover ratio, as well as a delay in the improvement of the Company’s profitability. Investors are advised to consider that an increase in the Company’s inventory levels may cause, among other things, an increase in the cost of managing such inventories and a reduction in the value of inventory over time, which in turn may negatively affect the Company’s profitability due to higher cost of sales as a result of the recognition of inventory valuation losses.

G. Risk of deterioration of profitability and financial stability due to delayed collection of trade accounts and notes receivable

The Company’s revenue increased from KRW 24.3 trillion in 2020 to KRW 29.9 trillion in 2021, and its trade accounts and notes receivable increased from KRW 3.5 trillion as of December 31, 2020 to KRW 4.6 trillion as of December 31, 2021. In 2022, the Company’s revenue decreased to KRW 26.2 trillion and its trade accounts and notes receivable also decreased to KRW 2.4 trillion as of December 31, 2022. For the nine months ended 2023, the Company’s revenue decreased to KRW 13.9 trillion, representing a 26.1% decrease compared to the nine months ended 2022, mainly due to the prolonged sluggishness in demand from downstream industries and extended replacement cycles for IT devices, while the amount of trade accounts and notes receivable decreased by 17.9% to KRW 2.4 trillion as of September 30, 2023. The ratio of the Company’s allowance for impairment of trade accounts and notes receivable was 0.03% in 2020, 0.03% in 2021 and 0.04% in 2022. As of September 30, 2023, the Company’s trade accounts and notes receivable decreased compared to as of December 31, 2022 due to lower revenue, but the ratio of the Company’s allowance for impairment of trade accounts and notes receivable remained constant at 0.04%. While the Company has had superior trade accounts and notes receivable turnover ratios compared to its peers in the past, investors are cautioned that the Company’s cash flows may be adversely affected in the future if the collection of its trade accounts and notes receivable does not proceed as planned due to reasons such as deteriorations in the business environment of customers or in the Company’s business relationships with key customers, or if trade accounts and notes receivable remain outstanding for a prolonged period due to a deterioration of customers’ ability to pay, which in turn could adversely affect the Company’s profitability and financial stability.

H. Risks related to fluctuations in exchange rate and interest rate

The Company’s overseas sales accounted for approximately 96.8% of its total consolidated revenue in the first nine months of 2023. The Company possesses assets and liabilities denominated in foreign currencies due to its consistent overseas sales transactions and is exposed to currency risks on sales, purchases and borrowings denominated in currencies other than in KRW, the Company’s functional currency. In order to hedge against the risks of interest rate fluctuations and exchange rate fluctuations on foreign currency denominated borrowings and bonds, the Company has entered into an aggregate of USD 2,065 million and CNY 345 million cross currency swap agreements with KB Kookmin Bank and others as of September 30, 2023. The Company’s exposure to interest rate risks relates primarily to its floating rate long term loan obligations. In order to hedge against the risk of interest rate fluctuations on foreign currency denominated borrowings with floating interest rates, the Company has entered into an aggregate of USD 1,565 million (equivalent to KRW 2,104.6 billion) in cross currency interest swap agreements and an aggregate of KRW 990 billion in interest rate swap agreements as of September 30, 2023. The Company regularly monitors, assesses and manages its risks relating to exchange rates and interest rates, and internally measures currency risks related to exchange rate fluctuations of major currencies in an effort to manage such risks. Nevertheless, drastic changes in exchange rates in the future caused by external factors beyond the Company’s control may adversely affect the Company’s net profit or loss by causing the Company to incur foreign currency-related losses. Furthermore, a decline in exchange rates (an appreciation of the KRW) may have an adverse effect on the sales of the Company by causing an increase in the prices of the Company’s products and thereby weaken their price competitiveness. In addition, due to the nature of the Company’s business, in which sales are primarily conducted in USD, any increase in the Company’s foreign currency assets could have a significant impact on the Company’s financial condition. Investors should be aware of such risks.

I. Risks related to related party transactions

In the first nine months of 2023, the Company’s sales to its related parties, including LG Electronics, amounted to approximately KRW 2,317.7 billion, approximately 16.6% of the Company’s total revenue of KRW 13,934.9 billion. Accordingly, the Company’s overall sales may be affected if the Company’s sales to related parties, including LG Electronics, decline due to adverse business conditions in the downstream industries. A future deterioration in the financial performance of the Company’s related parties or a change in the terms and conditions of transactions with related parties that is unfavorable to the Company may adversely affect the Company’s financial performance. In addition, the Company has close business relationships with some of its related parties, and accordingly, any risks relating to the Company’s affiliates may have an adverse impact on the Company’s business environment and profitability. Therefore, investors are advised to continually monitor the status of the Company’s transactions with its related parties before making their investment decision.

J. Risks relating to the business group status

The Company is a member company of the LG Group, which ranks as the fourth-largest business group in Korea as designated by the Korea Fair Trade Commission (the “KFTC”) in April 2023. As of December 31, 2023, the LG Group consisted of a total of 63 domestic affiliates engaged in electronics, chemical, telecommunications, service and other businesses. The LG Group is organized as a holding company, with Chairman Koo Kwang-mo and his specially related persons holding 41.7% stake as of September 30, 2023, and has stable control of its major direct and indirect subsidiaries. LG Electronics, the largest shareholder of the Company, is the top-tier affiliate of the electronics business division of the LG Group and owned approximately 37.9% (135,625,000 shares) of the Company’s shares as of the business day immediately preceding the date of this prospectus, and the Company’s management control is expected to remain stable. However, pursuant to the regulations relating to large business groups, the Company may be subject to certain restrictions on its business activities, such as providing debt guarantees and conducting mutual investments among affiliated companies, and approvals of board of directors are required for large-scale related party transactions.

K. Risks related to intellectual property disputes and litigation

Considering the characteristics of the display industry, in which R&D capabilities are directly linked to a company’s competitiveness, intellectual property rights and patented technologies play a very important role in the display industry. As of September 30, 2023, the Company has accumulated 27,275 domestic registered patents and 33,662 overseas registered patents, and in the first nine months of 2023, the Company has obtained 1,782 domestic patents and 1,662 overseas patents. However, even if the Company promptly applies the output of its R&D efforts (i.e., its newly developed technology) to the Company’s products, the Company cannot guarantee whether such output will be accepted by the market. In addition, no assurance can be given that the Company’s current measures will be sufficient to prevent misappropriation of its intellectual property rights or that the Company’s competitors will not independently develop alternative technologies that are equivalent to or superior to the technology developed by the Company based on its intellectual property rights. Investors are advised to note the potential risk of losses to the Company’s business in the event of infringements in intellectual property rights if such rights are not systematically managed.

L. Status of lawsuits, sanctions and contingent liabilities

As of September 30, 2023, the Company is a defendant in various lawsuits, including those filed against it and certain other LCD panel manufacturers for damages relating to alleged anticompetitive behavior of the defendants, but the final outcome of these lawsuits cannot be reasonably predicted. The Company has agreements with Korea Development Bank and several other banks for accounts receivable sales negotiating facilities of up to an aggregate of USD 1,000 million (KRW 1,344,800 million) in connection with the Company’s export sales transactions with its subsidiaries. The Company believes that its contingent liabilities are unlikely to materialize in the near term and thereby result in changes that would adversely affect its financial position. However, as future materialization of the Company’s contingent liabilities could have an adverse effect on the Company’s financial position, such events should be continually monitored. In addition, the relevant authorities’ sanctions against the Company may have an adverse effect on the Company’s business and reputation.

M. Risks related to review and audit of financial statements

On December 26, 2023, the FSS selected the Company as a target for the review of the Company’s financial statements as of and for the year ended December 31, 2022 pursuant to Article 23, Paragraphs 1 through 3 of the Regulations on External Audit and Accounting, etc., and such review is currently ongoing. The FSS conducts its review and audit processes in accordance with the Act on External Audit of Stock Companies and the Regulations on External Audit and Accounting, etc. The Company is in the process of submitting relevant materials and responding diligently to the FSS’ review process. Although the target processing period for the ongoing FSS review is expected to be approximately three months, the actual processing period may be extended if any violations of accounting standards are identified, issues related to the interpretation of accounting standards arise or other unavoidable circumstances occur, and the outcome of such review cannot be predicted at this time. While the FSS review may conclude with no further actions required, the FSS may proceed to order a formal audit if it identifies any intentional or grossly negligent violation of accounting standards or if the Company fails to implement the recommendations by the FSS to correct a violation of accounting standards. Investors should note that if the FSS review is converted to an audit, the result of such audit may include no further actions or regulatory sanctions including the imposition of fines, which could adversely affect the Company’s reputation and business.

A. Risk of change in shareholding ratio as a result of the largest shareholder’s subscription participation rate

As of the business day immediately preceding the submission date of this prospectus, the largest shareholder of the Company’s common shares is LG Electronics, which (together with its specially related persons) held 37.91% of the Company’s shares. On December 19, 2023, LG Electronics, the Company’s largest shareholder, announced its participation in the proposed offering to subscribe for 120% of the new shares allocated to it, including 20% in oversubscribed shares. If LG Electronics is allocated with the maximum number of its oversubscribed shares, it will be allocated with an aggregate of 51,737,236 new shares in this proposed offering. However, the actual allocation of oversubscribed shares may change depending on the actual results of subscription. LG Electronics’ shareholding in the Company is estimated to decrease by 0.43 percentage points to 37.47% after the completion of this proposed offering. Depending on the number of new shares the largest shareholder and its specially related persons will subscribe to in this proposed offering, the shareholding of the largest shareholder and its specially related persons may change.

B. Restriction on the liquidity of new shares and risk of loss due to stock price fluctuations

If investors participate in this proposed offering subscription and subscribe to new shares, there will be constraints on the liquidity of the new shares, and there is a possibility of loss of principal if the market price declines between the subscription date and the additional listing date. Investors are advised to be aware of such constraints.

C. Offering method and subscription procedures and risks of a decline in the share prices

Upon the completion of this proposed offering, 142,184,300 new shares, representing 39.74% of the 357,815,700 common shares of the Company that are currently outstanding, are expected to be newly issued and listed. This proposed offering will be conducted as an offering of Share Rights to existing shareholders followed by a general public offering of unsubscribed shares, if any. Since it is possible for existing shareholders to oversubscribe in the Rights Offering, investors are advised to maintain an accurate understanding of the offering method and subscription procedure before making any investment decision. In particular, given the significant scale of this proposed offering, which is equivalent to approximately 30% of the Company’s market capitalization of approximately KRW 4.6 trillion as of one day prior to the submission of this prospectus, there is a possibility that the stock price may decrease due to the withdrawal of the increased number of shares and share price dilution. In addition, if the new shares are not fully subscribed even after the general public offering, the Joint Lead Managers will subscribe for their own accounts. If the Joint Lead Managers sell a large amount of such shares they subscribed to in the near term, the market price of the Company’s common shares may decline due to the temporary increase in the volume of the Company’s shares released for sale. Even if the Joint Lead Managers hold their subscribed shares for some time, their subscribed volume will exist as being potentially available for sale, which will likely act as a constraint on the market price of the Company’s common shares.

D. Risk of decrease in the aggregate offering proceeds due to stock price decline

A significant decrease in the aggregate proceeds of this proposed offering due to a material deterioration of the stock market may have an adverse effect on the Company’s funding plans, which in turn may negatively impact the Company’s financial stability. Investors are advised to consider such possibility.

E. Risk of changes in the offering timetable

This prospectus may be amended during the disclosure review process, and if the main contents closely related to investment judgment are changed, the schedule may be delayed or postponed due to correction orders from supervisory agencies. In addition, the schedule may be changed based on the working progress with the related institutions. Investors are advised to consider such possibility.

F. Limitations of analytical information and risks related to investment decisions

The value of the Company’s shares acquired through this offering may decrease. The effectiveness of this prospectus does not constitute an acknowledgment by the government that the statements in this prospectus are true or accurate, nor does it endorse or approve the value of these securities, and the statements are subject to change prior to the subscription date. In addition, this prospectus contains forward-looking information. Investors should not make investment decisions solely based on the information described in the investment risk factors described in this prospectus but should make their own judgment through careful review from various perspectives.

G. Risks of stricter regulatory standards for listed companies

Recently, the applicable regulatory standards for listed companies have been becoming stricter. Non-compliance with such regulatory standards may result in various regulatory sanctions, including the Company’s listed securities becoming subject to trading suspensions, inclusion in the watchlist of the stock exchange administrator, review for potential delisting, and actual delisting.

H. Risk of class action lawsuits

If the Company causes damage to its shareholders by providing misleading information or engaging in insufficient audits, class action lawsuits may be filed by certain shareholders. Investors should consider such risk.

I. Risks of withdrawal of offering

This proposed offering may be withdrawn at the discretion of the Company or the Joint Lead Managers due to events that may materially affect the offering process. If this proposed offering is withdrawn before the payment of the subscription price, no losses will be incurred by the reason of making such subscription. However, depending on the time of such withdrawal, losses may be incurred due to, among other things, a decrease in the market price of the Company’s common shares due to ex-rights or the trading of the Share Rights. Investors should consider such risk.

J. Risks related to restriction on participation by persons engaged in leveraged short sales

Pursuant to the applicable amendment to the Enforcement Decree of the Financial Investment Services and Capital Markets Act by the Financial Services Commission in connection with a regulatory reform of short-selling procedures, persons who have engaged in the short sale of a listed company’s shares during the period between the date of the announcement of such company’s paid-in capital increase and the last day of the trading period for calculating the definitive subscription price for such paid-in capital increase are restricted from participating in such paid-in capital increase, except in limited circumstances (See Article 180(4) of the Financial Investment and Capital Markets Act.)

General Matters Regarding the Offering or Sale

(Unit: KRW, Shares)

Type of

Securities    

Offering (or Sale)

Method

Common shares

Whether underwritten (arranged)   

Whether public offering for listing of equity securities, etc. is done

Underwritten

Underwriter (Manager)          

Consideration for
Underwriting

Joint Lead Manager

Joint Lead Manager

Joint Lead Manager

Joint Lead Manager

Subscription Date     

Payment Date

Date of Public

Notice of

Subscription

Date of Public

Notice of

Allocation

Record Date for

Allocating Share

Rights

Short-Selling Transaction Period during which Subscription hereunder is Prohibited

Start date

Expected Use of Proceeds

Item

Amount

Matters regarding Share Rights

Securities subject to preemptive rights

—

Matters regarding the Seller

Holder

Relationship with

the Company

Number of

securities held

prior to the sale

Number of

securities sold

Number of

securities held

after the sale

—

—

—

—

—

Redemption Request Right of General Public Subscribers

Reason for the

grant of the right

Investors entitled

to exercise the

right

Number of

securities for

which the right is

exercisable

Exercise period

Exercise price

—

—

—

—

—

1) The joint lead managers for the paid-in capital increase through general public offering of unsubscribed shares after allocation to existing shareholders of the Company are Korea Investment & Securities Co., Ltd., NH Investment & Securities Co., Ltd., KB Securities Co., Ltd. and Daishin Securities Co., Ltd.

2) The subject paid-in capital increase is on the “stand-by underwriting” basis, under which the joint lead managers shall subscribe for the unsubscribed shares resulting from general public offering of shares that remain unsubscribed after the Share Rights (as defined below) offering to existing shareholders. For details of the subscription method and subscription price, please refer to “Chapter 1. Matters Regarding the Offering or Sale – I. General Matters Regarding the Offering or Sale – 5. Matters Regarding Underwriting, etc.”

3) The above offering price refers to the Definitive Subscription Price (as defined below).

4) The above subscription dates refer to the subscription dates for existing shareholders, and the subscription dates for the general public offering are March 11, 2024 and March 12, 2024 (two (2) business days). A public notice of subscription for general public offering is scheduled to be posted on the websites of the Company and the joint lead managers on March 8, 2024.

5) Subscription for the general public offering in Korea is available at the head office and branches of each of the joint lead managers (Korea Investment & Securities Co., Ltd., NH Investment & Securities Co., Ltd., KB Securities Co., Ltd. and Daishin Securities Co., Ltd.), as well as at their websites and HTS and MTS. However, under Article 9(2)7 of the Regulation on Securities Underwriting Business, Etc., if the total number of the shares to be allocated to high-yield and high-risk investment trusts and general public subscribers is not more than 5,000 shares (based on the par value per share of KRW 5,000), or if the total public offering amount is not more than KRW 100 million, the joint lead managers may subscribe therefor for their own account without allowing subscription through a general public offering.

6) Under Article 180-4 of the Financial Investment Services and Capital Markets Act and Article 208-4 (1) of the Enforcement Decree thereof, no person who engaged the short-selling of, or entrusted the short-selling of, any shares of the Company from December 19, 2023 to February 29, 2024 may subscribe in this proposed offering, and pursuant to Article 429-3(2) of the above act, a fine may be imposed for any acquisition of shares in violation thereof. However, acquisition of shares may be permitted as an exception if it falls under Article 208-4(2) of the Enforcement Decree thereof and Article 6-34 of the Regulation on Financial Investment Business and does not impede the establishment of a fair offering price.

7) In case of correction of descriptions herein due to a change in important matters in the course of examination of this public disclosure form by the Financial Supervisory Service (“FSS”), there may occur a change in the timetables described in this document.

8) The effectiveness of the related registration statement does not confirm that the descriptions herein are true or correct, or represent the government’s guarantee or approval of the value of the subject securities. Accordingly, the responsibility for the investment in the subject securities falls solely on the shareholders and investors.

9) The various expenses for issuance will be paid out of the funds of the Company.

Overview of Public Offering

Information on the offering (or sale)

Type of Shares  

Offering (or Sale) Method

Registered common shares

Basis for the calculation of the first indicative subscription price

u   First Indicative Subscription Price (KRW 10,070) =

Number of
Days   

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

First Indicative Subscription Price

Any amount less than the quotation unit of the Company’s common shares shall
be rounded up, and if the resulting amount is less than the par value, the par value
shall be the estimated subscription price.

Basis for the calculation of the second indicative subscription price

Number of
Days   

1

2

3