Simtek Holdings: "Capital Impairment Is an Accounting Effect... Will Be Fully Resolved by Year-End"

Simtek Holdings announced on December 9 that the "adverse opinion" in the semi-annual review (audit) disclosure (capital impairment ratio of 50% or more) was due to a "temporary accounting effect caused by the downturn in the semiconductor market cycle."

On this day, Simtek Holdings stated through its disclosure on the "confirmation of facts regarding adverse opinion in semi-annual review (audit)" that the capital impairment ratio based on the semi-annual report was calculated at 77.2%.

Simtek Holdings explained, "The consolidated capital was temporarily reduced due to a decrease in profit contributions from consolidated subsidiaries as a result of the global semiconductor industry slowdown in 2023 and 2024, as well as valuation losses related to the 120 billion won worth of convertible bonds (CB) and bonds with warrants (BW) issued by Simtek, our major operating subsidiary, in March last year." The company added, "The external auditor's opinion is 'unqualified,' so there are no issues with our financial soundness."

Simtek Holdings expects to fully resolve the capital impairment by the end of the year. The company stated, "Currently, the performance of Simtek Holdings' consolidated subsidiaries has been on a recovery trend since the second half of this year," and added, "In the case of Simtek, most of the aforementioned CB and BW will be converted into shares and incorporated into capital." The company further noted, "Based on the balance sheet at the end of 2025, the capital impairment will be completely resolved."

The company also emphasized that trading on the stock market will continue as normal without any changes. Simtek Holdings stated, "Due to the temporary capital impairment ratio exceeding 50%, there is a possibility of being designated as an 'investment caution alert item' in the future, but this is merely a procedural measure for investor awareness." The company stressed, "This does not meet the requirements for trading suspension, and there will be no restrictions on stock trading."