[May 18, 2005]

OSE USA Inc. Reports First Quarter 2005 Results

SAN JOSE, Calif. --(Business Wire)-- May 18, 2005 -- OSE USA Inc. (OTCBB:OSEE), reported its results today for the first quarter and year ended April 3, 2005.

Revenues from the continuing operations were $645,000 and $1,023,000 for the first quarter ended April 3, 2005 and March 28, 2004, respectively. The Company reported a net loss from operations applicable to common stockholders of ($588,000) or ($0.01) per diluted share, for the first quarter of 2005, compared with a net loss of ($308,000) or ($0.01) per diluted share, for the first quarter of 2004.

Founded in 1992, OSE USA, Inc. has been the nation's leading onshore advanced technology IC packaging foundry. In May 1999 Orient Semiconductor Electronics Limited (OSE), one of Taiwan's top IC assembly and packaging services companies, acquired a controlling interest in IPAC, boosting its US expansion efforts.

After the closure of its US manufacturing operations, the Company has focused on servicing its customers through its offshore manufacturing affiliates. OSE USA's customers include IC design houses, OEMs, and manufacturers. -0- *T OSE USA, Inc. Condensed Consolidated Balance Sheets (In thousands except share and per share data) December 31, April 3, 2005 2004 (Unaudited) ------------ ------------- Assets Current assets: Cash and cash equivalents $533 $391 Accounts receivable, net of allowance for doubtful accounts of $135 and $155 respectively 1,708 1,752 Prepaid expense and other current assets 47 206 ----------- ------------- Total current assets 2,288 2,349 Property and equipment, net 59 55 Intangible assets, net of accumulated amortization of $1,826 and $1,915, respectively 1,731 1,642 ----------- ------------- Total Assets $4,078 $4,046 =========== ============= Liabilities, Convertible Preferred Stock, and Stockholders' Deficit Current liabilities: Loan payable - related party $26,102 $26,102 Accounts payable - related parties 6,147 6,388 Accrued dividends and interest on unpaid dividends - related party 5,037 5,344 Accrued expenses and other liabilities 1,105 1,179 Liabilities from discontinued operations 667 635 ----------- ------------- Total current liabilities 39,058 39,648 Deferred gain on sale of facilities 423 389 ----------- ------------- Total Liabilities 39,481 40,037 ----------- ------------- Convertible preferred stock, $0.001 par value; 20,000,000 shares authorized; 6,023,225 (Series A: 3,000,000 shares, Series B: 3,023,225 shares) issued and outstanding; liquidation preference: Series A: $1.70 per share, Series B: $1.98 per share 11,100 11,100 Stockholders' deficit: Common stock, $.001 par value; 300,000,000 shares authorized; 56,725,808 shares issued and outstanding 56 56 Additional paid-in capital 54,458 54,458 Accumulated deficit (101,017) (101,605) ----------- ------------- Total stockholders' deficit (46,503) (47,091) ----------- ------------- Total liabilities and stockholders' deficit $4,078 $4,046 =========== ============= OSE USA, Inc. Condensed Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) Three Months Ended -------------------- March 28, April 3, 2004 2005 --------- ---------- Revenues $1,023 $645 Operating expenses: Selling, general and administrative 824 752 --------- ---------- Operating income (loss) from operations 199 (107) Interest and other income - 19 Interest expense (217) (193) --------- ---------- Net loss from operations (18) (281) Preferred stock dividends and interest on unpaid dividend 290 307 --------- ---------- Net loss applicable to common stockholders ($308) ($588) ========= ========== Per share data: Net loss per share applicable to common stockholders - basic and diluted ($0.01) ($0.01) Number of shares used to compute per share data basic and diluted 56,726 56,726 ========= ========== *T

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