[November 16, 2005]

OSE USA, Inc. Reports Third Quarter 2005 Results

SAN JOSE, Calif. --(Business Wire)-- Nov. 16, 2005 -- OSE USA, Inc. (OTCBB:OSEE), reported its results today for the third quarter ended October 2, 2005.

Revenues for the three and nine-month periods ended October 2, 2005 from continuing operations were $758,000 and $2,163,000, respectively, compared with revenues of $1,240,000 and $3,470,000 for the same periods one year ago. The Company reported a net loss applicable to common stockholders of ($396,000) or ($0.01) per diluted share, for the third quarter of 2005, compared with a net loss applicable to common stockholders of ($92,000) or ($0.00) per diluted share, for the same quarter of 2004. For the first nine months of 2005, the Company reported a net loss applicable to common stockholders of ($1,315,000) or ($0.02) per diluted share, compared with a net loss applicable to common stockholders of ($1,032,000) or ($0.02) per diluted share, for the same period 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 October 31, 2, 2004 2005 (Unaudited) --------- ------------ Assets Current assets: Cash and cash equivalents $533 $588 Accounts receivable, net of allowance for doubtful accounts of $135 and $131, respectively 1,708 2,551 Prepaid expense and other current assets 47 116 --------- ------------ Total current assets 2,288 3,255 Property and equipment, net 59 49 Intangible assets, net of accumulated amortization of $1,826 and $2,093 respectively 1,731 1,464 --------- ------------ Total Assets $4,078 $4,768 ========= ============ Liabilities Convertible Preferred Stock and Stockholders' Deficit Current liabilities: Loans payable - related party $26,102 $26,102 Accounts payable - related parties 6,147 7,454 Accrued dividends and interest on unpaid dividends 5,037 5,968 Accrued expenses and other liabilities 1,105 1,009 Liabilities from discontinued operations 667 633 --------- ------------ Total current liabilities 39,058 41,166 Deferred gain on sale of facilities 423 320 --------- ------------ Total Liabilities 39,481 41,486 --------- ------------ 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, $0.001 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) (102,332) --------- ------------ Total stockholders' deficit (46,503) (47,818) --------- ------------ Total liabilities and stockholders' deficit $4,078 $4,768 ========= ============ OSE USA, Inc. Condensed Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) Three Months Ended Nine Months Ended ------------------ ------------------ September October September October 26, 2, 26, 2, 2004 2005 2004 2005 --------- ------- --------- -------- Revenues $1,240 $758 $3,470 $2,163 Operating expenses: Selling, general and administrative 844 614 3,006 1,973 --------- ------- --------- -------- Total operating expenses 844 614 3,006 1,973 --------- ------- --------- -------- Operating income from operations 396 144 464 190 Interest and other income 8 2 16 41 Interest expense (195) (197) (629) (586) --------- ------- --------- -------- Income (loss) from operations before taxes 209 (51) (149) (355) Provision for taxes 2 29 4 29 --------- ------- --------- -------- Net income (loss) 207 (80) (153) (384) Preferred stock dividends 299 316 879 931 --------- ------- --------- -------- Net loss applicable to common stockholders $(92) $(396) $(1,032) $(1,315) ========= ======= ========= ======== Per share data: Net loss applicable to common stockholders - basic and diluted $(0.00) $(0.01) $(0.02) $(0.02) Number of shares used to Compute per share data (see Note 6 to financial statements) - basic and diluted 56,726 56,726 56,726 56,726 *T

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