| Article 23 | The analysis of the previous cash capital increase, merger or acquisition, issue of new shares in connection with the acquisition of shares of another company, or plan of utilization of capital from issuance of corporate bonds, the following items shall be specified:
- Contents of the plan: for the previous cash capital increase, merger or acquisition, issue of new shares in connection with acquisition of shares of another company, or corporate bond issue plan, and, as of the quarter preceding the prospectus publication date, for every preceding cash capital increase, merger or acquisition, issue of new shares in connection with acquisition of shares of another company, or corporate bonds issue plan that has not yet been completed or the actual completion date of which was no more than 3 fiscal years from the date of the registration, a detailed explanation shall be given of the specific content of each such plan, including the content of each and every changed plan, the source of capital and its usage, reasons for the change, the effects before and after the change, the date that the changed plan was proposed to the shareholders meeting, and the date on which the above information was posted to the information disclosure website designated by the FSC shall also be published.
- Implementation status: Analyzing, item by item up to the quarter immediately preceding the prospectus publication date, the status of the plans' implementation and the comparison with the originally projected effects based on the purpose of each of the above-mentioned plans. If the implementation progress or effect does not reach the projected target, a concrete explanation on the causes, impact on the shareholders' equity and improvement plans shall be made. If the content of any of the plans referred to in the preceding subparagraph is as set forth in the following sub-subparagraphs, the information set forth herein below shall also be disclosed:
- For acquiring or merging with, or taking assignment of, other companies, or expanding or newly constructing property, plant and equipment, compare and describe the property, plant and equipment, operating revenue, operating costs and operating income, etc.
- For investments in other companies, the prospectus shall describe the operation status of the company invested in and its impact on the company's investment profit/loss.
- For strengthening the operating capital or paying off liabilities, compare and describe the increase and decrease of current assets, current liabilities, total liabilities, interests payments, operating revenues, and the retained earnings per share etc. as well as financial structure analysis.
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| Article 24 | The plan for the current cash capital increase, issuance of corporate bonds, issuance of employee stock warrants, or issuance of new restricted employee shares shall specify the following items:
- Sources of capital: Description of whether a cash capital increase or issue of corporate bonds is the capital source for the current plan. If the capital is used to acquire or to invest in other companies, or to expand or newly construct property, plant and equipment, the prospectus shall set forth the total amount of the plan. If the funds from the current offering are insufficient, the fund raising methods and sources shall also be described.
- For the current issue of corporate bonds, relevant particulars, the method for raising the bond redemption funds, and the method for custody of the funds, shall be disclosed in accordance with Article 248 of the Company Act. If an FSC approved or recognized credit rating institution has been engaged to conduct a credit rating of the bonds, the prospectus shall set forth the name of the credit rating institution, the date of the rating, and the credit rating results shall also be disclosed. If conversion, exchange, or subscription rights are attached to the bonds, the issuance and conversion, exchange, or subscription rules, possibility of dilution of equity under the terms and conditions of issuance, and effect on shareholder equity shall be disclosed.
- For the current issue of preferred shares, the prospectus shall set forth the par value per share, issue price, effect of issuance terms and conditions on preferred share shareholders' equity, possible conditions of dilution, effect on shareholder equity, and items provided under Article 157 of the Company Act shall be disclosed. If conversion or subscription rights are attached to the shares, the prospectus shall set forth the issuance and conversion rules or subscription rules (including enjoyment and assumption, after the compulsory conversion of the original preferred shares, of rights and obligations existing on the original preferred shares before conversion, such as dividends that have not yet been distributed) shall be disclosed.
- Where a company listed on the TWSE or the TPEx issues preferred shares that are not to be TWSE listed or TPEx listed, the purpose of issuance, the reason the shares are not to be listed on the TWSE or the TPEx, the effect on the interests of current shareholders and potential investors, and whether there is any plan to apply for TWSE listing or TPEx listing in the future shall be disclosed.
- If new shares are issued by a company that has received approval (in accordance with the provisions of Article 5 of the Taipei Exchange Rules Governing Review of Emerging Stocks for Trading on the TPEx) for its shares to be traded on the TPEx, the company shall describe its futures plans for listing its shares on the TWSE or the TPEx.
- If employee stock warrants are to be issued, disclose the rules governing the issuance and exercise of employee stock warrants.
- If new restricted employee shares are to be issued, disclose the rules governing the issuance of new restricted employee shares.
- Explanation of the feasibility, necessity, and reasonableness of the current plan and an analysis of the influence of each type of funding on the dilution of earnings per share for the fiscal year of the company's registration and the following year. For issuance of stock at below par value, the necessity and reasonableness of issuing new shares at a discount shall be explained, as well as the reasons for not using other capital raising methods and the reasonableness thereof, and the amount of offsets against capital reserves or retained earnings.
- Explanation of the mechanism for setting the current issue price, conversion price, exchange price, or subscription price.
- Capital utilization estimates and possible resulting effects: Explanation of the progress of the capital utilization and the projected resultant effects after the completion of the current plan:
- In the case of acquiring other companies or expanding or newly constructing property, plant and equipment, the prospectus shall set forth the projected possible increased production/sales volume, value, cost structure (including total cost and unit cost), changes of profitability, improvement of product quality and other potential effects upon the completion of the current plan shall be described.
- In the case of investing in other enterprises, the following items shall be set forth:
- The after-tax net profit of the invested company for the most recent 2 fiscal years, purposes of the investment, planned use of the funds and the relatedness of the enterprise's operations to the company's line of business, and the loss/profits from investment and its impact on the company's operations. If 20 percent or more of the investee enterprise's common shares are held, the prospectus shall set forth the projected schedule for fund use by the investee enterprise, the number of years within which the invested funds are to be recovered, the projected effect each fiscal year before recovery of the funds, and its influence on the company's profitability and earnings per share.
- If investing in companies where special approval is required, the prospectus shall set forth the status of approval or permission from the competent authority in charge of such special permit enterprises, and whether any terms or conditions attached to the approval or permission have an effect on this offering and issuance of securities.
- In the case of replenishing operating capital or paying off liabilities, the following items shall be set forth:
- The amount of debt matured annually, repayment plan, status of projected relief of financial burden, current capital utilization status, amount of needed capital and proposed usage plan, and each month's projected schedule of cash receipts and expenditures for the fiscal year of the registration and the coming 1 fiscal year. (Table 50)
- The policy for collection of accounts receivable and payment of accounts payable, capital expenditure plan, and the financial leverage and debt ratio (or the self-provided capital and risk capital ratio) for the fiscal year of the registration and the coming 1 fiscal year, and the reasons for paying off liabilities or enriching operating capital.
- If the capital increase plan involves paying off liabilities, the prospectus shall set forth the purpose for borrowing funds and the effect achieved in doing so. If the funds were borrowed to purchase a piece of land for construction, or to pay for the costs of a construction project, or to undertake contracted works, the prospectus shall set forth the estimated total amount needed from the purchase of the construction land to the completion of sale of the construction project or the completion of the contracted works, the source of extra capital needed, the capital for each stage of construction and the progress of the construction, the original reason for borrowing funds, and the timing and amounts for recognizing any profits/losses and the anticipated possible effects of such recognition and the status of realization thereof.
- In the projected schedule of cash receipts and expenditures, if the total combined amount of any significant capital expenditures and long-term equity investments in the future reaches 60 percent of the amount of the current capital raising plan, the prospectus shall specify the necessity, anticipated sources of funding, and benefits of those expenditures and investments.
- In the case of buying a piece of land for construction, or paying the costs of a construction project, or undertaking contracted works, the prospectus shall set forth the estimated total amount needed from the purchase of the construction land to the completion of sale of the construction project or the completion of the contracted works, the source of extra capital needed, the capital for each stage of construction and the progress of the construction, the original reason for borrowing funds, and the timing and amounts for recognizing any profits/losses and the anticipated possible effects of such recognition and the status of realization thereof.
- In the case of purchasing an unfinished project and assuming the burden of the seller's unfulfilled contract, the prospectus shall set forth the buyer's reason for the transfer, the basis on which the acquisition price was determined, and the effect of the process of acquisition on the rights and obligations of the parties to the contract.
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| Article 26 | For the current issue of new shares in connection with acquisition or merger, the following items shall be specified:
- Plan content:
- Content of the merger or acquisition plan: including the purpose of the merger or acquisition; the integration plan for financial, business, personnel, information, etc. affairs after the merger or acquisition and anticipated benefits; the share conversion ratio and the basis upon which it was calculated; proposed schedule; items that materially affect the share conversion ratio after the public announcement of the merger or acquisition; effects on net value per share and earnings per share; matters related to the assumption of rights and obligations of the extinguished company (including principles for handling treasury shares and already-issued equity securities), and the basic identifying information of the company to be merged or acquired (Table 51).
- Content of the split plan: the purpose of the split; estimated value of the operations and assets planned to be assigned to the existing company or new company; share conversion rates and the basis upon which they were calculated; the total number and the types and quantities of the shares to be acquired by the split company or its shareholders; matters related to assumption by the existing company or new company of rights and obligations of the split company (including principles for handling treasury shares and already-issued equity securities); matters related to the reduction, if any, in capital of the split company; anticipated benefits of the split.
- Merger or acquisition contract.
- Opinion of an independent professional on the reasonableness of the share conversion rate of the merger or acquisition plan.
- Any restrictions on future transfer or pledge of new shares issued due to the merger or acquisition.
- The projected consolidated balance sheet as of the record date for calculating the share conversion ratio between the merging and merged companies.
- Financial reports of the merged company for the most recent 2 fiscal years, audited and attested by a CPA or CPAs. (If the merged company is not a publicly issued company, its financial reports may be audited and attested by a single CPA.)
- Minutes of the shareholders meeting of the merged company at which the resolution for merger was passed; however, this restriction shall not apply where any act or regulation provides otherwise.
- Summary of the merged company's financial and business conditions:
- The main content of the merged company's business operations, current products and their uses or current services, the condition of the supply of the main raw materials, and the sales areas for the main products or services shall be set forth.
- Where the merged company is not a public company, if assets listed among the merged company's major assets during the most recent 2 fiscal years or during the current period up to the prospectus publication date are bought/sold in an amount equivalent to 20 percent of the company's paid-in capital, or if such amount reaches 300 million New Taiwan Dollars or more, any endorsements, guarantees, or loans made to other parties shall be set forth. However, in the case of shares issued by a company with no par value or a par value other than NT$10 per share, the calculation of 20 percent of the paid-in capital shall be replaced by 10 percent of the equity attributable to owners of the parent. (Tables 52 to 54)
- In accordance with Article 21, subparagraph 1, a summary of the merged company's investments in other companies shall be set forth.
- In accordance with Article 22, important contracts signed by the merged company shall be set forth and the effect on the company's financial and business conditions after the merger shall be described.
- In accordance with subparagraph 2 of Article 9, major litigation, non-litigation, and administrative disputes of the merged company and related companies shall be set forth and the effect on the company's financial and business conditions after the merger shall be described.
- If the merged company is a construction company or has a construction department, the estimated income and gross profit for each construction project during the fiscal year of registration and the preceding fiscal year shall be set forth, and the estimated sales of completed but not yet sold projects shall be described.
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