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Article 3
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On the front cover of the prospectus, the common stock code shall be printed in the upper right-hand corner, and the following particulars shall be printed in sequential order:
1. The name and seal of the company or preparatory office.
2. Where the prospectus is prepared for the purpose of issuing the following securities:
A. Issuance of new shares: the source of this new issue, types of new shares, number of shares, value, conditions of the issue, the public underwriting ratio, and manner of underwriting and sale allocation. If there are specially agreed conditions for preferred shares, the page number in the prospectus where these are set forth in full shall be separately noted.
B. Issuance of corporate bonds: types, value, interest rate, conditions of issue, the public underwriting ratio, and manner of underwriting and sales allocation. If there are conversion or subscription features, the page number in the prospectus where these are set forth in full shall be separately noted.
C. Issuance of employee stock options: number of units issued, number of shares each unit represents, terms and conditions, and method of performance. For terms and conditions, readers may be referred simply to the page number in the prospectus where these are listed in full.
D. Issuance of new restricted employee shares: type of issue, number of shares, value, and terms and conditions of issuance. For conditions of issuance, readers may be referred simply to the page number in the prospectus where these are listed in full.
E. Establishment by public offering: authorized capital amount, source of the current issuance of new shares, types of new shares, number of shares, value, terms and conditions of issuance and the number of shares subscribed by the promoters.
F. Other.
3. Summary of the purpose of the capital utilization plan and the projected possible effect thus created. The page numbers in the prospectus where this is set forth in full shall also be noted.
4. Fees and charges related to the current issuance:
A. Underwriting fees.
B. Other fees and charges, including such other fees and charges as related to certified public accountants and attorneys (no itemization is required).
5. The following statements shall be printed in a conspicuous manner:
A. The effective registration of the securities may not be cited in an advertisement as proof of the veracity of registration particulars, or to guarantee the value of the securities.
B. If the prospectus contains false or omitted information, the issuer and its responsible person and all other persons who sign or affix their seal on the prospectus shall be held liable in accordance with laws.
C. Before making any investment, investors shall go to the information disclosure website designated by the Financial Supervisory Commission (FSC) to carefully read the content of the prospectus and take note of the company's risks. The page number in the prospectus where these are set forth in full must be separately noted.
D. The web addresses for enquiry about the prospectus, including the address of the information disclosure website designated by the FSC and the web address used by the company to disclose information relating to the prospectus.
6. Publication date.
A prospectus prepared in order to register for public offering and issuance of securities shall note on its front cover that it is a draft version for the purpose of such registration.
Where any of the following occurs, the company shall make a statement to that effect in bold typeface on the cover of the prospectus:
1. Where there has been a change in the common stock code referred to in the preceding paragraph, both the original stock code and the new stock code shall be printed in the fiscal year in which such change occurred and in the 2 consecutive fiscal years thereafter.
2. Where there has been a change in the company name as referred to in the first paragraph, the change shall be disclosed by printing the new and old names adjacently in the fiscal year in which such change occurred and in the 2 consecutive fiscal years thereafter.
3. If stabilization operations are proposed in connection with cash capital increase in accordance with the relevant regulations, the following statement shall be noted: "To deal with price fluctuations in the stock market, the underwriter may proceed with stabilization operations regarding the issued shares of the current issuance if necessary."
4. Where an issuer is registering to issue shares at below par value, it shall also note that the company is issuing the new shares at a discount.
5. The par value of the shares.
6. Where an issuer is registering to issue stocks or straight corporate bonds and purchasers of the stocks or the bonds are restricted, it shall note the restriction.
7. Where new shares are issued upon merger or acquisition (including merger or consolidation, acquisition, or split) or acquisition of another company's shares, if there are any restrictions on transfer or pledge of the issued shares, such restrictions shall be noted.
8. For cases of establishment by offering and of public offerings by companies whose shares are neither listed on the Taiwan Stock Exchange (TWSE) (hereinafter, are "unlisted") nor traded on the Taipei Exchange (TPEx), the following shall also be noted: "The shares are neither listed on the TWSE nor traded on the TPEx."
9. For cases of public offerings by companies whose shares listed and traded on the Taiwan Innovation Board (TIB) of the TWSE, the following shall be noted: "The company is a TIB listed company, with relatively high operational risk."
10. The company has an accumulated deficit or has had 2 consecutive years of losses, and its net worth per share is lower than par value.
11. If the company adopts the shelf registration method for the issuance of new shares, the following shall be noted: "The shelf registration method is adopted for the current issue of new shares for cash capital increase."
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Article 24
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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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