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Industrial circumstances and operational risks:
- Operational risks of the sector in which the issuing company runs its business:
The underwriter shall list by way of example, taking into consideration the macro economy, the operational risks of the sector in which the issuing company runs its business (e.g. economic cycles, changes in the upstream/downstream of the industry, future development of the business, and product substitution).
- Operational risks of the issuing company:
The underwriter shall list by way of example the operational risks such as to the issuing company's business operation, technical capabilities, R&D, patents, human resources, finance (including costs and exchange rate fluctuations).
Where the listing application is filed in accordance with Article 4, paragraph 2 or 3, or Article 28-1, paragraph 5 or 6 of the Taiwan Stock Exchange Corporation Rules Governing Review of Securities Listings (“Review Rules”), the information about operation model and its risks, and the future development plan shall be described and explained.
For a technology-based enterprise, cultural and creative enterprise or information software enterprise, the underwriter shall also describe the following:
- assessment of the probability of accomplishment of projected production time schedules and costs, market positioning, needs and estimates on future revenue benefits, and the internal control and security measures for research and development based on the level, sources, protection and advancement of technologies employed for its product production and development, and competitive edge, life cycles, sustainability, and R&D programs for new products; and
- information about the background (work experiences, academic background, job positions and seniority) of the company's directors participating in the operation and decision making, shareholders holding 5% or more of the total number of outstanding shares of the issuing company, shareholders contributing capital with patents or expertise, and officers controlling manufacturing technologies and technical developments, their shareholding ratios, share transfers by them within the past three fiscal years and the year of application, and how much time these technical shareholders and officers spend on and how they are actually involved in operation, and assessment of the impact on the finance and business of the issuing company and its action plans if these people discontinue their participation in the operation.
For an applicant for listing of stocks on the Taiwan Innovation Board, the underwriter shall also describe the following:
- assessment, based on the features of innovation and operational models, of the possible risks to arise out of any changes to the material technologies, products, policies, and operational models, together with the countermeasures taken;
- assessment of the probability of accomplishment of projected production time schedules and costs, market positioning, needs and estimates on future revenue benefits, and the internal control and security measures for research and development shall be assessed based on the level, sources, protection and advancement of technologies employed for its product production and development, and competitive edge, life cycles, sustainability, and R&D programs for new products;
- background (work experiences, academic background, job positions and seniority) of the company's directors participating in the operation and decision making, shareholders holding 5% or more of the total number of outstanding shares of the issuing company, shareholders contributing capital with patents or expertise, and officers controlling manufacturing technologies and technical developments, their shareholding ratios, share transfers by them within the past two fiscal years and the year of application, and how much time these technical shareholders and officers spend on and how they are actually involved in operation, and assessment of the impact on the finance and business of the issuing company and its action plans if these people discontinue their participation in the operation; and
- for an enterprise in the biotechnology and medicine industry, assessment of the clinical trial progress of its core products.
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