The Board resolved to the issuance of common shares for the cash capital increase of the Company by private placement.

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Provided by: PHIHONG TECHNOLOGY CO., LTD.
SEQ_NO	2	Date of announcement	2021/10/28	Time of announcement	16:09:42
Subject	The Board resolved to the issuance of common shares for the cash capital increase of the Company by private placement.
Date of events	2021/10/28	To which item it meets	paragraph 11
Statement	1.Date of the board of directors resolution:2021/10/28 2.Types of securities privately placed:common shares 3.Counterparties for private placement and their relationship with the Company:(1)The common shares will be privately placed to the specific investors meeting the requirement under Article 43-6 of the Act and the ruling of Year 2002 Tai Tsai Cheng I Zi No. 0910003455 issued by Financial Supervisory Commission on June 13, 2002. The method of selecting the private investors is to introduce strategic investors who have a good understanding of the Company and are helpful to the Company's future operations and are not insiders or related parties of the Company. It is proposed that the Company's Shareholders' Meeting authorizes the Board with full discretionary power to handle the certificate of qualifications and related matters. (2)Objective and the necessity of selecting strategic investors and the anticipated benefits: (A)Selection Method and Purposes: the private investors to be chosen shall be an individual or corporate entity who can assist Company��s operations with various management and financial resources, provide operational management techniques, strengthen financial cost management and support business development and expansion so as to improve the Company's competitiveness, operational efficiency, and long-term development, and should be beneficial to shareholders' equity. (B)Necessity: in response to the Company��s long-term business plan, to improve the operational performance and strengthen the financial structure, and considering to strengthen the stability of management, the introduction of funds form strategic investors by the Private Placement will facilitate the Company's operations and business development, and can increase long-term funds and improve the company's overall operation. Therefore, it is necessary for the Private Placement to bring in strategic investors. (C)Anticipated Benefits: through the capital injection of strategic investors, the anticipated benefits include reducing the pressure on working capital, strengthening the financial structure, improving Company's competitiveness,promoting the stable growth of the Company, and benefiting shareholders' equity. (3)The Company does not have a selected specific investor at present. The Board is authorized with full discretionary power to deal with relevant matters related to the selection of the specific investor. 4.Number of shares or bonds privately placed: Within the limit of no more than 37,520,000 shares, the Board is authorized to issue the common shares by private placement in two tranches within one year from the date of the resolution of the Company's Shareholders' Meeting. 5.Amount limit of the private placement: Within the limit of no more than 37,520,000 shares. 6.Pricing basis of private placement and its reasonableness: (1)The reference price for the pricing of Private Placement should be the higher of the following calculations: (a) the simple arithmetic average closing price of the common shares of the Taiwan Stock Exchange Corporation (the��TWSE��) listed or TPEx listed company for either the 1, 3, or 5 business days before the price determination date, deducting any distribution of stock dividends or cash dividends, and adding back the share price after capital reduction, and (b) the simple arithmetic average closing price of the common shares of the TWSE listed or TPEx listed company for the 30 business days before the price determination date, deducting any distribution of stock dividends or cash dividends, and adding back the share price after capital reduction. (2)The actual issuance price for the Private Placement should be no less than 85% of the reference price. It is proposed that Shareholders' Meeting authorizes the Board to determine the actual issuance price in accordance with relevant laws and regulations, depending on the then market status and other objective conditions. (3)The pricing of the Private Placement abovementioned is respectively based on the Company's business operation, vision, the three-year restriction on share transfer in principle for securities issued by private placement, and Company's recent stock price. The pricing is also determined in accordance with the Directions for Private Placement and relevant laws and regulations. Therefore, the pricing shall be well-grounded and reasonable. 7.Use of the funds raised in this private placement: The fund raised by the Private Placement will be used to enrich the Company's working capital, strengthen its financial structure, and support other fund requirements for the Company's long-term development of one or more fund utilization plans, depending on market status and the situation of selecting specific investors, the Company will authorize the Board to issue the privately placed common shares in two tranches within one year from the date of the resolution of the Shareholders' Meeting. After completing the use of funds, the Private Placement fundraising is expected to improve the Company��s competitiveness and operational efficiency, and it will also be beneficial to shareholders' equity, as explained below: The Company will, depending on the situation of selecting specific investors in the market, issue the privately placed common shares in two tranches. (1)First Issuance Expected Amount of Shares to be issued 18,760,000 shares. Second Issuance Expected Amount of Shares to be issued 18,760,000 shares. (2)The Use of Funds:To enrich working capital, improve the financial structure, or meet the fund requirements for the Company's long-term development so as to improve the Company's financial structure and strengthen the competitiveness. (3)Anticipated Benefits:To provide a more flexible and multilateral means for fundraising, strengthen the Company's financial structure, expand the scale of the Company's future operation, and improve the Company's long-term competitiveness and shareholders' equity. (4)In terms of the aforementioned first and second expected issuance quotas, the number of shares to be issued in each private placement may be adjusted according to the actual issuance status. In each issuance, the number of previously unissued shares and / or the subsequent number of shares can be issued together wholly or partly, but the total number of issued shares should not exceed 37,520,000 shares. 8.Reason for conducting non-public offering: The Company considers the conditions of the capital market, timeliness and feasibility of fundraising, the issuance cost, and the actual need of introducing strategic investors; in addition, considering that private placement is rather rapid and simple, and that securities issued by private placement are in principle subject to a three-year restriction on share transfer so that a long-term partnership between the Company and strategic investors can be better secured, while authorizing the Board to conduct private placement in tranches and at appropriate timing according to the actual need of Company's business will also effectively improve the Company's mobility and flexibility in fundraising, the Company intends to issue common shares by private placement instead of adopting a public offering. The conduct of Private Placement is expected to have a sound financial structure and benefits of improving operational efficiency, and it will also be beneficial to shareholders' equity. 9.Objections or qualified opinions from independent directors:None 10.Actual price determination date:NA 11.Reference price:NA 12.Actual private placement price, and conversion or subscription price:NA 13.Rights and obligations of these new shares privately placed: The Private Placement will be delivered without printing certificate. The rights and obligations of the shares issued by the Private Placement will be the same as the issued and outstanding common shares of the Company. However, according to Article 43-8 of the Act, unless meeting certain circumstances, the privately placed securities shall not be transferred freely until three years after the delivery of privately placed securities. After three years from the delivery of the Company��s privately placed common shares, the Board is authorized to, depending on situations then, obtain an approval letter issued by the TWSE acknowledging that the securities have met the listing criteria, apply with the competent authorities for public issuance, and apply for TWSE listing of such privately placed common shares. 14.Record date for any additional share exchange, stock swap, or subscription:NA 15.Possible dilution of equity in case of any additional share exchange, stock swap, or subscription:NA 16.For additional share exchange or subscription, possible influence of change in shareholding ratio of TWSE-listed common shares if all privately placed corporate bonds are converted and shares subscribed for (no.of TWSE - listed common shares (A), (A) / common shares issued):NA 17.Please explain any countermeasures for lower circulation in shareholding if the aforesaid estimated no.of TWSE -listed common shares does not reach 60million and the ratio does not reach 25%:NA 18.Any other matters that need to be specified: After the approval of the Private Placement by Shareholders' Meeting, except for the percentage of the pricing for the Private Placement, it is proposed that the Shareholders' Meeting authorizes the Board with full discretionary power to, depending on the actual need of the Company, the market conditions and relevant laws and regulations, determine, adjust and deal with the main content and other matters in connection with this Private Placement, including the actual issuance price, the pricing date, the number of shares to be issued each time, the amount raised, terms and conditions of the Private Placement, fund utilization plan, the use of funds, expected process and other related issues. If some revision or adjustment has to be made due to amendment to the laws and regulations, the competent authorities' instructions, or based on changes in objective environmental factors such as operational assessments or the market status, it is also proposed that the Shareholders' Meeting authorizes the Board with full discretionary power to handle all related matters.