Qisda : The Board resolved to issue new common shares for cash to sponsor the DR Offering and/or issue new common and/or new preferred shares for cash in public offering

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Provided by: Qisda Corporation
SEQ_NO	1	Date of announcement	2022/03/07	Time of announcement	19:20:50
Subject	The Board resolved to issue new common shares for cash to sponsor the DR Offering and/or issue new common and/or new preferred shares for cash in public offering
Date of events	2022/03/07	To which item it meets	paragraph 11
Statement	1.Date of the board of directors resolution:2022/03/07 2.Source of capital increase funds: Issuance of new common shares for cash to sponsor the DR Offering and/or issuance of new common shares for cash in public offering and/or issue new preferred shares for cash in public offering 3.Whether to adopt shelf registration (Yes, please state issuance period/No): To be decided 4.Total monetary value of the issuance and number of shares issued (shares issued not including those distributed to employees if consisting in capital increase from earnings or capital surplus):To be decided 5.If adopting shelf registration, monetary value and number of shares to be issued this time:To be decided 6.The remaining monetary value and shares after this issuance when adopting shelf registration:To be decided 7.Par value per share:NTD 10 8.Issue price:To be determined 9.Number of shares subscribed for by or allocated to employees: 10%-15% of the new common shares shall be allocated for the employees' subscription 10.Number of shares publicly sold:To be determined 11.Ratio of shares subscribed by or allotted as stock dividends to existing shareholders: (1)Issuance of new common shares for cash to sponsor the DR Offering: Except for 10% -15% of the new common shares shall be allocated for the employees' subscription in accordance with the applicable law, rights to subscribe to the remaining shares shall be waived by the shareholders and such remaining shares should be offered to the public under Article 28-1 of the Securities and Exchange Law as the underlying shares of the global depositary shares to be sold in the DR Offering. (2)It is proposed to authorize the Board to choose either of the following methods to sell the new common shares in the public offering,except for 10% -15% of the new shares must be offered to employees in accordance with Article 267, Paragraph I of the Company Law: a.It is proposed that the pre-emptive rights to subscribe to the remaining shares to be waived by the shareholders in accordance with Article 28-1 of the Securities and Exchange Law and such remaining shares will be offered to the public via book building. b.It is proposed that 10% of the new shares to be sold to the public through the underwriter(s) in accordance with Article 28-1,paragraph 2 of the Securities and Exchange Law and the remaining shares will be subscribed to by the existing shareholders of the Company in accordance with their shareholding. (3)It is proposed to authorize the Board to choose either of the following methods to sell the new preferred shares in the public offering,except for 10% -15% of the new shares must be offered to employees in accordance with Article 267, Paragraph I of the Company Law: a.It is proposed that the pre-emptive rights to subscribe to the remaining shares to be waived by the shareholders in accordance with Article 28-1 of the Securities and Exchange Law and such remaining shares will be offered to the public via book building. b.It is proposed that 10% of the new shares to be sold to the public through the underwriter(s) in accordance with Article 28-1,paragraph 2 of the Securities and Exchange Law and the remaining shares will be subscribed to by the existing shareholders of the Company in accordance with their shareholding. 12.Handling method for fractional shares and shares unsubscripted for by the deadline: (1)Issuance of new common shares for cash to sponsor the DR Offering: Any new common shares not subscribed by employees of the Company shall be determined by the Chairman, depending on the market needs, to be allocated as underlying shares of the global depositary shares or to be subscribed by the designated person(s). (2)Issuance of new common shares for cash in public offering: It is proposed that any new common shares not subscribed by employees and shareholders of the Company will be sold to the person(s) designated by the Chairman of the Company at the issue price. (3)Issuance of new preferred shares for cash in public offering: It is proposed that any new preferred shares not subscribed by employees and shareholders of the Company will be sold to the person(s) designated by the Chairman of the Company at the issue price. 13.Rights and obligations of these newly issued shares: (1)Issuance of new common shares for cash to sponsor the DR Offering: The new common shares will have the same rights and obligations as the Company's existing issued and outstanding common shares. (2)Issuance of new common shares for cash in public offering: The new common shares will have the same rights and obligations as the Company's existing issued and outstanding common shares. (3)Issuance of new preferred shares for cash in public offering: It is proposed to authorize the Board to determine the rights and obligations of the new preferred shares in accordance with the Article of Incorporation and applicable laws and regulations. 14.Utilization of the funds from the capital increase: To enrich working capital, strengthen financial structure, purchase of materials from oversea and/or support the Company's funding needs for long term development. 15.Any other matters that need to be specified: The reason for the situation where the issue price of the new common shares to be issued to sponsor the DR Offering, the new common shares to be issued in public offering, the new preferred shares to be issued in public offering,Private Placement Shares and the conversion price for the Private Placement CB is set at a price less than the par value due to the market change and the reason for the Company not adopt other fund raising method and the reasonableness for such determination: This is mainly based on considerations of the sound operation of the Company and the security of its financial structure and issuing equity related securities for fund raising is more appropriate than pure debt fanancing . If the Company decides to use the fund raising methods, such as issuing new shares for cash to sponsor the DR Offering, issuing new shares for cash in public offering, issuing new preferred shares for cash in public offering and issuing Private Placement Shares, etc., the Company would not incur any interest of the debt in such case not only the Company's financial risk could be reduced, the Company's financial structure could be improved and the flexibility of the Company's treasury management would also be increased. For issuance of Private Placement CB, if investors convert Private Placement CB into the common shares, such would improve the Company's financial structure and would benefit the Company's long term development. Thus, it should be reasonable for the Company to issue the equity related securities. If the issue price and the conversion price is less than the par value, such would be expected to cause decrease of the Company's capital surplus and retained earnings in which case the Company will, depending on the actual operating conditions in the future, make up for the losses. As the issue price and conversion price will be determined in accordance with the relevant regulations, thus, after realization of the benefit of the capital increase, the Company's financial structure will be effectively improved which would be favorable to the Company's long-term development and would not have adverse impact on the rights and benefits of the shareholders.