Current report no. 79/2017 of 4 December 2017 – Signing a letter of intent concerning strategic development in co-operation with Euvic and increasing engagement in the Company

This current report was published via ESPI system on 4 December 2017, at 19:46

Management Board of Qumak S.A. (hereinafter referred to as the “Company” or “Qumak”) informs that on 4 December 2017 there was signed a letter of intent between Qumak S.A. and Euvic Sp. z o.o. with its registered office in Gliwice (hereinafter referred to as “Euvic”), (hereinafter jointly referred to as the “Parties”), concerning strategic development within the scope of the conducted business activity in the IT sector and increasing capital engagement of Euvic in the Company.

In the content of the letter, the Parties declared that in good faith they are going to aim at realizing joint undertaking in order to achieve the following goals, in particular:

– Euvic will sell on account of Qumak 50.000 items of shares of IT WORKS S.A., which constitute 100% of share capital of this Company until 31 March 2018;

– Qumak within the period of time until 30 June 2018 will conduct an increase of share capital through issue of ordinary bearer series N shares by way of a private subscription, at simultaneous waiving in full the pre-emptive right of shareholders of Qumak and will apply for allowing series N shares for trade on a regulated market conducted by Warsaw stock Exchange in Warsaw S.A., and Euvic declares taking up these issued shares;

– Liability of Euvic on account of payment of price for shares of IT WORKS S.A. will be deducted from receivables of Qumak on account of taking up series N shares.

Price of shares of IT WORKS S.A. and the planned value and volume of issue of series N shares will be agreed upon at a later stage of discussions.

In the case of performing the activities described above, the Parties declared undertaking steps towards the merge of Qumak with Euvic through acquisition by Qumak of Euvic in return for Qumak shares taken up by shareholders of Euvic. Conducting the merge is conditioned by Qumak’s achievement of a stable financial situation and also by setting a parity of exchange of Qumak shares for the acquired Euvic, which will be acceptable to shareholders of Qumak and partners of Euvic.

The Parties agreed that the above actions will be performed by the Parties on condition of:

– Qumak obtaining from increase of share capital of Qumak because of issuing ordinary bearer series M shares, described in a current report of Qumak no. 72/2017 of 1 November 2017 payments on account of issue price in a total amount not lower than PLN 30,000,000 (thirty million);

– Absence of substantial liabilities of Qumak due to contractual penalties in the projects performed by Qumak, substantial liabilities due to improper civil-law settlements, etc.

 

In the Management Board’s opinion realization of the transactions described in the letter of intent is the best scenario of continuing business operations by the Company. This is at the same time a confirmation of the Company’s potential, which – supported by a strategic engagement of Euvic – will successfully complete repair actions and again will become a valuable asset in portfolios of shareholders.

 

In the case when the transactions described in the letter of intent do not come to realization, the Management Board will be forced to consider other scenarios of securing the Company’s and its shareholders’ interest.

 

Legal ground:

Article 17 section 1 MAR – confidential information.