Management Board of IMS S.A. (“Issuer”) informs that on 28th March 2023 more investment agreements were signed concerning the acquisition of the capital in the subsidiary Closer Music Sp. z o.o. (‘the Company’, ‘Closer Music’), dealing with the development and commercialisation of its own music libraries. The Company will issue and sell shares representing a total of 0.73% of the share capital to the investors for the amount of PLN 363,7, i.e. at an estimated pre-money valuation of 100% of Closer Music shares of PLN 50 million. The investors will pay 100% of the issue price of the new shares within 7 days after signing the agreement. The Company will use the funds raised for further development, in particular to expand the sales application and acquire new customers. The investors are:

– Mr Piotr Bielawski, Vice-President of the Management Board and Finance Director of the Issuer, who will acquire 0.2% of the shares for a price of PLN 100.5 thousand;

– Mr Wojciech Piwocki, Vice-President of the Management Board and Sales Director of the Issuer, who will acquire 0.33% of shares at a price of PLN 162.7 thousand;

– a manager with several years of experience in commercial positions at IMS S.A., who will acquire 0.2% of the shares at a price of PLN 100.5 thousand.

In calculating the number and % of shares for the investors, in addition to the 10,015 Closer Music shares registered with the KRS, 435 shares have been taken into account, which will be allocated to two beneficiaries of the completed Incentive Programme for 2020 – 2022. The agreements, in order to be implemented in their entirety, require the necessary resolutions to be passed by the Closer Music Shareholders’ Meeting. If the aforementioned resolutions are not adopted by 30th June 2023, the agreements will be automatically terminated and their provisions will have no legal effect, and the issue price paid will be refunded to the investors’ account.

Management Board of IMS S.A. (“Issuer”, “IMS”) announces that a Term Sheet agreement was signed on 15 March this year to raise capital of PLN 6 million for its subsidiary Closer Music Sp. z o.o. (“CM”, “Closer Music”), which is engaged in the construction and commercialisation of proprietary music libraries. The parties to the Term Sheet are the investors:

– JR HOLDING ASI S.A. with its registered office in Krakow (“JRH”), controlled by January Ciszewski;

– EKIPA Investments ASI Sp. zo.o. with its registered office in Kraków (“EKIPA”), controlled by Ekipa Holding S.A. with its registered office in Kraków;

– one natural person

and the Issuer, Closer Music and World of Music ASI Sp. z o.o. (a subsidiary of the Issuer, through which the Issuer controls Closer Music).

The investors will invest a total of PLN 6 million at a pre-money valuation of 100% of Closer Music’s shares of PLN 50 million. The investors will acquire a total of 1254 shares representing 10.71% of CM’s capital after the increase. In the case of JRH, the investment will amount to PLN 4 million in exchange for 836 shares in CM (7.14% share in CM’s capital after the increase), in the case of EKIPA PLN 1 million in exchange for 209 shares in CM, in the case of an individual PLN 1 million in exchange for 209 shares in CM.

Closer Music will use the funds raised for further development, in particular for:

– expanding the on-line sales application;

– increasing the sales force and acquiring new customers;

– marketing and promotional activities mainly related to the on-line channel;

– further building a high-quality music database.

In calculating the number and % of shares for new investors, in addition to the 10,015 Closer Music shares registered with the KRS, 435 shares have been taken into account, which will be allocated to two beneficiaries of the completed Incentive Programme for 2020 – 2022.

The Investors have the right to convert the shares held in CM into IMS shares between 24 and 36 months after the signing of the Investment Agreement, which means that the Investors have an unconditional right to request the conversion of the 1254 shares held by the Investors in CM into 1,869,159 newly created IMS shares. The share price (issue price) is PLN 3.21 per share, which is equivalent to the average of the closing prices of IMS shares on the Warsaw Stock Exchange in January 2023 plus 15%.

Investors are entitled to conduct due diligence on CM. The Term Sheet also contains, inter alia, CM’s future corporate governance principles, CM’s board member remuneration principles, customary transaction rights (including anti-dilution, tag-along, drag-along, priority right, lock-up) and contractual penalties adequate and determined at arm’s length for this type of transaction. The execution of the Term Sheet in its entirety is subject to the obtaining of the approvals of the relevant bodies of the above-mentioned entities by the Parties which are companies limited by shares.

Management Board of IMS S.A. (“Issuer”) informs that on 7th December 2023 an investment agreement was signed concerning the acquisition of capital in the subsidiary Closer Music Sp. z o.o. (‘the Company’, ‘Closer Music’), dealing with the development and commercialisation of its own music libraries. The Company will issue and sell shares representing a total of 0.40% of the share capital to a new investor for the amount of PLN 201,000, i.e. at an estimated pre-money valuation of 100% of Closer Music shares of PLN 50 million. The investor will pay 100% of the issue price of the new shares within 7 days after signing the agreement. The Company will use the funds raised for further development, in particular to expand the sales application and acquire new customers.

In calculating the number and % of shares for the new investor, in addition to the 10,015 shares of Closer Music registered in the KRS, 435 shares have been taken into account, which will be granted to two beneficiaries of the completed Incentive Programme for the years 2020 – 2022.

The agreement, in order to be implemented in its entirety, requires the necessary resolutions to be passed by the Closer Music Shareholders’ Meeting. If the aforementioned resolutions are not adopted by 30th June 2023, the Agreement will be automatically terminated and its provisions will have no legal effect, and the issue price paid will be refunded to the investor’s account.