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MESSAGE _ENGLISH VERSION_
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With reference to current report ESPI No. 25/2025 dated 21 October 2025,
the Management Board of Proguns Group S.A., with its registered office
in Warsaw _the "Issuer"_, announces that on 16 January 2026 the Issuer
entered into an investment agreement _the "Agreement"_ with Forum 119
Closed-End Investment Fund - an entity from the Fidera Group _the
"Investor"_, Niewiadów Polska Grupa Militarna S.A. _"NPGM"_, Zakłady
Sprzętu Precyzyjnego Niewiadów sp. z o.o. _"ZSP"_, and Fabryka Amunicji
Pocisk S.A. _"FAP"_.
The Agreement sets out the key assumptions of the
Investor's planned investment, with a value of PLN 60 million, aimed at
financing the launch in Poland of a factory producing medium-calibre 40
mm ammunition _the "Project"_.
The Project will be implemented in cooperation with
ST Engineering Advanced Material Engineering Pte. Ltd., with its
registered office in Singapore _"ST Engineering"_.
The Issuer, FAP, and ZSP will enter into a joint
venture agreement defining the rules of cooperation in the
implementation of the Project.
Pursuant to the provisions of the Agreement, the
Investor subscribed for 4,519,167 bearer shares of the Issuer in
exchange for a cash contribution of PLN 20,019,909.81, i.e. PLN 4.43 per
each individual new share.
Investment in FAP:
The Issuer will subscribe for 313,000 bearer shares
of FAP in exchange for a cash contribution of PLN 19,002,230.00,
obtaining in total an interest of approximately 49% in the share capital
of FAP.
The Investor will provide project financing in the
amount of PLN 40 million, which will be implemented through the
Investor's subscription for participating bonds of FAP. These
bonds will entitle the Investor to participate in from 50% to 20% of
FAP's profits. The proceeds from the issuance will be used in full to
finalize the construction of the factory producing medium-calibre
ammunition.
ZSP will hold shares in FAP representing in total 51.03% of FAP's share
capital, while the Issuer will hold shares in FAP representing in total
48.97% of FAP's share capital.
NPGM will indirectly hold voting rights in FAP representing
approximately 79% of FAP's share capital.
Moreover, pursuant to the provisions of the Agreement:
Proportionally to the financing provided through the participating
bonds, the Investor will obtain the right to subscribe for 2,259,583
Series D subscription warrants of the Issuer, entitling the holder to
subscribe for the Issuer's Series H bearer shares at an issue price of
PLN 1 per each individual share.
In particular, ZSP will undertake actions to transfer to FAP all rights
and obligations arising from the ST Engineering agreement.
The parties have undertaken to use the funds received from the Investor
for the purpose of implementing the Project.
The Investment Agreement contains provisions establishing security in
favour of the Investor, which do not materially differ from the terms
commonly applied in the capital market to secure investments of this
type.
The Issuer explains that the conclusion of the Agreement resulted from
the implementation of the provisions of the term sheet entered into by
the Investor, the Issuer, ZSP, and NPGM, which the Issuer reported in
current report ESPI No. 25/2025 dated 21 October 2025.
The Issuer indicates that the conclusion of the Agreement constitutes
another step in the implementation of the Issuer's strategy, which
assumes the development of competencies in the defence technology market.
According to data from the European Defence Agency and the NATO
Industrial Advisory Group report _2024_, the European 40 mm ammunition
market exceeds EUR 2 billion annually, with growing demand from the
armed forces of NATO member states and industrial partners in the
Central and Eastern European region.
The Issuer considers the above information to be material due to its
significance for the Issuer's development and its potential impact on
the Issuer's results. In the opinion of the Issuer's Management Board,
the conclusion and implementation of the Agreement will affect the
Issuer's development and contribute to a significant improvement in its
financial results.
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RB_ASO: Zawarcie umowy dot. inwestycji o wartości 60 mln zł w produkcję amunicji 40 mm w Polsce
