7/2020 Commencement of public offering with the exclusion of the pre-emptive right of the Company’s current shareholders in the private subscription of series G ordinary bearer shares and conclusion of the placement agreement

Date: January 20, 2020

Legal basis: Article 17(1) of MAR – inside information

With reference to current reports No. 2/2020 of January 7, 2020 and 5/2020 of January 13, 2020, the Management Board of Medicalgorithmics S.A. with its registered office in Warsaw (“the Company”, “the Issuer”) hereby informs that on January 20, 2020, a decision was made to commence a public offering in the form of  a private subscription by issuing no more than 721.303 series G ordinary bearer shares of the Company (“Series G Shares” or “Offered Shares”), with the exclusion of the pre-emptive rights of the Company’s current shareholders. The decision to commence the public offering by the Company was made as a result of the implementation of the Resolution No. 3/1/2020 of the Extraordinary General Meeting (“EGM”) of the Company on January 7, 2020 regarding:

(i) increasing the Company’s share capital by issuing new series G ordinary bearer shares with the exclusion of the pre-emptive rights of the Company’s current shareholders to entirely new series G shares, (ii) dematerialisation and applying for admission and introduction of new series G shares and rights to shares G series for trading on the regulated market operated by the Warsaw Stock Exchange S.A. and (iii) amendments to the Company’s Articles of Association (hereinafter referred to as the “Issue Resolution”).

The Offered Shares will be issued and offered as part of the public offering (the “Offer”) excluded from the obligation to publish the prospectus pursuant to art. 1 clause 4(a), (b) or (d) of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71 / EC (“Regulation 2017/1129”), therefore the provisions of generally applicable law regarding the obligation to prepare, approve and make public the prospectus, information memorandum or any other offer document will not apply to the Offer.

On the success of the Offer, the Company intends to apply for admission and introduction of the Offered Shares and, if  conditions of such admission and introduction will be fulfilled, subscription right to trading on the regulated market operated by the Warsaw Stock Exchange S.A. (“WSE”), on which the Company’s shares issued so far are listed. The Company intends to apply for admission and introduction of the Offered Shares and subscription right to trading on the regulated market operated on the WSE without the preparation and publication of the prospectus pursuant to art. 1 clause 5 (a) of Regulation (EU) 2017/1129.

The offer is directed, on the terms set out in the subscription rules, only to investors who:

a) were appointed by the Management Board of the Company, without prejudice to the provisions of the Issue Resolution, to invite them to participate in the bookbuilding process for Offer Shares (“Bookbuilding Process”) from a group of persons who are: (i) qualified investors within the meaning of the Regulation (EU) 2017/1129 (“Qualified Investors”), (ii) will take up Offered Shares with a total value of at least EUR 100,000 per investor,

b)   they were indicated by the Company’s Management Board, without prejudice to the provisions of the Issue Resolution, to invite them to participate in the Bookbuilding Process from among persons other than those indicated in item a) above, in the number of less than 150 persons.

The Company’s Management Board also informs that the Offer will be launched immediately after the publication of this current report and will be conducted in the form of building a book of demand in accordance with the Issue Resolution. It is anticipated that the bookbuilding process will end on January 23, 2020 at 15:00 CET.Pursuant to the provisions of the Issue Resolution, eligible investors who are shareholders of the Company, as at the date of registration of attendance at the Extraordinary General Meeting of January 7, 2020, i.e. on December 22, 2019 (“Priority Day”), which hold shares entitling to exercise at least 0.5% (half percent) of the total number of votes in the Company (“Eligible Priority Investors”) will be entitled to take priority in the subscription of Offered Shares in a number corresponding to the product of: (a) the ratio of the number of Company shares held by the Eligible Prior Investor as at the Priority Date indicated in the document confirming the ownership of the Company’s shares by such an investor to the number of all existing shares of the Company on the Priority Day and (b) the final number of Offered Shares determined by the Management Board, if the number of Offered Shares attributable to the Pre-emptive Eligible Investor so determined is not an integer, it will be rounded down to the nearest whole number (“Priority for Acquiring Offered Shares”).

A condition that the Eligible Investor covered by a Priority Right may exercise the Priority in Acquiring Offered Shares, is that the Eligible Investor fulfills, in a manner that, according to the Company’s Management Board, subject to the provisions of the Issue Resolution, will be appropriate, the following additional conditions (“Terms of Recognition as Eligible Investor covered by a Priority”):

• after prior invitation by the Company’s Management Board, without prejudice to the provisions of the Issue Resolution, (1) presenting in the Bookbuilding Process, subject to the following provisions, a document confirming that the given investor was a shareholder of the Company on the Priority Day, which document is referred to below , and (2) submitting by this investor in the Bookbuilding Process a declaration of interest in subscribe the Offered Shares by a price not lower than the issue price finally determined by the Company’s Management Board; and
• after the decision of the Management Board, subject to the provisions of the Issue Resolution, to submit to the investor an offer to subscribe the Offered Shares, signing with the Company an agreement to subscribe the Offered Shares offered to this investor, at an issue price determined by the Management Board of the Company.

In order to participate in the private subscription, the Eligible Investor covered by a Priority Right referred to above, without prejudice to the next paragraph, upon prior invitation of the Management Board should provide a document confirming that the Eligible Investor was a Company shareholder on the Priority Date. The template of the document “information on the status of the securities account” is attached to this current report.

A Eligible Investor covered by a Priority Right who has been registered at the Extraordinary General Meeting on January 7, 2020 is not required to submit the document referred to in the previous paragraphs. In the case of such Investors, it is assumed that this Investor  had on Priority Day, such a number of Company’s shares with which Investor had registered at the Extraordinary General Meeting of the Company, unless Investor will submit the document referred to in the preceding paragraph, which will result in a different number of Company shares on the Priority Day than that with which this Investor signed up for the mentioned above Extraordinary General Meeting of the Company. Available deadlines for the delivery of documents and the method of their delivery will be given in the Subscription Rules, which will be forwarded to investors invited by the Company’s Management Board. The final number of Series G Shares that will be offered for subscription and the issue price of these shares will be determined by the Company’s Management Board after the Bookbuilding process, depending on the level of investors’ interest in taking up Series G Shares. Pursuant to §3 of Resolution No. 3/1/2020 of the EGM of the Company dated January 7, 2020, the issue price of Series G Shares may not be lower than the average market price minus 10% (ten percent), i.e. the price being the arithmetic average from the average daily prices of the Company’s shares weighted by the volume of trading (excluding block transactions) from the period of 1 (one) month preceding the date of commencement of the Bookbuilding Process, during which the Company’s shares were traded on the main market operated by the Warsaw Stock Exchange S.A., i.e. it may not be lower than PLN 16.94 per share. Series G Shares will be finally offered for subscription to those Eligible Investors who will be indicated in the resolution of the Company’s Management Board adopted after Bookbuilding Process.

It is anticipated that the conclusion of contracts for the subscription of Series G Shares and payment of cash contributions for Series G Shares will take place no later than by 18:00 CET on January 28, 2020. Payments of cash contributions for Series G Shares will be made to Santander’s bank account (as defined below) indicated in the contracts for subscription of  Series G Shares.

In addition, on January 17, 2020, the Company concluded a conditional placement agreement for the Company’s Series G Shares (Placement Agreement) with Santander Bank Polska S.A. operating through an organizationally separated unit – Santander Brokerage House (“Santander”) (“Placement Agreement”).

Pursuant to the Placement Agreement, Santander committed itself to provide services for the placement of Series G Shares on the terms and conditions indicated in this agreement, in particular to exercise due diligence in order to attract potential investors and to accept payments for Series G Shares make by such investors. However, Santander has no obligation to guarantee the success of the issue of Series G Shares.

Without prejudice to standard exclusions agreed between the Issuer and Santander, the Issuer in the Placement Agreement has committed that without consent of  Santander will not issue, sell or offer shares in the period from the date of conclusion of the Placement Agreement to the expiry of 180 days from the date of the first listing of rights to Series G Shares or Series G Shares in the absence of listing rights to shares (“Lock-up Restriction”). Lock-up restrictions imposed on the Issuer do not include issue Series G shares, any other shares issued by the Issuer in the performance of instruments convertible into shares that were issued before the date of the Placement Agreement, shares issued as part of the Issuer, in force as at the date of conclusion of the Placement Agreement, the incentive program and the acquisition of own shares by the Issuer. In addition, Mr. Marek Dziubiński (President of the Issuer’s Management Board) and Santander agreed that the prohibition of sale and offering will also apply to Mr. Marek Dziubiński (President of the Issuer’s Management Board) from the date of conclusion of the Placement Agreement until 360 days from the date of the first listing of rights to Series G Shares or Series G Shares in the absence of listing rights to shares.

The Issuer will apply for admission and introduction of Series G Shares and, if the regulatory requirements for such admission and introduction of rights to Series G Shares will be met, to be traded on the regulated market operated by the Warsaw Stock Exchange S.A. (“Admission”). For the purposes of the Offer and Admission, it is not required for the Issuer to make public the prospectus or information memorandum.

Reservation:

This current report is for information purposes only. This current report does not in any way, directly or indirectly, promote the subscription of the Issuer’s new issue shares and is not promotional material prepared or published by the Company for the purpose of promoting the new issue of shares or their subscription or encouraging, directly or indirectly, to subscribe for them. The company has not yet published any materials aimed at promoting new issue shares or their subscription. This document is not an issue prospectus or other offer document, the preparation of which is not expected in connection with the issue of shares by the Company.

This material, as well as any part thereof, is not intended for distribution, directly or indirectly, in the territory or to the United States of America or in other countries where the public dissemination of information contained in this material may be restricted or prohibited by law. The securities referred to in this material have not been and will not be registered under the US Securities Act of 1933 as amended and may not be offered or sold in the territory of the United States of America with the exception of transactions that are not subject to registration as required by the US Securities Act or by virtue of an exception to such registration.

It is not disseminated, published or distributed, directly or indirectly, in the territory or to the United States of America, Australia, Canada, Japan or any other jurisdiction in which it is subject to restrictions or is not allowed.