With reference to ESPI Current Report No. 65/2025 dated October 21, 2025, and ESPI Current Report No. 70/2025 dated November 20, 2025, The Management Board of Niewiadów Polska Grupa Militarna S.A., with its registered office in Warsaw (the Issuer), hereby announces that on January 16, 2026, the Issuer entered into an investment agreement (“Agreement”) with Forum 119 Closed-End Investment Fund – an entity of the Fidera Group (“Investor”), Proguns Group S.A. (“Proguns”), Zakłady Sprzętu Precyzyjnego Niewiadów sp. z o.o. (“ZSP”), and Fabryka Amunicji Pocisk S.A. (“FAP”).
The agreement sets out the key terms of the Investor’s planned investment, valued at PLN 60 million, aimed at financing the launch of a factory in Poland to produce 40 mm medium-caliber ammunition (“the Project”).
The project will be carried out in cooperation with ST Engineering Advanced Material Engineering Pte. Ltd., based in Singapore (“ST Engineering”). The Issuer announced the signing of a Memorandum of Understanding (“MoU”) between ST Engineering and ZSP in its current report ESPI No. 56/2025 dated September 3, 2025.
Proguns, FAP, and ZSP will sign a joint venture agreement setting forth the terms of cooperation for the implementation of the Project;
In accordance with the provisions of the Agreement, the Investor acquired 4,519,167 bearer shares of Proguns in exchange for a cash contribution of PLN 20,019,909.81, i.e., PLN 4.43 per new share.
Upon registration of the above increase, the Issuer will hold Proguns shares representing 57.61% of Proguns’ share capital, and the Investor will hold Proguns shares representing 20% of Proguns’ share capital;
Investment in FAP:
1. Proguns will acquire 313,000 bearer shares of FAP in exchange for a cash contribution of PLN 19,002,230.00, thereby obtaining a total stake of approximately 49% in FAP’s share capital.
2. The investor will provide project financing in the amount of PLN 40 million, which will be secured through the investor’s subscription to FAP participation bonds. These bonds will entitle the investor to a share of between 50% and 20% of FAP’s profits. The proceeds from the issuance will be used in their entirety to complete the construction of a factory producing medium-range ammunition;
3. ZSP will hold FAP shares representing a total of 51.03% of FAP’s share capital, and Proguns will hold FAP shares representing a total of 48.97% of FAP’s share capital;
4. The Issuer will indirectly hold a stake in FAP representing approximately 79% of FAP’s share capital.
In addition, in accordance with the provisions of the Agreement:
1. The investor will be entitled, in proportion to the financing raised through participation bonds, to subscribe for 2,259,583 Proguns Series D subscription warrants, entitling the holder to subscribe for Proguns Series H bearer shares in exchange for an issue price of PLN 1 per share.
2. In particular, ZSP will take steps to transfer to FAP all rights and obligations arising from the agreement with ST Engineering Advanced Material Engineering Pte. Ltd., based in Singapore (“ST Engineering”), referred to in ESPI Current Report No. 70/2025 dated November 20, 2025; and the ownership rights to the real estate where 40 mm ammunition production will be launched;
3. The parties have agreed to use the funds received from the Investor to carry out the Project.
The Investment Agreement contains provisions establishing security measures in favor of the Investor that do not differ materially from the terms typically used in the capital market to secure this type of investment.
The Issuer explains that the Agreement was entered into pursuant to the provisions of the Term Sheet signed by the Investor, the Issuer, ZSP, and Proguns, as disclosed by the Issuer in Current Report ESPI No. 65/2025 dated October 21, 2025.
The completion of this investment will enable the Issuer’s Capital Group to establish an integrated medium-caliber ammunition production segment within the holding company’s structure, encompassing the design, licensed production, and sale of ammunition and components. It represents the next step in the implementation of the Issuer’s strategy, which aims to develop domestic capabilities in defense technologies and build a private defense industry holding company.
According to data from the European Defence Agency (EDA) and a report by the NATO Industrial Advisory Group (2024), the European market for 40 mm ammunition is worth over €2 billion annually, with growing demand from the armed forces of NATO member states and industrial partners in Central and Eastern Europe.
The Issuer considers the above information to be material, given its significance for the development of the Issuer’s Capital Group and its potential impact on the Group’s value. In the opinion of the Issuer’s Management Board, the conclusion and performance of the Agreement will influence the development of the Issuer’s Capital Group and contribute to a significant improvement in its financial results.