Regulated and Inside Information
Settlement Your Drinks, updates Auction Protocol, wind down,
Annual Accounts and General Meeting
To the shareholders:
London - 20 July 2017 at 08:30 hours CET
Introduction
In this notification, the Board wishes to inform and update the shareholders of the following:- A settlement between Your Drinks AG ("Your Drinks") and the Company / Algo Vision Systems GmbH ("AVS") finally settling all existing disputes, claims and costly court proceedings. A single payment of EUR 250,000 is made by the Company or AVS to Your Drinks. The claims Your Drinks stated to have against the Company and AVS of approximately EUR 1,500,000 are settled. Your Drinks agreed not to stand in the way of a dissolution or liquidation of the Company.
- The (Financial) consequences of the settlement.
- The proposed winding down of the Company and in that respect the proposed sale of assets, including an update on (the lack of bids under) the Auction Protocol and the intended sale of assets to a foundation (subject to shareholder approval).
- An update regarding the intended date for publication of the Annual Accounts and the Company's General Meeting.
- A summary of the next steps proposed by the Board.
Settlement with Your Drinks AG
As the Company disclosed in its announcement on 20 January 2017, Your Drinks filed legal proceedings in Germany against the Company's subsidiary AVS, demanding payment in aggregate of approximately EUR 1 million plus interest and costs pursuant to a Royalty Agreement entered into in 2014. Separate from these proceedings, Your Drinks and the Company were in dispute about a set-off against a claim of approx. EUR 0.5 million that Your Drinks believed to have against the Company, as well as other payment obligations resulting from loan- and financing agreements agreed between Your Drinks and the Company in 2014. Both the claim that was subject to the proceedings in Germany and the claims which were not subject to court proceedings were strongly contested by the parties. Both AVS and the Company disputed the validity of the agreements and claimed that the circumstances under which they were entered into gave rise to claims against Your Drinks. Your Drinks for its part contested these arguments and counter-claims.
In order to avoid the uncertainty and costs of protracted legal proceedings, and noting even if a success would finally be achieved, it had to be assumed that the claims may not be (fully) recoverable from Your Drinks, and furthermore having regard to the limited liquidity of the OIM-group, the Board considered it desirable to compromise the claims if suitable terms could be agreed. Parties were promoted by the suggestion of the Judge in the German Court that AVS and Your Drinks should attempt settlement negotiations.
The Board is therefore pleased to announce that a settlement has now been reached before the District Court of Berlin, in which Your Drinks, AVS and the Company are included. The terms of the settlement agreement are confidential. However the Board can state that the purpose and effect of the settlement is to settle all existing disputes between the parties, which concern not merely the claims that are subject of the proceedings but other related issues not yet brought into any proceedings and therefore include the abovementioned (disputed) claims against the Company and AVS and the liability claims of the Company and AVS against Your Drinks (as referred to in the Auction Protocol published on 3 February 2017).
Under the settlement agreement OIM or AVS makes a single payment to Your Drinks of EUR 250,000 and no further payments will be due from either company to Your Drinks. The settlement leaves unaffected the existing and future obligations of Your Drinks under an (extended) 5 million loan agreement from 2014 (noting that interest is again due from 1 January 2018 onwards) and the abovementioned Royalty Agreement. This includes, therefore, the payment of royalty fees as well as the repayment of a principal loan amount and the payment of interest from 1 January 2018 onwards. A further financing agreement from 2014 is considered completed and terminated with no remaining rights or obligations for any party.
(Financial) consequences settlement
The Board informs the shareholders that the OIM Group is able to make the aforementioned single payment to Your Drinks and still be able to pay its debts as they fall due. Following the settlement with Your Drinks and excepting running costs including advisors' fees, neither the Company nor AVS has any known creditors. The Board believes that there is now sufficient liquidity available for an orderly winding down, as the substantial reservations required in view of the claims made by Your Drinks AG are now no longer necessary.
Sale of assets
OIM and AVS have initiated an auction on 3 February 2017 of certain assets held by them as part of a longer term liquidation or dissolution strategy. As part of this same strategy, OIM and AVS intended to transfer all their contractual relationships with Your Drinks to a third party or to a foundation. The Board refers to the publications on the Company's website on 3 February 2017. As the aforementioned settlement negotiations have presently been finalised, the Board is now at liberty to announce that following publication of the Auction Protocol on 3 February 2017, only one (conditional) bid was received and subsequently fully withdrawn. As such, no acceptable bids were received within the timeframes set out in the Auction Protocol.
The Board is currently considering its options in view of the proposed winding down of the Company. Pursuant to the Auction Protocol, the Company and AVS intend (subject to approval) to sell the relevant assets to a foundation to be incorporated for this purpose for their current market value. As part of the abovementioned settlement with Your Drinks, Your Drinks has approved a transfer of the contracts between parties to such a foundation. This foundation (a Dutch "Stichting") will administer the assets for the benefit of OIM's shareholders that are formally registered as shareholders on the register of members on the date of the start of the legal transfer of assets to the foundation. The foundation would therefore, amongst other things, receive any payment of royalty fees, as well as the repayment of a principal loan amount and the payment of interest from 1 January 2018 onwards. The Board expresses severe doubts as to whether any such royalty fees, interest payments or repayments will take place in the future and/or be recoverable from Your Drinks. However if such payments are made following dissolution or liquidation of OIM, these payments would then be made to the foundation acting for the benefit of OIM's shareholders. The manner in which the foundation will administer the assets will be described in more detail in a following notification to the shareholders. This notification will be published prior to the General Meeting.
As stated, excepting running costs including advisors' fees, neither the Company nor AVS has any creditors. The Board notes it has waived its management fee from April 2017 onwards. The proposed sale of assets to a foundation would therefore clear the way for an orderly dissolution or liquidation of OIM and its subsidiaries. The Board intends to inform the shareholders in more detail about the proposed next steps, the plan to wind down the Company and strategy in further notifications.
Annual accounts and General Meeting
The Company is in the process of finalising the Company's accounts for the year ended 31 December 2016 ("Annual Accounts"). The (reciprocal) claims that were the subject of the aforementioned legal proceedings in Germany and subsequent settlement with Your Drinks created financial uncertainty, which affected the drafting of the Annual Accounts 2016 and resulted in a delay in the publication of the Annual Accounts. The Board paused the finalisation of the accounts whilst the settlement negotiations were underway, to avoid unnecessary costs. Now that negotiations with Your Drinks have resulted in a settlement, the Board expects to be able to complete the process of finalising the Company's accounts for the year ended 31 December 2016, reflecting the certainty of the terms of this settlement. The accounts will be published as soon as practicable and, taking into account the holiday season, the expectation of the Board is that the accounts will be published on or before 15 September 2017.
The 2017 Annual General Meeting is expected to be held in October 2017. An announcement of the date will be made and notices will be posted shortly following the publication of the accounts. At approximately the same time, the Company expects to update shareholders by way of further announcement about the longer term winding down of the Company and its subsidiaries, which was referred to in the announcement made at the AGM on 15 July 2016 and published on the Company's website.
Summary next steps
Following this notification to the shareholder, the Company intends to take the following steps:
- Finalisation and publication of the Annual Accounts;
- Further notification to the shareholders regarding the proposed sale of assets to a foundation;
- Further notification to the shareholders regarding a concrete plan for winding down the Company;
- General Meeting; and
- Implementation of a plan to wind down the Company.
Board of Directors
Mr. P. Zwart (CEO)
Mr. W. Bouma
Mr. A. van Raak