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Baltika sells some of “Ivo Nikkolo” trademarks, which it continues to use under an exclusive licence

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AS  Baltika (Baltika) and Niul OÜ (the Acquiring Company) signed on 08.08.2022 a
trademark  transfer agreement  (the Sales  Agreement) under  which the Acquiring
Company  acquires some of "Ivo Nikkolo" trademarks (the Trademarks). Despite the
transfer  of  the  Trademarks,  Baltika  retains  the exclusive right to use the
Trademarks under an exclusive trademark licence agreement signed on 08.08.2022 a
between  Baltika and the Acquiring Company (the Licence Agreement). In addition,
Baltika  and the  Acquiring Company  have on  08.08.2022 signed notarised pledge
agreements  with respect to the Trademarks and  in favour of Baltika (the Pledge
Agreements)  to  secure  the  performance  of  the  obligations by the Acquiring
Company under the Sales Agreement.

The  transfer of the Trademarks enters into  force and pledges to the Trademarks
are  created by making respective entries in  the Estonian register of trade and
service  marks and  the Register  of European  Union trade  marks concerning the
transfer and pledges.

The  purpose of the transaction is to finance the main activities, projects, and
investments  of the Baltika Group. In addition,  as a result of the transaction,
Baltika's  equity is in line with  the requirements stipulated in the Commercial
Code.

This  transaction is not a related party transaction in the essence of the Rules
of  the Nasdaq Tallinn Stock Exchange, and  the supervisory board and members of
the management board of Baltika have no personal interest in the transaction.

SALE OF TRADEMARKS

Under  the Sales  Agreement, the  Acquiring Company  acquires the following "Ivo
Nikkolo" Trademarks:

+-----------------+------------+-------------------------+-----------+------------+-----------+------------+
|                 |            |                         |Application|Registration|Application|Registration|
|Country/territory|Mark        |Nice Classification      |number     |number      |date       |date        |
+-----------------+------------+-------------------------+-----------+------------+-----------+------------+
|                 |Ivo  Nikkolo|                         |           |            |           |            |
|Estonia          |(combined)  |14, 16, 18, 25, 35.      |M200800846 |47140       |27.05.2008 |18.02.2010  |
+-----------------+------------+-------------------------+-----------+------------+-----------+------------+
|                 |Ivo  Nikkolo|                         |           |            |           |            |
|Estonia          |(word)      |25.                      |9900991    |32389       |04.06.1999 |29.09.2000  |
+-----------------+------------+-------------------------+-----------+------------+-----------+------------+
|the      European|IVO  NIKKOLO|                         |           |            |           |            |
|Union            |(figurative)|3, 9, 14, 18, 24, 25, 35.|018352063  |018352063   |10.12.2020 |16.04.2021  |
+-----------------+------------+-------------------------+-----------+------------+-----------+------------+
|the      European|Ivo  Nikkolo|                         |           |            |           |            |
|Union            |(word)      |9, 14, 18, 25.           |018325616  |018325616   |22.10.2020 |06.02.2021  |
+-----------------+------------+-------------------------+-----------+------------+-----------+------------+

The  total purchase price  for the Trademarks  is EUR 8,000,000. Pursuant to the
Sales  Agreement, the Acquiring Company undertakes  to pay the purchase price as
follows:

  * EUR 500,000 of the purchase price will be paid by the Acquiring Company to
    Baltika in cash latest by 09.08.2022;
  * EUR 1,500,000 of the purchase price will be paid by the Acquiring Company to
    Baltika in cash latest by 16.08.2022;
  * EUR 3,000,000 of the purchase price will be paid by the Acquiring Company to
    Baltika in cash latest by 31.12.2023; and
  * EUR 3,000,000 of the purchase price will be paid by the Acquiring Company to
    Baltika in cash latest by 31.12.2024.

The purchase price payment obligation of the Acquiring Company is secured by the
pledges  created  to  the  Trademarks  in  favour  of  Baltika  under the Pledge
Agreements.

LICENCE AGREEMENT

Under  the Licence Agreement, the Acquiring  Company grants Baltika a world-wide
and  unlimited right to  use and exploit  the Trademarks and  the rights arising
from  the Trademarks, i.e. an exclusive licence  to the Trademarks for the whole
period of the validity of the Licence Agreement. Among other things, Baltika has
the right to transfer the right of use arising from the Licence Agreement to any
third person.

The  Licence Agreement is valid for 10 years  as of the signing of the agreement
(the  Initial  Term).  After  the  expiration  of  the Initial Term, the Licence
Agreement  will automatically renew  for one additional  year (the Renewal Term)
and  this occurs after the expiration of  each Renewal Term unless a party gives
notice of non-renewal to the other party not less than three months prior to the
expiration  of the Initial Term or any  Renewal Term. The Licence Agreement will
terminate  in  any  case  if  the  trademark  protection  for all Trademarks has
expired.  Otherwise, the  Licence Agreement  may be  terminated only  by written
agreement between the parties.

Baltika  pays  the  Acquiring  Company  royalty consisting of several components
under the Licence Agreement as follows:

  * A Lump sum royalty of EUR 27,000 will be paid by Baltika to the Acquiring
    Company for the year 2022 on 10.08.2022.
  * As of 22.08.2022 until 07.08.2023 Baltika will pay to the Acquiring Company
    a monthly royalty EUR 2,109 on the 22(th) day of every month.
  * As of 08.08.2023 Baltika will pay to the Acquiring Company a monthly royalty
    EUR 3,775.67 on the 10(th) day of every month.
  * In addition to the above royalties, there is an annual royalty which is
    2.5% of the annual turnover of Baltika from the sale of goods bearing "Ivo
    Nikkolo" trademark based on the audited annual reports of Baltika but capped
    at EUR 300,000 per year. Baltika undertakes to pay the annual royalty for
    the preceding calendar year within 30 days as of the receipt of the
    auditor's approval to the annual report with respect to the preceding
    calendar year by Baltika. The first annual royalty payment is due in mid-
    2023 for the year 2022 and is calculated based on months the exclusive
    licence is valid in 2022.

If prescribed by law, Value-Added Tax shall be added to royalty payments.

PURPOSE OF THE TRANSACTION AND EFFECT ON BALTIKA

According  to the Sales Agreement, Baltika will  keep the right to register "Ivo
Nikkolo"  trademark  or  similar  trademark  outside  the  European  Union, as a
business  name or domain name without  any territorial or other restrictions and
to  use trademarks  owned by  Baltika (including  those to  be registered in the
future) without any restrictions.

The  purpose of  the transaction  is to  finance Baltika's  business operations.
Baltika  will use the proceeds from the  transaction to finance the Group's main
activities,  projects, and investments.  In addition, the  transaction will have
positive  effect  on  the  equity  of  Baltika.  As a result of the transaction,
Baltika's  equity  follows  the  50% share  capital  requirement  stated  in the
Commercial Code.

Brigitta Kippak

Member of the management board, CEO

[email protected] (mailto:[email protected])