Annual General Meeting of Arco Vara AS

NOTICE OF THE ANNUAL GENERAL MEETING, ITS AGENDA AND PROPOSED RESOLUTIONS

Dear shareholder of Arco Vara AS,

Notice is hereby given that the annual general meeting of Arco Vara AS (registry number 10261718; registered office at Rotermanni 10, Tallinn) will be held in Tallinn at Kodulahe pavilion (address Lammi 8) on 5 June 2025 at 5:15 pm at the Kodulahe Pavilion in Tallinn (address: Lammi 8).

The agenda of the annual general meeting:

1. Approval of the annual report for 2024

The Supervisory Board proposes to the shareholders:

• To approve the annual report of Arco Vara AS for 2024.
  
  

2. Distribution of profit and dividend payment

The Management Board, in coordination with the Supervisory Board, proposes to the shareholders:

• to cover the net loss of EUR 624 thousand for the financial year ended on 31.12.2024 from retained earnings.

• to pay a dividend of EUR 0.02 per share. The dividend of EUR 0.02 per share will be paid to shareholders on 12.11.2025 via transfer to the shareholder’s bank account. The list of shareholders entitled to receive the dividend (record date) will be fixed as of 05.11.2025.
  
  

3. Approval of the Management Board’s remuneration principles

The Management Board, in coordination with the Supervisory Board, proposes to the shareholders:

• to approve the principles of remuneration of the Management Board of Arco Vara AS as set out in the materials of the general meeting and made available to shareholders.
  
  

4. Extension of the Supervisory Board’s authorizations

The Management Board, in coordination with the Supervisory Board, proposes to the shareholders:

• to approve the mandates of Supervisory Board members Steven Yaroslav Gorelik, Kert Keskpaik, Hillar-Peeter Luitsalu, Allar Niinepuu and Tarmo Sild as of the end of their term until adoption of this resolution of the general meeting of shareholders;

• to extend the term of office of the following persons as members of the Supervisory Board for five (5) years from the date of this resolution of the general meeting of shareholders:

1. Steven Yaroslav Gorelik;
2. Kert Keskpaik;
3. Hillar-Peeter Luitsalu;
4. Allar Niinepuu; and
5. Tarmo Sild.
   
   

5. Approval of remuneration of the Supervisory Board

The Management Board, in coordination with the Supervisory Board, proposes to the shareholders:

• to approve the remuneration for the position of the Chairman of the Supervisory Board in the amount of EUR 5,000 net per month;
• to approve remuneration of regular supervisory board members in the amount of up to EUR 500 net per each supervisory board meeting.
  
  

6. Amendment of the Articles of Association

The Management Board, in coordination with the Supervisory Board, proposes to the shareholders:

• to amend clause 2.1 of Arco Vara AS’s Articles of Association and adopt the following wording:

"The minimum share capital of the Company is 5,000,000 euros and the maximum share capital is 20,000,000 euros."

7. Increase of Share Capital in the Form of Directed Share Issue

To acquire the Luther Quarter and prepare for development, additional investments are necessary. In this regard, Arco Vara AS has decided to increase its share capital through a directed share issue and involve new investors, the former owners of the Luther Quarter properties, Luther Factory OÜ and Luther Factory Holding OÜ. Arco Vara AS majority shareholder Alarmo Kapital OÜ, has also committed to subscribing to the issued shares to maintain its majority stake.

The Management Board, in coordination with the Supervisory Board, proposes to the shareholders:

•  to increase the share capital of Arco Vara AS as follows:

• 1. to issue 6,980,000 new ordinary shares with a nominal value of 0.7 euros per share. The new ordinary shares will be of the same class as all other shares of Arco Vara AS;
  2. the issue price of one new share will be 2.5 euros, of which 0.7 euros nominal value and 1.8 euros share premium;
  3. the new share capital is 12,157,856.90 euros;
  4. the pre-emptive right to subscribe for new shares is divided follows:

• • 1. Alarmo Kapital OÜ (registry code 11716173): 2,100,000 shares. Alarmo Kapital OÜ will pay for new subscribed shares in full with monetary contribution, totalling 5,250,000 euros;
    2. Luther Factory OÜ (registry code 16151741): 3,309,999 shares. Luther Factory OÜ will pay for new subscribed shares in full with monetary contribution, totalling 8,274,997.50 euros;
    3. Luther Factory Holding OÜ (registry code 14806675): 1,570,001 shares. Luther Factory Holding OÜ will pay for new subscribed shares in full with monetary contribution, totalling 3,925,002.50 euros;

• 5. the subscription period for the new shares is fourteen (14) days from the adoption of the share capital increase resolution, whereas the Management Board has the right to shorten the subscription period if all shares are subscribed before the deadline. Shares are considered subscribed upon payment of monetary contribution to AS Arco Vara’s bank account EE307700771000592876;
  6. to exclude the pre-emptive subscription rights of existing shareholders for the newly issued shares to enable the persons listed in point (d) to make the desired investment into Arco Vara’s equity;
  7. the Management Board has the right to extend the subscription period or cancel the shares that were not subscribed for during the subscription period within fifteen (15) days after the end of the subscription period;
  8. the existing shareholders will not have any rights related to the new shares, including no pre-emptive subscription rights under § 345 (1) of the Commercial Code;
  9. the new shares will confer the right to receive dividends starting from the end of the subscription period;
  10. the Company will apply for all newly issued shares to be admitted to trading on the main list of the Nasdaq Tallinn Stock Exchange, and the shareholders authorize the Company’s Supervisory Board and Management Board to carry out all necessary actions and conclude all required agreements for this purpose.

The materials for the annual general meeting of shareholders of Arco Vara AS are available on the company’s website at www.arcovara.com and at the Arco Vara AS office in Tallinn at Rotermanni 10 on working days from 9:30 AM to 5:00 PM.

Questions regarding the agenda items can be submitted by email to info@arcovara.com. The questions and answers will be published on Arco Vara AS’s website. In accordance with the law, shareholders have the right to obtain information from the Management Board about Arco Vara AS’s activities during the general meeting. Shareholders representing at least 1/20 of Arco Vara AS’s share capital may request additional items to be added to the agenda by submitting such a request no later than 15 days before the general meeting, i.e. by May 20, 2025. They may also submit draft resolutions regarding each agenda item by making proposals no later than 3 days before the general meeting, i.e. by June 1, 2025. Shareholders’ demands and proposals must be sent by email to info@arcovara.com and will be published in accordance with the law.

The list of shareholders entitled to vote at the meeting will be determined 7 days before the meeting, i.e. on May 28, 2025, based on the end-of-day data of the Nasdaq CSD Estonia settlement system.

Anyone wishing to appoint a proxy representative is asked to inform us by June 1, 2025 and send the digitally signed power of attorney to info@arcovara.com. If digital signing is not possible, a scanned power of attorney should be sent to info@arcovara.com and the original sent by post to Rotermanni 10, Tallinn 10111. Registration for shareholders wishing to physically attend the general meeting will begin on June 5, 2025 at 4:45 PM. Please bring an identity document for registration. Shareholder representatives should also bring a written power of attorney or documents proving the right of representation.

The notice convening the general meeting will be published in the newspaper Postimees on 13.05.2025.

Sincerely,

The Management Board of Arco Vara AS
+372 614 4630
info@arcovara.com