RB nr 25/2006

Legal basis: Art. 56, subpar. 1, pt. 1 of the Act on Public Offering

The Board of MCI Management SA informs that on July 3, 2006 the Fund. in the third round of investment it took up 4,500 new shares (four thousand five hundred) with the nominal value of PLN 100.00 (one hundred) each and their total nominal value of PLN 450,000.00 (four hundred fifty thousand). In total the purchased shares account for 16.44% of the share capital of DomZdrowia.pl Sp. z o.o. MCI Management SA paid PLN 450,000 for the purchased shares, that is PLN 100 per each share. After the purchase of new issue shares MCI Management S.A. holds in total 13,567 shares of DomZdrowia.pl Sp. z o.o. which accounts for 49.57% of the share capital of the Company.

The third round of investment is another stage of financing DomZdrowia.pl. The assumption of MCI Management S.A. is to invest over PLN 2.5 million in the shares of DomZdrowia.pl Sp. z o.o. over 3 years. After carrying out all rounds of investment the estimated shareholding of MCI in the share capital of the Company shall exceed 50%. The implementation of the third round increased the capital engagement of the Fund in the enterprise up to almost PLN 1.4 million.

Since July 2004 DomZdrowia.pl Sp. z o.o. has been an operator of www.domzdrowia.pl website and has been operating based on a pharmacy outlet. The Company was first in the Polish market to enable purchasing of OTC drugs through the Internet in July 2004 and placing orders for prescription drugs online since June 2006. The business model assumes running an e-commerce pharmacy (www.domzdrowia.pl) and an e-commerce drugstore (www.domurody.pl) as well as dedicated web sites such as www.apteka.interia.pl, www.pretty.pl, www.zdrowewakacje.pl and others. The websites present a wide range of OTC drugs, prescription drugs and cosmetics. The basic objective of the enterprise is to enable the individual clients to place orders in the pharmacy outlet online and drugstore online; the orders shall be delivered by courier or mail, as requested by the clients. The prices offered at websites maintained by DomZdrowia.pl are on average 15% lower than in traditional pharmacies and drugstores, which is the main cause of the growth of its popularity of among online users of domzdrowia.pl websites. Almost ž of the clients of the Company include women over 30 who live in the cities with over 100 000 inhabitants; the average value of purchases exceeds PLN 120.

The strategic objective of the company is to maintain the position of the undisputed leader in the area of health and beauty products ordered online in Poland. The funds from the third round of investment will be spent on financing strategic projects of the company aiming at accelerating the growth of the company:
– implementation and development of e-commerce platform,
– development and promotion of the offer of cosmetics on the basis of DomUrody.pl,
– development of e-commerce websites specialized in individual product categories in cooperation with strategic partners (producers of medicines and cosmetics, horizontal portals, thematic vortals)
– development and promotion of offer of prescription drugs

In the first half of 2006 DomZdrowia.pl extended its product range to include cosmetics and prescription drugs, completing the offer building phase. In total the value of OTC drugs markets, prescription drugs and cosmetics exceeds PLN 20 billion annually. The Internet as a sales channel may in medium term take over 1% to 3% of the market share.

Current owners of the Company directly engaged in the management of the Company have a long business experience in the pharmaceutical and medical branch. The Management of the Company are engaged in active support of legislative changes of the Polish pharmaceutical law to comply with the UE directives.

The third round of investment of MCI Management in DomZdrowia.pl is the result of following the strategy of the Fund assuming an increase of investments in the area of e-commerce, especially in the segment of products for consumers with a large critical mass.