Summa Linguae S A : 12/2020 Report for Q2 2020

Consolidated interim report for Q2 2020

CONSOLIDATED INTERIM REPORT

for Q2 2020

Table of contents I. LETTER OF THE PRESIDENT OF THE MANAGEMENT BOARD 3 II. INTRODUCTION 4 III. KEY INFORMATION ABOUT THE ISSUER'S GROUP 5 IV. CONDENSED QUARTERLY FINANCIAL STATEMENTS OF THE COMPANY AND THE GROUP 6 V. INFORMATION ON PRINCIPLES ADOPTED FOR PREPARATION OF THE REPORT, INCLUDING INFORMATION ON CHANGES IN ACCOUNTING PRINCIPLES 20 VI. BRIEF DESCRIPTION OF THE ISSUER'S SIGNIFICANT ACHIEVEMENTS OR FAILURES DURING THE REPORTING PERION ALONG WITH DETAILS OF THE MOST IMPORTANT FACTORS AND EVENTS, ESPECIALLY THOSE OF UNUSUAL NATURE, AFFECTING THE RESULTS ACHIEVED BY THE ISSUER 26 VII. WHERE THE ISSUER PUBLISHED EARNINGS GUIDANCE - THE POSITION AS REGARDS ITS FEASIBILITY IN THE YEAR CONCERNED, IN LIGHT OF THE RESULTS PRESENTED IN THE QUARTERLY REPORT 30 VIII. WHERE THE ISSUER'S INFORMATION STATEMENT CONTAINED THE INFORMATION REFERRED TO IN ARTICLE 10(13A) OF APPENDIX 1 TO THE ALTERNATIVE TRADING SYSTEM RULES - DESCRIPTION OF THE ADVANCEMENT OF THE ISSUER'S OPERATIONS AND INVESTMENTS WITH THE SCHEDULE OF THEIR IMPLEMENTATION 30 IX. WHERE THE ISSUER UNDERTOOK DURING THE REPORTING PERIOD INITIATIVES TO INTRODUCE IN THE COMPANY INNOVATIVE SOLUTIONS AIMED AT THE DEVELOPMENT OF ITS BUSINESS - INFORMATION ON SUCH ACTIVITY 31 X. THE NUMBER OF THE ISSUER'S EMPLOYEES IN FULL-TIME EQUIVALENTS 31 XI. WHERE THE ISSUER IS THE PARENT COMPANY OF A GROUP AND DOES NOT PREPARE CONSOLIDATED FINANCIAL STATEMENTS - THE REASON WHY SUCH STATEMENTS ARE NOT PREPARED 31 XII. INFORMATION ON THE ISSUER'S SHAREHOLDING STRUCTURE WITH DETAILS OF SHAREHOLDERS ENTITLED, AS AT THE DATE OF THE REPORT, TO AT LEAST 5% OF VOTES AT THE GENERAL MEETING 31

I. LETTER OF THE PRESIDENT OF THE MANAGEMENT BOARD

Dear Readers,

On behalf of the Management Board of Summa Linguae Technologies S.A., I have a pleasure to present to you the consolidated interim report for Q2 2020.

The past quarter brought a lot of challenges for the broadly understood market, the LSP industry, and also for us, due to the necessity to adapt to the new conditions of operation in the world facing a pandemic. These challenges are particularly demanding, as they coincide with the process of our internal integration with North American companies acquired in December 2019. Nevertheless, in light of the pressure related to the SARS-CoV-2 virus pandemic, the second quarter of 2020 confirmed the legitimacy of the expansion to North American markets. The thus gained competences and a portfolio of customers based on ones from the technology and life science sectors enabled, in the scale of the entire Group, minimizing the negative effects of the pandemic, reducing the decline in revenue in some geographical areas, and, through efficient internal management measures, improving the ultimate level of the generated margin.

Moreover, still before the outbreak of the pandemic, we decided to intensively use the potential of the North American market. To this end we established cooperation with Shanonn Zimmerman who as a Chief Revenue Officer is responsible in the Group for coordinating sales and expansion in this area. The foregoing, coupled with the competences and experience gained over the years while working with customers from the IT/ITES, retail/e-commerce and e-learning sectors, as well as entities from the life science/medical devices sectors, already brings tangible benefits in the form of new orders.

Owing to a high sense of responsibility, effective process and cost optimization and the consistently implemented strategy, despite the unfavorable external operating conditions in the COVID-19 reality, the Group ended Q2 2020 with financial results that allow us to look at the next quarters and the whole year with cautious optimism.

In the second quarter of 2020, we generated consolidated revenue of PLN 22.4 million, representing a 108% increase, and in like-for-like terms, having taken into account revenue of the companies acquired last year, the organic increase in revenue would have been around 20%. Consolidated EBITDA for Q2 2020 amounted to PLN 2.2 million, while EBITDA adjusted for one-off expenses was PLN 2.6 million.

I would like to express my gratitude to our Investors, business partners and colleagues for their trust and cooperation, and kindly invite you to get familiar with this Report.

Krzysztof Zdanowski

CEO

Summa Linguae Technologies S.A.

II. INTRODUCTION

The Summa Linguae Technologies Group is a leading provider of technological solutions in the area of multilingual data management.

The Issuer's strategy focuses on cooperation with global brands operating in promising sectors of economy, such as IT/ITES, E-Commerce/Retail, E-learning and Life Science.

The range of the Issuer's services is grouped in three areas:

a. Data Services

- data annotation and collection

- data structuring

b. Managed Services

- end-to-end outsourcing

- placement/staffing

c. Technology-enabled localization services

- localization and translation

- internationalization, transcreation

The Company's strategy provides for dynamic organic growth through acquisitions and consolidation of the market for translation and localization services as well as technical solutions in the area of translation/localization and data services.

The Group operates globally through its branches and subsidiaries in nine countries:

a. Poland	h. India	e. Finland
b. USA	i. Sweden	f. Denmark
c. Canada	j. Norway	g. Romania

The Company's strategy provides also for technological development based both on in-house technologies and off-the-shelf ones. Not only does it enable effective optimization of processes, both as regards delivered quality and project implementation time, but it also makes it possible for the Company to offer comprehensive technological solutions in the area of localization to meet new needs of the ever more globalized market.

III. KEY INFORMATION ABOUT THE ISSUER'S GROUP

The Issuer: Summa Linguae Technologies S.A. headquartered in Krakow at 63 Josepha Conrada Street, entered into the Register of Companies of the National Court Register kept by the District Court for Kraków-Śródmieście in Krakow under KRS number 0000400208, VAT ID: 9452165721, REGON statistical number: 122435108.

Table 1. Companies in the Issuer's Group as at 30 June 2020

Company	Abbreviated names used herein	Registered office	Parent Company's share in the capital and voices (as at 30 June 2020)	Share capital
Summa Linguae Technologies S.A.	Summa Linguae Technologies, Issuer, Parent Company	Krakow (Poland)	Parent Company	PLN 755,454.60 as at 30 June 2020
Kommunicera Communications AB	Kommunicera, KCAB	Gothenburg (Sweden)	100%	SEK 100,000.00 i.e. PLN 42,490.00 as at 30 June 2020
Kommunicera AS		Oslo (Norway)	100% (through Kommunicera Communications AB)	NOK 100,000.00 i.e. PLN 40,880.00 as at 30 June 2020
Lingtech A/S		Stenløse near Copenhagen (Denmark)	100% (through Kommunicera Communications AB)	DKK 2,466,668.00 i.e. PLN 1,478,027.47 as at 30 June 2020
Mayflower Language Services Pvt. Ltd.	Mayflower	Bangalore (India)	100% of votes* 83.85% of capital	INR 500,060.00 i.e. PLN 26,353.16 as at 30 June 2020
Summa Linguae Romania S.R.L.	Summa Linguae Romania, SLR	Bucharest (Romania)	99.996%	RON 254,100.00 i.e. PLN 234,280.20 as at 30 June 2020
GlobalMe Localizations Inc.	GlobalMe	Vancouver (Canada)	100%	USD 1.00 i.e. PLN 3.98 as at 30 June 2020
GlobalVision International Inc.	GlobalVision	Westborough near Boston (USA)	100%	CAD 1.00 i.e. PLN 2.91 as at 30 June 2020

*100% share in votes in Mayflower under an investment agreement concluded by the Company with Mayflower and its partners

All subsidiaries listed in Table 1 are consolidated on a line-by-line basis.

IV. CONDENSED QUARTERLY FINANCIAL STATEMENTS OF THE COMPANY AND THE GROUP

The Issuer presents financial data for Q2 2020 along with comparative data for the same period of the previous year.

The balance sheet, income statement, cash flow statement and statement of changes in equity have been drawn up pursuant to the Accounting Act of 29 September 1994 (Journal of Laws of 2018, item 395, consolidated text, as amended) and its implementing acts. The data has not been audited. Amounts are given in PLN thousand, unless otherwise specified.

Table 2. Consolidated income statement for Q2 2020 along with comparative data (in PLN thousand)

Consolidated income statement of Summa Linguae S.A.	Q1-Q2 2020	Q1-Q2 2019	Q2 2020	Q2 2019
A. Sales revenue and equivalents, of which:	42,825.2	20,642.8	22,438.7	10,788.5
- from related parties which are not consolidated on a line-by-line basis	0.0	0.0	0.0	0.0
I. Net revenue from sales of products	42,825.2	20,642.8	22,438.7	10,788.5
II. Change in inventories - additions (+), withdrawals (-)	0.0	0.0	0.0	0.0
III. Cost of production for internal purposes	0.0	0.0	0.0	0.0
IV. Net revenue from sales of goods and materials	0.0	0.0	0.0	0.0
B. Operating expenses	40,661.9	20,431.0	20,161.0	10,216.1
I. Amortization and depreciation	135.9	84.0	71.5	43.5
II. Consumption of materials and energy	88.4	121.7	25.2	57.1
III. Third-party services	11,532.1	11,774.7	6,873.6	5,934.3
IV. Taxes and fees, of which:	57.3	34.0	-299.7	13.1
- excise tax	0.0	0.0	0.0	0.0
V. Salaries	25,234.3	6,208.6	11,664.2	3,104.5
VI. Social security and other benefits, of which:	1,933.9	1,444.9	903.0	684.3
- retirement pay	400.8	0.0	211.5	0.0
VII Other costs by type	1,680.0	763.0	923.2	379.4
VIII. Value of goods and materials sold	0.0	0.0	0.0	0.0
C. PROFIT/(LOSS) ON SALES (A-B)	2,163.3	211.8	2,277.7	572.3
D. Other operating income	140.1	31.0	-169.3	19.1
I. Profit on disposal of non-financial fixed assets	0.0	0.0	0.0	0.0
II. Subsidies	0.0	0.0	0.0	0.0
III. Revaluation of non-financial assets	0.0	0.0	0.0	0.0
IV. Other operating income	140.1	31.0	-169.3	19.1
E. Other operating expenses	251.6	204.7	111.6	141.1
I. Loss on disposal of non-financial fixed assets	0.0	0.0	0.0	0.0
II. Revaluation of non-financial assets	0.0	0.0	0.0	0.0
III. Other operating expenses	251.6	204.7	111.6	141.1
- of which: amortization of goodwill	188.2	203.5	86.5	139.9
F. OPERATING PROFIT/(LOSS) (C+D-E)	2,051.7	38.0	1,996.8	450.3
G. Financial income	680.3	20.3	554.2	9.8
I. Dividends and share in profits, of which:	0.0	0.0	0.0	0.0
(a) from related parties, of which:	0.0	0.0	0.0	0.0
- those in which the entity has equity interests	0.0	0.0	0.0	0.0
(b) from other entities, of which:	0.0	0.0	0.0	0.0
- those in which the entity has equity interests	0.0	0.0	0.0	0.0
II. Interest, of which:	14.0	11.7	-14.3	8.1
- from related parties	0.2	0.0	0.2	0.0
III. Profit on disposal of financial assets, of which:	0.0	0.0	0.0	0.0
- in related parties	0.0	0.0	0.0	0.0
IV. Revaluation of non-financial assets	0.0	0.0	0.0	0.0
V. Other	666.2	8.6	568.5	1.7
H. Financial expenses	281.2	267.9	-591.7	104.8
I. Interest, of which:	213.6	187.8	150.6	72.5
- to related parties	0.0	-0.0	0.0	-0.0
II. Loss on disposal of financial assets, of which:	0.0	0.0	0.0	0.0
- in related parties	0.0	0.0	0.0	0.0
III. Revaluation of financial assets	0.0	0.0	0.0	0.0
IV. Other	67.6	80.1	-742.3	32.4
I. Profit/(loss) on sale of all or part of shares in controlled entities	0.0	0.0	0.0	0.0
J. PROFIT/(LOSS) ON ORDINARY ACTIVITIES (F+G+H+/-I)	2,450.8	-209.6	3,142.8	355.2
K. Goodwill amortization allowance	1,302.3	133.3	661.9	68.0
I. Goodwill amortization allowance - subsidiaries	1,302.3	133.3	661.9	68.0
II. Goodwill amortization allowance - jointly controlled entities	0.0	0.0	0.0	0.0
L. Negative goodwill amortization allowance	7.9	0.0	7.9	0.0
I. Negative goodwill amortization allowance - subsidiaries	7.9	0.0	7.9	0.0
II. Negative goodwill amortization allowance - jointly controlled entities	0.0	0.0	0.0	0.0
M. Profit/(loss) on shares in subsidiaries measured in accordance with the equity method	0.0	0.0	0.0	0.0
N. PROFIT/(LOSS) BEFORE TAX (J-K+L+/-M)	1,156.3	-342.9	2,488.8	287.2
O. Income tax	11.7	68.5	15.1	79.1
P. Other obligatory charges	0.0	0.0	0.0	0.0
R. Minority interest profit/(loss)	-115.7	-0.6	-115.7	163.0
S. NET PROFIT/(LOSS) (N-O-P+/-R)	1,028.9	-412.0	2,358.0	371.1

Table 3. Consolidated balance sheet as at 30 June 2020 along with comparative data (in PLN thousand)

Consolidated balance sheet of Summa Linguae Technologies S.A.	30.06.2020	30.06.2019
ASSETS
A. NON-CURRENT ASSETS	59,975.9	13,236.5
I. Intangible assets	5,572.3	4,339.0
1. R&D expenses	0.0	0.0
2. Goodwill	3,610.6	4,002.3
3. Other intangible assets	1,061.8	336.8
4. Advances for intangible assets	900.0	0.0
II. Goodwill of controlled entities	50,305.6	5,092.1
1. Goodwill - subsidiaries	50,305.6	5,092.1
2. Goodwill - jointly controlled entities	0.0	0.0
III. Property, plant and equipment	307.9	230.2
1. Fixed assets	278.4	230.2
(a) freehold land (including right of perpetual use)	0.0	0.0
(b) buildings, premises, rights to premises and constructions	0.0	0.0
(c) plant and machinery	67.9	105.4
(d) vehicles	53.5	25.0
(e) other fixed assets	157.0	99.8
2. Fixed assets under construction	29.5	0.0
3. Advances for fixed assets under construction	0.0	0.0
IV. Non-current receivables	254.2	262.6
1. From related parties	0.0	0.0
2. From other entities in which the entity has equity interests	0.0	0.0
3. From other entities	254.2	262.6
V. Long-term investments	1,262.1	74.0
1. Real property	0.0	0.0
2. Intangible assets	0.0	0.0
3. Not-current financial assets	1,262.1	74.0
(a) in subsidiaries and jointly controlled entities which are not measured using the full or proportional consolidation method	0.0	0.0
- shares	0.0	0.0
- other securities	0.0	0.0
- loans granted	0.0	0.0
- other not-current financial assets	0.0	0.0
(b) in subsidiaries, jointly controlled entities and affiliates measured using the equity method	1,262.1	0.0
- shares	14.8	0.0
- other securities	0.0	0.0
- loans granted	1,247.3	0.0
- other not-current financial assets	0.0	0.0
(c) in other entities in which the entity has equity interests	0.0	0.0
- shares	0.0	0.0
- other securities	0.0	0.0
- loans granted	0.0	0.0
- other not-current financial assets	0.0	0.0
(d) in other entities	0.0	74.0
- shares	0.0	0.0
- other securities	0.0	0.0
- Loans granted	0.0	74.0
- other not-current financial assets	0.0	0.0
4. Other long-term investments	0.0	0.0
VI. Non-current prepayments and accrued income	2,273.7	3,238.6
1. Deferred tax assets	1,083.1	880.4
2. Other accrued income	1,190.6	2,358.2
B. CURRENT ASSETS	19,172.9	12,281.1
I. Inventories	0.0	0.0
1. Materials	0.0	0.0
2. Semi-finished goods and work in progress	0.0	0.0
3. Finished products	0.0	0.0
4. Goods	0.0	0.0
5. Advances for deliveries and services	0.0	0.0
II. Current receivables	11,299.0	8,765.0
1. Receivables from related parties	0.0	0.0
(a)trade receivables, maturing:	0.0	0.0
- within up to 12 months	0.0	0.0
- in over 12 months	0.0	0.0
(b) other	0.0	0.0
2. Receivables from other entities in which the entity has equity interests	0.0	0.0
(a)trade receivables, maturing:	0.0	0.0
- within up to 12 months	0.0	0.0
- in over 12 months	0.0	0.0
(b) other	0.0	0.0
3. Receivables from other entities	11,299.0	8,765.0
(a)trade receivables, maturing:	9,953.3	8,004.0
- within up to 12 months	9,953.3	8,004.0
- in over 12 months	0.0	0.0
(b) taxes, subsidies, custom duties, social and health insurance and other public liabilities	671.6	370.3
(c) other	674.1	390.7
(d) claimed in court	0.0	0.0
III. Short-term investments	5,322.0	1,514.9
1. Current financial assets	5,322.0	1,514.9
(a) in subsidiaries and jointly controlled entities	0.0	0.0
- shares	0.0	0.0
- other securities	0.0	0.0
- loans granted	0.0	0.0
- other current financial assets	0.0	0.0
(b) in associates	0.0	0.0
- shares	0.0	0.0
- other securities	0.0	0.0
- loans granted	0.0	0.0
- other current financial assets	0.0	0.0
(c) in other entities	0.0	69.2
- shares	0.0	0.0
- other securities	0.0	0.0
- loans granted	0.0	69.2
- other current financial assets	0.0	0.0
(d) cash and cash equivalents	5,322.0	1,445.7
- cash in hand and at bank	5,266.8	1,404.7
- other cash	55.2	41.0
- other financial assets	0.0	0.0
2. Other short-term investments	0.0	0.0
IV. Current prepayments and accrued income	2,551.8	2,001.2
C. CALLED UP SHARE CAPITAL	0.0	0.0
D. TREASURY SHARES	0.0	879.9
TOTAL ASSETS	79,148.7	26,397.5

EQUITY AND LIABILITIES
A. EQUITY	48,819.7	7,707.6
I. Share capital	755.5	447.9
II. Reserve capital, of which:	52,005.3	10,532.9
- share premium	49,812.5	10,261.8
III. Revaluation reserve, of which:	0.0	-0.0
- fair value revaluation	0.0	-0.0
IV. Other capital reserves, of which:	820.3	820.3
- created in accordance with the Articles of Association	0.0	0.0
V. Exchange rate differences on translation of foreign operations	-1,234.5	-86.4
VI. Profit/(loss) brought forward	-4,555.8	-3,595.1
VII. Net profit/(loss)	1,028.9	-412.0
VIII. Net profit write-offs during the financial year (negative value)	0.0	0.0
B. MINORITY INTERESTS	724.6	1,481.1
C. NEGATIVE GOODWILL OF CONTROLLED ENTITIES	208.5	0.0
I. Negative goodwill - subsidiaries	208.5	0.0
II. Negative goodwill - jointly controlled entities	0.0	0.0
D. LIABILITIES AND PROVISIONS FOR LIABILITIES	29,395.9	17,208.8
I. Provisions for liabilities	10,634.3	1,038.4
1. Provision for deferred income tax	5.9	85.4
2. Provision for retirement and similar benefits	454.1	212.1
- long-term	330.1	212.1
- short-term	124.0	0.0
3. Other provisions	10,174.3	740.8
- long-term	9,951.5	409.8
- short-term	222.8	330.9
II. Non-current liabilities	474.8	2,929.2
1. Payable to related parties	0.0	0.0
2. Payable to other entities in which the reporting entity has equity interests	0.0	0.0
3. Payable to other entities	474.8	2,929.2
(a) loans and borrowings	474.8	2,520.3
(b) arising from issue of debt securities	0.0	0.0
(c) other financial liabilities	0.0	0.0
(d) bill-of-exchange liabilities	0.0	0.0
(e) other	0.0	409.0
III. Current liabilities	16,320.3	12,136.3
1. Payable to related parties	0.0	-0.0
(a)trade liabilities, maturing:	0.0	-0.0
- within up to 12 months	0.0	-0.0
- in over 12 months	0.0	0.0
(b) other	0.0	0.0
2. Payable to other entities in which the reporting entity has equity interests	0.0	0.0
(a)trade liabilities, maturing:	0.0	0.0
- within up to 12 months	0.0	0.0
- in over 12 months	0.0	0.0
(b) other	0.0	0.0
3. Payable to other entities	16,320.3	12,136.3
(a) loans and borrowings	3,968.8	669.4
(b) arising from issue of debt securities	0.0	0.0
(c) other financial liabilities	39.2	4.5
(d) trade liabilities, maturing:	4,493.0	4,416.2
- within up to 12 months	4,493.0	4,374.9
- in over 12 months	0.0	41.3
(e) received advances for deliveries and services	23.2	12.5
(f) bill-of-exchange liabilities	0.0	0.0
(g) taxes, custom duties, social and health insurance and other public liabilities	3,031.5	1,283.5
(h) payroll liabilities	3,286.3	2,019.2
(i) other	1,478.4	3,731.1
4. Special purpose funds	0.0	0.0
IV. Accruals	1,966.5	1,104.9
1. Negative goodwill	0.0	0.0
2. Other accrued income	1,966.5	1,104.9
- long-term	113.8	0.0
- short-term	1,852.6	1,104.9
TOTAL LIABILITIES AND EQUITY	79,148.7	26,397.5

Table 4. Consolidated cash flow statement for Q2 2020 along with comparative data (in PLN thousand)

Consolidated cash flow statement of Summa Linguae S.A.	Q1-Q2 2020	Q1-Q2 2019	Q2 2020	Q2 2019
A. OPERATING CASH FLOWS
I. NET PROFIT/(LOSS)	1,028.9	-412.0	2,358.0	371.1
II. Adjustments (total)	-1,567.4	-905.8	-832.4	738.6
1. Minority interest profit/(loss)	115.7	0.6	115.7	-163.0
2. Profit/(loss) on shares in entities measured using the equity method	0.0	0.0	0.0	0.0
3. Amortization and depreciation	319.2	280.3	160.6	176.1
4. Goodwill amortization allowance	1,302.3	133.3	661.9	68.0
5. Negative goodwill amortization allowance	-7.9	0.0	-7.9	0.0
6. Foreign exchange gains/losses	-424.4	0.0	-1,187.7	0.0
7. Interest and share in profits (dividends)	-41.7	-5.1	-31.6	-2.2
8. Profit/(loss) on investing activity	0.0	0.0	0.0	0.0
9. Change in provisions	-279.0	-85.9	-79.6	-149.2
10. Change in inventories	0.0	0.0	0.0	0.0
11. Change in receivables	-682.7	-685.5	-4,206.6	-137.8
12. Change in current liabilities, excluding loans and borrowings	-1,089.5	-11.5	4,743.6	1,450.8
13. Change in prepayments and accrued income	-281.5	-648.1	-539.7	-532.3
14. Other adjustments	-497.9	116.1	-461.2	28.2
III. Net operating cash flow (I+/-II)	-538.5	-1,317.9	1,525.6	1,109.7
B. CASH FLOW FROM INVESTING ACTIVITIES
I. Inflows	160.1	6.5	160.1	2.8
1. Disposal of intangible assets and property, plant and equipment	0.0	0.0	0.0	0.0
2. Disposal of investments in real property and intangible assets	0.0	0.0	0.0	0.0
3. From financial assets, of which:	160.1	6.5	160.1	2.8
(a) in entities measured using the equity method	0.0	0.0	0.0	0.0
(b) in other entities	160.1	6.5	160.1	2.8
- sale of financial assets	0.0	0.0	0.0	0.0
- dividends and share in profits	0.0	0.0	0.0	0.0
- repayment of long-term loans granted	0.0	6.5	0.0	2.8
- Interest	160.1	0.0	160.1	0.0
- other inflows from financial assets	0.0	0.0	0.0	0.0
4. Other inflows from investments	0.0	0.0	0.0	0.0
II. Outflows	2,558.8	217.8	641.4	217.8
1. Purchase of intangible assets and property, plant and equipment	1,325.4	216.7	647.6	216.7
2. Investment in real property and intangible assets	0.0	0.0	0.0	0.0
3. For financial assets, of which:	1,233.4	1.1	-6.2	1.1
(a) in entities measured using the equity method	0.0	1.1	-6.2	1.1
(b) in other entities	1,233.4	0.0	0.0	0.0
- purchase of financial assets	0.0	0.0	0.0	0.0
- long-term loans granted	1,233.4	0.0	0.0	0.0
4. Dividends and other interests in profit paid to minority shareholders	0.0	0.0	0.0	0.0
5. Other capital expenses	0.0	0.0	0.0	0.0
III. Net cash flows from investing activities (I-II)	-2,398.7	-211.3	-481.3	-214.9
C. CASH FLOWS FROM FINANCING ACTIVITIES
I. Inflows	1,576.9	5,601.0	1,061.5	2,260.0
1. Net inflows from issue of shares and other securities and from capital contributions	8.6	2,801.3	0.0	14.9
2. Loans and borrowings	1,568.3	2,799.7	1,061.5	2,245.2
3. Issue of debt securities	0.0	0.0	0.0	0.0
4. Other financial inflows	0.0	0.0	0.0	0.0
II. Outflows	678.3	4,505.4	384.4	3,448.9
1. Purchase of treasury shares	0.0	707.2	-12.1	707.2
2. Dividends and other payments to shareholders	0.0	0.0	0.0	0.0
3. Profit distribution expenses other than payments to shareholders	0.0	0.0	0.0	0.0
4. Repayment of loans and borrowings	678.3	3,789.2	396.4	2,738.5
5. Redemption of debt securities	0.0	0.0	0.0	0.0
6. Other financial liabilities	0.0	0.0	0.0	0.0
7. Payment of liabilities under finance lease agreements	0.0	7.7	0.0	2.6
8. Interest	0.1	1.4	0.1	0.6
9. Other financial expenses	0.0	0.0	0.0	0.0
III. Net cash flows from financing activities (I-II)	898.6	1,095.6	677.2	-1,188.8
D. TOTAL NET CASH FLOWS (A.III.+/-B.III+/-C.III)	-2,038.6	-433.6	1,721.5	-294.0
E. BALANCE SHEET CHANGE IN CASH, of which:	-2,038.6	-433.6	1,721.5	-294.0
- Change in cash due to foreign exchange differences	0.0	0.0	0.0	0.0
F. OPENING BALANCE OF CASH	7,360.6	1,879.2	3,600.5	1,739.7
G. CLOSING BALANCE OF CASH (F+/-D), of which:	5,322.0	1,445.7	5,322.0	1,445.7
- restricted cash	0.0	0.0	0.0	0.0

Table 5. Consolidated statement of changes in equity for Q2 2020 along with comparative data (in PLN)

Consolidated statement of changes in equity of Summa Linguae S.A.	Q1-Q2 2020	Q1-Q2 2019	Q2 2020	Q2 2019
I. OPENING BALANCE OF EQUITY (OB)	48,171.3	4,970.3	48,171.3	4,970.3
- amendments to adopted accounting policies	0.0	0.0	0.0	0.0
- corrections of errors	0.0	0.0	0.0	0.0
I.a. Opening balance of equity (OB) after adjustments	48,171.3	4,970.3	48,171.3	4,970.3
1. Opening balance of share capital	450.4	389.6	450.4	389.6
1.1. Change in share capital	305.0	58.4	0.0	58.4
(a) increase (due to)	305.0	58.4	0.0	58.4
- issue of shares	305.0	58.4	0.0	58.4
(b) decrease (due to)	0.0	0.0	0.0	0.0
- redemption of shares	0.0	0.0	0.0	0.0
1.2. Closing balance of share capital	755.5	447.9	450.4	447.9
2. Opening balance of reserve capital	51,996.7	7,761.0	51,996.7	7,761.0
2.1. Change in reserve capital	8.6	2,771.9	0.0	2,771.9
(a) increase (due to)	8.6	3,025.7	0.0	3,025.7
- share premium	8.6	3,025.7	0.0	3,025.7
- (statutory) profit distribution	0.0	0.0	0.0	0.0
- profit distribution (above the minimum statutory value)	0.0	0.0	0.0	0.0
- issue of shares	0.0	0.0	0.0	0.0
(b) decrease (due to)	0.0	253.7	0.0	253.7
- loss coverage	0.0	0.0	0.0	0.0
- share issue costs	0.0	253.7	0.0	253.7
2.2. Closing balance of reserve capital	52,005.3	10,532.9	51,996.7	10,532.9
3. Opening balance of revaluation reserve	0.0	0.0	0.0	0.0
3.1. Change in revaluation reserve	0.0	0.0	0.0	0.0
(a) increase (due to)	0.0	0.0	0.0	0.0
(b) decrease (due to)	0.0	0.0	0.0	0.0
- disposal of fixed assets	0.0	0.0	0.0	0.0
3.2. Closing balance of revaluation reserve	0.0	0.0	0.0	0.0
4. Opening balance of other capital reserves	820.3	854.3	820.3	854.3
4.1. Change in other capital reserves	0.0	-34.0	0.0	-34.0
(a) increase (due to)	0.0	0.0	0.0	0.0
(b) decrease (due to)	0.0	34.0	0.0	34.0
4.2. Closing balance of other capital reserves	820.3	820.3	820.3	820.3
5. Exchange rate differences from translation	-1,234.5	-86.4	-1,234.5	-86.4
6. Opening balance of profit/(loss) carried forward	-2,954.6	-3,595.1	-4,555.8	-3,595.1
6.1. Opening profit carried forward	0.0	2,633.0	0.0	2,633.0
- amendments to adopted accounting policies	0.0	0.0	0.0	0.0
- corrections of errors	0.0	0.0	0.0	0.0
6.2. Opening balance of profit carried forward, after adjustments	0.0	2,633.0	0.0	2,633.0
(a) increase (due to)	0.0	0.0	0.0	0.0
- distribution of profit carried forward	0.0	0.0	0.0	0.0
(b) decrease (due to)	0.0	0.0	0.0	0.0
6.3. Closing profit carried forward	0.0	2,633.0	0.0	2,633.0
6.4. Opening loss carried forward	-2,954.6	-6,228.1	-4,555.8	-6,228.1
- amendments to adopted accounting policies	0.0	0.0	0.0	0.0
- corrections of errors	0.0	0.0	0.0	0.0
6.5 Opening loss carried forward, after adjustments	-2,954.6	-6,228.1	-4,555.8	-6,228.1
(a) increase (due to)	0.0	0.0	0.0	0.0
- loss carried forward to be covered	0.0	0.0	0.0	0.0
(b) decrease (due to)	-1,601.2	0.0	0.0	0.0
6.6. Closing balance of loss carried forward	-4,555.8	-6,228.1	-4,555.8	-6,228.1
6.7. Closing balance of profit/(loss) carried forward	-4,555.8	-3,595.1	-4,555.8	-3,595.1
7. Net profit/(loss)	1,028.9	-412.0	2,358.0	-412.0
(a) net profit	1,028.9	0.0	1,028.9	0.0
(b) net loss	0.0	-412.0	0.0	-412.0
(c) profit write-offs	0.0	0.0	0.0	0.0
II. CLOSING BALANCE OF EQUITY (CB)	48,819.7	7,707.6	49,835.2	7,707.6
III. EQUITY ACCOUNTING FOR PROPOSED PROFIT DISTRIBUTION/(LOSS COVERAGE)	48,819.7	7,707.6	49,835.2	7,707.6

Table 6. Separate income statement for Q2 2020 along with comparative data (in PLN thousand)

Separate income statement of Summa Linguae S.A.	Q1-Q2 2020	Q1-Q2 2019	Q2 2020	Q2 2019
A. Sales revenue and equivalents, of which:	4,263.7	4,385.2	1,549.0	2,306.6
- from related parties which are not consolidated on a line-by-line basis	0.0	0.0	0.0	0.0
I. Net revenue from sales of products	4,263.7	4,385.2	1,549.0	2,306.6
II. Change in inventories - increase (+), decrease (-)	0.0	0.0	0.0	0.0
III. Cost of production for internal purposes	0.0	0.0	0.0	0.0
IV. Net revenue from sales of goods and materials	0.0	0.0	0.0	0.0
B. Operating expenses	5,771.8	4,573.1	2,649.2	2,370.7
I. Amortization and depreciation	37.5	19.7	15.5	10.0
II. Consumption of materials and energy	33.3	44.9	4.9	28.2
III. Third-party services	3,342.2	3,095.1	1,485.3	1,578.1
IV. Taxes and fees, of which:	5.0	1.5	1.4	0.5
- excise tax	0.0	0.0	0.0	0.0
V. Salaries	2,112.4	1,156.5	1,024.2	607.6
VI. Social security and other benefits, of which:	238.8	176.8	116.8	93.4
- retirement pay	0.0	0.0	0.0	0.0
VII Other costs by type	2.4	78.7	0.9	53.0
VIII. Value of goods and materials sold	0.0	0.0	0.0	0.0
C. PROFIT/(LOSS) ON SALES (A-B)	-1,508.0	-187.9	-1,100.2	-64.0
D. Other operating income	0.2	0.2	0.1	0.2
I. Profit on disposal of non-financial fixed assets	0.0	0.0	0.0	0.0
II. Subsidies	0.0	0.0	0.0	0.0
III. Revaluation of non-financial assets	0.0	0.0	0.0	0.0
IV. Other operating income	0.2	0.2	0.1	0.2
E. Other operating expenses	191.7	204.7	95.0	141.1
I. Loss on disposal of non-financial fixed assets	0.0	0.0	0.0	0.0
II. Revaluation of non-financial assets	0.0	0.0	0.0	0.0
III. Other operating expenses	191.7	204.7	95.0	141.1
- of which: amortization of goodwill	188.2	203.5	86.5	139.9
F. OPERATING PROFIT/(LOSS) (C+D-E)	-1,699.5	-392.5	-1,195.0	-205.0
G. Financial revenue	102.7	8.7	83.2	4.3
I. Dividends and share in profits, of which:	0.0	0.0	0.0	0.0
(a) from related parties, of which:	0.0	0.0	0.0	0.0
- those in which the entity has equity interests	0.0	0.0	0.0	0.0
(b) from other entities, of which:	0.0	0.0	0.0	0.0
- those in which the entity has equity interests	0.0	0.0	0.0	0.0
II. Interest, of which:	35.7	7.9	19.3	4.2
- from related parties	35.5	7.9	19.1	4.2
III. Profit on disposal of financial assets, of which:	0.0	0.0	0.0	0.0
- in related parties	0.0	0.0	0.0	0.0
IV. Revaluation of non-financial assets	0.0	0.0	0.0	0.0
V. Other	67.0	0.7	63.9	0.2
H. Financial expenses	84.6	133.5	46.6	53.2
I. Interest, of which:	62.0	108.8	27.1	37.5
- to related parties	0.0	0.0	0.0	0.0
II. Loss on disposal of financial assets, of which:	0.0	0.0	0.0	0.0
- in related parties	0.0	0.0	0.0	0.0
III. Revaluation of financial assets	0.0	0.0	0.0	0.0
IV. Other	22.6	24.8	19.5	15.6
I. PROFIT/(LOSS) BEFORE TAX (F+G-H)	-1,681.4	-517.3	-1,158.4	-253.8
J. Income tax	0.0	0.0	0.0	0.0
K. Other obligatory charges	0.0	0.0	0.0	0.0
L. NET PROFIT/(LOSS) (I-J-K)	-1,681.4	-517.3	-1,158.4	-253.8

Table 7. Separate balance sheet as at 30 June 2020 along with comparative data (in PLN thousand)

Separate balance sheet of Summa Linguae Technologies S.A.	30.06.2020	30.06.2019
ASSETS
A. NON-CURRENT ASSETS	53,523.6	13,762.7
I. Intangible assets	3,659.1	4,002.9
1. R&D expenses	0.0	0.0
2. Goodwill	3,610.6	4,002.3
3. Other intangible assets	48.5	0.7
4. Advances for intangible assets	0.0	0.0
II. Property, plant and equipment	66.2	95.4
1. Fixed assets	66.2	95.4
(a) freehold land (including right of perpetual use)	0.0	0.0
(b) buildings, premises, rights to premises and constructions	0.0	0.0
(c) plant and machinery	13.1	23.5
(d) vehicles	14.3	25.0
(e) other fixed assets	38.8	46.9
2. Fixed assets under construction	0.0	0.0
3. Advances for fixed assets under construction	0.0	0.0
III. Non-current receivables	0.0	0.0
1. from related parties	0.0	0.0
2. From other entities in which the reporting entity has equity interests	0.0	0.0
3. From other entities	0.0	0.0
IV. Long-term investments	49,617.2	9,617.4
1. Real property	0.0	0.0
2. Intangible assets	0.0	0.0
3. Not-current financial assets	49,617.2	9,617.4
(a) in related parties	48,355.1	9,543.4
- shares	48,175.7	9,397.1
- other securities	0.0	0.0
- loans granted	179.4	146.3
- other not-current financial assets	0.0	0.0
(b) in other entities in which the entity has equity interests	1,262.1	0.0
- shares	14.8	0.0
- other securities	0.0	0.0
- loans granted	1,247.3	0.0
- other not-current financial assets	0.0	0.0
(c) in other entities	0.0	74.0
- shares	0.0	0.0
- other securities	0.0	0.0
- loans granted	0.0	74.0
- other not-current financial assets	0.0	0.0
4. Other long-term investments	0.0	0.0
VI. Non-current prepayments and accrued income	181.1	46.9
1. Deferred tax assets	181.1	46.9
2. Other accrued income	0.0	0.0
B. CURRENT ASSETS	2,756.7	5,331.6
I. Inventories	0.0	0.0
1. Materials	0.0	0.0
2. Semi-finished goods and work in progress	0.0	0.0
3. Finished products	0.0	0.0
4. Goods	0.0	0.0
5. Advances for deliveries and services	0.0	0.0
II. Current receivables	2,562.8	3,665.6
1. Receivables from related parties	889.1	1,599.2
(a)trade receivables, maturing:	889.1	1,599.2
- within up to 12 months	889.1	1,599.2
- in over 12 months	0.0	0.0
(b) other	0.0	0.0
2. Receivables from other entities in which the entity has equity interests	0.0	0.0
(a)trade receivables, maturing:	0.0	0.0
- within up to 12 months	0.0	0.0
- in over 12 months	0.0	0.0
- taxes, subsidies, custom duties, social and health insurance	0.0	0.0
- other	0.0	0.0
3. Receivables from other entities	1,673.7	2,066.3
(a)trade receivables, maturing:	938.1	1,632.8
- within up to 12 months	938.1	1,632.8
- in over 12 months	0.0	0.0
(b) taxes, subsidies, custom duties, social and health insurance and other public liabilities	549.7	102.9
(c) other	185.9	330.7
(d) claimed in court	0.0	0.0
III. Short-term investments	136.5	446.5
1. Current financial assets	136.5	446.5
(a) in related parties	0.0	16.8
- shares	0.0	0.0
- other securities	0.0	0.0
- loans granted	0.0	16.8
- other current financial assets	0.0	0.0
(b) in other entities	0.0	69.2
- shares	0.0	0.0
- other securities	0.0	0.0
- loans granted	0.0	69.2
- other current financial assets	0.0	0.0
(c) cash and cash equivalents	136.5	360.5
- cash in hand and at bank	136.5	360.5
- other cash	0.0	0.0
- other financial assets	0.0	0.0
2. Other short-term investments	0.0	0.0
IV. Current prepayments and accrued income	57.5	1,219.6
C. CALLED UP SHARE CAPITAL	0.0	0.0
D. TREASURY SHARES	0.0	0.0
TOTAL ASSETS	56,280.3	19,094.3

EQUITY AND LIABILITIES
A. EQUITY	48,093.0	9,535.4
I. Share capital	755.5	447.9
II. Reserve capital, of which:	50,083.6	10,532.9
- share premium	49,812.5	10,261.8
III. Revaluation reserve, of which:	0.0	0.0
- fair value revaluation	0.0	0.0
IV. Other capital reserves, of which:	820.3	820.3
- created in accordance with the Articles of Association	0.0	0.0
- for treasury shares	0.0	0.0
VI. Profit/(loss) brought forward	-1,884.9	-1,748.3
VII. Net profit/(loss)	-1,681.4	-517.3
VIII. Net profit write-offs during the financial year (negative value)	0.0	0.0
B. LIABILITIES AND PROVISIONS FOR LIABILITIES	8,187.3	9,558.9
I. Provisions for liabilities	129.9	82.2
1. Provision for deferred income tax	5.9	10.1
2. Provision for retirement and similar benefits	124.0	0.0
- long-term	0.0	0.0
- short-term	124.0	0.0
3. Other provisions	0.0	72.1
- long-term	0.0	0.0
- short-term	0.0	72.1
II. Non-current liabilities	690.6	2,716.9
1. Payable to related parties	215.8	216.9
2. Payable to other entities in which the reporting entity has equity interests	0.0	0.0
3. Payable to other entities	474.8	2,500.0
(a) loans and borrowings	474.8	2,500.0
(b) arising from issue of debt securities	0.0	0.0
(c) other financial liabilities	0.0	0.0
(d) other	0.0	0.0
III. Current liabilities	6,859.1	6,339.6
1. Payable to related parties	17.7	3.4
(a)trade liabilities, maturing:	17.7	3.4
- within up to 12 months	17.7	3.4
- in over 12 months	0.0	0.0
(b) other	0.0	0.0
2. Payable to other entities in which the reporting entity has equity interests	0.0	0.0
(a)trade liabilities, maturing:	0.0	0.0
- within up to 12 months	0.0	0.0
- in over 12 months	0.0	0.0
(b) other	0.0	0.0
3. Payable to other entities	6,841.3	6,336.3
(a) loans and borrowings	3,015.3	232.3
(b) arising from issue of debt securities	0.0	0.0
(c) other financial liabilities	0.0	4.5
(d) trade liabilities, maturing:	1,542.3	1,523.1
- within up to 12 months	1,542.3	1,523.1
- in over 12 months	0.0	0.0
(e) received advances for deliveries and services	0.0	0.0
(f) bill-of-exchange liabilities	0.0	0.0
(g) taxes, custom duties, social and health insurance and other public liabilities	565.5	527.2
(h) payroll liabilities	256.8	333.9
(i) other	1,461.4	3,715.2
4. Special purpose funds	0.0	0.0
IV. Accruals	507.7	420.2
1. Negative goodwill	0.0	0.0
2. Other accrued income	507.7	420.2
- long-term	0.0	0.0
- short-term	507.7	420.2
TOTAL LIABILITIES AND EQUITY	56,280.3	19,094.3

Table 8. Separate cash flow statement for Q2 2020 along with comparative data (in PLN thousand)

Separate cash flow statement of Summa Linguae S.A.	Q1-Q2 2020	Q1-Q2 2019	Q2 2020	Q2 2019
A. OPERATING CASH FLOWS
I. NET PROFIT/(LOSS)	-1,681.4	-517.3	-1,158.4	-253.8
II. Adjustments (total)	873.7	-646.0	653.7	-3,018.3
1. Amortization and depreciation	230.3	216.0	114.3	142.6
2. Foreign exchange gains/losses	0.0	0.0	0.0	0.0
3. Interest and share in profits (dividends)	0.0	0.0	0.0	0.0
4. Profit/(loss) on investing activity	0.0	0.0	0.0	0.0
5. Change in provisions and deferred income tax	0.0	72.1	0.0	-17.0
6. Change in inventory	0.0	0.0	0.0	0.0
7. Change in receivables	2,840.4	-1,410.8	1,475.9	-194.9
8. Change in current liabilities, excluding loans and borrowings	-2,150.6	722.2	-926.4	-2,701.0
9. Change in prepayments and accrued income	-46.5	-245.5	-8.0	-248.0
10. Other adjustments	0.0	0.0	-2.0	0.0
III. Net operating cash flow (I+/-II)	-807.7	-1,163.3	-504.8	-3,272.1
B. CASH FLOW FROM INVESTING ACTIVITIES
I. Inflows	0.0	0.0	0.0	0.0
1. Disposal of intangible assets and property, plant and equipment	0.0	0.0	0.0	0.0
2. Disposal of investments in real property and intangible assets	0.0	0.0	0.0	0.0
3. From financial assets, of which:	0.0	0.0	0.0	0.0
(a) in entities measured using the equity method	0.0	0.0	0.0	0.0
(b) in other entities	0.0	0.0	0.0	0.0
- sale of financial assets	0.0	0.0	0.0	0.0
- dividends and share in profits	0.0	0.0	0.0	0.0
- repayment of long-term loans granted	0.0	0.0	0.0	0.0
- Interest	0.0	0.0	0.0	0.0
- other inflows from financial assets	0.0	0.0	0.0	0.0
4. Other inflows from investments	0.0	0.0	0.0	0.0
II. Outflows	1,306.8	0.0	8.7	0.0
1. Purchase of intangible assets and property, plant and equipment	73.4	0.0	15.0	0.0
2. Investment in real property and intangible assets	0.0	0.0	0.0	0.0
3. For financial assets, of which:	1,233.4	0.0	-6.2	0.0
(a) in related parties	0.0	0.0	-6.2	0.0
(b) in other entities	1,233.4	0.0	0.0	0.0
- purchase of financial assets	0.0	0.0	0.0	0.0
- long-term loans granted	1,233.4	0.0	0.0	0.0
4. Other capital expenses	0.0	0.0	0.0	0.0
III. Net cash flows from investing activities (I-II)	-1,306.8	0.0	-8.7	0.0
C. CASH FLOWS FROM FINANCING ACTIVITIES
I. Inflows	684.0	5,377.2	580.3	5,296.3
1. Net inflows from issue of shares and other securities and from capital contributions	8.6	2,801.3	0.0	2,796.3
2. Loans and borrowings	675.4	2,575.8	580.3	2,500.0
3. Issue of debt securities	0.0	0.0	0.0	0.0
4. Other financial inflows	0.0	0.0	0.0	0.0
II. Outflows	0.0	4,460.8	0.0	2,829.3
1. Purchase of treasury shares	0.0	0.0	0.0	707.2
2. Dividends and other payments to shareholders	0.0	0.0	0.0	0.0
3. Profit distribution expenses other than payments to shareholders	0.0	0.0	0.0	0.0
4. Repayment of loans and borrowings	0.0	0.0	0.0	2,119.5
5. Redemption of debt securities	0.0	0.0	0.0	0.0
6. Other financial liabilities	0.0	0.0	0.0	0.0
7. Payment of liabilities under finance lease agreements	0.0	0.0	0.0	2.6
8. Interest	0.0	0.0	0.0	0.0
9. Other financial expenses	0.0	0.0	0.0	0.0
III. Net cash flows from financing activities (I-II)	684.0	916.4	580.3	2,467.0
D. TOTAL NET CASH FLOWS (A.III.+/-B.III+/-C.III)	-1,430.5	-247.0	66.8	-805.1
E. BALANCE SHEET CHANGE IN CASH, of which:	-1,430.5	-247.0	66.8	-805.1
- change in cash due to foreign exchange differences	0.0	0.0	0.0	0.0
F. OPENING BALANCE OF CASH	1,566.9	607.5	69.7	1,165.6
G. CLOSING BALANCE OF CASH (F+/-D), of which:	136.5	360.5	136.5	360.5
- restricted cash	0.0	0.0	0.0	0.0

Table 9. Separate statement of changes in equity for Q2 2020 along with comparative data (in PLN)

Separate statement of changes in equity of Summa Linguae S.A.	Q1-Q2 2020	Q1-Q2 2019	Q2 2020	Q2 2019
I. Opening balance of equity (OB)	49,765.8	7,256.5	50,461.8	7,256.5
- corrections of errors from previous years	0.0	0.0	0.0	0.0
- effects of changes in accounting policies	0.0	0.0	0.0	0.0
I.a. Opening balance of equity (OB) after adjustments	49,765.8	7,256.5	9,879.9	7,256.5
1. Opening balance of share capital	450.4	389.6	755.5	389.6
1.1. Change in share capital	305.0	58.4	0.0	58.4
(a) increase (due to)	305.0	58.4	0.0	58.4
- issue of shares	305.0	58.4	0.0	58.4
(b) decrease (due to)	0.0	0.0	0.0	0.0
- redemption of shares	0.0	0.0	0.0	0.0
1.2. Closing balance of share capital	755.5	447.9	755.5	447.9
2. Opening balance of reserve capital	50,380.0	7,761.0	50,083.6	7,761.0
2.1. Change in reserve capital	-296.4	2,771.9	0.0	2,771.9
(a) increase (due to)	8.6	3,025.7	0.0	3,025.7
- share premium	8.6	3,025.7	0.0	3,025.7
- (statutory) profit distribution	0.0	0.0	0.0	0.0
- profit distribution (above the minimum statutory value)	0.0	0.0	0.0	0.0
- share issue costs	0.0	0.0	0.0	0.0
(b) decrease (due to)	305.0	253.7	0.0	253.7
- share issue costs	305.0	253.7	0.0	253.7
2.2. Closing balance of reserve capital	50,083.6	10,532.9	50,083.6	10,532.9
3. Opening balance of revaluation reserve	0.0	0.0	0.0	0.0
3.1. Change in revaluation reserve	0.0	0.0	0.0	0.0
(a) increase (due to)	0.0	0.0	0.0	0.0
(b) decrease (due to)	0.0	0.0	0.0	0.0
- disposal of fixed assets	0.0	0.0	0.0	0.0
3.2. Closing balance of revaluation reserve	0.0	0.0	0.0	0.0
4. Opening balance of other capital reserves	820.3	854.3	820.3	854.3
4.1. Change in other capital reserves	0.0	-34.0	0.0	-34.0
(a) increase (due to)	0.0	0.0	0.0	0.0
- INCREASE - declared unpaid shares	0.0	0.0	0.0	0.0
- INCREASE - ISSUE OF SERIES G SHARES	0.0	0.0	0.0	0.0
(b) decrease (due to)	0.0	34.0	0.0	34.0
- issue of series E shares	0.0	0.0	0.0	0.0
- transfer to the share capital due to registration in the National Court Register	0.0	34.0	0.0	34.0
4.2. Closing balance of other capital reserves	820.3	820.3	820.3	820.3
5. Opening balance of profit/(loss) carried forward	-1,884.9	-1,748.3	-1,783.6	-1,748.3
5.1. Opening balance of profit carried forward	0.0	35.3	35.3	35.3
- corrections of errors from previous years	0.0	0.0	0.0	0.0
- effects of changes in accounting policies	0.0	0.0	0.0	0.0
5.2. Opening balance of profit carried forward, after adjustments	0.0	35.3	0.0	35.3
5.3. Change in profit carried forward	0.0	0.0	0.0	0.0
(a) increase (due to)	0.0	0.0	0.0	0.0
- distribution of profit carried forward	0.0	0.0	0.0	0.0
(b) decrease (due to)	0.0	0.0	0.0	0.0
- distribution of profit carried forward	0.0	0.0	0.0	0.0
- decrease - movement to reserve capital	0.0	0.0	0.0	0.0
5.4. Closing balance of profit carried forward	0.0	35.3	0.0	35.3
5.5. Opening balance of loss carried forward	-1,884.9	-1,783.6	-1,783.6	-1,783.6
- corrections of errors from previous years	0.0	0.0	0.0	0.0
- effects of changes in accounting policies	0.0	0.0	0.0	0.0
5.6. Opening balance of loss carried forward, after adjustments	-1,884.9	-1,783.6	-1,783.6	-1,783.6
5.7. Change in loss carried forward	0.0	0.0	-101.3	0.0
(a) increase (due to)	0.0	0.0	-101.3	0.0
- loss carried forward to be covered	0.0	0.0	-101.3	0.0
(b) decrease (due to)	0.0	0.0	0.0	0.0
- loss carried forward to be covered	0.0	0.0	0.0	0.0
5.8. Closing balance of loss carried forward	-1,884.9	-1,783.6	-1,884.9	-1,783.6
5.9. Closing balance of profit/(loss) carried forward	-1,884.9	-1,748.3	-1,884.9	-1,748.3
6. Net profit/(loss)	-1,681.4	-517.3	-1,158.4	-517.3
(a) net profit	0.0	0.0	0.0	0.0
(b) net loss	-1,681.4	-517.3	-1,158.4	-517.3
(c) profit write-offs	0.0	0.0	0.0	0.0
II. Closing balance of equity (CB)	48,093.0	9,535.4	48,616.0	9,535.4
III. Equity accounting for proposed profit distribution	48,093.0	9,535.4	48,616.0	9,535.4

V. INFORMATION ON PRINCIPLES ADOPTED FOR PREPARATION OF THE REPORT, INCLUDING INFORMATION ON CHANGES IN ACCOUNTING PRINCIPLES

These financial statements cover the period from 1 January 2020 to 30 June 2020 and have been prepared assuming that the Company will continue its business in the foreseeable future, and that it neither intends nor is forced to abandon its business or significantly reduce its scale. To the Issuer's knowledge, there are no circumstances indicating a threat to the continued operation of the Company.

The Company prepares a comparative income statement.

The cash flow statement is prepared using the indirect method.

The Polish Zloty is the reporting currency.

The Company's financial result for the period concerned includes all revenue generated by it, as well as revenue payable to it and costs related to this revenue, calculated on an accrual basis and in accordance with the principle of prudence and the matching principle.

The accounting principles adopted in the preparation of these financial statements are compliant with the Accounting Act.

Particular assets are measured at their actual purchase prices or costs, subject to the principle of prudence. Liabilities are measured in the amount due. In the case of financial liabilities, the adjusted purchase price can be used, and for those intended for sale within up to three months - the market value or a fair value otherwise specified.

Intangible assets and fixed assets

Intangible assets, fixed assets and fixed assets under construction are measured at their purchase price or manufacturing cost, less accumulated depreciation.

Depreciation is calculated in accordance with the straight-line method.

In the case of assets for which there is a suspicion that they will not bring economic benefits in the foreseeable future, an allowance is made for impairment losses.

The Company uses the following tax depreciation rates for its key categories of assets:

1. For intangible assets:

all are charged against costs within a period of 48 months,

whereby the components relating to fees for modification of computer software are treated as services.

2. For fixed assets:

(a) buildings	-	2.5%
(b) plant and machinery	-	10% - 30%
(c) vehicles	-	20%
(d) other fixed assets	-	20%

whereby:

(a) fixed assets of a greater value (over PLN 2,500) are depreciated linearly,

(b) fixed assets of a lesser value (up to PLN 2,500) are depreciated (posted to expenses) as follows: 100% of the value at the time of purchase,

(c) tax depreciation rates are used.

Until financial year 2018, the Company amortized the goodwill of Contact Language Services P. Stróżyk, P. Siwiec spółka jawna (CLS) and that of Summa Linguae Outsourcing Sp. z o.o. (SLO), adopting a 20-year amortization period, pursuant to Article 44b(10) of the Accounting Act. Starting with 2019, the period of amortizing the goodwill of SLO was reduced to 10 years.

The adopted amortization periods result, among others, from contracts signed with customers acquired along with CLS and SLO and the history of cooperation with them. In accordance with its strategy, Summa Linguae Technologies S.A. does not foresee the sale of the organized parts of the aforementioned enterprises and intends to draw tangible economic benefits from them for minimum 10 years in the case of SLO and 20 years in the case of CLS. The Management Board of Summa Linguae Technologies S.A. believes that the proposed period for carrying out amortization of the goodwill reflects in the best way the actual period of drawing economic benefits arising from the acquisitions.

Since Q4 2015 inclusive, amortization of the goodwill as defined above has been recognized in other operating expenses.

Permanent investments

Acquired or generated financial assets and other financial investments are recognized in the accounting records as at their acquisition or generation date, at their acquisitions/purchase price.

As at the balance sheet date, shares in other entities and other investments classified as fixed assets are measured at their acquisition price less any impairment losses.

Impairment losses are charged to financial expenses. If the reason for which assets were written down has ceased to exist, the equivalent of all or part of the previously made impairment losses increases the value of a given asset and is recognized in financial income.

As at the balance sheet date, shares in other entities and other investments recognized as fixed assets for which maturity dates have been specified are measured at their amortized cost.

Short-term investments

Acquired shares and other current assets are recognized in the accounting records as at the date of their acquisition or generation, at the acquisition cost.

As at the balance sheet date, assets classified as short-term investments are measured at their market price.

The effects of changes in the value of short-term investments affect in the total amount financial income or expenses, respectively.

As at the balance sheet date, assets classified as short-term investments for which maturity dates have been specified are measured at amortized cost.

Inventories

Materials and goods acquired during the financial year are recognized at their purchase price. The costs of consumption of materials and goods are determined on the first-in, first-out basis. Inventories of materials and goods are measured as at the balance sheet date at their purchase price, not higher, however, than the net selling price of a given asset.

Inventory assets produced during the financial year are recognized at the manufacturing cost.

Finished and semi-finished products are measured as at the balance sheet date at their manufacturing cost, which is not higher, however, than the net selling price of a given asset.

Inventory assets that have lost their commercial and utility value are written down. Inventory write-downs are classified respectively as other operating expenses.

The Issuer keeps inventory quantity and value records.

Receivables and liabilities

Receivables denominated in PLN are recognized in the amount due, subject to the principle of prudence. Liabilities (including loans and borrowings) denominated in PLN are measured in the amount due. In the case of financial liabilities, the adjusted purchase price can be used, and for those intended for sale within up to three months - the market value or a fair value specified otherwise.

Receivables and liabilities denominated in foreign currencies are recognized at the time of their origination at the average exchange rate determined for a given currency by the President of the National Bank of Poland on the day preceding the day of their recognition. Foreign exchange gains/(losses) arising on the date of payment due to the difference between the exchange rate as at that date and the exchange rate on the date when receivables or liabilities originated, are charged to financial income or expenses, respectively.

Receivables and liabilities in foreign currencies outstanding as at the balance sheet date are measured at the average exchange rate determined for a given currency on that day by the President of the National Bank of Poland.

The value of receivables is re-measured based on the probability of their payment by creating an allowance for bad debts.

Cash

Domestic cash in hand and at bank is measured at its par value.

Transactions denominated in foreign currencies are recognized in the accounting records as at the date on which they were carried out - unless separate provisions on the funds from the budget of the European Union and other countries of the European Economic Area and on non-reimbursable funds from foreign sources provide otherwise - at the following exchange rate, accordingly: at the rate actually applied on that date, resulting from the nature of the transaction - in the case of sale or purchase of currencies and payment of receivables or liabilities.

As at the balance sheet date, cash in foreign currencies is measured at the average exchange rate determined for that date for a given currency by the President of the National Bank of Poland.

Foreign exchange gains/(losses) determined at the end of the financial year are recognized as financial income or expenses, respectively.

Capitals

The share capital is recognized in the amount specified in the Articles of Association and entered in the relevant court register.

Accruals and provisions for liabilities

Accruals are made when the Company incurs expenses relating to future reporting periods. Accruals include mainly:

property insurance,

costs of lease,

costs directly related to issue of bonds,

other.

Provisions are made for certain or highly probable future liabilities that may be caused by past events where the amount or date of their payment or incurrence is not certain, but they can be reliably estimated. The Company creates provisions for expenses in the amount of probable liabilities falling in the current reporting period, that arise from services provided to the Company by its contractors and the obligation to meet future liabilities relating to current operations, whose value can be estimated, although the date when they will arise is yet unknown.

Provisions are recognized in other operating expenses, financial expenses or extraordinary losses, depending on the circumstances that caused the loss.

Liabilities recognized as accrued ones and rules for determining the amounts thereof should be based on acceptable trade practices.

Accruals include mainly future liabilities related to current operations, such as:

liabilities payable to the employees, including holiday and retirement pay,

liabilities payable to unknown persons, whose amount can be reliably estimated, although the date when they will arise is yet unknown, including those relating to warranty repairs and guarantee for durables sold.

Accrued expenses are charged to operating expenses.

Deferred income

The Company's deferred income includes, in particular, the equivalent of revenue from services that will be performed in future reporting periods, intangible assets and fixed assets received free of charge, in the part not covered with depreciation write-offs, and negative goodwill.

Deferred income includes also cash received to finance the acquisition or construction of fixed assets, including fixed assets under construction and development work. Amounts charged to deferred income increase gradually the amount of other operating revenue, in parallel with amortization or depreciation write-offs of fixed assets or costs of development work funded from these sources.

Provisions for deferred income tax and deferred income tax assets

Due to temporary differences between the book value of assets and liabilities and their tax value and tax loss deductible in the future, the Issuer creates a provision for deferred income tax and determines such deferred income tax assets.

Deferred income tax assets are determined in the amount of the expected future income tax deduction in relation to deductible temporary differences which will result in a future reduction of the income tax base and a reduction of the deductible tax loss determined in accordance with the principle of prudence.

A provision for deferred income tax is established in the amount of income tax payable in the future with respect to taxable temporary differences, i.e. differences that will increase the income tax base in the future.

The amount of the provision for deferred income tax and that of deferred income tax assets are determined using the income tax rates applicable in the year when the tax liability arose.

In its balance sheet, the Company presents the balance of deferred income tax assets and provisions for deferred income tax.

Financial instruments

Acquired financial assets are measured at the price of expenditure (the par value and transaction costs incurred directly in connection with the acquisition of the financial assets).

As at the balance sheet date, assets held for trading and available for sale are measured at fair value, while held-to-maturity assets and loans granted by the Company - at amortized cost.

Financial liabilities are recognized in the accounting records in the amount due. As at the balance sheet date, financial liabilities held for sale are measured at their fair value. Other financial liabilities are recognized as at the balance sheet date at amortized cost.

Gains and losses from revaluation, as at the balance sheet date, of financial assets and financial liabilities classified as held for trading (including derivatives) and financial assets classified as held for sale and measured at fair value (with the exception of hedged items) are recognized, respectively, as financial income or expenses of the reporting period.

In the case of financial assets and liabilities measured at purchase price (with the exception of hedged and hedging items), discount or premium amortization and other differences determined as at the date of their exclusion from the accounts, are recognized, respectively, as financial income or expenses under interest in the reporting period.

An embedded derivative instrument is measured as at the date of its recognition in the accounts and as at the balance sheet date at its fair value. The difference between the fair value determined as at the balance sheet date and the fair value as at the date of recognition in the accounts is recognized in profit/(loss) on financing activity.

Derivative instruments used to hedge fair value are measured at fair value, and the change is recognized in profit/(loss) on financing activities.

Derivative instruments intended for cash flow hedging are measured at fair value, and the change is recognized in the revaluation reserve to the extent representing an effective hedge, while the part which does not constitute an effective hedge is recognized in profit/(loss) on financing activity.

Financial profit/(loss)

Financial profit/(loss) accounts for: profit/(loss) on sales, profit/(loss) on other operating activities, profit/(loss) on financing activities, profit/(loss) on extraordinary operations and mandatory charges on profit. The Company prepares a comparative income statement.

The amount to be paid by the recipient of finished products and services, less output tax on goods and services, constitutes revenue from sale of finished products and services. The date of transfer of goods to the recipient or receipt of a service by it is the date of sale.

The amount to be paid by the recipient of goods or materials, less output tax on goods and services, constitutes revenue from sale of goods and materials. The date of transfer of goods or materials is the date of sale.

The value of goods and materials sold at the purchase price, commensurate with the revenue on this account, is the value of goods and materials sold.

Other operating income and expenses include expenses and revenue that are not directly related to operating activities, but affect profit/(loss).

Financial income includes revenue from financing activities, whereas financial expenses include expenses incurred with respect to such activities. Interest, fees and foreign exchange gains/(losses) relating to fixed assets under construction accrued to the date of putting those assets into use influence the initial value of those assets. After putting a given fixed asset into use, foreign exchange gains/(losses) and interest on liabilities and investment loans affect profit/(loss) on financing activities.

The difference between generated extraordinary profits and extraordinary losses incurred as a result of random events unrelated to the general risk of the entity's business is the result on extraordinary events.

Rules governing consolidation

These consolidated financial statements have been drawn up based on the financial statements of the Parent Company and those of the entities controlled by the Parent Company (subsidiaries).

The subsidiaries, i.e. Summa Linguae Romania, Mayflower, Kommunicera, GlobalMe and GlobalVision have been consolidated on a line-by-line basis since the Parent Company took control over them and will continue to be consolidated in this manner until such control ceases to exist. Any transactions, balances, revenue and expenses settled between the consolidated entities are subject to relevant elimination.

Mayflower (subsidiary) is consolidated on a line-by-line basis due to the Investment Agreement (and annexes thereto) binding it with Summa Linguae S.A., concluded by this subsidiary and its partners and with the Parent Company. Arrangements made in the aforementioned documents provided that the Parent Company would take full control over the operational and financial policy of Mayflower in January 2018.

VI. BRIEF DESCRIPTION OF THE ISSUER'S SIGNIFICANT ACHIEVEMENTS OR FAILURES DURING THE REPORTING PERION ALONG WITH DETAILS OF THE MOST IMPORTANT FACTORS AND EVENTS, ESPECIALLY THOSE OF UNUSUAL NATURE, AFFECTING THE RESULTS ACHIEVED BY THE ISSUER

1. SALES REVENUE

In Q2 2020, the Group generated consolidated revenue of PLN 22.4 million. This is an increase by 108% compared to the Group's revenue in Q2 2019. Maintaining dynamic growth YoY is the result of the consistent implementation of the development strategy based on acquisitions and international expansion on selected markets that the Company considers strategic for its business.

The structure of the Group in Q2 2020 is different than in Q2 2019 - mainly as a result of the acquisitions made on the American market in Q4 2019. Since December 2019, these entities have been consolidated on a line-by-line basis.

Comparing the revenue generated in Q2 2020 to the consolidated revenue generated in the corresponding period of the previous year, covering with pro-forma consolidation GlobalMe and GlobalVision, it is worth emphasizing the increase in so characterized revenue by less than 20% from estimated PLN 18.8 million in Q2 2019. This proves that the Group is increasing the scale of its revenues not only as a result of acquisitions, but also through organic growth.

Figure 1. Consolidated quarterly revenue of the Group in the period Q1 2018 - Q1 2020 (in PLN million)[footnoteRef:1] [1: Data derived from quarterly reports published by the Issuer.]

Q2'20

Q1'20

Q4'19

22.4

20.4

15.2

Q3'19

Q2'19

10.3

10.8

9.9

Q1'19

Q4'18

Q3'18

Q2'18

Q1'18

7.9

4.3

4.6

3.9

Figure 2. Comparison of consolidated quarterly revenue of the Group YoY (in PLN million)

15,2

10,3

22,4

10,8

20,4

Q4

Q3

Q2

Q1

9,9

The increase in revenue is also the result of joint cooperation between the Group companies at all levels of operation, coordinated currently by Shanonn Zimmerman, a specialist highly acknowledged in the LSP industry, who took up in the Group the position of Chief Revenue Officer. At present, the Group focuses on organic sales, as well as a continuous increase in competences and the level of specialization, while ensuring the diversification of the customer portfolio. It is also important for the Group to continue to target its services at prospective industries such as IT/ITES, retail/e-commerce, e-learning, or entities from the life science/medical devices sectors. The Issuer still focuses on building a competitive advantage using modern technologies and tools, on the solid ground of partnership relations with customers that are leaders in their industries. The services provided to them, supported by innovative tools and technologies, flexibility and ever vaster experience, make up the Issuer's competitive advantage, contributing to building increasing loyalty and brand awareness.

Despite the pandemic caused by SARS-CoV-2 and postponing or cancelling some of orders, mainly in Asia and Scandinavia, caution and right managerial decisions enabled the Group to record significant increases in sales. The current scale of the Group's business places it among 100 largest global companies in the LSP industry[footnoteRef:2] on a highly fragmented market. [2: Based on a prestigious report "The 2020 Nimdzi 100" prepared by Nimdzi, a leading research and advisory company in the industry (https://www.nimdzi.com/2020-nimdzi-100/).]

2. FINANCIAL RESULTS

In Q2 2020, the Group generated consolidated adjusted EBITDA[footnoteRef:3] in the amount of PLN 2.6 million. Profit generated in Q2 2020 was reduced, like in previous quarters, by one-off costs, associated mainly with consulting and legal services as well as intra-Group integration, totalling PLN 0.4 million. [3: Profit adjusted for one-off costs related mainly to acquisitions and integration of acquired entities, purchase of equipment associated with rapid growth of the business and costs of investment in technological development and one-off costs related to optimization of employment.]

As regards its net result, the Group recorded in Q2 2020 profit in the amount of PLN 2.4 million (in the same period of 2019, its profit was PLN 0.4 million).

The result achieved in Q2 2020 is undoubtedly due to the margin generated on the customers of the companies acquired in Q4 2019 as part of the acquisitions on the American market. Furthermore, as for the entire Group, despite postponing the finalization of some projects to the third and fourth quarters of 2020 or their cancellation, a number of optimization measures taken by the Issuer brought an improvement in profitability. The main factors resulting in the optimization of the financial results include the reduction in fixed costs due to e.g. synergy effects developed within the Group, as well as the optimization of the direct margin[footnoteRef:4] by working out greater flexibility in subcontractors' remuneration, adapted to e.g. current market conditions or restrictions on business trips. [4: Direct margin - revenue less direct costs of project implementation, including primarily the costs of subcontractors and logistics expenses (business trips and other).]

The ongoing technological and operational integration between the companies in the Group result in ever greater synergistic effects at the level of revenue and costs. Having new acquisitions in mind, the costs associated with internal integration will continue to be significant, and the Company has great potential for further optimization, both as regards costs and revenue, through e.g. the development of technological solutions and the greater use of synergies and economies of scale.

3. IMPLEMENTATION OF THE DEVELOPMENT STRATEGY

In Q2 2020, the Company continued activities aimed at internal integration and optimization of the Group structures with the North American entities, i.e. GlobalMe and GlobalVision, taken over as part of the successful acquisition in December 2019, as announced by the Issuer in the annual and interim reports and stock exchange announcements. Operating in the pandemic reality, and thus limitations in travelling by air, made particular elements of the process last longer, nevertheless, consistent actions taken by the experienced management team enable us to successively implement further objectives, which includes taking over competences from the previous owners GlobalMe and GlobalVision.

The unification of sales processes within the entire SLT Group and the integration of the internal CRM system, used effectively in the ongoing implementation of tasks, have been successfully completed. The Group still faces challenges related to further integration in the area of the workflow system, which is planned for the third quarter of 2020.

In the previous interim report, the Company informed about focusing on sales activities using the potential of the acquired North American companies, taking into account especially the acquired competences and customer portfolio. These structures were additionally enhanced by the experience and competences of Shannon Zimmerman, who as Chief Revenue Officer is responsible within the SLT Group for the coordination and expansion of sales activities.

The Issuer announced the first effects of these actions already in the report for Q1 2020, while in the context of Q2 2020, the Company announced, in Current Report (ESPI) 31/2020 of 11 May 2020, that GlobalMe had concluded, on 7 May 2020, an agreement ("Agreement") and was awarded a contract for the provision of data services to an e-commerce company operating the world's largest online store based in the USA ("Employer"). The total value of the above contract is USD 556,800.00 (PLN 2,344,128.00, converted at the rate of USD 1 = PLN 4.21) and the deadline for the contract completion falls in December 2020. Shortly thereafter, in Current Report (ESPI) 39/2020 of 10 June 2020, the Issuer announced that GlobalMe had been awarded another four contracts under the Agreement. The total value of the additional contracts is USD 218,560.00 (PLN 857,751.83, converted at the rate of USD 1 = PLN 3.92) and it has increased the original value reported by the Issuer in Current Report 31/2020 of 11 May 2020 and Current Report 4/2020 of 15 January 2020. In total, all contracts awarded by the Employer in 2020 until the date of this Report under the framework agreement on the provision of data services, amount to USD 1,163,360.00 (PLN 4,560,371.20, converted at the rate of USD 1 = PLN 3.92), and their final deadline falls on 31 December 2020.

The aforementioned contracts involve the collection, transcription and annotation of audio/voice content (data) intended for training artificial intelligence (AI) algorithms that are then used by the Employer in the voice interface offered by it. The collection and annotation of data for the purposes of these contracts are carried out with the use of a proprietary application and a technology platform owned by GlobalMe.

Furthermore, in Current Report (ESPI) 33/2020 of 26 May 2020, the Issuer informed that GlobalMe had been awarded a contract (under the framework agreement concluded with the Employer on 20 April 2017) for the provision of multilingual data management services ("Contract") by the world's largest manufacturer of accessories, clothing and sports equipment based in the USA ("Employer"). The total value of the Contract is PLN 3,787,209.12 (USD 925,968.00 converted at the exchange rate of USD 1 = PLN 4.09), and its implementation deadline has been set for May 2021. The subject of the Contract is the provision of continuous multilingual data management for and on behalf of the Employer, as well as accompanying services, such as data analysis, research, visualization and engineering. The Issuer makes it clear that the Contract does not provide for translation services as such. GlobalMe has been providing this service to the Employer uninterruptedly since 20 April 2017, and the Contract concerned is its continuation for another year. It is worth noting that the value of the Contract is approx. two times higher compared to the similar contract awarded previously.

In turn, in Current Report (ESPI) 41/2020 of 19 June 2020, the Issuer announced that GlobalMe had been awarded a contract for the provision of data services ("Contract") by one of the largest global manufacturers of smart speakers with voice interface, based in the USA ("Employer"). The Contract was divided into two parts, the last of which was received by GlobalMe on 18 June 2020 under the framework agreement concluded by GlobalMe with the Employer on 2 November 2016. The total value of the Contract is USD 221,040.00 (PLN 877,528.80, converted at the rate of USD 1 = PLN 3.97), and the deadline for the contract implementation has been set for December 2020.

The Contract involves the collection, transcription and annotation of audio/voice content (data) intended for training artificial intelligence (AI) algorithms that are then used by the Employer in the voice interface offered by it. The collection and annotation of data for the purposes of the Contract are carried out also in this case with the use of a mobile application and a technology platform owned by GlobalMe.

In Current Report (ESPI) 17/2020 of 3 April 2020, the Issuer announced that on 1 April 2020, the Board of Giełda Papierów Wartościowych w Warszawie S.A. (Warsaw Stock Exchange) adopted Resolution No. 260/2020 on the introduction of: 1,000,000 series A bearer shares of the Company and 920,034 series K bearer shares of the Company to trading in the alternative trading system on NewConnect. By way of the resolution of the Board of Giełda Papierów Wartościowych w Warszawie S.A. (Warsaw Stock Exchange) of 7 April 2020, the first day of trading of the aforementioned shares was set for 14 April 2020, provided that the shares are registered on that day by Krajowy Depozyt Papierów Wartościowych S.A. (National Depository for Securities) and assigned code "PLSMLNG00010", as announced by the Issuer in Current Report (ESPI) 21/2020 of 8 April 2020.

The decision of Krajowy Depozyt Papierów Wartościowych S.A (National Depository for Securities) regarding the registration of series A and series K bearer shares on 14 April 2020 was announced by the Issuer in Current Report (ESPI) 22/2020 on 8 April 2020.

Furthermore, the Management Board of Giełda Papierów Wartościowych w Warszawie S.A. (Warsaw Stock Exchange), by way of Resolution 297/2020 of 17 April 2020, introduced to trading in the alternative trading system on NewConnect 3,050,252 series L bearer shares of the Company ("Shares"), as announced by the Issuer in Current Report (ESPI) 29/2020 of 20 April 2020.

On 22 June 2020, the Issuer became aware of the resolution of the Board of Giełda Papierów Wartościowych w Warszawie S.A. (Warsaw Stock Exchange) of 19 June 2020 on designating 25 June 2020 as the first day of the trading of 3,050,252 series L bearer shares of the Company in the Alternative Trading System on NewConnect, provided that the shares are registered on that day by Krajowy Depozyt Papierów Wartościowych S.A. (National Depository for Securities) and assigned code "PLSMLNG00010", as announced by the Issuer in Current Report (ESPI) 42/2020 of 22 June 2020.

In its Current Report (ESPI) 32/2020 of 11 May 2020, the Issuer announced that on 11 May 2020, it concluded with Bank Handlowy w Warszawie S.A. ("Bank") annexes to an overdraft facility agreement ("First Loan Agreement") and to a revolving loan agreement ("Second Loan Agreement"), as announced by the Company in Current Report 13/2019 of 17 May 2019 (each of them referred to separately as "Annex").

In accordance with the Annex to the First Loan Agreement:

1. The loan amount made available to the Company under the First Loan Agreement ("Loan 1") has not changed and is PLN 1,000,000 (one million zlotys);

2. The Company is obliged to repay the full amount of Loan 1 by 14 May 2021;

3. The amount of the Loan 1 repayment guarantee granted by Bank Gospodarstwa Krajowego as part of the de minimis portfolio guarantee line has been increased to PLN 800,000 (eight hundred thousand zlotys).

In accordance with the Annex to the Second Loan Agreement:

1. The loan amount made available to the Company under the Second Loan Agreement ("Loan 2") is PLN 2,500,000 (two million five hundred thousand zlotys);

2. The Company is obliged to repay the full amount of Loan 2 by 12 May 2021;

The other provisions of the First Loan Agreement and the Second Loan Agreement have not changed, except for changes regarding, inter alia, the Bank's margin, commissions and administrative fees, that do not differ from the provisions commonly used in this type of loan agreements.

A subsidiary of the Issuer - GlobalMe - concluded with Bank of Montreal ("Bank") an agreement for an overdraft facility up to the maximum amount of CAD 1,500,000 (PLN 4,485,500, converted at the NBP exchange rate of 6 May 2020, i.e. CAD 1 = PLN 2.99), of which the Company informed in Current Report (ESPI) 30/2020 of 6 May 2020. The Bank's receivables under the loan have been secured, among others, by transfer of GlobalMe's claims (including future ones) to the Bank and an agreement establishing for the Bank collateral in the form of the rights and assets of GlobalMe under British Columbia law (Registered General Security Agreement).

Along with the overdraft facility, the Bank granted GlobalMe a lending limit for credit cards up to a total amount of CAD 100,000 (PLN 299,000 converted at the average NBP exchange rate of 6 May 2020: CAD 1 = PLN 2.99).

In its Current Report (ESPI) 24/2020 of 9 April 2020, the Issuer announced that it had been notified by the Company's shareholders of an agreement to vote unanimously at the General Meeting of the Company's shareholders and pursue sustainable policy with respect to the Company. In accordance with the notice, the parties to the agreement include eM64 FIZAN, Potemma Limited, Czesław Kowalski, Martyna Sypnicka, Dominik Sypnicki, Bartłomiej Sieczkowski, Krzysztof Zasun, Monika Sieczkowska, Piotr Drzewiecki, Sebastian Janda and Paweł Laskarzewski. The parties to the agreement hold in total 1,572,778 Company's shares, representing 20.8% of the share capital of the Company and entitling to 1,572,778 votes at the General Meeting of the Company's Shareholders, representing 20.8% of the total number of votes in the Company.

Prior to the publication hereof, the Issuer, based on information it had obtained, informed about the withdrawal from the agreement, under a termination notice of 29 May 2020, by Ms. Martyna Sypnicka and Mr. Dominik Sypnicki (Current Report (ESPI) 34/2020 of 1 June 2020), and under a termination notice of 1 June 2020 - by Mr. Sebastian Janda, Mr. Piotr Drzewiecki and Mr. Paweł Łaskarzewski (Current Report (ESPI) 35/2020 of 2 June 2020).

In the second quarter of 2020, the Issuer was forced to take preventive measures aimed at protecting human capital and counteracting any economic effects of the pandemic caused by the SARS-CoV-2 virus. Still before the pandemic, the specific characteristics of the structures of the Issuer's Group allowed for the effective use of geographically dispersed international resources with a remote work culture in place. This enabled the Issuer to effectively minimize the risk of the negative impact of the virus on the execution of orders, by adapting relevant tools and communication channels.

As part of the above activities, the Issuer plans to further responsibly manage its finances and operations, using, where available, solutions proposed by particular state administration bodies in the countries where the Group has its offices. It was also decided to implement the "work from anywhere" model and pursue it until the end of September 2020. A number of actions were also taken to optimize fixed costs.

Given the above, the Issuer's current situation in the context of the pandemic seems to be stable, and the decisions taken so far seem adequate and are considered to effectively safeguard the Group's global interests. At present, the Issuer's focus in this respect is on providing adequate safeguards for its activities in operational and economic terms in case of any further development of the pandemic in the following quarters. Being aware that the virus may have a delayed negative impact on the Issuer's market and customers, the Company constantly monitors the situation and is ready to flexibly react in the future.

VII. WHERE THE ISSUER PUBLISHED EARNINGS GUIDANCE - THE POSITION AS REGARDS ITS FEASIBILITY IN THE YEAR CONCERNED, IN LIGHT OF THE RESULTS PRESENTED IN THE QUARTERLY REPORT

The Issuer did not published earnings guidance for 2020.

VIII. WHERE THE ISSUER'S INFORMATION STATEMENT CONTAINED THE INFORMATION REFERRED TO IN ARTICLE 10(13A) OF APPENDIX 1 TO THE ALTERNATIVE TRADING SYSTEM RULES - DESCRIPTION OF THE ADVANCEMENT OF THE ISSUER'S OPERATIONS AND INVESTMENTS WITH THE SCHEDULE OF THEIR IMPLEMENTATION

The Management Board of Summa Linguae Technologies S.A. announces that the Issuer's Information Statement did not contain the information referred to in Article 10(13a) of Appendix 1 to the Alternative Trading System Rules.

IX. WHERE THE ISSUER UNDERTOOK DURING THE REPORTING PERIOD INITIATIVES TO INTRODUCE IN THE COMPANY INNOVATIVE SOLUTIONS AIMED AT THE DEVELOPMENT OF ITS BUSINESS - INFORMATION ON SUCH ACTIVITY

The Issuer actively monitors technological solutions and innovations deployed in the sector. The Management Board of the Issuer considers technological development in this area as a chance to increase competitiveness, optimize profitability of operations and streamline processes associated with the implementation of translation and localization projects.

All measures taken to grow the Issuer's business through deployment of innovative solutions are described in section VI herein.

X. THE NUMBER OF THE ISSUER'S EMPLOYEES IN FULL-TIME EQUIVALENTS

As at 30 June 2020, the Summa Linguae Technologies Group employed - under contracts of employment or similar ones in the foreign companies - 273 full-time equivalent employees (including 39 ones in the Parent Company), whereby 74 FTEs were working for other entities as part of managed services.

XI. WHERE THE ISSUER IS THE PARENT COMPANY OF A GROUP AND DOES NOT PREPARE CONSOLIDATED FINANCIAL STATEMENTS - THE REASON WHY SUCH STATEMENTS ARE NOT PREPARED

The Issuer is the Parent Company of the Summa Linguae Technologies Group and prepares consolidated financial statements.

XII. INFORMATION ON THE ISSUER'S SHAREHOLDING STRUCTURE WITH DETAILS OF SHAREHOLDERS ENTITLED, AS AT THE DATE OF THE REPORT, TO AT LEAST 5% OF VOTES AT THE GENERAL MEETING

The Issuer's shareholding structure, as at the date of this quarterly report, accounting for shareholders holding at least 5% of votes at the General Meeting of Shareholders, is presented in Table 11 and Chart 3 below.

Table 11. Shareholding structure of Summa Linguae Technologies S.A.

No.	Shareholder	Number of shares	Number of votes	Share in votes
1.	LSP Investments S. a r.l.	4,249,398	4,249,398	56.25%
2.	Krzysztof Zdanowski (indirectly and directly)	919,545	919,545	12.17%
-	Directly	281,505	281,505	3.73%
-	Indirectly through Amidio Services Ltd.	638,040	638,040	8.45%
3.	Madhuri Hegde	769,188	769,188	10.18%
4.	eM64 FIZAN	545,862	545,862	7.23%
5.	Potemma Limited*	390,674	390,674	5.17%
6.	Other	679,879	679,879	9.00%
	TOTAL	7,554,546	7,554,546	100.00%

*As informed in the announcement of the Agreement referred to in Current Report 24/2020 of 9 April 2020.

Figure 3. Shareholding structure of Summa Linguae Technologies S.A. (share in the share capital and votes)

Other

9.00%

LSP Investments S. a r.l.

56.25%

Krzysztof Zdanowski

(directly and indirectly)

12.17%

Madhuri Hegde

10.18%

eM64 FIZAN

7.23%

Potemma Limited

5.17%

Agreement 1 - of 21 February 2020 regarding the purchase of the Company's shares by the Fund and the pursuit of a sustainable policy with respect to the Company. The parties to the agreement include Madhuri Hegde, Krzysztof Zdanowski and V4C Poland Plus Fund S.C.A. SICAV-FIAR (indirectly via LSP Investments S. a r. l.). As at 2 July 2020, the parties to the agreement hold in total 5,938,131 Company's shares, representing 78.6% of the share capital of the Company and entitling to 5,938,131 votes at the General Meeting of the Company's Shareholders, representing 78.6% of the total number of votes in the Company.

Agreement 2 - of 7 April 2020 (date of putting its signature by the last party to the agreement) regarding the unanimous vote at the General Meeting of Shareholders of the company under the name Summa Linguae Technologies S.A. with its registered office in Krakow. In accordance with the notification announced by the Company in Current Report 24/2020 on 9 April 2020, parties to the agreement include eM64 FIZAN, Potemma Limited, Czesław Kowalski, Martyna Sypnicka, Dominik Sypnicki, Bartłomiej Sieczkowski, Krzysztof Zasun, Monika Sieczkowska, Piotr Drzewiecki, Sebastian Janda and Paweł Laskarzewski. The parties to the agreement hold in total 1,572,778 Company's shares, representing 20.8% of the share capital of the Company and entitling to 1,572,778 votes at the General Meeting of the Company's Shareholders, representing 20.8% of the total number of votes in the Company.

In accordance with the notice announced by the Company in Current Report 34/2020 of 1 June 2020, Ms. Martyna Sypnicka and Mr. Dominik Sypnicki withdrew from the agreement under a termination notice of 29 May 2020.

In accordance with the notice announced by the Company in Current Report 35/2020 of 2 June 2020, Mr. Sebastian Janda, Mr. Piotr Drzewiecki and Mr. Paweł Łaskarzewski withdrew from the agreement under a termination notice of 1 June 2020.

Thus, the remaining parties to the agreement include eM64 FIZAN, Potemma Limited, Czesław Kowalski, Bartłomiej Sieczkowski, Krzysztof Zasun and Monika Sieczkowska. The parties to the agreement hold in total 1,308,432 Company's shares, representing 17.3% of the share capital of the Company and entitling to 1,308,432 votes at the General Meeting of the Company's Shareholders, representing 17.3% of the total number of votes in the Company.

Agreement 3 - of 29 June 2020, concluded by and between LSP and Mr. Dominik Sypnicki with respect to unanimous voting at the General Meeting of the Company's shareholders. The parties to the agreement hold in total 4,349,268 Company's shares, representing 57.57% of all shares in the Company, entitling to 4,349,268 votes in the Company, representing 57.57% of all votes in the Company. The Issuer announced that it had become aware of the conclusion of the agreement in Current Report (ESPI) 45/2020 of 2 July 2020.

The above information regarding agreements nos. 1, 2 and 3 has been given in accordance with the Company's knowledge based on notices submitted by the shareholders.

Krakow, 14 August 2020

Management Board of Summa Linguae Technologies S.A.

Krzysztof Zdanowski, CEO

Madhuri Hegde - Member of the Management Board

Registered office address

ul. Josepha Conrada 63

31-357 Kraków, Polska

Administration Department

[e-mail]

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Marketing and PR Department

[e-mail]

Tel. [phone]

Sales Department

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