BREAKING NEWS – 22.04.2024

In a press release of April 17th, 2024, Deodato.Gallery SpA, a Company operating in the contemporary art market, with main focus on the street art and pop art segment, at the head of a group of companies that manage several art galleries, announced the subscription of 2,000,000 convertible bonds issued following the approval by a resolution of the Board of Directors on March 12th, 2024, of a divisible capital increase serving a convertible bond issue.  Specifically, the Board of Directors’ resolution provided for the partial exercise of the authority granted by Article 2.4 (ii) of the Articles of Association, pursuant to Article 2420-ter of the Civil Code, to issue convertible bonds, excluding option rights, pursuant to Article 2441(5) and (6) of the Civil Code. At the same time, the Board of Directors approved a capital increase related to the conversion of the aforementioned bonds, also excluding option rights. Following the signing of the Bond Loan by Dr. Paolo Vantellini and MP Invest Srl, represented by Dr. Marco Patuano, in equal shares between them, a total of 2,000,000 convertible bonds were issued. The total issue amounts to € 1.00 million, which has already been paid to company treasury. Specifically: Mr. Paolo Vantellini subscribed for 1,000,000 convertible bonds, each worth € 0.50, for a total of € 0.50 million; MP Invest Srl also subscribed for 1,000,000 convertible bonds, at the same unit value, for a total of € 0.50 million.  The contract stipulates that the bonds will have a duration of 60 months from the date of issuance, namely from April 17th, 2024, with maturity set for April 17th, 2029. The bonds are issued in dematerialized form at a price equal to the nominal value and offer a gross annual fixed interest rate of 5.00%. Interest payments will be made semi-annually, deferred to June 30th and December 31st of each year during the validity period of the bond loan. The interest calculation for each installment will follow the 30/360 day count convention, as per market practices. The fixed conversion price for the bonds is set at €0.50, and it is also expected that the investor will communicate their intention to convert the bonds after the third year from the date of issuance and up to maturity, during specific periods as indicated below: between February 1st and February 15th of each conversion year; between August 1st and August 15th of each conversion year. The rationale to be followed for the allotment of the convertible shares to the bondholders,  by virtue of the conversion right of each convertible bond, is equal to the quotient obtained from the ratio between the nominal value of each convertible bond and the subscription price of the supplementary shares. Consequently, in the event of a full conversion of the bond loan, the supplementary shares issued to service the exchange will have a maximum number of 2,000,000. Bonds not converted into shares by the maturity date of the bond loan will be cash-settled at par and in a single transaction, for a total amount equal to their nominal value. The subscription of the bond loan strengthens our positive view on the stock, which is why we confirm our estimates: target price €0.85, rating BUY, and risk MEDIUM.

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