Tessellis S p A : Partial Execution of the Capital Increase

PRESS RELEASE

Tessellis S.p.A.: Partial execution of the capital increase

Cagliari, May 11, 2023

Tessellis informs that today the Board of Directors resolved, in partial execution of the proxy pursuant to Article 2443 of the Italian Civil Code conferred by the Extraordinary Shareholders' Meeting of January 10, 2023, to increase the share capital for cash, in divisible form, for a maximum amount of Euro 25,116,540.00, by issuing up to 50,233.080 new ordinary shares, with no par value, having the same characteristics as those in circulation (to be issued with regular dividend entitlement), at an issue price per share of Euro 0.50, to be fully allocated to share capital, to be offered under option to shareholders pursuant to Art. 2441, first paragraph, of the Italian Civil Code, as well as to holders of convertible bonds pursuant to Article 2441, first paragraph, second sentence, of the Italian Civil Code (the "Rights Offering"), by July 31, 2023, in the ratio of 5 newly issued Tessellis shares for every 19 Tessellis shares/convertible bonds held (the "Rights Issue").

It should be noted that the issue price of the new shares was determined by the Board of Directors, in accordance with market practices for similar transactions, by applying a discount on the TERP (Theoretical Ex Right Price) of 8.32%, calculated on the average stock market price of the Tessellis share for the week prior to today's date.

The execution of the Capital Increase will not result in dilutive effects in terms of shareholding in the Company's share capital for shareholders who fully exercise their option rights. Conversely, the failure to exercise the option rights will result in dilution of their shareholding in terms of percentage of the share capital, in the event of full subscription of the Capital Increase, up to a maximum of 21.74%.

The purpose of the Capital Increase is to provide the Company with a suitable instrument to quickly and efficiently raise risk capital and financial resources to be used to support, as an alternative to the resources currently available, in a less onerous manner and with less impact on the share price, the implementation of its business plan. Specifically, the execution of this transaction is aimed at providing the Company with a different and additional source of financing with respect to the convertible and converting bond loan outstanding with Nice&Green S.A. for a total maximum amount of 90,000,000.00 euros (the "POC"). Currently, in fact, the prospect of the Group's business continuity is closely linked, both as regards the coverage of the consolidated net financial requirements and the implementation of the business plan, to the resources derived from the aforementioned POC, the Group's main source of financing. Alternative and partial sources of financing include expected cash flows from the Group's operations, as well as proceeds from the possible sale of IPv4 addresses. In this context, the Capital Increase under the Option Scheme fits in as an alternative source, albeit also partial, to those indicated above, in line with the guidelines approved by the Extraordinary Shareholders' Meeting of January 10, 2023. In addition, since it is a transaction reserved for current shareholders, it enables them, where they subscribe to the option rights to which they are entitled, to finance the Company without being diluted in terms of their participation in its share capital.

With regard to the allocation of the proceeds from the Capital Increase, the latter will amount to approximately Euro 25 million, net of the expenses related to the implementation of the transaction (estimated at approximately Euro 120 thousand), in the event that it is fully subscribed. As envisaged within the business plan updated by the Board of Directors today, containing economic, equity and financial projections of the Company and the Group for the prospective time frame between 2023