Purchases 67% Of Innovation Pharma S.R.L., Owner Of Two Pharmacies In Northern Italy. The Strategy Of Rooting The Logistics Pharmacies Under The Brand Continues.

PRESS RELEASE

FARMACOSMO PURCHASES 67% OF INNOVATION PHARMA S.R.L., OWNER OF TWO PHARMACIES IN NORTHERN ITALY WITH EXPECTED REVENUES EXCEEDING 2 MILLION EUROS IN 2022

THE STRATEGY OF ROOTING THE LOGISTICS PHARMACIES UNDER THE

FARMACOSMO BRAND CONTINUES

Milan, December 20th 2022

Farmacosmo S.p.A. ("Company", "Farmacosmo"), a company active in the Health, Pharma & Beauty sector, listed on the Euronext Growth Milan market of Borsa Italiana, announces that on today's day it has acquired 67% of the share capital of Innovation Pharma S.r.l. ("Target", "Innovation Pharma"), already owner of two pharmacies, in the cities of Turin and Verbania, in the face of subscription of a reserved capital increase (the "Transaction" or the "Investment").

The Investment is functional to the execution of the expansion strategy already outlined in the Admission Document and to the construction of a network of logistics pharmacies, with the aim of creating facilities that can enable the evolution of Q-Commerce as well as a multi-channeloffer.

Fabio de Concilio, President and Chief Executive Officer of Farmacosmo, declared: "After the acquisition of Phàrmasi, continuing with the development of the industrial plan, we have reached another relevant stage in Farmacosmo's growth path through acquisitions: to continue with the development of "the omnichannel" strategy through the creation of a series of physical devices ("health hub"), functional to the Q-Commerce(Quick Commerce). Thanks to this agreement with the founder of the Target, Elena Giussani, we will acquire an extensive background in the field of training and management of physical pharmacies. The number of Farmacosmo's pharmacies rises to 3."

Elena Giussani, Chairman of Innovation Pharma S.r.l.'s Board of Directors, declared: "Through Innovation Pharma and my team we put strategic skills at the service of the current and future development of Farmacosmo. This is just a starting point and I'm sure that with all our experiences combined we can really create what for years has been called Pharmacy 2.0: accessible, innovative, physical and virtual place where to take care of oneself, without forgetting that every pharmacy has its own soul!"

The Target acquired the Turin pharmacy in April 2021 and that of Verbania in April 2022. For 2022, according to the Target's management estimates that were pondered in the investment agreement, total revenues of over €2m are expected.

STRATEGIC RATIONALE

The Transaction confirms the continuation of the path undertaken by acquiring Farmacia De Leo S.r.l. last November and therefore the construction of a network of logistics pharmacies on national territory.

In carrying out the strategies represented in the Admission Document, Farmacosmo intends to continue with the acquisition of additional points (pharmacies/drugstores), which in the Company's intentions will have to gradually transform into a "health hub", a junction point between offline and online.

It should be recalled that the "omnichannel" strategy that the Company thus intends to pursue is based on the following rationales:

• improve the brand awareness and the recognition of the Farmacosmo offer;
• improve the "customer journey" with additional value-added services, such as the fulfillment of online orders and the fetching and return of online purchases;
• accelerate the eventual introduction of telemedical services;

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• gradually reduce the delivery times, in line with the quick-commerce objective.

The acquisition will enable an efficiency improvement of the structure through numerous cost synergies (e.g. marketing, IT developments as well as benefits deriving from the creation of a single supply chain) and the exploitation of cross-selling opportunities.

STRUCTURE OF THE TRANSACTION

The Transaction foresaw the subscription of a capital increase by Farmacosmo reserved to the same and the consequent acquisition by G&Ph Holding S.r.l. of a stake equal to 67% of the share capital of Innovation Pharma S.r.l,. through a contribution in kind of its shareholding in Farmacia De Leo S.r.l. purchased last November 11th (see Press Release).

The Target's Enterprise Value, prior to the capital increase and considering a net financial position of approximately €1.9m, is approximately €4.0m. The involvement in Farmacia De Leo has been valued at approximately €4.6m.

The Transaction foresees a call option (3 years from the execution date) in favor of Farmacosmo and a put option (5 years from the execution date) in favor of the minority shareholder, aimed at the acquisition by Farmacosmo of the residual share capital of the Target, now held by G&Ph Holding, a company owned among other things by Dr. Elena Giussani. For both options, the valorization of the residual quota at the moment of the exercise date will be determined according to a value released by an independent expert. In case G&Ph Holding puts the put option into practice, Farmacosmo will be allowed the possibility to pay the relative purchase price in cash and/or through the assignment of its own shares, at its discretion.

The Shareholders' Meeting of Innovation Pharma also met on today's day and has:

• Approved a further capital increase of approximately €1.6m in cash, which was fully subscribed by Farmacosmo for the party of the same offer, for an amount of €1.1m, and which must be subscribed by G&Ph
  Holding S.r.l., according to the understandings contained in the investment agreement, by February 28th
  2023 for an amount of approximately €0.5m. In carrying out this increase, Farmacosmo employed only its own funds;
• Appointed the new Board of Directors. Fabio de Concilio (formerly Chief Executive Officer and President of Farmacosmo) has been appointed Chief Executive Officer of Innovation Pharma. Elena Giussani has been entrusted with the role of President. Paolo Cimmino (formerly CFO and Investor Relations Manager of Farmacosmo) completes the Board of Directors. The presence of Farmacosmo's CEO and CFO&IRM within the Innovation Pharma's Board of Directors proves the centrality of the strategic project for the Company.

The Transaction does not qualify as significant according to art. 12 of the Euronext Growth Milan Issuers' Regulations as it does not exceed any of the indices reported in Sheet 3 of the Euronext Growth Milan Issuers' Regulations.

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It should be recalled that G&PH ("Seller Partners") was assisted by Lexia Avvocati with the managing partner Francesco Dagnino for the legal profiles, by Hoop Capital in the person of Antongiulio Marti and SCM SIM in the person of Andrea Murdaca as Financial Advisors and that Farmacosmo was assisted by Studio Orrick, Herrington & Sutcliffe for legal profiles and by Studio Legale Tributario d'Aniello & Associati for due diligence finance and tax activities. Notary Demetrio Maltese of the notary firm Giamalex Notai Associati assisted the parties within his area of competence.

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This press release is available on the www.farmacosmoinvestors.comwebsite, section "Investors/Press Releases" and on the authorized storage mechanism "eMarket Storage" (www.emarketstorage.com)."

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PRESS RELEASE

THE SOCIETY

Farmacosmo is a company active in the Health, Pharma & Beauty sectors. The company's business model is based on the circular model of the l(ea)n strategy, and is divided into three main business areas: Logistics, Intelligence and Node. Logistics: enables the management and fulfilment of up to 12,000 orders per day, with delivery times of up to 20 hours from carrier picking and just-intime procurement ('zero warehouse' policy). Intelligence: includes strategy definition, competitive positioning and customer journey activities, which enabled the company to intercept c. 188,000 customers in 2021. Recurring customers contributed 74% of the annual retail stream turnover. The average cart value of active customers in the retail stream amounted to €92 (€109 related to recurring customers). Node: R&D activities, process innovation and IT infrastructure of the company. Over the past five years, Farmacosmo's sales value has grown by 54% (CAGR 2016-2021) and will be around €58 million in 2021. The Farmacosmo ecosystem aims to pursue standards of excellence in every part of its value chain, being inspired by compliance with ESG principles at all stages of the logistics process (from the packaging used for online orders to carbon compensation initiatives) and in the valorisation of its employees, the company's strategic asset. Farmacosmo's commitment to ESG is also underlined by the publication of its Sustainability Report 2021.

IDENTIFICATION CODES

Ordinary Shares: ISIN IT0005487670 (Ticker COSMO)

Warrant Farmacosmo 2022-2025: ISIN IT0005487415 (Ticker WCOSMO)