Monnalisa S p A : Financial Report 2025

MONNALISA

Monnalisa S.p.A.

Corporate Information

Registered office Via Madame Curie, 7, 52100, Arezzo (AR)

Legal Information Authorized, subscribed, and paid-in share capital: 10,000,000 Euro Tax ID and Arezzo Chamber of Commerce registration number: 01163300518 Registration with the Arezzo-Siena Chamber of Commerce under R.E.A. No. AR-87271 Corporate website https://group.monnalisa.eu

Management Report as of December 31, 2025

Consolidated Financial Statements as of December 31, 2025

Financial Statements

Financial statements as of December 31, 2025

1. COMPOSITION OF CORPORATE BODIES

   Board of Directors

   The Board of Directors, appointed on April 29, 2024, will remain in office for three fiscal years, until the approval of the financial statements as of December 31, 2026. The members of the Board of Directors are:

   Chairperson Piero Iacomoni

   Chief Executive Officer Matteo Tugliani

   Directors Simone Pratesi

   Stefano Della Valle Fabrizio Dosi

   Board of Statutory Auditors

   Chairperson Alessandro Luzzi

   Statutory Auditors Gabriele Nardi Alberto Sodini

   Independent Audit Firm EY S.p.A.

   Euronext Growth Advisor CFO Sim S.p.A.

   Dear Shareholders,

   the fiscal year ended December 31, 2025, reports a consolidated net loss of €6,998,764. The Holding company, Monnalisa S.p.A., reports a net loss for the year of €3,991,732.

2. BUSINESS ACTIVITIES AND STRUCTURE OF THE GROUP

   Monnalisa S.p.A. (hereinafter "Monnalisa" or "Company") designs, manufactures and distributes high-end childrenswear 0-16 years old, under the brand of the same name, through multiple distribution channels. The company philosophy has always combined entrepreneurial activity, innovation, the search for new markets, original styling and a particular attention to the development of company resources and skills. The Monnalisa Group (hereinafter the "Group") operates through a centralised business structure where almost all the activities relating to its organisational model are carried out, with the exception of the distribution and management of retail stores in the various geographical areas, which are carried out directly by the Group's individual commercial entities in the relevant reference market.

   Monnalisa is therefore an operating holding company that - in addition to holding shares in foreign commercial companies - manages all phases of the production process, from the conception and creation of the product to its marketing, outsourcing only some production phases.

   For 50 years, Monnalisa's philosophy has been based on the unique combination of entrepreneurial activity, innovation, search for new markets, original styling. Today the Group distributes in over 50 countries, both in direct flagship stores and in the most prestigious department stores in the world, and in over 400 multi-brand stores.

   The internalization of the creative and manufacturing process of the products - in addition to representing a highly distinctive element of the Monnalisa Group - pursues the primary objective of a strong industrialization of the same. The Group is in fact able to oversee all strategic processes internally, with consequent positive implications on the management of turnover and margins.

   The Group is organized according to a model in which product strategies and communication activities are closely connected so as to be consistent with the brand image and Monnalisa style. It is characterized by constant and careful control of the value chain by the Company.

   The organization chart of the Monnalisa Group as at 31 December 2025 is shown below, which also corresponds to the Scope of consolidation. Compared to the structure in place as of December 31, 2024, there are no changes:

   
   
   

   As at 31 December 2025, the Monnalisa Group includes Monnalisa S.p.A. and the fully consolidated subsidiaries, listed below, in which the Holding Company holds, directly or indirectly, the majority of the voting rights and over which it exercises control:

   • Monnalisa Hong Kong Ltd: incorporated on August 25, 2015 and based in Hong Kong, it is 100% owned by Monnalisa S.p.A. and aimed at developing the local retail market. As of the date of this report, the subsidiary operates a mono-brand store;

   • Monnalisa Russia Llc: incorporated on January 14, 2016, with the purpose of improving the efficiency of the local wholesale market management and expanding into the retail market through the direct opening of mono-brand stores (four at year-end: two DOS and two DOO). The company is 99.99% owned.

   • Monnalisa China Ltd: incorporated on February 17, 2016, based in Shanghai, it is 100% owned by Monnalisa S.p.A. The company was established to develop the local retail market through the opening of mono-brand stores in prestigious malls in Shanghai, Beijing, and other major Chinese cities. As further detailed later in this report, during the current financial year Monnalisa gradually closed several stores in the Chinese market. These closures were a direct consequence of the severe economic crisis affecting the country, which has prevented the Group from operating profitably in that market. As of the date of this report, the company does not manage any store following the closure of the last two stores in the first half of 2025;

   • ML Retail USA Inc.: incorporated on September 22, 2016, 100% owned by Monnalisa S.p.A. with the aim of managing the retail business of the local market. The company is present in the United States with currently three stores (2 DOS and 1 DOO);

   • Monnalisa Korea Ltd: incorporated in December 2016, 100% owned by Monnalisa S.p.A. The company is currently inactive;

   • Monnalisa Bebek Giyim Sanayi ve Ticaret A.Ş.: incorporated on December 11, 2018, and based in Turkey, it is 100% owned by Monnalisa S.p.A. The company operates a single store located in Istinye Park inaugurated in January 2021;

   • Monnalisa UK Ltd: incorporated in January 2019 and headquartered in London, the company currently

     operates a concession stand at Harrods. The company is wholly owned by Monnalisa S.p.A.;

   • Monnalisa International Limited: established in May 2019, headquartered in Taiwan, and wholly owned by Monnalisa S.p.A. The company operates one retail outlet;

   • Monnalisa Japan Co Ltd: a wholly-owned subsidiary of Monnalisa S.p.A. The company, established in 2019, is focused on developing the local retail market. After operating several pop-up stores in fiscal year 2020, the company is currently inactive as of the date of this document;

   • Monnalisa Singapore Ltd.: a wholly-owned subsidiary of Monnalisa S.p.A. The company operates a single retail store at Marina Bay Sands;

   • Monnalisa San Marino S.r.l.: a wholly-owned subsidiary of Monnalisa S.p.A., established to develop the local retail market through its retail outlet at The Market in San Marino.

3. KEY STOCK MARKET DATA

   On July 10, 2018, the ordinary shares of the Holding Company Monnalisa S.p.A. were admitted to trading on the Euronext Growth Milan market (formerly known as AIM Italia / Alternative Capital Market), a multilateral trading facility organized and managed by Borsa Italiana S.p.A. Trading in the Company's ordinary shares began on July 12, 2018.

   The admission to listing took place following the placement of a total of 1,290,800 ordinary shares, of which 1,236,300 shares related to a capital increase for payment, through placement carried out mainly with qualified institutional investors, Italian and foreign, and 54.500 shares offered for sale by the controlling shareholder, Jafin Due S.r.l. (formerly Jafin Due S.p.A.).

   The most important stock market data are provided below.

   Key Stock Market Data
   Official price as of December 30, 2025	0.922
   Lowest price 11/24/2025	0.896
   Highest price on May 19, 2025	1.39
   Market capitalization as of December 30, 2025	4,827,869
   Number of shares composing the share capital as of December 31, 2025	5,236,300

   The Group's current stock market capitalization reflects the performance of financial markets and the overall difficult economic situation, and exceeds the Group's net equity value. The Directors believe that this valuation does not represent the Group's actual value.

   According to art. 18 of the Euronext Growth Milan Issuers' Regulation, updated on 25 October 2021, the Company is required to publish the annual financial report within three months of the end of the financial year.

   Therefore, on March 16, 2026, the Board of Directors of Monnalisa S.p.A. approved the annual financial report for the year ended 31 December 2025 and ordered its publication in the Investor Relations section of the Monnalisa S.p.A. website and on the channels provided for by Borsa Italiana.

4. OPERATING PERFORMANCE

   In fiscal year 2025, the Monnalisa Group reported consolidated revenues of €33.8 million compared to €35.6 million in the prior year, representing a 5% decrease at both current and constant exchange rates.

   It should be noted that in these consolidated financial statements, the Monnalisa China Cash Generating Unit, following the decision to proceed with its definitive closure within 12 months from December 31, 2025, has consequently been treated as a Discontinued Operation in accordance with IFRS 5.

   In this regard, please refer to the details provided in paragraphs "2.3 Application of IFRS 5" and "31. Assets and Liabilities Held for Sale" of the Notes to the Consolidated Financial Statements.

   ****

   Monnalisa operates in the most important markets both through the DTC (Direct-to-Consumer) channel-comprising directly managed mono-brand stores (Directly Operated Stores-DOS and Directly Operated Outlets-DOO) and its own online store-and through the wholesale channel, comprising multi-brand stores and online sites specializing in the sale of luxury goods (e-tailers).

   Monnalisa's strategy aims to control the distribution chain-whether retail, wholesale, or digital-through a direct approach that leverages the companies within the Group's scope to reach all major markets.

   In 2025, Monnalisa completes a comprehensive strategic review of its retail business model, an initiative promoted and led by the new CEO, Matteo Tugliani, with the aim of restoring the direct retail operations to a state of economic sustainability and industrial coherence. The company is transitioning from a previous model known as "Expansive Showcase Retail"-characterized by widespread growth of stores in Italy and abroad conceived as "brand showcases"-to a new model called "Selective Profit-Driven Retail," based on streamlining the network and concentrating it in strategic locations with high potential. This approach has made it possible to significantly reduce the impact of fixed costs, improve inventory turnover, and return the retail outlets to a positive economic profile. Over the course of twelve months, the Group reduced its store count from 36 to 24, closing 12 structurally unprofitable stores and taking decisive action to improve the profitability of the remaining stores through more efficient management, an optimized product mix, and greater operational discipline.

   A key feature of the new model was also the gradual introduction of licenses for premium-luxury adult fashion brands, enhancing the stores' commercial appeal and expanding the customer base with a focus on cross-selling and brand elevation. This decision further strengthened Monnalisa's positioning in the high-end kidswear segment, integrating lifestyle elements consistent with global market dynamics. The rationale behind this initiative lies in the need to equip the Group with a resilient, sustainable retail model consistent with macroeconomic and sector-specific conditions.

   Another key element of the new business model, essential to support the relaunch, is the focus on data-driven analysis and omnichannel branding and marketing promotion, with investments in key personnel already made by the end of 2025, which are expected to have a decisive impact starting in 2026.

   The environment in which the Group operates continues to be characterized by extreme uncertainty and volatility, with economic and geopolitical dynamics significantly impacting the children's fashion sector and beyond, sharply eroding consumer confidence.

   It was precisely this awareness of such changes that enabled Monnalisa's management to recognize how crucial it was to act with a clear yet flexible strategy to respond to the new challenges arising from the external environment and, consequently, to the Group's distribution network.

   During the 2025 fiscal year, the Group continued to implement the new business plan, the foundations of which were laid starting in May 2024-the month the new management took office-which envisions growth through new licensing or manufacturing agreements with adult fashion brands, a strategy aimed not only at increasing volumes but, even more so, at boosting the Group's profitability by creating new revenue streams and achieving a rise in corporate profitability that is more than proportional to the increase in revenue, thanks to significant operational leverage resulting from greater utilization of the organizational, production, logistics, and distribution capabilities the Group already possesses.

   The results for the 2025 fiscal year thus mark an important first step toward this strategy.

   The 2025 performance shows a net loss but represents a significant improvement compared to the 2024 comparative figures. The decline in revenue highlighted above is a direct consequence of the strategy implemented by the new management, aimed at enhancing the quality of its distribution network through the rationalization of the retail channel and the resulting optimized management of existing retail locations, with the gradual closure of underperforming stores from a medium- to long-term perspective, as they operate in countries that are still experiencing extreme difficulties in recovering (first and foremost China). The strategy outlined above has therefore led to an absolute reduction in retail channel revenue but a more than proportional reduction in operating costs related to that channel, resulting, as can be seen from the financial data below, in a positive effect on the operating margin.

   The plan to reduce non-strategic operating costs resulted in savings of 2.9 million euros in service and personnel costs, with an improvement in operating profit of 4 percentage points compared to the 2024 comparative figure.

   In light of the above, the retail channel recorded revenues of 12.8 million as of December 31, 2025, representing a 13% decrease compared to sales volumes in 2024.

   The comparison analyzed here is significantly impacted by the closures of company-owned stores recorded during the year. On a like-for-like basis, in fact, the channel's revenue is perfectly in line with the previous year, with countries such as Turkey, Russia, and the Americas posting positive growth, offset by a more subdued trend in the Asian market.

   Revenues from the direct e-commerce channel stood at €2.8 million, compared to €2.6 million as of December 31, 2024, marking a significant 10% increase. For the second consecutive year, the e-commerce channel continues to grow at a double-digit rate.

   The share of the online channel-both direct and indirect-in total revenue stands at 17% of total sales (the same percentage as of December 31, 2024). The percentage share of the direct online channel alone stands at 8.4% of total revenue, an increase of 1.1 percentage points compared to the previous fiscal year.

   Revenues from the wholesale channel amounted to €18 million, remaining essentially in line with the previous fiscal year 2024, despite a decline in sales for a licensed brand that negatively impacted its revenues due to reputational risks arising from factors unrelated to its core business.

   The new licensing agreements signed over the past two years, however, have enabled the creation of new sources of profitability with growing revenues and a corresponding flexible and productive business model. The channel's percentage share of the group's total revenue stands at 54% compared to 51% in the prior-

   year period.

   Below is a breakdown of revenues by channel and geographic area (with changes at constant and current exchange rates):

   December 31 at current exchange rates
   In thousands of €	2025	% Change	2024	% change	Var	Change %
   Retail	12,820	38%	14,746	41%	(1,926)	-13%
   Wholesale	18,090	54%	18,298	51%	(208)	-1%
   Direct B2C	2,849	8%	2,590	7%	259	10%
   Total	33,759	100%	35,633	100%	(1,875)	-5%

   December 31 at constant exchange rates
   In thousands of €	2025	% change	2024	% change	Var	Change %
   Retail	12,977	38%	14,746	41%	(1,768)	-12%
   Wholesale	17,924	53%	18,298	51%	(374)	-2%
   Direct B2C	2,849	8%	2,590	7%	259	10%
   Total	33,750	100%	35,633	100%	(1,884)	-5%

   December 31 at current exchange rates
   In thousands of €	2025	% change	2024	% change	Var	Change %
   Italy	11,766	35%	12,929	36%	(1,162)	-9%
   Europe	8,219	24%	9,118	26%	(899)	-10%
   Rest of the World	13,773	41%	13,587	38%	186	1%
   Total	33,759	100%	35,633	100%	(1,875)	-5%

   December 31 at constant exchange rates
   In thousands of €	2025	% change	2024	% increase	Var	Change %
   Italy	11,766	35%	12,929	36%	(1,162)	-9%
   Europe	8,349	25%	9,118	26%	(769)	-8%
   Rest of the World	13,634	40%	13,587	38%	47	0%
   Total	33,750	100%	35,633	100%	(1,884)	-5%

   Adjusted EBITDA came in at €3.3 million; the adjustments relate to extraordinary costs associated with non-recurring events in fiscal year 2025. Reported EBITDA showed a significant improvement, reaching €2.5 million, compared to €1.8 million as of December 31, 2024.

   After depreciation, amortization, and impairment charges of €5.2 million (€6.1 million as of December 31, 2024), EBIT stood at €-2.4 million (€-4.3 million as of December 31, 2024). Net income from continuing operations, excluding the foreign exchange adjustment component, stood at -€4.6 million, a decrease of €1.7 million compared to fiscal year 2024, which stood at -6.3 million.

   Net financial debt (Net Financial Position), including the effects of applying IFRS 16, stood at €21 million compared to €22.9 million as of December 31, 2024. Adjusted net financial debt, defined in paragraph 5 below under "Alternative Performance Measures" and calculated by excluding current and non-current liabilities related to lease agreements, amounts to €11.7 million (€12.4 million as of December 31, 2024).

   The Group has shareholders' equity of €4.8 million. The shareholders' equity of the Holding company, Monnalisa S.p.A., amounts to €20.3 million.

5. ECONOMIC AND FINANCIAL ANALYSIS

   The Monnalisa Group uses certain alternative performance indicators, which are not recognized as accounting measures under generally accepted accounting principles, to facilitate a better assessment of the performance of the Group and the holding company. The calculation methods applied by the Group and the resulting figures may therefore not be consistent with or comparable to those of other groups. These indicators are derived exclusively from historical data of the Group and the holding company for the accounting period covered by these financial statements and the comparative periods, without reference to the expected performance of the Group and Monnalisa S.P.A., and should not be considered a substitute for the indicators required by the applicable accounting standards (IFRS).

   The following is a definition of the alternative performance indicators used:

   EBITDA (Earnings Before Interest, Taxes, Depreciation, Amortization): Represents earnings before financial income and expenses, income taxes for the period, depreciation and amortization of fixed assets, and foreign exchange gains/losses. EBITDA, as defined above, is the indicator used by Monnalisa's directors to monitor and evaluate the company's operating performance. Since EBITDA is not recognized as an accounting measure under Generally Accepted Accounting Principles (GAAP), it should not be considered an alternative measure for evaluating the Company's operating performance. Because the composition of EBITDA is not regulated by applicable accounting standards, the calculation method applied by Monnalisa may not be consistent with that adopted by other entities and therefore may not be comparable to theirs.

   ADJUSTED EBITDA (Adjusted EBITDA): Indicates earnings before financial income and expenses, income taxes for the period, depreciation and amortization of fixed assets, and foreign exchange gains/losses, adjusted for one-off costs incurred, the negative margin from stores opened and closed during the year, capital losses, and any extraordinary items (e.g., extraordinary inventory write-downs).

   EBIT (Earnings Before Interest and Taxes): EBIT represents earnings before financial income and expenses, foreign exchange gains/losses, and income taxes for the period. EBIT, as defined above, is the metric used by Monnalisa's management to monitor and evaluate the company's performance. Since EBIT is not recognized as an accounting measure under the applicable accounting standards, it should not be considered an alternative measure for evaluating the performance of Monnalisa's results. Because the composition of EBIT is not regulated by the applicable accounting standards, the calculation method applied by the Company may not be consistent with that adopted by other entities and therefore may not be comparable to them

   Net Financial Debt: In accordance with the provisions of CONSOB Communication No. DEM/6064293 of July 28, 2006, supplemented by CONSOB Advisory Notice No. 5/21, it is specified that net financial debt is calculated as the sum of cash and cash equivalents, current financial assets, and short- and long-term financial liabilities (current and non-current financial liabilities).

   Adjusted Net Financial Debt: this is represented by Net Financial Debt excluding current and non-current lease liabilities.

   1. Reclassified Income Statement

      The operating segments of the reclassified income statement are organized by distinguishing between ordinary operating activities (operating and non-operating) and financial activities (financial expenses and foreign exchange management). For the purposes of reclassification, financial income and expenses, bank charges, and foreign exchange management are included within financial activities.

      5.1.1 Reclassified Parent Company Income Statement
      (Euro)	31.12.2025	Chg %	31.12.2024	% Change
      Revenue from contracts with customers	28,836,251		30,822,318
      Gross margin	16,017,395	56%	17,683,559	57%
      Cost of services	(7,092,888)		(8,713,138)
      Personnel expenses	(7,512,686)		(8,671,287)
      Other operating expenses	(667,805)		(529,311)
      Other income	780,421		1,090,872
      EBITDA	1,524,437	5%	860,695	3.0%
      Depreciation, amortization, and impairment losses	(3,194,290)		(5,996,916)
      Provisions for risks	(350,000)		0
      EBIT	(2,019,853)	-7%	(5,136,221)	-17%
      Financial expenses	(1,631,355)		(7,277,250)
      Financial income	(340,524)		632,749
      EBT	(3,991,732)	-14%	(11,780,722)	-38%
      Income taxes	0		(523,000)
      Net income for the year	(3,991,732)	-14%	(12,303,721)	-40%

      5.1.2 Reclassified consolidated income statement
      (Euro)	31.12.2025	Chg %	31.12.2024	Chg %
      Revenue from contracts with customers	33,758,882		35,633,490
      Gross margin	21,128,892	63%	22,525,556	63%

      Cost of services	(9,018,576)		(10,346,024)
      Personnel expenses	(9,418,116)		(10,611,055)
      Other operating expenses	(748,548)		(570,081)
      Other income	569,182		815,834
      EBITDA	2,512,834	7.4%	1,814,231	7.2%
      Depreciation, amortization, and impairment losses	(4,927,694)		(6,101,572)
      Provisions for risks	(350,000)		0
      EBIT	(2,764,860)	-8%	(4,287,342)	-12%
      Financial expenses	(2,829,531)		(2,553,145)
      Financial income	141,780		1,180,087
      EBT	(5,452,612)	-16%	(5,660,400)	-17%
      Income taxes	(262,994)		(428,474)
      Net income from continuing operations	(5,715,606)	-16%	(6,088,874)	-17%
      Net income from discontinued operations	(1,283,158)		(815,994)
      Net income for the year	(6,998,764)	-21%	(6,904,868)	-19%
      Group share of net income	(6,998,764)		(6,904,867)
      Minority interest	1		(1)
      5.2 Net Financial Position

      The net financial position, which identifies the net financial debt of the Group and the holding company, summarizes the balance between financial sources and investments. It is calculated as the sum of cash and cash equivalents, plus financial receivables, net of financial liabilities (i.e., those not attributable to the operating cycle) for both the short and medium-to-long term.

      1. Net Financial Position of the Parent Company

         Amounts in thousands of euros	31.12.2025	31.12.2024
         	755 -2,738	519 -2,545
         D. Cash and cash equivalents A+B+C	3,493	3,064
         E. Current financial debt	7,760	6,931
         F. Current portion of non-current financial debt	1,049	2,870
         G. Current financial debt (E+F)	8,809	9,801
         H. Net current financial debt (G-D)	5,316	6,737
         I. Non-current financial debt	10,290	10,787
         J. Debt instruments	-	-
         K. Trade payables and other current liabilities	-	-
         L. Non-current financial debt (I+J+K)	10,290	10,787
         M. Net financial debt (H+L)	15,606	17,524
         Current financial liabilities from leases	1,560	1,439
         Financial liabilities from non-current leases	4,343	5,467
         Adjusted net financial debt	9,704	10,618

         1. Cash and cash equivalents

         2. Cash equivalents

         3. Other current financial assets

      2. Group net financial position

      Amounts in thousands of euros	31.12.2025	31.12.2024
      A. Cash and cash equivalents	1,380	1,190
      B. Cash equivalents	-	-

      C. Other current financial assets	95	87
      D. Cash and cash equivalents A+B+C	1,475	1,278
      E. Current financial debt	9,206	8,495
      F. Current portion of non-current financial debt	1,049	2,870
      G. Current financial debt (E+F)	10,256	11,364
      H. Net current financial debt (G-D)	8,781	10,086
      I. Non-current financial debt	12,286	12,910
      J. Debt instruments	-	-
      K. Trade payables and other current liabilities	-	-
      L. Non-current financial debt (I+J+K)	12,286	12,910
      M. Net financial debt (H+L)	21,067	22,996
      Current lease liabilities	3,006	2,964
      Financial liabilities from non-current leases	6,338	7,590
      Adjusted net financial debt	11,722	12,442

      The net financial position has been presented in accordance with the format set forth in Consob Communication No. DEM/6064293 of July 28, 2006, supplemented by Consob Advisory Notice No. 5/21, which updates references to ESMA guidelines regarding disclosure requirements pursuant to EU Regulation 2017/1129. The comparative figures have been restated; however, no differences arose from the adoption of the new format for presenting the net financial position.

      If the "net financial position" is negative, financial receivables and cash are greater than financial liabilities. Adjusted financial debt is calculated by excluding current and non-current financial liabilities from lease agreements from net financial debt.

6. DESCRIPTION OF THE MAIN RISKS AND UNCERTAINTIES TO WHICH THE GROUP IS EXPOSED

   In managing its operations and implementing its strategy, the Group is naturally exposed-like any company-to a series of risks that, if not properly managed and mitigated, may affect its economic results and its current and future financial and equity positions. Monnalisa S.p.A. has established risk management procedures in the areas most exposed to risk in order to eliminate or reduce potential negative impacts on the Company's economic and financial position.

   Business interruption risks caused by natural, economic, and geopolitical events, including pandemics

   The risk is associated with the possibility that natural, economic, and geopolitical events, including pandemics, may cause a significant interruption or halt to business continuity, with consequent economic/financial and/or reputational repercussions due to the inadequacy of the recovery strategies defined at the corporate level.

   Market-related risks

   The Monnalisa Group is responsible for the creation, development, industrialization, production, marketing, advertising, promotion, and distribution of Products globally; consequently, its business is subject to the risks typical of a manufacturer and distributor in the fashion industry. General market risks include competition, the market positioning of Products, negative demand conditions, and fluctuations in raw material costs. In

   particular, the fashion industry is characterized by the sensitivity of consumer tastes, which are constantly changing, as well as by consumers' economic means.

   Therefore, the Group is inevitably subject to the risk that, for whatever reason, its collections may not be well received by the market. In addition, the macroeconomic climate also affects the disposable income that consumers can spend on luxury goods. In both circumstances, the Group may experience lower-than-expected sales and is therefore subject to the risk that its revenue may prove insufficient to cover its operating expenses. This risk is compounded by that arising from the countries in which the company operates, each characterized by a different economic and political situation, particularly in those nations where the Group has a direct presence. These risks are managed by investing in innovation and research, fueling creativity with continuous stimuli and challenges. Furthermore, having a widespread presence in a significant number of markets around the world allows the Group to mitigate the risk arising from a potential deterioration in the economic or political situation of certain markets.

   Reputational risks

   The market in which the Monnalisa Group operates is influenced by the perceptions of both retailers and end customers, not only regarding the company's stylistic offerings but also regarding the intrinsic quality of the product and the brand's reputation. To mitigate these risks, the product and brand image (brand, product, company, and group communications) are carefully managed. The public relations function is handled internally to ensure more effective oversight of external communications, guaranteeing consistency in terms of brand identity and the Group's corporate image. To protect the end consumer and mitigate the resulting reputational risk, significant attention is paid to the safety of the product and the materials used in it, through quality control, chemical and physical testing of specific products, compliance with Reach regulations, and adherence to the highly restrictive requirements for access to major international shopping malls, achieved through specific product certifications.

   Risks related to the distribution network

   Risks arising from the wholesale channel relate to customer solvency and financial stability, which are regularly monitored: on the one hand, by prudently assessing credit limits to be granted, and on the other, by relying on a credit insurance and management service. An additional service is also in place to gather realtime commercial information online, enabling the Group to monitor the soundness of granted credit over time. The Group continuously invests in the distribution channel, confirming a win-win approach between customer and supplier, through personalized support for store layout and setup, assistance in preparing the initial stock order, monitoring of the product mix, training of sales staff, visual merchandising initiatives, management and co-management of in-store events, merchandise exchange services, and modular support in managing unsold inventory.

   In the retail sector, it is essential to secure and maintain over time the most sought-after locations in the world's major cities and in the most prestigious department stores. The main risk associated with this type of channel relates to the duration of lease agreements, their potential for renewal, and any revision of the applicable terms.

   Risks related to relationships with manufacturers and suppliers

   Production is outsourced to small local workshops (façon) and to manufacturers of commercialized products, located in Italy and abroad (China, Turkey, Egypt). With key suppliers, collaboration is based on a long-term partnership approach, centered on shared objectives and tools to identify high-quality professional solutions and achieve mutually satisfactory results, aiming to stabilize the relationship while mitigating the risk of

   dependence on key suppliers-whether due to volume of work or the type of product/service offered. Although the Group does not depend significantly on any single supplier, the risk of termination of existing supply relationships for any reason cannot be ruled out a priori. Therefore, workloads at each supplier are regularly monitored, and an intensive search for new suppliers is conducted worldwide.

   Risks related to the loss of know-how and talent

   The Group's success depends heavily on the people who work there, their skills, and their professionalism. We therefore strive to prevent the loss of talent by ensuring a stimulating, challenging work environment rich in opportunities for learning and growth. We encourage the sharing of knowledge by promoting cross-functional growth and the dissemination of skills through direct training of colleagues and the publication on the server of all information that can be systematized via procedures and instructions.

   With the opening of new branches abroad in countries with cultures vastly different from that of the parent company, it has also become crucial to understand the work dynamics and motivational factors of staff of other nationalities, developing tailored policies and taking into account differing attitudes toward long-term company loyalty.

   Risks related to the loss of information and data

   Although the obligation to draft and update the security policy document has been lifted, the Monnalisa Group has incorporated data management and backup procedures into the instructions of the ISO 9001 manual of the holding company Monnalisa. There have never been any complaints regarding privacy violations or data loss. One of the three IT staff members is dedicated to the continuous updating of IT tools to prevent the risk of obsolescence, while a committee for software technology development operates at the management level. For the online sales system of its products, secure payment systems managed by certified companies that use the best security protocols are employed. Through its own controls, the company ensures the formal and substantive integrity of transactions.

   Environmental Risks and Sustainability

   With regard to strategic risks, climate change and public attention to the issue could impact customer preferences, leading to potential changes in the purchase of certain specific product categories-which are marginal to the Group's business-and in the potential sourcing of certain raw materials, without any current indication of a reduction in the quality of raw materials used in the production cycle. The Group therefore monitors risks related to climate change in order to reduce their impact on its operations. At present, the Group does not report any significant impacts of climate change on operational risks.

   With regard to financial risks, the Group may be exposed in the future to potential higher costs and investments related to the adaptation of its production and distribution structure, in order to mitigate the impacts that the business could have on climate change. To date, no estimates of significant costs or investments in this regard have emerged.

   Finally, regarding compliance risks, sustainability-related implications stem from non-compliance with environmental laws and regulations to which the Group may be subject. The Group monitors the ongoing evolution of the national and international regulatory framework and the potential introduction of additional regulations aimed at reducing the business's environmental impacts.

   Liquidity Risks

   The Monnalisa Group plans its financial operations to reduce liquidity risk. Based on financial needs, the Group utilizes credit lines guaranteed by the banking system, drawing on sources that are most appropriate, in terms of duration, relative to the related uses of funds. To limit the absorption of liquidity caused by the expansion of working capital, its volume and composition are constantly monitored, with the aim of containing it or, at the very least, ensuring its various components (receivables, payables, inventory) are balanced in terms of both volume and duration.

   Financial Risks

   Capital risks, understood as the possibility that the group may be unable to cope with "adverse" events, whether exogenous or endogenous, are fully mitigated by the company's long-standing policy of setting aside generated profits, as evidenced by the significant level of equity relative to invested capital.

   Risks related to exchange rate fluctuations

   The diverse geographic distribution of the Group's production and commercial activities exposes it to foreign exchange risk, both transactional and translation risk. Transactional foreign exchange risk arises from commercial and financial transactions carried out by individual Group companies in currencies other than the functional currency, due to fluctuations in exchange rates between the time the commercial/financial relationship is established and the time the transaction is settled (receipt/payment). Since, for the holding company, purchase volumes in dollars are temporally misaligned with the setting of sales price lists, exchange rates-established when compiling the bill of materials-are hedged when deemed appropriate, using flexible forwards, which are never speculative in nature but solely for insurance purposes, to guarantee planned margins. Using the same rationale, and where the conditions are met, foreign currency payment flows related to sales made in foreign markets are hedged.

   Monnalisa holds controlling interests in companies that prepare their financial statements in currencies other than the euro, which is used for the preparation of the consolidated financial statements. This exposes the Group to translation risk, due to the conversion into euros of the assets and liabilities of subsidiaries operating in currencies other than the euro.

   Risks related to corruption

   The Group does not work with the public administration or large-scale retail chains; therefore, the risk of corruption is considered low. The governance system and business processes contribute to keeping the risk level low, as they provide for general accountability controls, separation of duties, and responsibilities regarding potentially sensitive management processes. Monitoring of activities related to corruption risk management is also part of the assessment required by the Organization, Management, and Control Model pursuant to Legislative Decree No. 231 ("Model 231") adopted by the Company.

   Whistleblowing

   In 2023, the Company adopted and implemented all appropriate technical and administrative measures to comply with the provisions of Legislative Decree of March 10, 2023, adopting a specific procedure for managing related reports under the Whistleblowing regulations and appointing an individual with the necessary qualifications to serve as the manager of such reports.

   The entity has established a dedicated email address for reports.

   During the fiscal year, as in previous years, there were no reports regarding possible acts or instances of corruption.

   Risks related to corporate administrative liability

   Since 2017, the Group has adopted the Code of Ethics and the Organization, Management, and Control Model pursuant to Legislative Decree No. 231 of 2001. Since 2024, the role of the Supervisory Body has been entrusted to a dedicated organizational unit consisting of two external members and the HR manager. The risk assessment is updated by the Compliance Team, which consists of the aforementioned individuals and reports to the CEO. The Compliance Team and the Supervisory Body periodically prepare reports on their activities for senior management.

   Risks Related to Governance

   The holding company is a first-generation family-owned business in which the founders still play an active role in terms of contribution and direction; therefore, potential risks to continuity and sustainability are evident. To mitigate these risks, a Board of Directors was established in 2010 and renewed in 2024. In addition to Chairman Piero Iacomoni and CEO Matteo Tugliani, the Board currently includes three members from outside the founder's family, all of whom are independent directors.

   Risks related to accounting and tax matters

   The accounting activities of the parent company Monnalisa are handled internally and overseen by individuals with extensive experience in these roles. The professionalism of these individuals is complemented by continuous professional development and the support of high-profile external consultants. The statutory audit engagement has been entrusted to the audit firm EY SpA, which is responsible for certifying the holding company's financial statements and the consolidated financial statements. With regard to the subsidiaries, accounting activities are entrusted to local consulting firms with international experience. The subsidiaries with the highest turnover (Russia and China) are subject to audit by local auditors. There have been no instances of penalties, monetary or otherwise, for non-compliance with laws and regulations.

   With regard to ongoing tax-related disputes, please refer to the details provided under "Provisions for risks and charges."

   Finally, it should be noted that the Group's operations are characterized, among other things, by activities in various countries (both European and non-European). As part of these operations, there are transfers of goods and provision of services between Group entities located in different countries and territories. In particular, transactions between the parent company and its foreign subsidiaries fall under transfer pricing regulations. In the management's opinion, the transactions between the parent company and the other non-resident group companies were carried out in the ordinary course of business and are conducted in full compliance with the "arm's length price" principle, as required by Italian law and defined (at the international level) by the guidelines provided by the OECD."

   Risks Related to the Integration of Sustainability into Business Processes

   Monnalisa adheres to the main standards of social responsibility and integrated corporate management (ISO 26000, SA8000, ISO 9001, ISO 14001). This commitment involves continuous work to improve and manage

   activities and processes, which are periodically evaluated by independent external bodies. The publication of the integrated report demonstrates the commitment to include stakeholders-some as recipients and others as contributors-in this virtuous cycle of sustainability, quality, and environmental policies. The adoption of materiality analysis as a "management tool" for sustainability is instrumental in improving the effectiveness of reporting and stakeholder engagement.

   Risks Related to Growth Management

   Among its economic and financial planning tools, Monnalisa prepares a three-year development plan, reviewed annually, which outlines in descriptive and numerical terms the strategies, actions, and expected economic and financial impact that the Company intends to implement both to consolidate its existing operations and to seize new growth opportunities.

   Risks Related to Product Distinctiveness

   Creativity-that is, the ability to make the product distinctive-is the competitive advantage par excellence, to be preserved and enhanced as one of the key components of the Company's intangible assets. Oversight of this crucial area is in the hands of Barbara Bertocci and Diletta Iacomoni, respectively the founder's wife and daughter, reflecting the continuity the Company intends to maintain in terms of product identity and distinctiveness. With the same care and attention, Monnalisa approaches the licensing business, effectively interpreting, producing, and distributing third-party brands as well.

   Risks related to safety and product quality assurance

   Every Monnalisa garment is designed and evaluated with health and safety in mind, issues that are even more critical given that children are the end users of the product. The materials used and the finished products purchased are tested for the presence of harmful substances, and during the design and manufacturing phases, regulations regarding the physical safety of children's clothing are strictly followed. Requirements and their strictness may vary from country to country, as does the list of substances deemed hazardous to consumer health; therefore, close attention must be paid to regulatory developments, striving to comply even with the most stringent standards. Addressing this issue involves raising awareness and monitoring the supply chain through which Monnalisa products are manufactured. To this end, all health and safety aspects of the product have been formally incorporated into the relationship with suppliers via the code of conduct, which is an integral part of the supply contract; by signing this contract, the supplier commits to adhering to the principles adopted by the client company.

   Risks Related to Employee Health and Safety

   Occupational health and safety are an inalienable right of every worker. At Monnalisa, since there are no inherently hazardous activities, our commitment to this aspect goes beyond legal requirements to cover softer-but no less important-aspects, such as the "workplace atmosphere" or work-life balance policies. In the face of the health emergency caused by the Coronavirus, the well-being and health of people have been at the center of the initiatives and policies promoted by the Group. As the pandemic spread globally, it became necessary to rethink people's workspaces and work schedules to ensure the safest possible conditions for them to perform their duties, while maintaining operational continuity and safeguarding the health of those who, in various capacities, interacted with the Group during the same period: specifically, customers, consumers, and suppliers.

   Risks Related to Supply Chain Management

   Monnalisa does not have in-house production, so control of its supply chain is very important from every perspective: quality, labor practices, human rights, the environment, and the safety of the products supplied. The selection and evaluation of suppliers is a crucial aspect of the Company's activities, especially given that purchases of both raw materials and finished products or services take place in many countries around the world, which may vary over time due to macroeconomic factors. In general, the philosophy guiding Monnalisa's collaboration with its main suppliers is based on building long-term partnerships, which involve sharing objectives and tools to identify professional solutions that prioritize quality and efficiency, thereby achieving mutually satisfactory results. The methods for selecting and evaluating suppliers, based not only on product aspects but also on ethical criteria, are designed to foster a lasting collaboration grounded in shared values. The effectiveness of this process is evidenced by the continuity and stability of the relationships established with key suppliers. The Company tends to prioritize suppliers with whom it collaborates in research, development, and testing.

7. RELATIONS WITH FINANCIAL INSTITUTIONS

   Debt relates primarily to the holding company. The activities covered by the bank-company relationship include the execution of loans, foreign exchange hedging, asset sales, management of collections and payments, financing and credit lines, and the opening of documentary credits. The structure of the debt presents a good balance between short- and long-term obligations.

   Use of Financial Instruments

   Derivative financial instruments may be used to hedge financial risks related to changes in exchange rates on commercial transactions in foreign currency or to hedge financial risks arising from changes in variable interest rates on specific medium- to long-term financing transactions. At present, the Group has in place only hedges against risks arising from changes in interest rates.

8. INVESTMENTS

   During the period, the Group made investments in the following areas:

   Fixed Assets	Investments for the year
   Industrial rights and patents	11,700
   Land and buildings	71,926
   Plant and machinery	39,893
   Industrial and commercial equipment	12,557
   Other assets	5,380
   Assets under construction and advance payments	15,601
   Improvements to third-party property	105,398
   Total	262,456

9. INFORMATION REGARDING RELATIONS WITH THE ENVIRONMENT AND EMPLOYEES

   In accordance with the provisions of Article 2428, paragraph 2, of the Italian Civil Code, we hereby state the following:

   • no complaints have been filed regarding damage caused to the environment;

   • no final sanctions or penalties have been imposed for environmental crimes or damage;

   • no violations of environmental protection regulations have been alleged.

     The Group has not implemented specific environmental impact policies because they are not necessary in relation to its operations.

     The holding company has an ISO 14001-certified environmental management system. Environmental improvement objectives are defined annually, and their achievement is then reported in the integrated financial statements, together with the environmental indicators required by the GRI (Global Reporting Initiative). To supplement the information provided in the Notes to the consolidated financial statements as of December 31, we clarify the following:

   • there were no workplace fatalities among personnel listed in the employee register;

   • there were no serious workplace accidents resulting in serious or very serious injuries to employees on the payroll;

   • no claims were filed regarding occupational diseases involving employees or former employees, nor were there any cases of workplace bullying for which the company was definitively held liable;

   • the Company has implemented personnel safety measures to bring the company into compliance with applicable legal provisions.

   The parent company adopts all appropriate measures to protect the health and safety of the workplace through the application of standard procedures (risk assessment, occupational health monitoring plan) and with the support of qualified professionals (Managers, Supervisors, Occupational Physician, and Head of the Prevention and Protection Service as per Legislative Decree 81/2008). The prevention of occupational risks is a fundamental principle guiding the Company and represents an opportunity to improve the quality of life in the Company's plants and offices; with this in mind, training and awareness initiatives for employees and, more generally, for all workers on issues concerning workplace safety have continued. These activities were implemented through training and information initiatives (conducted via specialized courses), the implementation of the occupational health surveillance plan, and the dissemination of notices and circulars as required by relevant regulations. In compliance with the provisions of Legislative Decree No. 81 of 2008,

   additional investments were made to ensure that facilities and equipment meet the requirements of the aforementioned legislation.

10. RESEARCH AND DEVELOPMENT ACTIVITIES

    Pursuant to and for the purposes of the provisions of point 1) of the third paragraph of Article 2428 of the Italian Civil Code, it is hereby certified that no research and development activities were carried out during 2025.

11. RELATED-PARTY TRANSACTIONS

    Transactions between the various companies are governed by current market conditions. The following table details the terms of significant transactions carried out in 2024, by company:

    • Jafin S.r.l.: a financial company with which Monnalisa has lease agreements in place for certain properties used for the company's operations

    • Fondazione Monnalisa: a non-profit entity that carries out philanthropic activities in the Arezzo area

    • Barbara Bertocci: creative director of Monnalisa

    • Diletta Iacomoni: fashion coordinator at Monnalisa

    • Monnalisa Hong Kong Ltd: retail development company in Hong Kong

    • Monnalisa China Ltd: a retail development company in China

    • Monnalisa Rus LLC: a retail and wholesale development company in Russia

    • ML Retail USA Inc: retail development company in the U.S.

    • Monnalisa Bebek Gygim Sanayi Ve Ticaret A.S.: retail development company in Turkey

    • Monnalisa Japan: retail development company in Japan

    • Monnalisa International: retail development company in Taiwan

    • Monnalisa UK Ltd: retail development company in the United Kingdom

    • Monnalisa Singapore: company for retail channel development in the local market

    • Monnalisa San Marino srl: company for retail channel development in the local market

    The following table details the economic and financial aspects of the relationships as of December 31, 2025:

    Related party	Receivables	Financial receivables	Liabilities	Revenues	Costs
    Jafin S.r.l.	26,295		242,378	11,895	150,598
    Monnalisa Foundation	164,753			158,961	110,489
    Barbara Bertocci			48,600		30,000
    Diletta Iacomoni			15,647		260,422
    Monnalisa Hong Kong Ltd	1,733,079	970,000	198,153	105,902	18,467
    Monnalisa China LLC				66,033	14,075
    Monnalisa Rus LLC	1,356,522			1,529,249
    ML Retail USA Inc	3,176,641	1,749,746	697,086	680,528	114,855
    Monnalisa Baby Clothing Industry	341,999	10,000	83,729	196,599	26,654
    Monnalisa UK Ltd	1,115,532	635,584		319,348
    Monnalisa Taiwan	511,470	155,000			20,988
    Monnalisa Japan	0	0		1,072
    Monnalisa Singapore Ltd	557,707	125,000		113,451	4,261

    Monnalisa San Marino S.r.l.	335,722			203,581
    Total	9,319,719	3,645,331	1,285,593	3,386,618	750,810

    75% of Monnalisa's shares are held by Jafin Due S.r.l., which, pursuant to Article 2497-sexies of the Italian Civil Code ( ), exercises management and coordination activities .

12. TREASURY SHARES AND SHARES/INTERESTS IN PARENT COMPANIES

    At the end of the fiscal year, Monnalisa S.p.A. held 18,075 treasury shares with a total value of €149,915, purchased pursuant to the Company's treasury share buyback and disposal program approved on January 16, 2019, by the Board of Directors of Monnalisa S.p.A. in accordance with the shareholders' meeting resolution of June 15, 2018.

    The treasury shares may be sold at any time, in whole or in part, on one or more occasions, through their sale on the market, in blocks, or otherwise off-market, via accelerated bookbuilding, or through the transfer of any real and/or personal rights relating to them (including, by way of example, securities lending), as well as in the context of industrial projects or extraordinary finance transactions, through exchange, swap, or contribution transactions or other methods involving the transfer of treasury shares at a price or value deemed appropriate in line with the transaction, also taking into account market trends.

13. OTHER INFORMATION

In order to comply with the provisions of the Euronext Growth Milan Issuers' Regulations (formerly AIM Italia

/ Mercato Alternativo del Capitale) updated as of October 25, 2021, the Company has adopted specific corporate governance procedures such as:

• an Internal Dealing procedure designed to regulate disclosure obligations regarding certain transactions carried out by the Company's directors;

• regulations for the management and handling of corporate information and for the external disclosure of inside information;

• a procedure for transactions with related parties aimed at regulating the identification, approval, and execution of transactions carried out by the Company with related parties in order to ensure the transparency and fairness, both substantive and procedural, of such transactions;

• procedure for fulfilling disclosure obligations to the Euronext Growth Advisor.

1 4. SIGNIFICANT EVENTS OCCURRING AFTER THE END OF THE PERIOD AND FORECAST BUSINESS OUTLOOK

Pursuant to the third paragraph of Article 2428 of the Italian Civil Code, the following are the significant events that occurred after the end of the period and that may have a material impact on the Group's performance.

Resolution on Capital Increase

At its meeting on February 24, 2026, the Board of Directors of Monnalisa resolved to propose to the Shareholders' Meeting that it proceed with a capital increase of €1 million, excluding subscription rights pursuant to Article 2441, paragraph 4, second sentence, of the Italian Civil Code, as well as Article 7.4 of the current Articles of Association, to be offered for subscription in equal shares of 50% each to the majority shareholder (Jafin Due, which currently holds 74.48% of the Company's capital) and to a third-party investor, represented by the family of Arezzo-based entrepreneur Massimo Anselmi, owner, among other businesses, of Vivetta, a company active in the "premium" fashion segment.

The transaction is part of a strategic repositioning process aimed at transforming Monnalisa from a premium brand focused on children's wear into an integrated platform for design, product development, operations, and international omnichannel distribution, progressively expanding its scope of operations to include the premium men's and women's segments as well.

The decision was made ahead of the commitments made by the majority shareholder to the banking sector, following the implementation of the group's new restructuring and relaunch plan, launched in May 2024, which is based on three value creation drivers:

1. Strengthening the core business: Consolidation of the premium children's wear segment, greater omnichannel integration, rationalization of the retail network, and optimization of working capital.

2. Diversification and multi-segment development: Leveraging creative, production, and distribution expertise to develop industrial partnerships and licensing in the premium adult segment, with the aim of increasing volumes, margins, and revenue quality.

3. Operational efficiency and financial discipline: Structural cost reduction, supply chain optimization, and capital strengthening to support financial stability in the medium term.

Specifically, the strategic plan calls for the consolidation of channels managed directly under the Monnalisa brand, as well as the continuation of the strategy to seek new licensing or manufacturing agreements with adult fashion brands, aimed not only at increasing volumes but also at enhancing the Group's profitability by creating new revenue streams and boosting corporate profitability. In parallel, the groundwork has been laid for targeted actions aimed at containing and reducing operating costs through a tailored cost-saving plan, as well as optimizing the network of directly operated retail stores deemed underperforming from a medium-to long-term perspective. Although the actions and initiatives already identified by the new management, together with others currently under consideration, have contributed and may still contribute positively to achieving financial equilibrium in the medium term, the situation of uncertainty and market downturn, which has now persisted for several fiscal years, has inevitably led to and progressively exacerbated a situation of financial strain for the Group, with significant effects particularly on the management of short-term financial exposure. In this regard, since taking office (in May 2024), management has promptly taken action with banks and suppliers to ensure short-term financial stability and, in parallel-including with the support of external advisors-to define a strategy aimed at restoring overall operational stability and a gradual return to profitability.

In this context, the Board of Directors has therefore decided to propose to the shareholders' meeting that a capital increase (initially scheduled under the recovery plan by 2028) be brought forward through a capital

increase reserved for the majority shareholder and a third-party operator (the Anselmi family) in the fashion market.

The transaction proposed by the Board of Directors therefore provides for a total increase in the share capital of Monnalisa S.p.A. up to €1,000,000, an amount corresponding to 10% of the existing share capital, with the exclusion of subscription rights pursuant to Article 2441, paragraph 4, second sentence, of the Italian Civil Code, as provided for in Article 7.4 of the current Articles of Association, offered for 50% (fifty percent) to JAFIN DUE S.r.l. (hereinafter "Jafin2 Shareholder"), and the remaining 50% (fifty percent) to Modamet S.r.l., a company linked to Arezzo-based entrepreneur Massimo Anselmi, owner, among others, of Vivetta S.r.l., which operates in the "premium" women's fashion segment.

In order to raise the funds necessary to subscribe to the capital increase, the shareholders' meeting of JAFIN DUE S.r.l. resolved on February 23, 2026, to carry out a capital increase for a maximum amount of €700,000, to be paid in full in cash. The transaction will be carried out through the issuance of shares of corresponding value, the subscription of which-in the event that shareholders do not exercise their subscription rights (some of whom have already decided to waive them)-and for the entire unopted portion, will be reserved for Finmat S.r.l., a holding company headed by Mr. Matteo Tugliani, Chief Executive Officer of Monnalisa

S.p.A. In this regard, the proposed transaction does not entail a change in control of the Company, which will remain with the same family, to which the Chief Executive Officer belongs, as the spouse of the majority shareholder of JAFIN DUE SRL, Diletta Iacomoni, who already exercises control over the Issuer.

In compliance with the provisions of Article 2441, paragraph 4, second sentence, of the Italian Civil Code, the proposed transaction is based on valid economic and industrial reasons of particular significance, which necessitate an immediate and targeted capital strengthening initiative, as well as the entry of strategic partners possessing distinctive expertise essential for the Company's future development.

If completed, the Transaction will ensure the Company:

-the exploitation of the benefits arising from the association of the "MOA Concept" sneaker brand owned by Fashion Gate S.r.l. (attributable to Matteo Tugliani) and the "premium" women's fashion brand of Vivetta

S.r.l. ("Made in Vivetta") with the internationally renowned premium kidswear brand "Monnalisa" of Monnalisa S.p.A.;

-access to the Monnalisa Group's extensive omnichannel distribution network;

-the realization of significant operational and cost synergies with the Monnalisa Group, including, but not limited to, design, sampling, production, and logistics. At the same time, the transaction will enable the Monnalisa Group to expand its business-currently focused on the premium kidswear segment-into the world of accessories through the MOA Concept brand and into "premium" women's fashion through the Vivetta brand, while also benefiting from significant operational and cost synergies. Considering that the weighted average trading price of MONNALISA common shares over the last three months on the EGM market was €0.96 (zero point nine six) per common share, the issue price of the new shares (supported by an appraisal prepared in accordance with the law by an independent auditor) is proposed at €1.15 (one point fifteen) per share (hereinafter, the "Issue Price of the New Shares"), which incorporates a 20% premium over the weighted average price of the last three months. The aforementioned Issue Price of the New Shares also

incorporates a premium of approximately 31% over the price recorded by Monnalisa shares on February 23 (€0.88). Consequently, having determined the total consideration of €1,000,000 that Shareholder Jafin2 and Modamet S.r.l. will be required to pay "pro-rata" in connection with the subscription of the new shares of Monnalisa S.p.A., the Company will proceed with the issuance of a corresponding number of new shares, namely 869,565.

The capital increase consolidates the capital structure, strengthens the credibility of the business plan, introduces complementary industrial expertise in the adult premium segment, and accelerates the evolution toward a scalable multi-segment platform model. The global macroeconomic environment remains volatile, but in the face of this uncertainty and unpredictability, the Group is continuing to work in line with its strategic plan, the pursuit of which has been significantly accelerated thanks to the aforementioned transaction, enabling Monnalisa to take an important step toward an integrated platform model of design and omnichannel distribution at the international level. All of this is accompanied by even stricter measures to contain operating costs, the effects of which are already clearly visible as of 2025 and will be even more so starting next fiscal year.

The environment in which the Group operates still calls for a cautious approach to the short-term outlook, but the Group is proceeding with energy and optimism in the implementation of its strategic plan, which aims to progressively expand its scope not only in children's wear-which remains the Group's core identity- but also in the premium men's and women's fashion segment, leveraging its historical DNA and its ongoing commitment to innovation and creativity-qualities already present and further strengthened by the arrival of new partners.

U.S. Supreme Court Ruling on IEEPA Tariffs

On February 20, 2026, the U.S. Supreme Court issued a decision of international significance regarding trade policy, ruling that the International Emergency Economic Powers Act (IEEPA) does not grant the President of the United States the authority to impose tariffs. The Court, in a 6-3 vote, clarified that the authority to "regulate" imports under the IEEPA does not include the imposition of tariffs, which instead falls within Congress's ordinary taxing power. The decision invalidated the IEEPA tariffs imposed in 2025, including those related to the so-called "Reciprocal Tariffs" and other tariffs linked to declared emergencies. However, the Court did not address the retroactive effects of the ruling or the procedures for any refund of duties already collected, creating a situation of operational uncertainty left to administrative authorities and proceedings currently pending before the Court of International Trade (CIT). Subsequently, the CIT ordered the Customs and Border Protection (CBP) to proceed with the assessment and, where applicable, the reassessment of imports without applying IEEPA duties, potentially extending access to refunds to all record importers, even in the absence of specific litigation. However, an appeal by the federal administration remains possible, as does the introduction of new tariff regimes based on different legal grounds, such as Section 122 of the Trade Act of 1974.

Although at present there are no direct and measurable impacts on procurement costs or on the commercial

terms adopted by the Group, management will continue to monitor developments in the U.S. regulatory and judicial framework in order to promptly assess any effects on margins, the supply chain, and contractual relationships with U.S. and international operators.

Geopolitical events and potential impacts

During the first few months of fiscal year 2026, there was a significant deterioration in the geopolitical situation in the Persian Gulf region, following the military escalation between the United States, Israel, and Iran that began on February 28, which led to the closure of the Strait of Hormuz and major disruptions in global supply chains for oil and liquefied natural gas (LNG). The Strait is the world's main energy corridor, and its closure has caused significant volatility in energy commodity prices, with Brent crude oil prices consistently exceeding $100 per barrel and significant increases in European gas benchmarks. Although the Company does not have direct commercial relationships with counterparties operating in the countries involved, the evolution of the conflict and the continuation of geopolitical tensions could indirectly affect the macroeconomic environment, energy costs, and, more generally, conditions in the relevant markets. As of the date of approval of these financial statements, there are no direct impacts on the figures reported in this Financial Report; however, the directors continue to closely monitor developments in the region and their potential repercussions on the Company's operations, in accordance with the internal control and risk management system.

On behalf of the Board of Directors of Monnalisa S.p.A. Chairperson Piero Iacomoni

Financial Statements

Consolidated Income Statement

(Euro) Notes 31.12.2025

of which with 31.12.2024

related parties

of which with related parties

Consolidated Statement of Comprehensive Income

Consolidated Balance Sheet and Financial Statements

(Euro) Notes 31.12.2025

NON-CURRENT ASSETS

of which with 31.12.2024

related parties

of which with related parties

Property, plant, and equipment 13 13,202,746 13,877,164

Statement of Changes in Consolidated Equity

Consolidated Cash Flow Statement

(Euro) 31.12.2025

of which with related

parties

31.12.2024

of which

with related parties

Net income for the period (5,715,606) (6,088,873) Adjustments to reconcile net income with cash flows generated (used)

by operations:

Increase (decrease) in net cash from continuing operations 207,606 (3,144,975)

Increase (decrease) in net cash from discontinued operations 34 23,749

1. GENERAL INFORMATION

   1. Corporate Information

      Monnalisa S.p.A., hereinafter also referred to as the "Company" or "Holding Company," is a corporation incorporated and domiciled in Italy, with its registered office at Via Madame Curie No. 7, organized as a joint-stock company, governed by Italian law, and structured in accordance with the legal system of the Italian Republic. It is organized according to the traditional management and control model, comprising the Shareholders' Meeting, the Board of Directors, and the Board of Statutory Auditors. The Company's shares are traded on Euronext Growth Milan, managed by Borsa Italiana S.p.A.

      The Monnalisa Group operates in a single business segment focused on the design, production, and distribution of high-end children's wear for ages 0-16 under the eponymous brand, through multiple distribution channels.

      The consolidated financial statements for the fiscal year ended December 31, 2025, were approved by the Board of Directors on March 16, 2026, and are derived from the financial statements for the period of the Holding Company and the companies in which the Company directly or indirectly holds a controlling interest or exercises control.

   2. Management and Coordination

      Monnalisa S.p.A. is subject to management and coordination, pursuant to Article 2497 et seq. of the Italian Civil Code, by Jafin Due S.r.l., with registered office in Arezzo, Via Madame Curie. In compliance with the provisions of Article 2497-bis, paragraph 4, of the Italian Civil Code, the key financial data from the financial statements as of December 31, 2024, and December 31, 2023, of Jafin Due S.r.l. are presented below:

      (Euro)	31.12.2024	31.12.2023
      A) Receivables from shareholders for payments still due
      B) Fixed assets	7,822,892	6,904,002
      C) Current assets	146,241	354,580
      D) Prepaid expenses and accrued income	5,615	199
      TOTAL ASSETS	7,974,748	7,258,781
      Share capital	810,000	800,000
      Reserves	7,070,102	6,463,622
      Net income (loss) for the year	6,737	(83,520)
      Total equity	7,886,839	7,180,102
      B) Provisions for risks and charges
      C) Employee severance pay
      D) Liabilities	87,909	78,679
      E) Accrued liabilities and deferred income
      TOTAL LIABILITIES AND NET EQUITY	7,974,748	7,258,781

2. MAIN ACCOUNTING PRINCIPLES

   1. Content and Form of the Consolidated Financial Statements

      The Company's consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board ("IASB"), as adopted by the European Union and effective as of the balance sheet date.

      The Group's consolidated financial statements consist of the consolidated balance sheet, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of cash flows, the statement of changes in equity, and the related notes.

      The following are the financial statement formats and related classification criteria adopted by the Group, within the scope of the options provided for by IAS 1 - Presentation of Financial Statements:

      Consolidated Statement of Financial Position: distinguishes between current and non-current assets and liabilities, where non-current assets comprise asset balances with a realization period exceeding twelve months and include intangible, property, plant, and equipment, and financial assets, as well as deferred tax assets; current assets comprise asset balances with a realization period of twelve months or less; non-current liabilities include payables due in more than twelve months, including financial liabilities, provisions for risks and charges, employee benefit liabilities, and deferred tax liabilities; current liabilities include payables due within twelve months, including the current portion of medium- and long-term loans, provisions for risks and charges, and employee benefit liabilities;

      Consolidated Income Statement: It is presented using a classification of costs by nature, a format considered the most representative and reliable way to present the expenses and costs incurred by the Group during the period. The interim "Operating Income" (defined as the difference between revenues and operating costs) is presented as an essential margin for understanding the Group's ordinary earning capacity, prior to remuneration of third-party investors, the government, and shareholders;

      Statement of Comprehensive Income: the Group has decided to present the income statement and the statement of comprehensive income in two separate statements. The latter includes other components of comprehensive income, which may be reclassified to the income statement in subsequent periods or which will not be reclassified to the income statement in subsequent periods;

      Statement of Cash Flows: The consolidated statement of cash flows presents cash flows from operating, investing, and financing activities and is presented in accordance with IAS 7. Cash flows from operating activities are presented using the indirect method, whereby net income for the year or period is adjusted for the effects of non-cash transactions, any deferrals or accruals of past or future operating receipts or payments, and items of revenue or expense related to cash flows arising from investing or financing activities;

      Statement of Changes in Consolidated Equity: The statement of changes in consolidated equity shows the comprehensive income for the period and the effect, for each equity item, of changes in accounting policies and corrections of errors, as required by International Accounting Standard No. 8. In addition, the statement presents the balance of accumulated gains or losses at the beginning of the period, the movements during the year, and the balance at the end of the year.

      The consolidated financial statements are presented in euros, which is the currency of the primary economic environment in which the Group operates, and all amounts are rounded to the nearest thousand euros, unless otherwise indicated.

      The following sections detail the main accounting policies and principles applied in the preparation of the Consolidated Financial Statements. In accordance with IAS 24, the following paragraphs highlight transactions with the Group's related parties and their impact, if material, on the statement of financial position, income statement, and cash flows.

   2. Accounting principles used in the preparation of the consolidated financial statements

      The consolidated financial statements have been prepared on a historical cost basis, except for derivative instruments and financial assets held for sale (if any), which are recognized at fair value, and on a going concern basis.

      The most significant accounting principles adopted in the preparation of the Consolidated Financial Statements are set forth in the following sections:

      1. Property, plant, and equipment

         Property, plant, and equipment are recognized at historical cost, net of the related accumulated depreciation and accumulated impairment losses, including directly attributable incidental costs necessary to make the assets ready for use.

         The carrying amount of property, plant, and equipment is subsequently adjusted by depreciation calculated on a straight-line basis from the time the asset is available and ready for use, based on its estimated useful life-defined as the estimated period during which the asset will be used by the company-and any accumulated impairment losses.

         The Group reviews the estimated residual values and expected useful lives of its property, plant, and equipment at least annually. In particular, the Group considers the impact of health, safety, and environmental regulations when assessing expected useful lives and estimated residual values. The carrying amount of an item of property, plant, and equipment and any significant component initially recognized is derecognized upon disposal (i.e., on the date the buyer obtains control) or when no future economic benefits are expected from its use or disposal. The gain or loss arising upon the derecognition of the asset (calculated as the difference between the asset's net carrying amount and the consideration received) is recognized in the income statement when the asset is derecognized.

         The residual values, useful lives, and depreciation methods of property, plant, and equipment are reviewed at each year-end and, where appropriate, adjusted prospectively.

         If significant portions of such property, plant, and equipment have different useful lives, these components are accounted for separately. Land, whether vacant or attached to buildings, is recognized separately and is not depreciated as it has an indefinite useful life.

         Costs for improvements, modernizations, and conversions that increase the value of property, plant, and equipment are capitalized when it is probable that they will increase the future economic benefits expected from the use or sale of the asset.

         Expenses incurred for maintenance and repairs are charged directly to the income statement for the fiscal year in which they are incurred.

         The annual depreciation rates used are as follows:

         Category	%
         Industrial buildings	3%
         Machinery and equipment	12.50%
         Cutting machines and automated machinery	17.50%
         Office furniture and general office equipment	12%
         Electromechanical and electronic office machines	20%
         Commercial vehicles	20%
         Equipment	25%
         Passenger cars	25%
         Solar power systems	9%
         Improvements to third-party property	The shorter of the asset's useful life and the remaining term of the contract

         It should be noted that, in accordance with the provisions of IAS 16, improvements to third-party assets previously recorded under intangible assets have been reclassified to the relevant asset category in the line item under review. The carrying amount of property, plant, and equipment is reviewed for impairment whenever events or changes in economic conditions indicate that the carrying amount may not be recoverable. If there is such an indication and if the carrying amount exceeds the recoverable amount, the assets are impaired accordingly, aligning the carrying amount with the recoverable amount or fair value. The fair value of property, plant, and equipment is the higher of the net selling price and the value in use. To determine the value in use, expected future cash flows are discounted using a discount rate that reflects the current market estimate of the cost of capital and the risks specific to the asset. For an asset that does not generate independent cash flows, the fair value is determined in relation to the revenue-generating unit to which the entity belongs. Impairment losses are recognized in the income statement under depreciation, amortization, and impairment charges. Impairment losses are reversed if the reasons that gave rise to them no longer exist.

      2. Intangible Assets

Separately acquired intangible assets are initially recognized at cost, while those acquired through business combinations are recognized at fair value as of the acquisition date. After initial recognition, intangible assets are carried at cost net of accumulated amortization and any accumulated impairment losses. Internally generated intangible assets, with the exception of any development costs, are not capitalized and are recognized in the income statement of the fiscal year in which they were incurred.

The useful life of intangible assets is assessed as finite or indefinite. Intangible assets with a finite useful life are amortized over their useful life and are tested for impairment whenever there are indications of a possible impairment. The amortization period and amortization method for an intangible asset with a finite useful life are reviewed at least at each year-end. Changes in the expected useful life or in the manner in which the future economic benefits associated with the asset will be realized are recognized by adjusting the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization rates applied to the Group's intangible assets with a finite useful life are as follows: