Investment Guidelines

Space3 S.p.A. has not identified specific sectors for its target company. Space3 S.p.A., however, expects to concentrate its search in those industries that are typically associated with Italian industrial excellence, including, luxury goods, apparel, furniture, design and food and beverage sectors, as well the bio-medical sector and the advanced mechanical industry. The foregoing list of business sectors and industries on which the Company expects to focus its attention is for illustrative purposes only and not exhaustive. However, the Company has excluded from its otherwise broad range of targets the following industries: raw materials, real estate, banking and arms manufacturing. In addition, the Company does not intend to invest in targets operating in business sectors or in ways that are contrary to generally recognized standards of ethics.

Space3 S.p.A. has developed general criteria and guidelines for evaluating and selecting potential target companies.

Performance
Space3 intends to focus its interest on companies that have historically achieved positive operating and financial results. Space3 does not intend to target companies in the startup phase or companies involved in situations of financial distress and/or in debt restructuring plans.

International presence or plans for international growth
Space3 intends to focus on target companies that have a solid international platform or the ability to expand outside their domestic market, even if their identity as well as management and coordination hubs  are in Italy.

Growth prospects
Space3 intends to target companies with significant expected growth rates, taking into account, for example, the projected growth rates of their industries, the competitive dynamics, the level of consolidation in their reference markets and their investment prospects.

Competitive positioning
Space3 intends to target companies that have a distinctive market position in their reference sectors. More specifically, in this regard, the company will assess the strengths and weaknesses of the target companies focusing, for example, on such factors as product quality, degree of customer loyalty, level of patent protection, diversification of the customer and supplier base as well as brand positioning.

Cash generation
Space3 intends to focus on target companies with a history and the ability of generating-positive, stable cash flows to fund their ordinary investments and generate adequate remuneration for invested capital over time.

Management
Space3 intends to focus on target companies with a strong and experienced management team, with a proved ability to fulfil a continuous growth pattern, with ongoing profitability and financial stability.