Diamanti Per Tutti 1A

1.      Risk associated with the need for new financing

Risk: Given the expansion of activities and the investments in new channels (e.g., retail in transportation hubs, digital growth), it is likely that additional financing will be needed.

Consequence: On the one hand, there is the risk that the company will not find investors, which would lead to the dissolution or bankruptcy of the company, causing the investor to lose part or all of his investment. On the other hand, there is the possibility that the company will find new investors, which will lead to dilution, if the convertible loan is converted into shares, which will be even greater if there is a lower valuation than the one used for conversion of the loan.

1.        Risk associated with the market

Risk: The jewelry market can be sensitive to economic recessions and shifts in consumer preferences for discretionary purchases.

Consequence: A decline in consumer demand can lead to reduced sales, unsold inventory (among wholesale customers), resulting in slower growth/sales and pressure on profit margins as it may be necessary to contribute to discount schemes.

2.        Risk associated with the brand and reputation

Risk: The DPT brand could be negatively affected by quality issues, misconduct by influencers, or poor customer service experiences.

Consequence: Customer confidence and brand value could be damaged, leading to lower conversion rates, customer churn, and a long-term loss of brand value. This could lead to a lower valuation in the event of a possible exit because the business plan could not be executed as planned. In that case, there could be lower or even non-existent returns. In the worst case, there could even be a liquidation and bankruptcy of DIAMANTI PER TUTTI, with partial or complete loss of the invested capital.

3.        Risk associated with supply chain risk

Risk: Global supply chains can be affected by political instability, natural disasters, or disruptions at key suppliers or logistics partners.

Consequence: Delays in production or delivery can affect inventory availability and sales, especially during peak seasons or product launches.

4.        Risk associated with retail and travel retail

Risk: Because DPT is heavily dependent on external retailers, it is exposed to changes in travel patterns, the performance of airlines/cruise lines/airports, or the strategies of retail partners.

Consequence: Revenue may decline due to unexpected drops in passenger traffic, airline restructuring, or loss of shelf space. This could lead to a lower valuation in the event of a possible exit because the business plan could not be executed as planned. In that case, there could be lower or even non-existent returns. In the worst case, there could even be a liquidation and bankruptcy of DIAMANTI PER TUTTI, with partial or complete loss of the invested capital.

5.        Risk associated with exchange rate risk and international risks

Risk: As an international company, DPT is exposed to currency fluctuations and must comply with various local regulations and cultural norms.

Consequence: Exchange rate volatility can erode margins, while a lack of local adaptation can limit success in new markets.This could lead to a lower valuation in the event of a possible exit because the business plan could not be executed as planned. In that case, there could be lower or even non-existent returns. In the worst case, there could even be a liquidation and bankruptcy of DIAMANTI PER TUTTI, with partial or complete loss of the invested capital.

6.        Risk associated with technology and cybersecurity

Risk: Due to its dependence on e-commerce and digital tools, DPT is exposed to cyber security threats and system failures.

Consequence: A breach or platform failure could compromise customer data, disrupt sales, and cause legal or reputational damage. This could lead to a lower valuation in the event of a possible exit because the business plan could not be executed as planned. In that case, there could be lower or even non-existent returns. In the worst case, there could even be a liquidation and bankruptcy of DIAMANTI PER TUTTI, with partial or complete loss of the invested capital.

7.               Risk associated with concurrency

Risk: The accessible luxury jewelry sector is highly competitive, with low barriers to entry and a rapidly changing landscape.

Consequence: Increased competition can lead to price pressure, reduced differentiation, and higher customer acquisition costs. This could lead to a lower valuation in the event of a possible exit because the business plan could not be executed as planned. In that case, there could be lower or even non-existent returns. In the worst case, there could even be a liquidation and bankruptcy of DIAMANTI PER TUTTI, with partial or complete loss of the invested capital.

Risk: The risk of insolvency means that the company does not have sufficient funds to meet its payment deadlines (insolvency). 

Consequence: If the company does not find alternative financing (shocked credit), it may go bankrupt. In that case, holders of subordinated claims—such as this Underlying Asset before conversion into shares—will only be paid by the trustee after the other creditors and just before the shareholders. In most cases, subordinated creditors are not paid in the event of bankruptcy.

Note: Although repayment of the convertible loan is an option for the lender, the intention is to convert the loan into shares. This means that, in the event of bankruptcy, the DIAMANTI PER TUTTI 1A compartment of Spreds Finance, as a shareholder, would only be repaid after all creditors.

1.           Risk associated with the lack of guarantees

Risk: Neither the convertible loan nor the shares of DIAMANTI PER TUTTI nor the Participatory Notes of the DIAMANTI PER TUTTI 1A compartment of Spreds Finance provide guarantees of a return or repayment of the invested capital. 

Consequence: Although repayment of the convertible loan is an option for the lender, the intention is to convert the loan into shares. This means that, in the event of bankruptcy, the DIAMANTI PER TUTTI 1A compartment of Spreds Finance, as a shareholder, would only be repaid after all creditors.

2.           Risk associated with the lack of a fixed return

Risk: Participatory Notes do not offer a fixed return. 

Consequence for both risks: The return of the Participatory Notes depends solely on the performance of the Underlying Asset, namely the convertible loan issued by DIAMANTI PER TUTTI and if and when the loan is converted into shares, shares of DIAMANTI PER TUTTI.  If the project owner's predictions do not come true (within the predetermined timing), there is a risk of lower or non-existent returns and, in the worst case, partial or complete loss of the invested capital. 

Risk: Although each Spreds Finance compartment is ‘bankruptcy remote’ (meaning that no other creditor can claim a right on or against this compartment) in relation to the others and in relation to the ‘general’ liabilities of Spreds Finance itself, as a result of (i) the terms and conditions of the Notes, (ii) the articles of association of Spreds Finance and (iii) article 4 of the Law of 18 December 2016 on crowdfunding; there is a subsidiary risk of  insolvency of Spreds Finance. 

Consequence: Should such insolvency occur, Noteholders may be exposed to the risk of a significant delay in the recovery of their investment. The probability of this risk occurring is extremely low given the structure and organization of Spreds Finance, in particular the compartmentalization mechanism and the "bankruptcy-remoteness" described above. Each participation taken or loan granted to a project owner is recorded in a separate compartment and is appropriately accounted for in the accounts, taking into account the fact that the accounts are kept by compartment. As a result of (i) the conditions attached to the issue of Participatory Notes, (ii) the articles of association of Spreds Finance and (iii) article 10 of the law regulating the recognition and delimitation of crowdfunding and containing various provisions relating to finance and notwithstanding articles 7 and 8 of the Mortgage Law of 16 December 1851, the assets of a particular compartment serve exclusively to guarantee the rights of investors with respect to this compartment.

1.               Risk associated with the absence of an organized exchange market for Participatory Notes

Risk: Neither the project owner nor Spreds Finance organizes an exchange market for Participatory Notes. It is thus up to the investor himself to find a buyer for his Participating Notes. Given the absence of an exchange market for Participatory Notes, there is no way to adequately establish a comparative pricing methodology for Participatory Notes.

Consequence: A holder of Participatory Notes may not be able to find a buyer for the Participatory Notes it wishes to sell (at the price at which it wishes to sell).

2.           Risk associated with liquidity of DIAMANTI PER TUTTI

Risk: Liquidity risk means that DIAMANTI PER TUTTI has the theoretical resources to meet its deadlines, but that these resources cannot be mobilized immediately (illiquid). This is the case, for example, when the resources in question are invested for the long term or are the subject of a loan to a third party.

Consequence: The illiquidity of DPT would lead to delays in payments or, in more serious cases, to the bankruptcy of the company.

1.               Risk associated with the absence of analysis by Spreds Finance

Risk: Spreds Finance has not conducted an analysis of the proposed project or of the financial situation of the Company.

Consequence: Any investor considering subscribing to Participatory Notes should make its own analysis of DIAMANTI PER TUTTI's solvency, activity, financial situation and prospects.

2.               Risk associated with the lack of (periodic) reporting

Risk: There is no obligation for periodic reporting in unlisted companies (except for the cases provided by law, such as the annual general meeting of shareholders and an alarm bell procedure). While some entrepreneurs proactively communicate good and bad news (with a certain periodicity), others do not. As a convertible loan holder (and in the case of subsequent conversion shareholder), one cannot enforce reporting (other than in those cases provided by law).

Consequence: If an entrepreneur does not do (periodic) reporting, there can be long periods during which investors have no insight into the (financial) state of the company. The lack of reporting does not in itself change the (financial) state of the company but can create a sense of unease among investors. If at some point a company has to file a procedure of judicial reorganization or bankruptcy, this can come as a (big) surprise for the investor.

3.               Risk associated with the absence of full verification of the key financial figures and ratios

Risk: DPT publishes abridged financial statements. This means that certain figures (such as turnover) do not have to be published. DPT has chosen not to publish these figures. As a result, certain key financial figures and ratios could not be verified by the crowdfunding service provider in the financial statements, including the amount of shareholder loans, which is not officially published anywhere.

Consequence: There is a risk that the figures are incorrect. This may influence investors' analysis.

4.               Risk associated with a convertible loan

Risk: There is a risk that at the time of conversion -when Spreds Finance negotiates a shareholder agreement- the other shareholders do not agree to certain clauses that Spreds Finance negotiates, such as, for example, a proportional tag along right or a joint drag along obligation. 

Consequence: Spreds Finance therefore cannot guarantee the inclusion of these clauses in a shareholder agreement.

Risk: As of 1 January 2026, a tax on capital gains will apply upon the sale of assets. The shares of DPT will fall within the scope of this capital gains tax in the event of an exit.

Consequence: If the capital gain realized on the sale of DPT shares exceeds the exemption (of €10,000 – which may be increased to €15,000), investors will have to pay tax on this gain.

Note: As mentioned above, there is a €10,000 exemption (this amount will be indexed annually in line with inflation). 

To the best knowledge of the project owner, there are no other material risks associated with their activities.