{"url_path":"/sec/shmdw/10-k/2026/item-10","section_key":"item-10","section_title":"Item 10 ADDITIONAL INFORMATION**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1987240/0001104659-26-062643-index.html","accession_number":"0001104659-26-062643","cik":"0001987240","ticker":"SHMD","issuer_name":"SCHMID Group N.V.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1987240/0001104659-26-062643-index.html","primary_entity_key":"0001987240","primary_entity_name":"SCHMID Group N.V."},"word_count":19150,"has_tables":true,"body_markdown":"**ITEM 10. ADDITIONAL INFORMATION**\n\nA. Share Capital\n\nNot applicable.\n\nB. Memorandum and Articles of Association\n\nThe information set forth in Exhibit 2.1 “*Description of Securities*” and the copy of our Amended and Restated articles of association filed as Exhibit 1.1, which are each incorporated herein by reference.\n\nC. Material Contracts\n\nExcept as otherwise disclosed in this Annual Report (including the exhibits thereto), we are not currently, and have not been in the last two years, party to any material contract, other than contracts entered into in the ordinary course of business.\n\n72\n\n[Table of Contents](#TOC)\n\nMaterial Contracts Relating to the Business Combination\n\n**Business Combination Agreement**\n\nOn May 31, 2023, Pegasus, Gebr. Schmid GmbH, TopCo and Merger Sub entered into the Business Combination Agreement which was amended by that First Amendment to Business Combination Agreement dated as of September 26, 2023 and which was further amended by the Second Amendment to Business Combination Agreement dated as of January 29, 2024, and which provided for, among other things, that Pegasus was selling TopCo to the shareholders of Gebr. SCHMID GmbH for nominal consideration; the shareholders of Gebr. Schmid GmbH were contributing their shares in Gebr. Schmid GmbH to TopCo in return for 28,725,000 TopCo shares; Pegasus then merged with Merger Sub, with Pegasus as the surviving company. In connection with the merger, each issued and outstanding share of Pegasus were, as a result of the Business Combination Agreement, automatically cancelled and extinguished in exchange for merger consideration and each outstanding warrant to purchase a Pegasus Class A share was, by its terms, converted into a warrant to purchase one TopCo share, on the same contractual terms and conditions as were in effect with respect to such warrants immediately prior to the closing of the merger; and immediately thereafter, a notarial deed was agreed to be executed by a Dutch notary in order to change the legal form of TopCo from a private limited liability company to a public limited liability company and its name changed to SCHMID Group N.V. The events set out in the Business Combination Agreement were completed on April 30, 2024.\n\n**Earn-out Agreement**\n\nIn connection with the execution of the Second Amendment to Business Combination Agreement, Pegasus, TopCo and Anette Schmid and Christian Schmid entered into an earn-out agreement pursuant to which (i) 2,500,000 TopCo shares are issued to Anette Schmid and Christian Schmid (in equal parts) and vest if the share price of TopCo following the completion of the Business Combination reaches USD 15.00 and (ii) 2,500,000 TopCo shares are issued to Anette Schmid and Christian Schmid (in equal parts) and vest if the share price of TopCo following the completion of the Business Combination reaches USD 18.00 (the “**Earn- out Agreement**”). The Earn-out Agreement expires after three (3) years from the date of the closing of the Business Combination.\n\n**Shareholders’ Undertaking**\n\nIn connection with the Business Combination Agreement, Pegasus and the existing shareholders of Gebr. Schmid GmbH entered into a Shareholders’ Undertaking pursuant to which, among other things, each such existing shareholder (a) granted or will grant, as applicable, Gebr. Schmid GmbH and TopCo with a power of attorney permitting and directing Gebr. Schmid GmbH and/or TopCo to execute the necessary transfer documents (on behalf of such existing shareholder of Gebr. Schmid GmbH), required pursuant to Dutch and German law, to effect the closing of the Business Combination Agreement, (b) undertook, vis-à-vis the Company, TopCo, Pegasus and each other existing shareholder of Gebr. Schmid GmbHto take all necessary or desirable actions in connection with the transactions set forth in the Business Combination Agreement and (c) agreed, to certain customary covenants to support the Business Combination.\n\nIn the First Amendment to the Shareholders’ Undertaking, the parties agreed that Christian Schmid can transfer up to 1.5% of the shares in SCHMID prior to the closing of the Business Combination, subject to such third party acceding to the lock-up arrangements and other obligations in relation to such shares.\n\n**Sponsor Support Agreement**\n\nIn connection with their entry into the Business Combination Agreement, the Sponsor, Pegasus, TopCo and Gebr. Schmid GmbH and certain individuals entered into the Sponsor Support Agreement, pursuant to which the Sponsor and other holders of founder shares have agreed (a) to vote in favor of the Business Combination Agreement and the transactions contemplated thereby and take all actions reasonably necessary to cause the closing of the Business Combination, including execution of the TopCo Ordinary Shareholder approval and (b) forfeit 2,812,500 Pegasus Class B Ordinary Shares that would otherwise have converted into TopCo Ordinary Shares in connection with the Merger for no consideration which may be used for incentives for non- redemption agreements or for PIPE investors (and if not used for such purposes, will be cancelled).\n\n73\n\n[Table of Contents](#TOC)\n\n**Lock-Up Letter and Agreements to Remove Lock-ups**\n\nIn connection with the Business Combination Agreement, TopCo, the Sponsor and the existing shareholders of Gebr. Schmid GmbHentered into a Lock-Up Letter imposing certain restrictions on such shareholders ability to offer, sell, pledge or otherwise transfer or dispose of the shares they will receive in TopCo unless and until certain conditions outlined therein are met.\n\nOn February 27, 2024, Pegasus, the Sponsor, Gebr. Schmid GmbH, TopCo, and certain members of the board of directors and management of Pegasus entered into an agreement pursuant to which 2,812,500 Pegasus Class B Ordinary Shares are to be used as incentives to entice existing holders of Pegasus Class A Shares or new investors to enter into non-redemption and investment agreements. In order to enable the use of such Pegasus Class B Ordinary Shares, the agreement also lifts and waives the lock-up periods applicable thereto as well as any restrictions on the transfer of such shares.\n\nFurthermore, on April 29, 2024, Pegasus, the Sponsor and TopCo agreed to also lift and waive the lock-up periods applicable to 1,375,000 shares held by certain 2021 IPO anchor investors in order to increase the freefloat of the Company after the closing of the Business Combination.\n\n**Registration Rights Agreement**\n\nAt the closing of the Business Combination, TopCo has entered into a Registration Rights Agreement with Pegasus, Sponsor, XJ Harbour and Gebr. Schmid GmbHshareholders providing for, among other things, subject to the terms thereof, customary registration rights. TopCo has agreed to file a shelf registration statement to register the TopCo Ordinary Shares covered by the Registration Rights Agreement no later than thirty days following consummation of the Business Combination.\n\n**Warrant Assumption Agreement**\n\nIn connection with the Business Combination Agreement, TopCo, Pegasus and Continental Stock and Transfer & Trust Company will, prior to Closing, enter into a Warrant Assignment, Assumption and Amendment Agreement, pursuant to which the parties will agree that, as part of the Merger, each Pegasus Public Warrant and Private Placement Warrant that is outstanding immediately prior to the effective time of the Merger shall cease to represent a right to acquire Pegasus Class A Ordinary Shares and shall automatically represent, immediately following the Merger, a right to acquire TopCo Ordinary Shares on the same contractual terms and conditions as were in effect immediately prior to Merger under the original Warrant Agreement, including that the warrant holders are deemed to have consented to an exclusive forum provision requiring all claims to be brought before the courts of the State of New York or the United States District Court for the Southern District of New York other than suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum.\n\n**Private Warrants Transfer Agreement**\n\nIn connection with the Second Amendment to Business Combination Agreement, the Sponsor entered into an agreement with Anette Schmid and Christian Schmid pursuant to which the Sponsor committed to transfer 2,000,000 private warrants to Anette Schmid (1,000,000 private warrants) and Christian Schmid (1,000,000 private warrants) subject to the closing of the Business Combination.\n\nOn April 29, 2024 in connection with the conclusion of the Warranty Agreement, the Sponsor, Anette Schmid and Christian Schmid entered into an amendment to the Warrant Transfer Agreement pursuant to which an additional 2,000,000 private warrants will be transferred upon the earlier of (a) the receipt of at least EUR 10 million in proceeds from a new loan to be entered into by Gebr. Schmid GmbH or SCHMID Group N.V. or another SCHMID Group company and (b) six (6) months after closing of the business combination.\n\n74\n\n[Table of Contents](#TOC)\n\n**Private Warrants Undertaking Agreement**\n\nIn connection with the execution of the Second Amendment to Business Combination Agreement, the Sponsor, Pegasus, Gebr. Schmid GmbH, TopCo and all officers and directors of Pegasus who hold private warrants have entered into a private warrants undertaking agreement, pursuant to which the Sponsor and such officers and directors of Pegasus agreed to (i) only exercise their private warrants on a “cashless basis” in accordance with the terms of the private warrants, and (ii) in case the reference price of the TopCo shares subsequently to the closing of the Business Combination reaches USD 18.00 to, on a “cashless basis”, exercise their private warrants in accordance with terms of the private warrants unless such warrants have been previously redeemed or exercised.\n\n**2024 XJ Harbour Subscription Agreement**\n\nIn connection with the execution of the Second Amendment to Business Combination Agreement, Pegasus, Gebr. Schmid GmbHand TopCo entered into a subscription agreement with XJ Harbour according to which XJ Harbour agreed to in stages transfer its 24.1% equity interest in Schmid Technology (Guangdong) Co., Ltd. (“**STG**”), a subsidiary of Gebr. Schmid GmbH, to TopCo for consideration amounting to\n\n●1,406,361 TopCo shares to be allotted to XJ Harbour at the time of the completion of the Business Combination,\n\n●a EUR 10 million payment to XJ Harbour from TopCo at the closing of the Business Combination, (iii) a EUR 5 million payment to XJ Harbour from TopCo within 270 days from the day of the closing of the Business Combination and (iv) a EUR 15 million payment (plus an interest in respect thereof at an annual rate of 6% from the closing of the Business Combination to the date of payment) to XJ Harbour from TopCo within 455 days from the day of the closing of the Business Combination.\n\nXJ Harbour will retain approximately 16% of the shares in STG after the closing of the Business Combination, of which it will transfer approximately 4% of such shares in STG to TopCo after the EUR 5 million payment and the remainder after the last payment has been received.\n\nXJ Harbour and TopCo agreed on April 29, 2024 that the initial payment of EUR 10 million to XJ Harbour is split into two equal payments, one due at closing of the Business Combination (which has been paid to XJ Harbour by the Company) and a second tranche after 30 days from the closing of the Business Combination.\n\nThe first payment to XJ Harbour for EUR 10 million was made in 2024 following the closing of the Business Combination. All remaining payments due were later agreed to be set-off by way of agreements signed on November 12, 2025, i.e. the Company entered into a subscription agreement and a set-off agreement with XJ Harbour for the relevant payments amounts including accrued and unpaid interest.\n\n**Warranty Agreement**\n\nOn April 29, 2024, Pegasus, Gebr. Schmid GmbH, TopCo, Merger Sub and Validus/StratCap, LLC entered into a warranty agreement (the “**Warranty Agreement**”) in which Validus/StratCap, LLC guaranteed a reduction in the total indebtedness of Pegasus and TopCo remaining at the closing of the Business Combination (or converted to shares of TopCo at closing) will not exceed USD 7.4 million of which USD 2.75 million are deferred by nine months from the closing (or earlier if TopCo enters into a loan agreement for more than EUR 10 million). In addition, StratCap agreed to provide a loan of USD 2.35 million to TopCo within 30 days after closing of the Business Combination repayable within 12 months after closing (or earlier if TopCo enters into a loan agreement for more than EUR 10 million).\n\nPrior to the Business Combination, Pegasus, TopCo, the Sponsor and various investors entered into non-redemption and investment agreements at a total volume of USD 26.4 million as follows:\n\n●Various investors entered into non-redemption and investment agreements for a total of 1,430,683 Class A ordinary shares of Pegasus (equaling approximately USD 16.3 million at the redemption price). In order to induce such investors to enter into these non-redemption and investment agreements, the Sponsor committed to transfer 1,741,743 founder shares (that were transferred to Class A shares prior to closing of the Business Combination and then exchanged 1:1 into shares of SCHMID Group N.V.) to such investors.\n\n75\n\n[Table of Contents](#TOC)\n\n●In addition, the Sponsor entered into an investment agreement to purchase 756,964 SCHMID Group N.V. shares at the closing of the Business Combination against approximately USD 8.6 million in debt of Pegasus owed to the Sponsor (such debt was transferred to SCHMID Group N.V. through a debt assumption and exchange agreement against the payment of cash by Pegasus to SCHMID Group N.V.). It was further agreed that Sponsor retains 921,544 founders shares which would otherwise be cancelled at closing of the Business Combination in order to induce the Sponsor to purchase SCHMID Group N.V. shares against setting off all USD 8.6 million in debt it was owed by Pegasus.\n\n●In addition, two further investors agreed to subscribe for 35,000 SCHMID Group N.V. shares after the closing of the Business Combination against cash payment to SCHMID Group N.V. at the redemption price per share (the Sponsor is obligated to transfer 43,433 of its founder shares – which have been converted into SCHMID Group N.V. shares at closing – to such investors for their commitment).\n\n●In addition, Appleby, Cayman counsel to Pegasus committed to subscribe 87,565 shares of SCHMID Group N.V. against setting off fees due to Appleby (the Sponsor is obligated to transfer 106,603 of its founder shares – which have been converted into SCHMID Group N.V. shares at closing – to Appleby for its commitment to subscribe for the shares against setting off its fees that became due at the closing). These subscriptions for new shares of SCHMID Group N.V. are subject to the approval of the board of directors of the Company.\n\n**2025** **Subscription Agreement with XJ Harbour HK Limited and Set-Off Agreement**\n\nOn November 12, 2025, the Company entered into a subscription agreement and a set-off agreement with XJ Harbour, pursuant to which the Company agreed to issue and sell shares to XJ Harbour in a private placement. The Company agreed to issue ordinary shares to XJ Harbour at $2.15 per share to set off $26,962,158.90 of liabilities (including accrued interest) owed to XJ Harbour by the Company. In an extraordinary general shareholders’ meeting held by the Company on December 23, 2025, the shareholders authorized the issuance of shares to XJ Harbour. 12,540,539 SCHMID shares were issued on January 16, 2026 and transfered to XJ Harbour.\n\n**Subscription Agreement with Schmid AVACO Korea**\n\nOn November 3, 2025, the Company entered into a subscription agreement and set-off agreement with SCHMID Avaco Korea Co., Ltd. and AVACO Co., Ltd. to issue and sell a total of approximately 1.07 million shares of the Company to SCHMID Avaco Korea, which SCHMID Avaco Korea was to sell and transfer to AVACO against set-off of liabilities of approximately EUR 2.3 million of SCHMID and certain of its group companies. The shares were issued but never counted as part of the Company’s outstanding shares, as they were never entered into the share register, and the set-off of libailities did not occur. The shares will be cancelled in accordance with the stipulations of the agreements. Conversations between the parties pertaining to the liabilities and any other arrangements are ongoing.\n\n**Shareholder debt waiver** **September 2025**\n\nIn September 2025, Anette Schmid and Christian Schmid agreed to waive €5 million in financial liabilities which were owed to them by SCHMID. These €5 million financial liabilities dated back to 2016 and were waived for no consideration or compensation. This waiver was part of the restructuring of SCHMID’s financial liabilities, which the Company undertook in 2025.\n\n**Secured Two-Tranche Term Loan Facility**\n\nThe Company signed a secured two-tranche term loan facility with a total commitment value of up to €10,000,000 with the lender Black Forest Special Situations I, a Cayman Islands incorporated vehicle on December 16, 2025. The lender is backed by a consortium that includes the Company’s chairman of the Board, Sir Ralf Speth, members of the Board of directors of the Company, its CFO Arthur Schuetz, and third-party investment and advisory professionals. The first tranche consisted of €2,500,000, which were paid out on December 18, 2025.\n\nThe second tranche of up to €7,500,000 was not utilized due to the Company issuing a convertible note (see below).\n\n76\n\n[Table of Contents](#TOC)\n\nThe lender has a conversion right under the term loan facility, which is exercisable at a share price of US$2.15 into shares of the Company between six months after the draw down of the first tranche and the date of the term loan facility’s maturity, which is 15 months after the first tranche draw down. The first and second tranches may be converted independently of one another. The term loan facility has a 15% p.a. interest rate with interest payable at maturity, unless the conversion right is exercised and interest is also converted into shares of the Company. Further, the term loan facility includes security by the Company’s majority shareholders, Christian Schmid and Anette Schmid who pledged personal assets for each tranche as security. The Company and the Company’s 100% German subsidiary Gebr. Schmid GmbH are both guarantors.\n\n**Related Party Loan**\n\nAt the same time, the Company received a cash injection of €200,000 from a related party of the Schmid family on December 15, 2025. The agreed interest rate is 5% and the loan has a maturity of 15 months. The €200,000 were injected into the Company alongside the Company’s conclusion of the term loan facility described above.\n\n**USD 30 Million 7.00% Senior Convertible Note due 2028**\n\nOn January 18, 2026 SCHMID entered into an investment agreement with an institutional investor, Linden Advisors LP, to sell, and on January 21, 2026 sold senior convertible notes in an aggregate principal amount of $30.0 million convertible into ordinary shares of the Company together with the issuance of warrants to purchase ordinary shares of the Company in a private placement to the Investor. The notes were issued at 98% of principal amount pursuant an indenture in two tranches to Linden Capital L.P., Crown Managed Accounts SPC and PCH Manager Fund SPC: (i) $15.0 million were funded on January 21, 2026 and (ii) $15.0 million were funded following the effectiveness of a registration statement covering the resale of the underlying shares in relation to the notes on March 5, 2026.\n\nThe notes bear interest at a rate of 7% per annum, compounded quarterly and payable in kind, subject to the Company’s right to elect cash payment upon prior notice. They have a two-year maturity, i.e. they will mature on January 21, 2028, unless previously converted into shares of the Company. This conversion option of the notes into shares of the Company at prices determined by reference to fixed premium conversion prices including at 95% of the applicable volume-weighted average price of the shares of the Company, is subject to a minimum conversion price and certain daily conversion limits as further specified in the investment agreement.\n\nOn March 5, 2026, March 25, 2026, April 8, 2026, April 20, 2026 and April 23, 2026, the noteholders of the $30.0 million convertible notes provided conversion notices and were issued ordinary shares of the Company as follows:\n\n●$2.0 million convertible notes were converted on March 5, 2026 at a share price of $6.0918 and a total of 331,183 shares were issued.\n\n●$2.0 million convertible notes were converted on March 25, 2026 at a share price of $5.9946 and a total of 337,850 shares were issued.\n\n●$2.0 million convertible notes were converted on April 8, 2026 at a share price of $4.8241 and a total of 420,873 shares were issued.\n\n●$2.0 million convertible notes were converted on April 20, 2026 at a share price of $5.6501 and a total of 379,127 shares were issued.\n\n●$2.0 million convertible notes were converted on April 23, 2026 at a share price of $5.6501 and a total of 379,344 shares were issued.\n\n●$2.0 million convertible notes were converted on April 24, 2026 at a share price of $5.8267 and a total of 349,521 shares were issued.\n\nAs a result, as of the date of this Annual Report, the aggregate principal amount now only amounts to $18 million in convertible notes.\n\n77\n\n[Table of Contents](#TOC)\n\nIn connection with the issuance of the notes, the Company also issued warrants to the investor to purchase shares of the Company in an amount determined by reference to the principal amount of the notes. In connection with the funding of the second tranche of the convertible notes on March 5, 2026, as contractually agreed in the investment agreement, further warrants were issued and the exercise price for all warrants was adjusted to be $8.0125 (subject to anti-dilution protection mechanisms). A total of 3,744,150 warrants were issued to Linden Capital L.P., Crown Managed Accounts SPC and PCH Manager Fund SPC. The warrants are exercisable until December 15, 2028, at an exercise price of $8.0125, exercisable for cash or, at the Company’s election, on a cashless basis.\n\nIn connection with the execution of this investment agreement, the Company also entered into a registration rights agreement to file a registration statement covering the resale of the shares issuable upon conversion of the notes and exercise of the warrants. The Company’s obligations under the notes are guaranteed by its German operating subsidiary, Gebr. Schmid GmbH, subject to applicable German law limitations. The investment agreement and the provisions of the notes and warrants contain customary affirmative and negative covenants, issuer call provisions, change of control protections, mandatory redemption events, and events of default customary for transactions of this type.\n\n**Share issuances and set-off agreements with majority shareholders and related parties**\n\nOn April 24, 2026 the Company entered into separate subscription agreements and set-off agreements with Anette Schmid, Christian Schmid, Christine Schmid and Schmid Grundstücke GmbH & Co KG respectively, to off-set financial liabilities in an aggregate amount of EUR 30.75 million. In connection with these agreements, the Company entered into debt assumption agreements with the Company’s fully-owned subsidiary, Gebr. Schmid GmbH.\n\nPursuant to the subscription agreements the Company has agreed, subject to the approval by a shareholders’ meeting, to be held on May 20, 2026, to issue and sell to Anette Schmid, Christian Schmid, Christine Schmid and Schmid Grundstücke GmbH & Co KG in private placements a number of shares of the Company determined by dividing the EUR 30.75 million by the 5-trading day VWAP of shares of the Company immediately preceding the approval by the Board. Exclusively in the case of the financial liabilities to Christine Schmid, amounting to EUR 2.4 million, the share price will be determined in relation to the 5-trading day VWAP with an applied 20% discount.\n\n**USD 30 Million Standby Equity Purchase Agreement**\n\nOn May 12, 2026, the Company entered into a SEPA with Yorkville for a term of 24 months from signing. The facility providesSCHMID access to equity financing of up to USD 30.0 million at its discretion. Under the terms of the SEPA, the Group paid a commitment fee of 0.5% of the USD 30.0 million equity line to secure the SEPA facility, and Yorkville is contractually obligated, subject to customary conditions, to purchase the shares of the Company over time upon the Company’s exercise of drawdown notices. The purchase price will be based on one of two pricing options selected by the Company. Under Option 1, the purchase price will equal 97% of the VWAP of the shares of the Company on the day of drawdown notice receipt. Under Option 2, the purchase price will equal 99% of the lowest daily VWAP of the shares of the Company during the three consecutive trading days commencing on the drawdown notice date.\n\nThe SEPA enables the Group to raise equity capital at its discretion, with the ability to issue shares to the investor on a periodic (including daily) basis. This structure provides the Group with a committed source of capital and significant flexibility as to the timing and amount of any equity issuances, allowing management to access liquidity if and when required, or to refrain from drawing on the facility if sufficient liquidity is available from operations or other sources. The Company will be able to draw under the SEPA once the shares underlying the facility have been registered.\n\n78\n\n[Table of Contents](#TOC)\n\nD. Exchange Controls and Other Limitations Affecting Security Holders\n\nUnder Dutch law, there are no exchange controls applicable to the transfer to persons outside of the Netherlands of dividends or other distributions with respect to, or of the proceeds from the sale of, shares of a Dutch company, subject to applicable restrictions under sanctions and measures, including those concerning export control, pursuant to applicable resolutions adopted by the United Nations, regulations of the European Union, the Sanctions Act 1977 (*Sanctiewet 1977*), national emergency legislation, or other legislation, applicable anti-boycott regulations and similar rules. Pursuant to the Dutch Foreign Financial Relations Act 1994 (*Wet financiële betrekkingen buitenland 1994*) entities could be obliged to provide certain financial information to the Dutch Central Bank for statistical purposes only. The European Directive Mandatory Disclosure Rules (2011/16/EU) in relation to cross-border tax arrangements can provide for future notification requirements. There are no special restrictions in our articles of association or Dutch law that limit the right of shareholders who are not citizens or residents of the Netherlands to hold or vote shares.\n\nUnder German law, there are no exchange controls restricting the transfer of funds between Germany and other countries or individuals subject to applicable restrictions concerning import or export control or sanctions and measures against certain persons, entities and countries subject to embargoes in accordance with German law and applicable regulations and resolutions adopted by the United Nations and the European Union.\n\nUnder German foreign trade regulation, with certain exceptions, every corporation or individual residing in Germany must report to the German Central Bank (*Deutsche Bundesbank*) on any payment received from or made to a non-resident corporation or individual if the payment exceeds €12,500 (or the equivalent in a foreign currency). Additionally, certain corporations and financial institutions and individuals residing in Germany must report to the German Central Bank on any claims of a resident against, or liabilities payable to, a non-resident corporation or individual exceeding an aggregate of €5 million (or the equivalent in a foreign currency) at the end of any calendar month. Resident corporations and individuals are also required to report annually to the German Central Bank on any stakes of 10% or more they hold in the equity of non-resident corporations with total assets of more than € 3 million. Corporations residing in Germany with assets in excess of €3 million must report annually to the German Central Bank on any stake of 10% or more in the company held by an individual or a corporation located outside Germany.\n\nE. Taxation\n\n**Certain Material U.S. Federal Income Tax Considerations**\n\nThis section describes certain material U.S. federal income tax consequences to a U.S. holder (as defined below) with respect to the ownership and disposition of the Ordinary Shares and the Public Warrants (collectively, the “**SCHMID securities**”). This discussion deals only with U.S. holders that hold their SCHMID securities as capital assets (generally assets held for investment). It does not cover all aspects of U.S. federal income taxation that may be relevant to the U.S. holders (including reporting requirements, consequences under any alternative minimum tax or net investment income tax), and does not address state, local, non-U.S. or other tax laws (such as estate or gift tax laws). This discussion also does not address tax considerations applicable to U.S. holders that own (directly, indirectly or by attribution) 5% or more of the SCHMID securities by vote or value, nor does this section discuss all of the tax considerations that may be relevant to certain types of investors subject to special treatment under the U.S. federal income tax laws (such as financial institutions; insurance companies; individual retirement accounts and other tax-deferred accounts; tax-exempt organizations; dealers in securities or currencies; traders in securities that elect to mark their securities to market for U.S. federal income tax purposes; investors that hold SCHMID securities as part of straddles, hedging transactions or conversion transactions for U.S. federal income tax purposes; persons that received SCHMID securities as compensation for services; nonresident alien individuals present in the United States for 183 days or more during any taxable year; persons that have ceased to be U.S. citizens or lawful permanent residents of the United States; investors holding the SCHMID securities in connection with a trade or business conducted outside of the United States; S corporations; partnerships or other entities or arrangements treated as partnerships or other flow-through entities for U.S. federal income tax purposes (and investors therein); U.S. citizens or lawful permanent residents living abroad; investors that are required to include amounts in their taxable income in advance of receipt under rules regarding applicable financial statements; or U.S. holders whose functional currency is not the U.S. dollar).\n\nAs used herein, the term “**U.S. holder**” means a beneficial owner of SCHMID securities that is, for U.S. federal income tax purposes, (i) an individual citizen or resident of the United States, (ii) a corporation created or organized under the laws of the United States, any state thereof or the District of Columbia, (iii) an estate the income of which is subject to U.S. federal income tax without regard to its source or (iv) a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust.\n\n79\n\n[Table of Contents](#TOC)\n\nThe U.S. federal income tax treatment of a partner in an entity or arrangement treated as a partnership for U.S. federal income tax purposes that holds SCHMID securities will depend on the status of the partner and the activities of the partnership. Entities or arrangements treated as partnerships for U.S. federal income tax purposes should consult their tax advisers concerning the U.S. federal income tax consequences to them and their partners of owning SCHMID securities.\n\nThis discussion is based on the tax laws of the United States, including the Code, its legislative history, existing and proposed regulations thereunder, published rulings of the IRS and court decisions, all as of the date hereof and all subject to change at any time, possibly with retroactive effect. Any such change or differing interpretation could affect the accuracy of the statements and conclusions set forth in this discussion. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax considerations described in this discussion. No ruling has been or will be sought from the IRS regarding any matter discussed below.\n\nALL HOLDERS OF SCHMID SECURITIES SHOULD CONSULT THEIR TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM RELATING TO THE OWNERSHIP OF SCHMID SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF STATE, LOCAL, NON-U.S. AND OTHER TAX LAWS AND POSSIBLE CHANGES IN TAX LAW.\n\n**Ownership of SCHMID Securities**\n\n**This discussion is subject to the discussion in “—**Application of the PFIC Rules to SCHMID Securities**” below.**\n\nDistributions on Ordinary Shares\n\nThe gross amount of any distribution on Ordinary Shares that is made out of the Company’s current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) generally will be taxable to a U.S. holder as ordinary dividend income on the date such distribution is actually or constructively received. Any such dividends generally will not be eligible for the dividends received deduction generally allowed to U.S. corporations in respect of dividends received from other U.S. corporations. To the extent that the amount of the distribution exceeds the Company’s current and accumulated earnings and profits (as determined under U.S. federal income tax principles), such excess amount will be treated first as a non-taxable return of capital to the extent of the U.S. holder’s adjusted tax basis in its Ordinary Shares, and thereafter as capital gain recognized on a sale or exchange.\n\nDividends paid by the Company generally will be taxable to a non-corporate U.S. holder at the reduced rate normally applicable to long-term capital gains, provided that the Company is considered a “qualified foreign corporation” and certain other requirements are met. A qualified foreign corporation includes a foreign corporation that is eligible for the benefits of the income tax treaty between Germany and the United States (the “Treaty”). A foreign corporation is also treated as a “qualified foreign corporation” with respect to dividends paid by that corporation on shares that are readily tradable on an established securities market in the United States. U.S. Treasury Department guidance indicates that shares listed on the NASDAQ, such as the Ordinary Shares, will be readily tradable on an established securities market in the United States. There can be no assurance, however, that the Ordinary Shares will be considered readily tradable on an established securities market in later years or that the Company will be eligible for the benefits of the Treaty. A U.S. holder will not be able to claim the reduced rate on dividends received from the Company if the Company is treated as a PFIC in the taxable year in which the dividends are received or in the preceding taxable year (or if any shares of the Company that they own are treated as stock in a PFIC). See the section entitled “— *Application of the PFIC Rules to SCHMID Securities*” below.\n\nSubject to certain conditions and limitations, withholding taxes, if any, on dividends paid by the Company may be treated as foreign taxes eligible for credit against a U.S. holder’s U.S. federal income tax liability under the U.S. foreign tax credit rules. For purposes of calculating the U.S. foreign tax credit, dividends paid on the Ordinary Shares will generally be treated as income from sources outside the United States and will generally constitute passive category income. The rules governing the U.S. foreign tax credit are complex and recent changes in the rules have imposed additional requirements and limitations that may further limit a U.S. Holder’s ability to claim a foreign tax credit in respect of any withholding taxes on dividends paid by the Company. Recent IRS guidance provides temporary relief from some of these additional requirements and limitations, subject to certain requirements being met, until further notice by the IRS. U.S. holders should consult their tax advisors regarding the availability of the U.S. foreign tax credit under particular circumstances.\n\n80\n\n[Table of Contents](#TOC)\n\nSale, Exchange, Redemption or Other Taxable Disposition of SCHMID Securities\n\nA U.S. holder generally will recognize gain or loss on any sale, exchange, redemption or other taxable disposition of SCHMID securities in an amount equal to the difference between (i) the amount realized on the disposition and (ii) such U.S. holder’s adjusted tax basis in such securities. Any gain or loss recognized by a U.S. holder on a taxable disposition of SCHMID securities generally will be capital gain or loss and will be long-term capital gain or loss if the holder’s holding period in such securities exceeds one year at the time of the disposition. Preferential tax rates may apply to long-term capital gains of non-corporate U.S. holders (including individuals). The deductibility of capital losses is subject to limitations. Any gain or loss recognized by a U.S. holder on the sale or exchange of SCHMID securities generally will be treated as U.S.-source gain or loss. Therefore, a U.S. holder may have insufficient foreign-source income to utilize foreign tax credits attributable to any non-U.S. withholding tax (if any) imposed on a sale, exchange, redemption or other taxable disposition. U.S. holders should consult their tax advisors as to the availability of and limitations on any foreign tax credit attributable to non-U.S. withholding taxes (if any such taxes are imposed).\n\nExercise or Lapse of a Public Warrant\n\nExcept as discussed below with respect to the cashless exercise of a Public Warrant, a U.S. holder generally will not recognize gain or loss upon the acquisition of a Ordinary Share on the exercise of a Public Warrant for cash. A U.S. holder’s tax basis in a Ordinary Share received upon exercise of the Public Warrant generally should be an amount equal to the sum of the U.S. holder’s adjusted tax basis in the Public Warrant exchanged therefor and the exercise price. The U.S. holder’s holding period for a Ordinary Share received upon exercise of the Public Warrant will begin on the date following the date of exercise (or possibly the date of exercise) of the Public Warrant and will not include the period during which the U.S. holder held the Public Warrant. If a Public Warrant is allowed to lapse unexercised, a U.S. holder generally will recognize a capital loss equal to such holder’s adjusted tax basis in the Public Warrant. The deductibility of capital losses is subject to limitations.\n\nThe tax consequences of a cashless exercise of a Public Warrant are not clear under current tax law. A cashless exercise may be tax-deferred, either because the exercise is not a gain realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In either tax-deferred situation, a U.S. holder’s basis in the Ordinary Shares received would equal the holder’s basis in the Public Warrants exercised therefor. If the cashless exercise were treated as not being a gain realization event, a U.S. holder’s holding period in the Ordinary Shares would be treated as commencing on the date following the date of exercise (or possibly the date of exercise) of the Public Warrants. If the cashless exercise were treated as a recapitalization, the holding period of the Ordinary Shares generally would include the holding period of the Public Warrants exercised therefor.\n\nIt is also possible that a cashless exercise of a Public Warrant could be treated in part as a taxable exchange in which gain or loss would be recognized. In such event, a U.S. holder would recognize gain or loss with respect to the portion of the exercised Public Warrants treated as surrendered to pay the exercise price of the Public Warrants (the “**surrendered warrants**”). The U.S. holder would recognize capital gain or loss with respect to the surrendered warrants in an amount generally equal to the difference between (i) the fair market value of the Ordinary Shares that would have been received with respect to the surrendered warrants in a regular exercise of the Public Warrants and (ii) the sum of the U.S. holder’s adjusted tax basis in the surrendered warrants and the aggregate cash exercise price of such warrants (if they had been exercised in a regular exercise). In this case, a U.S. holder’s tax basis in the Class A Ordinary Shares received would equal the U.S. holder’s tax basis in the Public Warrants exercised plus (or minus) the gain (or loss) recognized with respect to the surrendered warrants. A U.S. holder’s holding period for the Ordinary Shares generally would commence on the date following the date of exercise (or possibly the date of exercise) of the Public Warrants.\n\nDue to the absence of authority on the U.S. federal income tax treatment of a cashless exercise of warrants, there can be no assurance which, if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. holders should consult their tax advisors regarding the tax consequences of a cashless exercise of Public Warrants.\n\n81\n\n[Table of Contents](#TOC)\n\nPossible Constructive Distributions\n\nThe terms of each Public Warrant provide for an adjustment to the number of Ordinary Shares for which the Public Warrant may be exercised or to the exercise price of the Public Warrant in certain events. An adjustment which has the effect of preventing dilution generally is not taxable. A U.S. holder of a Public Warrant generally would be treated as receiving a constructive distribution from the Company if, for example, the adjustment increases the holder’s proportionate interest in the Company’s assets or earnings and profits (e.g., through an increase in the number of Ordinary Shares that would be obtained upon exercise of such warrant) as a result of a distribution of cash to the holders of the Ordinary Shares which is taxable to the U.S. holders of such shares as described in the section entitled “*— Distributions on Ordinary Shares*” above. Such constructive distribution generally would be subject to tax as described in the section entitled that section in the same manner as if the U.S. holder of such warrant received a cash distribution from the Company equal to the fair market value of such increased interest.\n\n**Application of the PFIC Rules to SCHMID Securities**\n\nA non-U.S. corporation, such as the Company, will be a PFIC for U.S. federal income tax purposes in any taxable year in which, after applying relevant look-through rules with respect to the income and assets of its subsidiaries, (i) 75% or more of its gross income is passive income, and/or (ii) 50% or more of the value of its assets (generally based on the quarterly average of the value of its assets during such year) is attributable to assets, including cash, that produce passive income or are held for the production of passive income. Passive income generally includes dividends, interest, certain royalties and rents, annuities, net gains from the sale or exchange of property producing such income and net foreign currency gains. Based on the expected composition of the Company’s gross assets and income and the manner in which the Company operated its business in 2024 and expects to operate its business in future years, the Company does not believe it was classified as a PFIC for U.S. federal income tax purposes for its 2024 taxable year nor does the Company expects to be classified as a PFIC in the foreseeable future. Whether the Company is a PFIC is a factual determination made annually, and the Company’s status could change depending, among other things, upon changes in the composition and relative value of its gross receipts and assets.\n\nIf the Company were a PFIC in any year during which a U.S. holder owns Ordinary Shares, subject to the discussion below regarding the mark-to-market (“**MTM**”) or qualified electing fund (“**QEF**”) elections, a U.S. holder generally will be subject to special rules (regardless of whether the Company continues to be a PFIC) with respect to (i) any “excess distribution” (generally, any distributions received by a U.S. holder on its Ordinary Shares in a taxable year that are greater than 125% of the average annual distributions received by the U.S. holder in the three preceding taxable years or, if shorter, the U.S. holder’s holding period for the Ordinary Shares) and (ii) any gain realized on the sale or other disposition of Ordinary Shares. Under these rules (a) the excess distribution or gain will be allocated ratably over the U.S. holder’s holding period, (b) the amount allocated to the current taxable year and any taxable year prior to the first taxable year in which the Company is a PFIC will be taxed as ordinary income, and (c) the amount allocated to each of the other taxable years will be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year and an interest charge for the deemed deferral benefit will be imposed with respect to the resulting tax attributable to each such other taxable year.\n\nA U.S. holder may be able to avoid some of the adverse impacts of the PFIC rules described under in the preceding paragraph by making an MTM election with respect to its Ordinary Shares. The election is available only if the Ordinary Shares are considered “marketable stock,” which generally includes stock that is regularly traded in more than de minimis quantities on a qualifying exchange. If a U.S. holder makes the MTM election, it generally will not be subject to the excess distribution regime discussed in the preceding paragraph and the tax consequences should be as set forth above under this paragraph. Any gain from marking the Ordinary Shares to market or from disposing of them would be ordinary income. Any loss from marking the Ordinary Shares to market would be recognized only to the extent of unreversed gains previously included in income. Loss from marking the Ordinary Shares to market would be ordinary, but loss on disposing of them would be capital loss except to the extent of unreversed inclusions with respect to such stock. It is expected that Ordinary Shares, which are listed on NASDAQ, will qualify as marketable shares for the PFIC rules purposes. No assurance can be given that the Ordinary Shares will be traded in sufficient frequency and quantity to be considered “marketable stock.” A valid MTM election cannot be revoked without the consent of the IRS unless the Ordinary Shares cease to be marketable stock. In addition, it is anticipated that U.S. holders of Public Warrants will not be able to make an MTM election with respect to such warrants.\n\nA U.S. holder would not be able to avoid the tax consequences described above by electing to treat the Company as a QEF because the Company does not intend to provide U.S. holders with the information that would be necessary to make a QEF election with respect to the Ordinary Shares. In any event, U.S. holders of Public Warrants will not be able to make a QEF election with respect to their warrants.\n\n82\n\n[Table of Contents](#TOC)\n\nU.S. holders should consult their own tax advisors concerning the Company’s possible PFIC status and the consequences to them, including potential reporting requirements, if the Company were classified as a PFIC for any taxable year.\n\n**Information Reporting and Backup Withholding**\n\nInformation reporting requirements may apply to distributions on and proceeds from a disposition of the SCHMID securities. Backup withholding may apply to such amounts if the U.S. holder fails to provide an accurate taxpayer identification number or is otherwise subject to backup withholding.\n\nBackup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against the U.S. holder’s U.S. federal income tax liability, and a U.S. holder may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for a refund with the IRS and furnishing any required information. U.S. holders should consult their tax advisors regarding these rules and any other reporting obligations that may apply to the ownership or disposition of SCHMID securities, including reporting obligations related to the holding of certain foreign financial assets.\n\n**Material Dutch Tax Considerations**\n\nThe following summary of certain Dutch taxation matters is based on the laws and practice in force as of the date of this proxy statement/prospectus and is subject to any changes in law and the interpretation and application thereof, which changes could have retroactive effect. The following summary does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to acquire, hold or dispose of Ordinary Shares and/or Public Warrants, and does not purport to deal with the tax consequences applicable to all categories of investors, some of which may be subject to special rules. An investor holding Ordinary Shares is being referred to as a shareholder (“**Shareholder**”) and an investor holding Public Warrants is being referred to as a warrant holder (“**Warrant Holder**”).\n\nFor the purpose of the paragraph “Taxes on Income and Capital Gains” below it is assumed that an individual holding Ordinary Shares and/or Public Warrants who is taxed as a resident of the Netherlands for income tax purposes did not, does not and will not have a substantial interest (*aanmerkelijk belang*) or a deemed substantial interest in SCHMID.\n\nGenerally speaking, an individual has a substantial interest in a company if (a) such individual, either alone or together with the individual’s partner, directly or indirectly has, or is deemed to have or (b) certain relatives of such individual or the individual’s partner directly or indirectly have or are deemed to have (i) the ownership of, a right to acquire the ownership of, or certain rights over, shares representing 5% or more of either the total issued and outstanding capital of such company or the issued and outstanding capital of any class of shares of such company, or (ii) the ownership of, or certain rights over, profit participating certificates (*winstbewijzen*) that relate to 5% or more of either the annual profit or the liquidation proceeds of such company. Also, an individual has a substantial interest in a company if his partner has, or if certain relatives of the individual or his partner have, a deemed substantial interest in such company. Generally, an individual or the individual’s partner or relevant relative has a deemed substantial interest in a company if either (a) such person or the individual’s predecessor has disposed of or is deemed to have disposed of all or part of a substantial interest or (b) such person has transferred an enterprise in exchange for shares in such company, on a non-recognition basis.\n\nThis summary assumes that SCHMID is not affiliated (*gelieerd*) to any recipient (*voordeelgerechtigde*) of any payments under the Ordinary Shares and/or Public Warrants within the meaning of the Withholding Tax Act 2021 (*Wet bronbelasting 2021*).\n\nGenerally speaking, an entity is regarded as ‘affiliated’ for Dutch Withholding Tax Act 2021 (*Wet bronbelasting 2021*) purposes, if (i) it has a qualifying interest in SCHMID, (ii) SCHMID has a qualifying interest in the relevant entity or (iii) a third party has a qualifying interest in both SCHMID and the relevant entity. Generally, the term “qualifying interest” means a direct or indirectly held interest, individually or jointly as part of a qualifying unity (*kwalificerende eenheid*), that gives the holder of such interest definite influence over the decisions of the entity in which the interest is held and allows determination of its activities.\n\n83\n\n[Table of Contents](#TOC)\n\nWhere this summary refers to a Shareholder, Warrant Holder, holder of Ordinary Shares and Public Warrants, an individual holding Ordinary Shares and Public Warrants or an entity holding Ordinary Shares and Public Warrants, such reference is restricted to an individual or entity holding legal title to as well as an economic interest in such Ordinary Shares and Public Warrants or otherwise being regarded as owning Ordinary Shares and Public Warrants for Dutch tax purposes. It is noted that for purposes of Dutch income, corporate and gift and inheritance tax, assets legally owned by a third party such as a trustee, foundation or similar entity, may be treated as assets owned by the (deemed) settlor, grantor or similar originator or the beneficiaries in proportion to their interest in such arrangement.\n\nWhere the summary refers to “the Netherlands” or “Dutch” it refers only to the European part of the Kingdom of the Netherlands.\n\nThis overview assumes that SCHMID shall have its place of effective management in Germany and that it is treated as a German tax resident for German tax purposes.\n\nInvestors should consult their professional advisers as to the tax consequences of acquiring, holding and disposing of Ordinary Shares and Public Warrants.\n\nDividend Withholding Tax\n\n*Ordinary Shares*\n\nIn general, SCHMID must withhold Dutch dividend tax from dividends distributed on the Ordinary Shares at the rate of 15%.\n\nDividends include, without limitation:\n\n●distributions of profits (including paid-in capital not recognised for Dutch dividend tax purposes) in cash or in kind, including deemed and constructive dividends;\n\n●liquidation distributions and, generally, proceeds realised upon a repurchase of Ordinary Shares by SCHMID or upon the transfer of Ordinary Shares to a direct or indirect subsidiary of SCHMID, in excess of the average paid-in capital recognized for Dutch dividend tax purposes;\n\n●the par value of Ordinary Shares issued to a shareholder or any increase in the par value of Ordinary Shares, except to the extent such (increase in the) par value is contributed to or funded out of the SCHMID’s paid-in capital recognised for Dutch dividend tax purposes;\n\n●repayments of paid-in capital recognized for Dutch dividend tax purposes up to the amount of SCHMID’s profits (*zuivere winst*) unless SCHMID’s general meeting of shareholders has resolved in advance that SCHMID shall make such repayments and the par value of the Ordinary Shares concerned has been reduced by a corresponding amount through an amendment of SCHMID’s articles of association.\n\nHowever, SCHMID is not required to withhold Dutch dividend tax from dividends distributed on the Ordinary Shares if, and for as long as, SCHMID is resident solely in Germany for purposes of the convention between Germany and the Netherlands for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income (the “**German-Dutch tax treaty**”), unless:\n\n●the Shareholder is an individual who is resident or deemed to be resident in the Netherlands for Dutch income tax purposes or an entity or enterprise that is subject to the Corporate Tax Act 1969 (*Wet op de vennootschapsbelasting 1969*) and is resident or deemed to be resident in the Netherlands for Dutch corporate tax purposes; or\n\n84\n\n[Table of Contents](#TOC)\n\n●the Shareholder is an individual not resident and not deemed to be resident in the Netherlands for Dutch income tax purposes or an entity not resident and not deemed to be resident in the Netherlands for Dutch corporate tax purposes and derives profits from an enterprise, which enterprise is, in whole or in part, carried on through a permanent establishment (*vaste inrichting*) or a permanent representative (*vaste vertegenwoordiger*) in the Netherlands, to which the Ordinary Shares are attributable.\n\nThe current German-Dutch tax treaty stipulates that if a company is treated as tax resident of both the Netherlands and Germany, it shall be treated as resident of the country in which it has its place of effective management for purposes of the treaty. As set out above, for the purposes of this summary we assume that SCHMID shall have its place of effective management in Germany.\n\nIf the Shareholder is a resident or deemed to be a resident in the Netherlands for Dutch corporate or income tax purposes, Dutch dividend tax which is withheld with respect to proceeds from the Ordinary Shares will generally be creditable for Dutch corporate tax or Dutch income tax purposes. For Shareholders that are subject to Dutch corporate tax, the credit of Dutch dividend tax per annum is limited to the amount of Dutch corporate tax due in that year. Any uncredited Dutch dividend can be carried forward without time restrictions.\n\nUnder the terms of Dutch domestic anti-dividend stripping rules, a recipient of dividends distributed on Ordinary Shares will not be entitled to an exemption from, reduction, refund, or credit of dividend tax if the recipient is not the beneficial owner of such dividends as meant in those rules.\n\n*Public Warrants*\n\nThe mere exercise of a Warrant does in the view of SCHMID not give rise to Dutch dividend tax, except to the extent (i) the exercise price paid in cash per issued Ordinary Share is below the nominal value of an Ordinary Share and (ii) such difference is not charged against SCHMID’s share premium reserve recognized for purposes of Dutch dividend tax. If any Dutch dividend tax due is not effectively withheld for the account of the relevant Warrant Holder, Dutch dividend tax shall be due by SCHMID on a grossed-up basis, meaning that the Dutch dividend tax basis shall be equal to the amount referred to in the preceding sentence multiplied by 100/85. Exceptions and relief from Dutch dividend tax may apply as set forth in the preceding paragraph.\n\nTaxes on Income and Capital Gains\n\nResidents\n\n*Resident entities*\n\nAn entity holding the Ordinary Shares and Public Warrants which is or is deemed to be resident in the Netherlands for Dutch corporate tax purposes and which is not tax exempt, will generally be subject to corporate tax (*vennootschapsbelasting*) in the Netherlands in respect of income or a capital gain derived from such Ordinary Shares and Public Warrants at rates up to 25.8%, unless the entity has the benefit of the participation exemption (*deelnemingsvrijstelling*) with respect to such Ordinary Shares. Generally speaking, the entity holding Ordinary Shares will have the benefit of the participation exemption if the entity owns at least 5% of the nominal paid-up share capital of SCHMID.\n\n*Resident individuals*\n\nAn individual holding Ordinary Shares and Public Warrants who is or is deemed to be resident in the Netherlands for Dutch income tax purposes will generally be subject to income tax in the Netherlands in respect of income or a capital gain derived from such Ordinary Shares and Public Warrants at rates up to 49.5% if:\n\n●the income or capital gain is attributable to an enterprise from which the holder derives profits (other than as a shareholder); or\n\n●the income or capital gain qualifies as income from miscellaneous activities (*belastbaar resultaat uit overige werkzaamheden*) as defined in the Income Tax Act 2001 (*Wet inkomstenbelasting 2001*), including, without limitation, activities that exceed normal, active asset management (*normaal, actief vermogensbeheer*).\n\n85\n\n[Table of Contents](#TOC)\n\nIf neither condition (i) nor (ii) applies, the individual holding Ordinary Shares and Public Warrants will in principle be subject to Dutch income tax based on an aggregate deemed return for savings, debts and investments, regardless of any actual income or capital gain derived from the Ordinary Shares and Public Warrants. Separate deemed return percentages for savings, debts and investments apply as at the beginning of the relevant calendar year. The applicable percentages should be updated annually based on historic market yields. For 2026, the deemed return percentage for the category investments (including the Ordinary Shares and Public Warrants) is 6%.\n\nHowever, if the Shareholder or Warrant Holder demonstrates that the aggregate actual return for savings, debts and investments – calculated in accordance with the Dutch Counterevidence Act (*Wet tegenbewijsregeling box 3*) – is lower than the applicable aggregate deemed return, the taxable basis should be that lower amount.\n\nThe individual’s taxable income from savings and investments (including the Ordinary Shares and Public Warrants) will be taxed at the prevailing statutory rate (36% in 2026).\n\n*Non-residents*\n\nA Shareholder or Warrant Holder which is not and is not deemed to be resident in the Netherlands for the relevant tax purposes will not be subject to taxation in the Netherlands on income or a capital gain derived from Ordinary Shares and Public Warrants, unless:\n\n(i)\n\nthe income or capital gain is attributable to an enterprise or part thereof which is either effectively managed in the Netherlands or carried on through a permanent establishment (*vaste inrichting*) or a permanent representative (*vaste vertegenwoordiger*) taxable in the Netherlands and the Shareholder or Warrant Holder derives profits from such enterprise (other than by way of the holding of securities); or\n\n(ii)\n\nthe Shareholder or Warrant Holder is an individual and the income or capital gain qualifies as income from miscellaneous activities (*belastbaar resultaat uit overige werkzaamheden*) in the Netherlands as defined in the Income Tax Act 2001 (*Wet inkomstenbelasting 2001*), including, without limitation, activities that exceed normal, active asset management (*normaal, actief vermogensbeheer*).\n\n*Gift and Inheritance Taxes*\n\nDutch gift or inheritance taxes will not be levied on the occasion of the transfer of Ordinary Shares or Public Warrants by way of gift by, or on the death of, a holder, unless:\n\n(i)\n\nsuch Shareholder or Warrant Holder is or is deemed to be resident in the Netherlands for the purpose of the relevant provisions; or\n\n(ii)\n\nthe transfer is construed as an inheritance or gift made by, or on behalf of, a person who, at the time of the gift or death, is or is deemed to be resident in the Netherlands for the purpose of the relevant provisions.\n\n*Value Added Tax*\n\nThere is no Dutch value added tax payable by a Shareholder or Warrant Holder in respect of payments in consideration for the acquisition of Ordinary Shares and Public Warrants, payments of dividend on the Ordinary Shares and Public Warrants, or payments in consideration for the disposal of Ordinary Shares and Public Warrants.\n\n*Other Taxes and Duties*\n\nThere is no Dutch registration tax, stamp duty, or other similar tax or duty payable in the Netherlands in respect of or in connection with the subscription, issue, placement, allotment, delivery or transfer of Ordinary Shares and Public Warrants.\n\n*Residence*\n\nA Shareholder or Warrant Holder will not be and will not be deemed to be resident in the Netherlands for Dutch tax purposes and, subject to the exceptions set out above, will not otherwise be subject to Dutch taxation, by reason only of acquiring, holding or disposing of Ordinary Shares and Public Warrants.\n\n86\n\n[Table of Contents](#TOC)\n\n**Material German Tax Considerations**\n\nThe following section is a description of the material German tax considerations that become relevant when acquiring, owning and/or disposing of Ordinary Shares and Warrants as from the date of this Annual Report. It is based on the German tax law applicable as of the date of this Annual Report without prejudice to any amendments introduced at a later date and implemented with or without retroactive effect.\n\nThis section is intended as general information only and does not purport to be a comprehensive or complete description of all potential German tax effects of the acquisition, ownership or disposal of Ordinary Shares or Warrants and does not set forth all German tax considerations that may be relevant to a particular person’s decision to acquire Ordinary Shares or Warrants. It cannot be ruled out that the German tax authorities or courts may consider an alternative interpretation or application to be correct that differs from the one described in this section.\n\nThis section does not describe any German tax considerations or consequences that may be relevant to the acquisition, ownership or disposal of Ordinary Shares or Warrants by a shareholder (i) for whom or for a direct or indirect shareholder or beneficiary of whom the income or capital gains derived from the Ordinary Shares or Warrants are attributable to employment, trade or freelancing activities, the income from which is taxable in Germany, or (ii) who exchanges, or has exchanged, other German taxable assets for Ordinary Shares or Warrants (or vice versa) under a German tax deferral transaction of the German reorganization tax act (*Umwandlungssteuergesetz*).\n\nThis section does not constitute particular German tax advice and potential purchasers of Ordinary Shares or Warrants are urged to consult their own tax advisors regarding the tax consequences of the acquisition, ownership and/or disposal of Ordinary Shares or Warrants in light of their particular circumstances with regard to the application of German tax law to their particular situations, in particular with respect to the procedure to be complied with to obtain a relief of withholding tax on dividends and on capital gains (*Kapitalertragsteuer*) and with respect to the influence of provisions of any applicable tax treaty on the mitigation of double income taxation (each a “tax treaty”), as well as any tax consequences arising under the laws of any state, local or other non-German jurisdiction. A shareholder or holder of Warrants may include an individual who or an entity that does not have the legal title to the Ordinary Shares or Warrants, but to whom nevertheless the Ordinary Shares or Warrants are attributed for German tax purposes, based either on such individual or entity owning a beneficial interest in the Ordinary Shares or Warrants or based on specific statutory provisions.\n\nAll of the following is subject to change as from the date of this Annual Report. Such changes could apply retroactively and could affect the consequences set forth below. This section does neither refer to any German filing, notification or other German tax compliance aspects nor to foreign account tax compliance act (“**FATCA**”) aspects.\n\nTax Residency Status\n\nWe have our statutory seat in the Netherlands and our sole place of management in Germany and are therefore tax resident in Germany as from the date of this Annual Report (both under German domestic law and for purposes of the German-Dutch tax treaty). Thus, we qualify as a corporation subject to German unlimited liability for corporate income tax purposes and are treated as a resident of Germany under the Dutch-German tax treaty. However, because our tax residency depends on future facts regarding our place of management, the German unlimited liability for corporate income tax purposes may change in the future.\n\nWe assume for all purposes herein that we shall be tax resident in Germany at all relevant points in time when taxable events may occur. For the avoidance of doubt, any tax effects in relation to the Warrants or Ordinary Shares (other than as regards withholding tax as addressed below) are out of the scope of this Annual Report.\n\n87\n\n[Table of Contents](#TOC)\n\nGerman Taxation of Holders of Ordinary Shares\n\n*Taxation of Dividends*\n\nWithholding Tax on Dividend Payments\n\nDividends distributed from SCHMID to our shareholders are generally subject to German withholding tax, except for certain scenarios in which a dividend is either excluded from the scope of German withholding tax (for example, repayments of capital from the tax contribution account (*steuerliches Einlagekonto*)) or fully or partially withholding tax exempt, as further described. The withholding tax rate is 25% plus a 5.5% solidarity surcharge (*Solidaritätszuschlag*) thereon, totaling 26.375% of the gross dividend amount and potentially church withholding tax for shareholders who are private individuals in certain cases (see below). Withholding tax is to be withheld and passed on for the account of the shareholders, depending on the specific circumstances, by the domestic branch of a domestic or foreign credit or financial services institution (*Kredit- oder Finanzdienstleistungsinstitut*) or by the domestic securities institution (*inländisches Wertpapierinstitut*) that keeps and administers the Ordinary Shares and disburses or credits the dividends or disburses the dividends to a foreign agent, or by the securities custodian bank (*Wertpapiersammelbank*) to which the Ordinary Shares were entrusted for custody if the dividends are distributed to a foreign agent by such securities custodian bank (each of which is referred to as the “Dividend Paying Agent”), or, in the case the Ordinary Shares are not held in deposit with a Dividend Paying Agent, SCHMID is responsible for withholding and remitting the tax to the competent tax office. Such withholding tax is generally levied and withheld irrespective of whether and to what extent the dividend distribution is taxable at the level of the shareholder and whether the shareholder is a person residing in Germany or in a foreign country.\n\nIn the case of dividends distributed to a parent company within the meaning of Art. 3 para. 1 lit. a of the amended EU Directive 2011/96/EU of the Council of November 30, 2011 (the “EU Parent Subsidiary Directive”) domiciled in another Member State of the European Union, withholding tax may be refunded or not levied upon application and subject to further conditions (as set out below). This also applies to dividends distributed to a permanent establishment located in another Member State of the European Union of such a parent company or of a parent company tax resident in Germany if the participation in SCHMID is effectively connected with and actually attributed to this permanent establishment. The key prerequisite for the application of the EU Parent Subsidiary Directive is that the shareholder has held a direct participation in the share capital of SCHMID of at least 10% for an uninterrupted period of at least twelve months. Further, the foreign resident shareholder must be eligible for purposes of the EU Parent Subsidiary Directive (as set out above) to invoke the reduction, and in addition, the German anti-directive/ treaty shopping provision of Section 50d paragraph 3 of the German Income Tax Act (*Einkommensteuergesetz*) must not be fulfilled.\n\nThe withholding tax on dividends distributed to other foreign resident shareholders may be refunded or not levied upon application (as set out below) in accordance with an applicable tax treaty (to 15%, 5% or 0% depending on certain prerequisites) if Germany has concluded such tax treaty with the country of residence of the shareholder and if the shareholder does not hold the Ordinary Shares either as part of the assets of a permanent establishment or a fixed place of business in Germany or as business assets for which a permanent representative has been appointed in Germany. Further, the foreign resident shareholder must be eligible for tax treaty purposes, and in addition, neither the limitation of benefits provision in a tax treaty nor the German anti-directive/treaty shopping provision of Section 50d paragraph 3 of the German Income Tax Act (*Einkommensteuergesetz*) must be fulfilled.\n\nIn the case of dividends received by corporate bodies (*Körperschaften*) which are not tax resident in Germany, i.e., corporate bodies with no registered office or place of management in Germany and if the shares neither belong to the assets of a permanent establishment or fixed place of business in Germany nor are part of business assets for which a permanent representative in Germany has been appointed, two-fifths of the withholding tax deducted and remitted may be refunded or not levied upon application (as set out below) without the need to fulfill all prerequisites required for such refund under the EU Parent Subsidiary Directive or under a tax treaty or if no tax treaty has been concluded between the state of residence of the shareholder, however, likewise subject to the conditions of the aforementioned German anti-directive/treaty shopping provision.\n\n88\n\n[Table of Contents](#TOC)\n\nThe application for a refund of withholding tax under the EU Parent Subsidiary Directive, a tax treaty or the aforementioned option for foreign corporate bodies is to be filed with the German Federal Central Tax Office (*Bundeszentralamt für Steuern*) within four years following the end of the calendar year in which the dividends were received. The application shall be made by submitting a completed form for refund (available at the website of the Federal Central Tax Office (http://www.bzst.de) as well as at the German embassies and consulates) together with a withholding tax certificate (*Kapitalertragsteuerbescheinigung*) issued by the institution that deducted the respective withholding tax via the website of the German Federal Central Tax Office (“electronic procedure”). In this case, the refund of deducted withholding tax is procedurally granted in such a manner that the difference between the total amount withheld, including the solidarity surcharge, and the tax liability determined on the basis of the EU Parent Subsidiary Directive (0%) or on the basis of the tax rate set forth in the applicable tax treaty (15%, 5% or 0%) is refunded by the German Federal Central Tax Office.\n\nIf, under fulfillment of the prerequisites of the EU Parent Subsidiary Directive or a tax treaty, withholding tax is not to be levied at all, the relevant shareholder must apply to the German Federal Central Tax Office for the issuance of an exemption certificate (*Freistellungsbescheinigung*) that documents that the prerequisites for the application of the reduced withholding tax rates have been met. Dividends covered by the exemption certificate of the shareholder are then only subject to the reduced withholding tax rates stipulated in the exemption certificate.\n\nPlease note that applying for a non-assessment notice and/or applying for a refund might require a significant amount of time. On 2 April 2024, the German Federal Government published a statement, according to which the Central Federal Tax Office currently needs (on an average basis) 480 days for deciding about the issuance of non-assessment notices under relief of source procedures (*Freistellungsverfahren*) and 615 days for deciding about refunds under the retain and refund procedures (*Erstattungsverfahren*). According to a recent statement on the website of the German Federal Central Tax Office, due to the large number of applications received, processing times for refund can exceed 20 months.\n\nThe aforementioned refunds of (or exemptions from) withholding tax are further restricted if (i) the applicable tax treaty provides for a tax reduction resulting in an applicable tax rate of less than 15% and (ii) the shareholder is not a corporation that directly holds at least 10% in the equity capital of SCHMID and is subject to tax on its income and profits in its state of residence without being exempt. In this case, the refund of (or exemption from) withholding tax is subject to the following three cumulative prerequisites: (i) the shareholder must qualify as beneficial owner of the shares in a company for a minimum holding period of 45 consecutive days occurring within a period of 45 days prior and 45 days after the due date of the dividends; (ii) the shareholder has to bear (taking into account claims of the shareholder from transactions reducing the risk of changes of the market value of the shares and corresponding claims of related parties of the shareholder) at least 70% of the change in value risk related to the shares in a company during the minimum holding period; and (iii) the shareholder must not be required to fully or largely compensate directly or indirectly the dividends to third parties.\n\nIn the absence of the fulfillment of all of the three prerequisites, three-fifths of the withholding tax imposed on the dividends must not be credited against the shareholder’s (corporate) income tax liability but may, upon application, be deducted from the shareholder’s tax base for the relevant assessment period. Furthermore, a shareholder that has received gross dividends without any deduction of withholding tax due to a tax exemption without qualifying for such a full tax credit has (i) to notify the competent local tax office accordingly, (ii) to declare according to the officially prescribed form and (iii) to make a payment in the amount of the omitted withholding tax deduction.\n\nHowever, these special rules on the restriction of withholding tax credit do not apply to a shareholder whose overall dividend earnings within an assessment period do not exceed €20,000 or that has been the beneficial owner of the shares in a company for at least one uninterrupted year upon receipt of the dividends.\n\nFor individual or corporate shareholders tax resident outside Germany neither holding the Ordinary Shares through a permanent establishment (*Betriebsstätte*) in Germany nor as business assets (*Betriebsvermögen*) for which a permanent representative (*ständiger Vertreter*) has been appointed in Germany, the remaining and paid withholding tax (if any) is then final (i.e., not refundable) and settles the shareholder’s limited tax liability in Germany. For individual or corporate shareholders tax resident in Germany (for example, those shareholders whose residence, domicile, registered office or place of management is located in Germany) holding their Ordinary Shares as business assets, as well as for shareholders tax resident outside of Germany holding their Ordinary Shares through a permanent establishment in Germany or as business assets for which a permanent representative has been appointed in Germany, the withholding tax withheld (including the solidarity surcharge) can be credited against the shareholder’s personal income tax or corporate income tax liability in Germany. Any withholding tax (including the solidarity surcharge) in excess of such tax liability will be refunded upon receipt of the relevant tax assessment. For individual shareholders tax resident in Germany holding Ordinary Shares as private assets, the withholding tax is a final tax (*Abgeltungsteuer*), subject to the exceptions described in the following section.\n\n89\n\n[Table of Contents](#TOC)\n\nTaxation of Dividend Income of Shareholders Tax Resident in Germany Holding Ordinary Shares as Private Assets (Private Individuals)\n\nFor individual shareholders (individuals) resident in Germany holding Ordinary Shares as private assets, dividends are subject to a flat rate tax, which is satisfied by the withholding tax actually withheld (*Abgeltungsteuer*). Accordingly, dividend income will be taxed at a flat tax rate of 25% plus a 5.5% solidarity surcharge thereon totaling 26.375% and church tax (*Kirchensteuer*) in the case the shareholder is subject to church tax because of his or her personal circumstances. An automatic procedure for deduction of church tax by way of withholding will apply to shareholders being subject to church tax, unless the shareholder has filed a blocking notice (*Sperrvermerk*) with the German Federal Tax Office (details related to the computation of the specific tax rate, including church tax, are to be discussed with the individual tax advisor of the relevant shareholder). Except for an annual lump sum savings allowance (*Sparer-Pauschbetrag*) of up to €1,000 (for individual filers) or up to €2,000 (for married couples and for partners in accordance with the registered partnership law (*Gesetz über die Eingetragene Lebenspartnerschaft*) assessed jointly), private individual shareholders will not be entitled to deduct expenses incurred in connection with the capital investment from their dividend income.\n\nThe income tax owed for the dividend income is satisfied by the withholding tax withheld by an agent of SCHMID or SCHMID. However, if the flat tax results in a higher tax burden as opposed to the private individual shareholder’s personal income tax rate, the private individual shareholder can opt for taxation at his or her personal income tax rate. In that case, the final withholding tax will be credited against the income tax. The option can be exercised only for all capital income from capital investments received in the relevant assessment period uniformly, and married couples as well as partners in accordance with the registered partnership law assessed jointly can only jointly exercise the option.\n\nExceptions from the flat rate tax (satisfied by withholding the tax at source, A*bgeltungswirkung*) may apply — that is, only upon application — (i) for shareholders who have a shareholding of at least 25% in SCHMID and (ii) for shareholders who have a shareholding of at least 1% in SCHMID and work for the Company in a professional capacity, each within the assessment period for which the application is first made. In such a case, the same rules apply as for sole proprietors holding Ordinary Shares as business assets (see below *“— Taxation of Dividend Income of Shareholders Tax Resident in Germany Holding Ordinary Shares as Business Assets — Sole Proprietors*”). Further, the flat rate tax does not apply if and to the extent dividends reduced SCHMID taxable income.\n\nTaxation of Dividend Income of Shareholders Tax Resident in Germany Holding Ordinary Shares as Business Assets\n\nIf a shareholder holds Ordinary Shares as business assets, the taxation of the dividend income depends on whether the respective shareholder is a corporation, a sole proprietor or a partnership.\n\nDividend income of corporate shareholders is exempt from corporate income tax, provided that the corporation holds a direct participation of at least 10% in the share capital of a company at the beginning of the calendar year in which the dividends are paid (participation exemption). The acquisition of a participation of at least 10% in the course of a calendar year (in one instance) is deemed to have occurred at the beginning of such calendar year. Participations in the share capital of the Company that a corporate shareholder holds through a partnership, including co-entrepreneurships (*Mitunternehmerschaften*), are attributable to such corporate shareholder only on a pro rata basis at the ratio of the interest share of the corporate shareholder in the assets of the relevant partnership. However, 5% of the tax-exempt dividends are deemed to be non-deductible business expenses for tax purposes and, therefore, are effectively subject to corporate income tax (plus a solidarity surcharge); i.e., tax exemption of 95%. Business expenses incurred in connection with the dividends received are entirely tax deductible. The participation exemption does not apply if and to the extent dividends reduced SCHMID’s taxable income.\n\nFor trade tax purposes, the entire dividend income is subject to trade tax (i.e., the tax-exempt dividends must be added back when determining the trade taxable income), unless the corporate shareholder holds at least 15% of the Company’s registered share capital at the beginning of the relevant tax assessment period (*Erhebungszeitraum*). In such case, the dividends are not subject to trade tax. However, trade tax is levied on the amount considered to be a non-deductible business expense (amounting to 5% of the dividend). Trade tax depends on the municipal trade tax multiplier applied by the relevant municipal authority. In the case of an indirect participation via a partnership, please refer to the section *“— Partnerships*” below.\n\nIf the shareholding is below 10% in the share capital, dividends are taxable at the applicable corporate income tax rate of 15% plus a 5.5% solidarity surcharge thereon and trade tax (the rate of which depends on the applicable municipality levy rate determined by the municipality in which the corporate shareholder has its place of management and permanent establishments, respectively, to which the Ordinary Shares are attributed).\n\n90\n\n[Table of Contents](#TOC)\n\nSpecial regulations apply that abolish the 95% tax exemption, if Ordinary Shares are held (i) as trading portfolio (*Handelsbestand*) assets in the meaning of Section 340e paragraph 3 of the German Commercial Code (*Handelsgesetzbuch*) by a (a) credit institution (*Kreditinstitut*), (b) securities institution (*Wertpapierinstitut*) or (c) financial service institution (*Finanzdienstleistungsinstitut*) or (ii) as current assets (*Umlaufvermögen*) by a financial enterprise (*Finanzunternehmen*) within the meaning of the German Banking Act (*Kreditwesengesetz*), in the case more than 50% of the shares of such financial enterprise are held directly or indirectly by a credit institution, a securities institution or a financial service institution, or (iii) by a life insurance company, a health insurance company or a pension fund in the case the shares are attributable to the capital investments, resulting in fully taxable income (any shareholder falling under (i), (ii) or (iii), a “Non-Exempt Corporation”).\n\nSole proprietors\n\nFor sole proprietors (individuals) resident in Germany holding Ordinary Shares as business assets, dividends are subject to the partial income rule (*Teileinkünfteverfahren*). Accordingly, only (i) 60% of the dividend income will be taxed at his/her personal income tax rate plus a 5.5% solidarity surcharge thereon (if applicable) and (ii) 60% of the business expenses related to the dividend income are deductible for tax purposes. In addition, church tax may be levied, whereby the 40% tax-exemption does not apply to church tax. In addition, the dividend income is entirely subject to trade tax if the Ordinary Shares are held as business assets of a permanent establishment in Germany within the meaning of the German Trade Tax Act (*Gewerbesteuergesetz*), unless the shareholder holds at least 15% of the Company’s registered share capital at the beginning of the relevant assessment period. In this latter case, the net amount of dividends, i.e., after deducting directly related expenses, is exempt from trade tax. The trade tax levied will be eligible for credit against the shareholder’s personal income tax liability based on the applicable municipal trade tax rate and the individual tax situation of the shareholder limited to the lower of 4.0 times the trade tax measurement amount (*Gewerbesteuer-Messbetrag*) and the amount of trade tax actually payable.\n\nPartnerships\n\nIn the case Ordinary Shares are held by a partnership, the partnership itself is not subject to corporate income tax or personal income tax. In this regard, corporate income tax or personal income tax (and church tax, if applicable) as well as a solidarity surcharge (if applicable) are levied only at the level of the partners with respect to their relevant part of the partnership’s taxable income and depending on their individual circumstances:\n\n(1)if the partner is a corporation, the dividend income will be subject to corporate income tax plus a solidarity surcharge (see above *“—Corporations*”);\n\n(2)if the partner is a sole proprietor, the dividend income will be subject to the partial income rule (see above *“—Sole Proprietors*”) plus a solidarity surcharge (if applicable); or\n\n(3)if the partner is a private individual – only possible if the partnership is not a (operative or deemed) commercial partnership, the dividend income will be subject to the flat tax rate plus a solidarity surcharge (see above *“—Private Individuals*”).\n\nIn the case the partnership is a (operative or deemed) commercial partnership with its place of management in Germany, the dividend income is subject to German trade tax at the level of the partnership, unless the partnership holds at least 15% of a company’s registered share capital at the beginning of the relevant assessment period. In such case, the dividend income is 95% exempt from trade tax to the extent the partners of the partnership are corporations (indirectly holding at least 10% of the shares in SCHMID) and 40% exempt from trade tax to the extent the partners of the partnership are sole proprietors. Any trade tax levied on the level of the partnership will be eligible for credit against an individual shareholder’s personal income tax liability based on the applicable municipal trade tax rate, depending on the individual tax situation of the shareholder and further circumstances and limited to the lower of 4.0 times the partial trade tax measurement amount allocable to such individual partner and the amount of trade tax actually payable by such individual partner.\n\nPartnerships can opt to be treated as a corporation for purposes of German income taxation. If the shareholder is a partnership that has validly exercised such option right, any dividends from shares or subscription rights are subject to corporate income tax (and, for the avoidance of doubt, trade tax).\n\n91\n\n[Table of Contents](#TOC)\n\nTaxation of Dividend Income of Shareholders Tax Resident Outside of Germany\n\nFor individual or corporate shareholders tax resident outside of Germany neither holding the Ordinary Shares through a permanent establishment in Germany nor as business assets for which a permanent representative has been appointed in Germany, the deducted withholding tax (possibly reduced by way of a tax relief under a tax treaty or domestic tax law, such as in connection with the EU Parent Subsidiary Directive) is final (that is, not refundable) and settles the shareholder’s limited tax liability in Germany, unless the shareholder is entitled to apply for a withholding tax refund or exemption (as set out above in *“— Withholding Tax on Dividend Payments*”).\n\nIn contrast, individual or corporate shareholders tax resident outside of Germany holding the Company’s Ordinary Shares through a permanent establishment in Germany or as business assets for which a permanent representative has been appointed in Germany are subject to the same rules as applicable (and described above) to shareholders resident in Germany holding the Ordinary Shares as business assets. The withholding tax withheld (including the solidarity surcharge) will generally be credited against the shareholder’s personal income tax or corporate income tax liability in Germany if the prerequisites set out above (see “— Withholding Tax on Dividend Payments”) are fulfilled.\n\n*Taxation of Capital Gains*\n\nWithholding Tax on Capital Gains\n\nCapital gains realized on the disposal of Ordinary Shares are only subject to withholding tax if a domestic branch of a domestic or foreign credit or financial services institution (*Kredit- oder Finanzdienstleistungsinstitut*) or a domestic securities institution (*inländisches Wertpapierinstitut*) (each of which is referred to as the “German Disbursing Agent”) stores or administrates or carries out the disposal of the Ordinary Shares and pays or credits the capital gains. In those cases, the institution (and not the Company) is required to deduct the withholding tax at the time of payment for the account of the shareholder and to pay the withholding tax to the competent tax authority.\n\nIn the case the Ordinary Shares are held (i) as business assets by a sole proprietor, a partnership or a corporation and such shares are attributable to a German business or (ii) in the case of a corporation being subject to unlimited corporate income tax liability in Germany, the capital gains are not subject to withholding tax. In case of the aforementioned exemption under (i), the withholding tax exemption is subject to the condition that the paying agent has been notified by the beneficiary (*Gläubiger*) that the capital gains are exempt from withholding tax. The respective notification has to be filed with the tax office competent for the beneficiary by using the officially prescribed form.\n\nTaxation of Capital Gains Realized by Shareholders Tax Resident in Germany Holding Ordinary Shares as Private Assets (Private Individuals)\n\nFor individual shareholders (individuals) resident in Germany holding Ordinary Shares as private assets, capital gains realized on the disposal of Ordinary Shares are subject to final withholding tax (*Abgeltungsteuer*). Accordingly, capital gains will be taxed at a flat tax rate of 25% plus a 5.5% solidarity surcharge thereon totaling 26.375% and church tax in the case the shareholder is subject to church tax because of his or her personal circumstances. An automatic procedure for deduction of church tax by way of withholding will apply to shareholders being subject to church tax unless the shareholder has filed a blocking notice (*Sperrvermerk*) with the German Federal Central Tax Office (details related to the computation of the specific tax rate, including church tax, are to be discussed with the personal tax advisor of the relevant shareholder). The taxable capital gain is calculated by deducting the acquisition costs of the Ordinary Shares and the expenses directly and materially related to the disposal from the proceeds of the disposal. Apart from that, except for an annual lump sum savings allowance (*Sparer-Pauschbetrag*) of up to €1,000 (for individual filers) or up to €2,000 (for married couples and for partners in accordance with the registered partnership law (*Gesetz über die Eingetragene Lebenspartnerschaft*) assessed jointly), private individual shareholders will not be entitled to deduct expenses incurred in connection with the capital investment from their capital gain.\n\nIn the case the flat tax results in a higher tax burden as opposed to the private individual shareholder’s personal income tax rate, the private individual shareholder can opt for taxation at his or her personal income tax rate. In that case, the withholding tax (including the solidarity surcharge) withheld will be credited against the income tax. The option can be exercised only for all capital income from capital investments received in the relevant assessment period uniformly and married couples as well as for partners in accordance with the registered partnership law assessed jointly may only jointly exercise the option.\n\n92\n\n[Table of Contents](#TOC)\n\nCapital losses arising from the disposal of the Ordinary Shares can only be offset against other capital gains resulting from the disposition of the Ordinary Shares or shares in other stock corporations during the same calendar year. Offsetting of overall losses with other income (such as business or rental income) and other capital income is not possible. Such losses are to be carried forward and to be offset against positive capital gains deriving from the disposal of shares in stock corporations in future years. The constitutionality of such limitation on the offsetting of losses is currently the subject of a pending procedure at the German Federal Constitutional Court.\n\nIf the seller of the Ordinary Shares or in the case of gratuitous transfer, its legal predecessor, has held, directly or indirectly, at least 1% of the Company’s registered share capital at any time during the five years prior to the disposal, capital gains are subject to the partial income rule (*Teileinkünfteverfahren*). Accordingly, only 60% of the capital gains (determined as sales proceeds less business expenses related to the sale) will be taxed at his or her personal income tax rate plus a 5.5% solidarity surcharge thereon (if applicable). In addition, church tax may be levied, whereby the 40% tax-exemption does not apply to church tax. The withholding tax withheld (including solidarity surcharge) will be credited against the shareholder’s personal income tax liability in Germany.\n\nTaxation of Capital Gains Realized by Shareholders Tax Resident in Germany Holding Ordinary Shares as Business Assets\n\nIf a shareholder holds Ordinary Shares as business assets, the taxation of capital gains realized on the disposal of such shares depends on whether the respective shareholder is a corporation, a sole proprietor or a partnership:\n\nCorporations\n\nCapital gains realized on the disposal of Ordinary Shares by a corporate shareholder are generally exempt from corporate income tax and trade tax. However, 5% of the tax-exempt capital gains are deemed to be non-deductible business expenses for tax purposes and, therefore, are effectively subject to corporate income tax (plus a solidarity surcharge) and trade tax; i.e., a tax exemption of 95%. Business expenses incurred in connection with the capital gains are entirely tax deductible.\n\nCapital losses incurred upon the disposal of Ordinary Shares or other impairments of the share value are not tax deductible. Capital losses in this context are also defined as any losses incurred in connection with a loan or security in the event the loan or the security is granted by a shareholder or by a related party thereto or by a third person with the right of recourse against the before mentioned persons and the shareholder holds directly or indirectly more than 25% of the Company’s registered share capital.\n\nSpecial regulations apply, which may exclude aforementioned tax exemptions if the Ordinary Shares are held by a Non-Exempt Corporation.\n\nSole Proprietors\n\nIf the Ordinary Shares are held by a sole proprietor, capital gains realized on the disposal of the Ordinary Shares are subject to the partial income rule (*Teileinkünfteverfahren*). Accordingly, only 60% of the capital gains (determined as sales proceeds less business expenses related to the sale) will be taxed at his or her personal income tax rate plus a 5.5% solidarity surcharge thereon (if applicable). In addition, church tax may be levied, whereby the 40% tax-exemption does not apply to church tax. In addition, 60% of the capital gains are subject to trade tax if the Ordinary Shares are held as business assets of a permanent establishment in Germany within the meaning of the German Trade Tax Act (*Gewerbesteuergesetz*). The trade tax levied will be eligible for credit against the shareholder’s personal income tax liability based on the applicable municipal trade tax rate and the individual tax situation of the shareholder limited to the lower of 4.0 times the trade tax measurement amount and the amount of trade tax actually payable.\n\n93\n\n[Table of Contents](#TOC)\n\nPartnerships\n\nIn the case the Ordinary Shares are held by a partnership, the partnership itself is not subject to corporate income tax or personal income tax as well as solidarity surcharge (and church tax) since partnerships qualify as transparent for German income tax purposes. In this regard, corporate income tax or personal income tax as well as a solidarity surcharge (and church tax, if applicable) are levied only at the level of the partners with respect to their relevant part of the partnership’s taxable income and depending on their individual circumstances:\n\n(i)If the partner is a corporation, the capital gains will be subject to corporate income tax plus solidarity surcharge (see above *“— Corporations*”). Trade tax will be levied additionally at the level of the partner insofar as the relevant profit of the partnership is not subject to trade tax at the level of the partnership. However, with respect to both corporate income and trade tax, the 95%-exemption rule as described above applies. With regard to corporations as partners, special regulations apply if they are held by a Non-Exempt Corporation, as described above.\n\n(ii)If the partner is a sole proprietor (individual), the capital gains are subject to the partial income rule plus a solidarity surcharge (if applicable) (see above “—*Sole Proprietors*”).\n\nIn addition, if the partnership is liable to German trade tax, 60% of the capital gains are subject to trade tax at the level of the partnership, to the extent the partners are individuals, and 5% of the capital gains are subject to trade tax, to the extent the partners are corporations. However, if a partner is an individual, any trade tax paid on the level of the partnership will be eligible for credit against an individual partner’s personal income tax liability based on the applicable municipal trade tax rate and depending on the individual tax situation of the individual and further circumstances, limited to the lower of 4.0 times of the partial trade tax measurement (*Gewerbesteuer-Messbetrag*) allocable to such individual partner and the amount of trade tax actually payable by such individual partner.\n\nPartnerships can opt to be treated as a corporation for purposes of German income taxation. If the shareholder is a partnership that has validly exercised such option right, any capital gains from the disposal of shares or subscription rights are subject to corporate income tax (and, for the avoidance of doubt, trade tax).\n\nTaxation of Capital Gains Realized by Shareholders Tax Resident Outside of Germany\n\nCapital gains realized on the disposal of the Ordinary Shares by a shareholder tax resident outside of Germany are subject to German taxation provided that (i) the Ordinary Shares are held as business assets of a permanent establishment or as business assets for which a permanent representative has been appointed in Germany or (ii) the shareholder or, in the case of a gratuitous transfer, its legal predecessor has held, directly or indirectly, at least 1% of the Company’s share capital at any time during a five years period prior to the disposal.\n\nIn these cases, capital gains are generally subject to the same rules as described above for shareholders resident in Germany. However, if capital gains are realized in case (ii) above by corporations tax resident outside of Germany that are not Non-Exempt Corporations, these capital gains are fully tax exempt under German tax law according to the case law of the German Federal Fiscal Court (*Bundesfinanzhof*). Additionally, except for the cases referred to in (i) above, most tax treaties concluded by Germany provide for a full exemption from German taxation except if the Company is considered a German real estate holding entity for treaty purposes.\n\n**German Taxation of Holders of Warrants**\n\nGeneral\n\nHolders of Warrants are likely to be taxed in particular upon certain forms of the exercise, sale or disposal of Warrants (taxation of capital gains) and the gratuitous transfer of Warrants (inheritance and gift tax).\n\n94\n\n[Table of Contents](#TOC)\n\nTaxation of Holders of Warrants Not Tax Resident in Germany\n\nThe capital gains from the disposition of the Warrants realized by a non-German tax resident holder of the Warrants would not be treated as German source income and not be subject to German income tax provided that (i) such non-German resident holder does not maintain a permanent establishment or other taxable presence in Germany that the Warrants form part of and (ii) the income does not otherwise constitute German-source income (such as income from the letting and leasing of certain German-situs property or income from certain capital investments directly or indirectly secured by German-situs real estate). If either requirement (i) or (ii) above is not met, a non-German tax resident holder will be subject to German taxation on the aforementioned capital gains corresponding to the taxation of holders of Warrants tax resident in Germany holding the Warrants as business assets, as set out below.\n\nIn this case, non-German resident holders of the Warrants are, in general, exempt from German withholding tax on capital gains. However, if capital gains derived from the Warrants are paid out or credited to the holder of the Warrants by a German Disbursing Agent, withholding tax may be levied under certain circumstances both in the case of business and non-business holders of Warrants. The withholding tax may be refunded based on an assessment to tax or under an applicable tax treaty, depending on the individual circumstances of the holder.\n\nTaxation of Holders of Warrants Tax Resident in Germany\n\nGeneral treatment of Capital Gains\n\nThe capital gains from the disposition (i.e., the difference between the proceeds from the disposal, redemption, repayment or assignment after deduction of expenses directly related to the disposal, redemption, repayment or assignment and the cost of acquisition) or (if applicable pursuant to the warrant agreement underlying the Warrants) a cash settlement (i.e., the cash amount received minus directly related costs and expenses, e.g., the acquisition costs) of the Warrants received by a German resident holder of Warrants holding the Warrants as private assets will be subject to German withholding tax if the Warrants are kept or administered in a custodial account with a German Disbursing Agent. The tax rate is 25% (plus a 5.5% solidarity surcharge thereon, resulting in an aggregate rate of 26.375%; plus church tax, if applicable). For individual holders who are subject to church tax, the church tax generally has to be withheld by the German Disbursing Agent based on an automatic data access procedure, unless the shareholder has filed a blocking notice (*Sperrvermerk*) with the Federal Central Tax Office.\n\nIn the case the Warrants have not been kept or administered in a custodial account with the same German Disbursing Agent since the time of their acquisition, the withholding tax rate will be applied to 30% of the (disposal) proceeds (the so called “Lump Sum Substitute Basis”), unless the current German Disbursing Agent has been notified of the actual acquisition costs of the Warrants by the previous German Disbursing Agent or by a statement of a bank or financial services institution from another member state of the European Union or the European Economic Area or from certain other countries (e.g., Switzerland or Andorra).\n\nIn the event of delivery of Ordinary Shares upon exercise of the Warrants, the tax consequences are not entirely clear under German tax law. In principle, the acquisition costs of the Warrants plus any additional sum paid upon exercise should be regarded as acquisition costs of the Ordinary Shares received upon physical settlement. Consequently, and subject to the following, no capital gain and no withholding tax may result from such exercise and delivery of Ordinary Shares upon exercise. Withholding tax may in this case only apply to any gain resulting later from the subsequent disposal, redemption or assignment of the Ordinary Shares received under certain circumstances.\n\nPlease note, however, that the German tax authorities have not confirmed the above treatment for the exercise of U.S. warrants, but only for the exercise of convertible bonds (*Wandelschuldverschreibungen, Optionsscheine*), wherefore, uncertainty remains regarding its application on the exercise of the Warrants. Therefore, there is a relevant risk that the delivery of Ordinary Shares upon exercise of the Warrants may constitute a taxable event and may attract withholding tax (as regards the latter, in the case a German Disbursing Agent is involved as per the above). Generally, capital gains are determined as the difference between (a) the proceeds of the sale or other disposition and (b) the acquisition costs plus the expenses directly connected to the sale or other disposition. It is unclear how exactly such capital gain would have to be determined in the case of delivery of Ordinary Shares upon exercise of the Warrants; possibly, the fair market value of the Ordinary Shares at the time of the exercise would be deemed relevant.\n\n95\n\n[Table of Contents](#TOC)\n\nIn computing any German tax to be withheld, the German Disbursing Agent generally deducts from the basis of the withholding tax, subject to certain limitations, negative investment income realized by a non- business holder of the Warrants via the German Disbursing Agent (e.g., losses from the sale of other securities with the exception of shares). The German Disbursing Agent also deducts accrued interest on other securities (if any) paid separately upon the acquisition of the respective security by a non-business holder of Warrants via the German Disbursing Agent. In addition, subject to certain requirements and restrictions, the German Disbursing Agent may credit foreign withholding taxes levied on investment income in a given year regarding securities held by a non-business holder of Warrants in the custodial account with the German Disbursing Agent.\n\nNon-business holders of the Warrants are entitled to an annual saver’s allowance of €1,000 for an individual or €2,000 for married couples and for partners in accordance with the registered partnership law (*Gesetz über die Eingetragene Lebenspartnerschaft*) assessed jointly for all investment income received in a given year. Upon the non-business holder of the Warrants filing an exemption certificate (*Freistellungsauftrag*) with the Disbursing Agent, the Disbursing Agent will take the allowance into account when computing the amount of tax to be withheld.\n\nNo withholding tax will be deducted if the holder of the Warrants has submitted to the Disbursing Agent a certificate of non-assessment (*Nichtveranlagungs-Bescheinigung*) issued by the competent local tax office. The deduction of expenses related to the investment income (including gains with respect to the Warrants) is generally not possible for private investors.\n\nGerman withholding tax should not apply to gains from the disposal, redemption, repayment or assignment of Warrants held by a German tax resident corporation. The same may apply to sole proprietors or partners of partnerships, where the Warrants form part of a trade or business or are related to income from letting and leasing of property, subject to further requirements being met (compare with “— Corporations, Sole Proprietors and Partnerships” below). Please note that for corporations, sole-proprietors or partnerships that or who are not tax resident in Germany, withholding tax may be levied, as set out above (compare with “— Taxation of Holders of Warrants Not Tax Resident in Germany”).\n\nIndividuals as the Holders of the Warrants\n\nThe personal income tax liability of a holder of the Warrants holding the Warrants as private assets deriving income from capital investments under the Warrants is, in principle, settled by the tax withheld (unless for example the income from Warrants qualifies as income from the letting and leasing of property). To the extent withholding tax has not been levied, such as in the case of Warrants kept in custody abroad or if no German Disbursing Agent is involved in the payment process, the non-business holder of Warrants must report his or her income and capital gains derived from the Warrants (through disposition or cash settlement, if applicable pursuant to the warrant agreement underlying the Warrants) on his or her tax return and then will also be taxed at a rate of 25% (plus a solidarity surcharge of 5.5% thereon, resulting in an aggregate rate of 26.375%; and church tax, if applicable).\n\nIn the event of delivery of Ordinary Shares upon exercise of the Warrants, the tax consequences are not entirely clear under German tax law. As per the above, there is a relevant risk that the delivery of Ordinary Shares upon exercise of the Warrants may constitute a taxable event and may attract withholding tax (as regards the latter, in the case a German Disbursing Agent is involved as per the above). Generally, capital gains are determined as the difference between (a) the proceeds of the sale or other disposition and (b) the acquisition costs plus the expenses directly connected to the sale or other disposition. It is unclear how exactly such capital gains would have to be determined in the case of delivery of Ordinary Shares upon exercise of the Warrants; possibly, the fair market value of the Ordinary Shares at the time of the exercise would be deemed relevant. For more detail, cf. above under the general comments.\n\nIf the withholding tax has been calculated on the basis of a Lump Sum Substitute Basis, a non-business holder of the Warrants may and in the case the actual gain is higher than 30% of the proceeds must also apply for an assessment on the basis of his or her actual acquisition costs. Further, a non-business holder may request that all investment income of a given year is taxed at his or her lower individual tax rate based upon an assessment to tax with any amounts over withheld being refunded. In each case, the deduction of expenses (other than transaction costs) on an itemized basis is not permitted.\n\nWith regard to non-business holders of Warrants, there is a relevant risk that such losses may only be applied against profits from income from capital investments (including but not limited to profits from other warrants) derived in the same or, subject to certain limitations, in subsequent years.\n\n96\n\n[Table of Contents](#TOC)\n\nCorporations, Sole Proprietors and Partnerships\n\nWhere Warrants form part of a trade or business, the withholding tax, if any, will not settle the personal or corporate income tax liability. The respective holder of Warrants (or the partner of the partnership holding the Warrants) will have to report income and related (business) expenses resulting from the disposition or (if applicable) cash settlement of the Warrants or, potentially, from a delivery of Ordinary Shares on the tax return and the balance will be taxed at the holder’s (or the partner of the partnership holding the Warrants) applicable tax rate. Withholding tax levied, if any, will be credited against the personal or corporate income tax of the holder (or the partner of the partnership holding the Warrants). Capital gains resulting from a disposal, redemption, repayment, assignment, cash settlement (if applicable) or, potentially, from a delivery of Ordinary Shares upon exercise of the Warrants may also be subject to German trade tax, if the Warrants form part of a German trade or business. A corporate income tax or trade tax exemption should, in this case, not be applicable.\n\nLosses can be carried forward indefinitely and, within certain limitations, applied against profits from income from capital investments (including but not limited to profits from other warrants) in subsequent years.\n\nIn the case of physical settlement of the Warrants, please see the above sections on disposal of Ordinary Shares for German taxation of the disposal or other transaction involving a resulting Ordinary Share.\n\nSolidarity Surcharge\n\nThe solidarity surcharge has been partially abolished or reduced as of the assessment period 2021 for certain German taxpayers. The solidarity surcharge continues, however, to apply for corporate income tax and capital investment income and, thus, on withholding taxes levied. In the case the individual income tax burden for an individual holder is lower than 25%, the holder can apply for his or her capital investment income being assessed at his or her individual tariff-based income tax rate, in which case solidarity surcharge should be refunded.\n\nInheritance and Gift Tax\n\nThe transfer of Ordinary Shares or Warrants to another person by way of succession or donation is subject to German inheritance and gift tax (*Erbschaft-und Schenkungsteuer*) if at the time of transfer:\n\n●the decedent, the donor, the heir, the donee or any other beneficiary has his/her/its residence, domicile, registered office or place of management in Germany, or is a German citizen who has not stayed abroad for more than five consecutive years without having a residence in Germany; or\n\n●(irrespective of the personal circumstances) the Ordinary Shares or Warrants are held by the decedent or donor as business assets for which a permanent establishment in Germany is maintained or a permanent representative is appointed in Germany; or\n\n●(irrespective of the personal circumstances) at least 10% of the registered share capital of SCHMID is held directly or indirectly by the decedent or person making the gift, himself or together with a related party in terms of Section 1 (2) German Foreign Tax Act (*Außensteuergesetz*).\n\nSpecial regulations apply to German citizens who maintain neither a residence nor their domicile in Germany but maintain a residence or domicile in a low tax jurisdiction and to former German citizens, also resulting in inheritance and gift tax. The few tax treaties on inheritance and gift tax that Germany has entered into may limit the German right to inheritance and gift tax to the case described under (i) above and, with certain restrictions, in case of (ii).\n\nValue Added Tax (VAT)\n\nNo German value added tax (*Umsatzsteuer*) will arise in respect of any acquisition, ownership and/or disposal of the Ordinary Shares or Warrants unless in certain cases where a waiver of an applicable VAT exemption occurs. Any such waiver would require a supply of securities from one entrepreneur for VAT purposes to the enterprise of another entrepreneur for VAT purposes.\n\n97\n\n[Table of Contents](#TOC)\n\nTransfer Taxes\n\nNo German capital transfer tax (*Kapitalverkehrsteuer*) or stamp duty (*Stempelgebühr*) or similar taxes are levied when acquiring, owning or disposing the Ordinary Shares or Warrants. Net wealth tax (*Vermögensteuer*) is currently not levied in Germany. German real estate transfer tax (*Grunderwerbsteuer*) may only be attracted by the acquisition (including by way of exercise of Warrants) or sale of Ordinary Shares or certain comparable transactions under very specific circumstances if SCHMID, or a subsidiary entity to SCHMID, own German situs real estate at such time, with “ownership” and “real estate” both having an extended meaning under the German Real Estate Transfer Tax Act (*Grunderwerbsteuergesetz*). Exemptions apply in specific cases of exchange traded shares.\n\nF. Dividends and Paying Agents\n\nNot applicable.\n\nG. Statement by Experts\n\nNot applicable\n\nH. Documents on Display\n\nWe are subject to the information reporting requirements of the Exchange Act applicable to foreign private issuers and under those requirements will file reports with the SEC. Those reports may be inspected without charge at the locations described below. As a foreign private issuer, we are partially exempt from the rules under the Exchange Act related to the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. Starting on March 18, 2026, Section 16(a) of the Exchange Act in relation to directors and officers became applicable to foreign private issuers and thus applies to SCHMID.\n\nIn addition, we are not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as United States companies whose securities are registered under the Exchange Act. Nevertheless, we will file with the SEC an Annual Report on Form 20-F containing financial statements that have been examined and reported on, with and opinion expressed by an independent registered public accounting firm.\n\nWe maintain a corporate website at www.schmid-group.com. We intend to post our Annual Report on our website promptly following it being filed with the SEC. Information contained on, or that can be accessed through, our website does not constitute a part of this Annual Report. We have included our website address in this Annual Report solely as an inactive textual reference.\n\nThe SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements and other information regarding registrants, such as us, that file electronically with the SEC. With respect to references made in this Annual Report to any contract or other document of our company, such references are not necessarily complete, and you should refer to the exhibits attached or incorporated by reference to this Annual Report for copies of the actual contract or document.\n\nI. Subsidiary Information.\n\nNot applicable.\n\n**J. Annual Report to Security Holders**\n\nIf we are required to provide an annual report to security holders in response to the requirements of Form 6-K, we will submit the annual report to security holders in electronic format in accordance with the EDGAR Filer Manual.\n\n​\n\n​\n\n98\n\n[Table of Contents](#TOC)"}