{"url_path":"/sec/turb/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/1963439/0001213900-26-057672-index.html","accession_number":"0001213900-26-057672","cik":"0001963439","ticker":"TURB","issuer_name":"Turbo Energy, S.A.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1963439/0001213900-26-057672-index.html","primary_entity_key":"0001963439","primary_entity_name":"Turbo Energy, S.A."},"word_count":10528,"has_tables":true,"body_markdown":"**ITEM 10. ADDITIONAL INFORMATION**\n\n \n\n**A. Share Capital**\n\n \n\nNot applicable.\n\n \n\n**B. Bylaws**\n\n \n\nThe following summary provides\ninformation concerning the share capital of the Company and briefly describes certain significant provisions of the Amended Bylaws, as\nfiled on August 28, 2023, and other internal regulation of the Company, as well as Spanish corporate law, including the Spanish Companies\nAct, Law 22/2014, “Royal Decree-Law 5/2023, of June on structural modifications of Commercial Companies,” the Securities\nMarket Act and Royal Decree 878/2015, dated October 2, 2015, on clearing, settlement and registry of negotiable securities in book-entry\nform (anotaciones en cuenta), and transparency requirements for issuers of securities admitted to trading on an official secondary market\n(Real Decreto Legislativo 1/2010, de 2 de julio, por el que se aprueba el texto refundido de la Ley de Sociedades de Capital) in accordance\nwith section 3, paragraphs a and b, of Article 495, the following special provisions shall apply to public limited companies whose shares\nare admitted to trading on a comparable regulated market in a third country (i.e., NASDAQ) and are not admitted to trading on a Spanish\nmarket:\n\n \n\n \n“a)\n*These provisions shall be deemed to be complied with by equivalence\nwhere the company complies with functionally analogous rules or requirements for listed companies under the law of the foreign market\nand those which are incompatible with the requirements laid down in the law of the foreign market for admission to trading and maintenance\nof listing shall be inapplicable*.” and\n\n \n\n \n“b)\n*The forms of communication and publicity shall comply with the provisions\nof the law of the foreign market. Information on the degree of compliance with corporate governance recommendations shall be formulated\nby reference to the codes or standards applicable in the foreign market*.”.\n\n \n\n78\n\n \n\n \n\nThis summary does not purport\nto be complete and is qualified in its entirety by reference to the Amended Bylaws and other internal regulations as well as the Spanish\nCompanies Act, Law 22/2014 and other applicable laws and regulations.\n\n \n\nCopies of the Amended Bylaws,\ntogether with their corresponding English translation, are available for information purposes at the principal headquarters of the Company\nand on the Company’s website (https://www.turbo-e.com/language/en/) and are filed as exhibits to this report.** **\n\n \n\n**General**\n\n \n\nThe Company is a public\nlimited liability company (sociedad anónima., S.A.) registered with the Commercial Registry of Valencia (Registro Mercantil de\nValencia), under volume 9686, sheet 44, page V-155858 and 1st inscription and holder of Spanish tax identification number\nA9856919, incorporated under the laws of Spain for an unlimited term pursuant to a notarized public deed of incorporation granted before\nthe public notary Mr. José Alicarte Domingo, under number 2287 of his protocol on having its registered address at Calle Isabel\nla Católiza 8, Oficinas 50-51, C.P 46004, Valencia (Spain) and with phone number +34 960 45 00 26. The Company’s legal\nname is “Turbo Energy S.A. and its commercial name is Turbo Energy. The financial year end of the Company is December 31. The Company’s\ncorporate purpose is as follows:\n\n \n\n \n●\nCNAE of its main activity 2712: Manufacture of electrical distribution\nand control device):\n\n \n\n \na)\nThe design and manufacture of electrical material and equipment.\n\n \n\n \nb)\nThe purchase, distribution and sale of electrical and electronic material\nfor the development of renewable energy projects, such as solar panels, inverters, chargers, regulators, batteries and structures\namong others.\n\n \n\nAt the date of this report, the issued share capital of the Company\namounts to €3,004,285 divided into a single series of 60,085,700 registered shares in book-entry form, with a nominal value of €0.05\neach and with ISIN code ES0105706008 allocated by the Spanish National Agency for the Codification of Securities (Agencia Nacional de\nCodificación de Valores Mobiliarios), an entity dependent upon the CNMV.\n\n \n\nOn June 26, 2023, our sole\nshareholder, Umbrella Solar Investment, S.A., approved decisions to increase the Company’s authorized share capital by a maximum\namount of twenty million seven hundred thousand euros (€20,700,000) through issuing and circulating a maximum of 9,000,000 new shares\nwith a par value of €0.05 each and an issue premium of €2.25 per share. These new shares belong to the same class and series\nas those currently in circulation and are subscribed through monetary contributions. Our increase in authorized share capital will not\ntake effect upon the pricing of the offering.\n\n \n\nThe newly issued shares are\nissued at an issue rate (par value plus a share premium) on the following terms. In any case, the par value of the new shares will be\nthe same as the current par value, i.e. 0.05 Euro cents per share. The Increase Shares are issued with an issue premium of two euros and\ntwenty-five cents (€2.25) per share issued. As a result, the total amount of the Capital Increase (nominal amount plus share premium)\nin the event of full subscription amounts to twenty million seven hundred thousand euros (€20,700,000).\n\n \n\nOn September 14, 2023, our\nsole shareholder, Umbrella Solar Investment, S.A., approved decisions to amend the prior sole shareholder decisions dated June 26, 2023\nin order to further increase the Company’s authorized share capital up to and by a maximum amount of twenty-two million seven hundred\nand fifty thousand euros (€22,750,000) through issuing and circulating a maximum of 25,000,000 new shares with a par value of €0.05\neach and an issue premium of €0.86 per share. These new shares belong to the same class and series as those currently in circulation\nand are subscribed through monetary contributions. Our increase in authorized share capital took effect upon the pricing of the offering.\n\n \n\nThe newly issued shares are\nissued at an issue rate (par value plus a share premium) on the following terms. In any case, the par value of the new shares will be\nthe same as the current par value, i.e. 0.05 Euro cents per share. The Increase Shares are issued with an issue premium of eighty-six\ncents of Euro (€0.86) per share issued. As a result, the total amount of the Capital Increase (nominal amount plus share premium)\nin the event of full subscription amounts to twenty-two million seven hundred and fifty thousand euros (€22,750,000).\n\n \n\nOn June 24, 2025, the General\nMeeting approved to authorize the Board of Director, pursuant to the provisions of Article 297.1.b) of Spanish Companies Act, so that,\nwithin the period of one year from the date of the General Meeting, to increase the share capital up to half of the existing capital as\nof the date of authorization, through one or more capital increases.\n\n \n\nThe delegation includes the\nfaculty to exclude, in whole or in part, the shareholders’ preemptive subscription rights in relation to capital increases carried\nout pursuant to Article 506 of Spanish Companies Act, subject to the maximum limit that the exclusion of preemptive subscription rights\nmay not, in aggregate, to more than 20% of the Company’s share capital at the time the corresponding capital increase resolution\nis adopted.\n\n \n\nBy delegation, the Board\nof Directors is empowered to set the terms and conditions of capital increases in all matters not provided for by the General Meeting,\nto determine the characteristics of the shares to be issued, to freely offer the new shares not subscribed for within the period or periods\nfor exercising the preemptive subscription right, and to provide that, in the event of incomplete subscription, the share capital shall\nbe increased only by the amount of the subscriptions actually made, as well as to amend the article of the Bylaws relating to share capital\nand the number of shares.\n\n \n\n79\n\n \n\n \n\nOn March 11, 2026, as part\nof the registered direct offering with certain institutional investor , and pursuant to the authority granted by the General Meeting\nheld on June 24, 2025, it was approved to issue and put into circulation 5,000,000 new ordinary shares of the company, of the same class\nand series as those then outstanding, with a par value of €0.05 each, numbered consecutively and fully subscribed through cash contributions.\n\n \n\nThe aforementioned shares\nwere issued at a price of €0.56 per share, with €0.05 representing the par value and €0.51 representing the share premium,\nbringing the total amount actually paid in for the capital increase to €2,800,000.\n\n \n\nAs a result of the foregoing, the share capital was fully subscribed\nand paid up, increased by a nominal amount of €250,000, and set at €3,004,285, represented by 60,085,700 shares with a par value\nof €0.05 each.\n\n \n\nUpon the pricing of the offering\ntook place to facilitate the delivery of the ADSs representing the new shares, the following aspects were completed or executed for the\nincrease in authorized share capital to take effect: (i) the execution of the notarial deed of capital increase relating to the Capital\nIncrease before a notary public, which is pending; (ii) the submission of the necessary tax returns and payment exemption for the capital\ntax (“Impuesto sobre Transmisiones Patrimoniales y Actos Jurldicos Documentados, en su modalidad de Operaciones Societarias) triggered\nby the Offering, which is pending; (iii) the registration of the notarial deed of capital increase of the Issuer at the Commercial Registry\nof Valencia, which is pending; (iv) the creation of the New Shares by the Sociedad de Gestión de los Sistemas de Registro, Compensación\ny Liquidación de Valores (Iberclear), which is pending; (v) the delivery of the New Shares to the Custodian of the Transaction\nin Spain for the blocking of the New Shares, and (vi) any other applicable requirements in connection with listing on the Nasdaq.\n\n \n\nAt the moment of its incorporation,\nthe ordinary shares which represented the Company’s share capital were fully subscribed and paid up. As of the date of this report,\nall of the Ordinary Shares are fully subscribed and paid up.\n\n \n\nThe ordinary shares are represented\nby book-entries and the entity responsible for maintaining the corresponding accounting records is Iberclear, with registered address\nat Plaza de la Lealtad 1, 28014 Madrid, Spain. As of the date of this report, the Company does not own any treasury shares (autocartera).\n\n \n\nDividend and Liquidation\n\n \n\nRights Holders of the ordinary\nshares through the ADSs have the right to participate in distributions of the profits and proceeds from liquidation, proportionally to\ntheir stake in the share capital. However, there is no right to receive a minimum dividend. Payment of dividends is proposed by the Board\nof Directors and must be authorized or ratified, as the case may be, by the shareholders at a General Shareholders’ Meeting.\n\n \n\nThe Board of Directors (as\nwell as the General Shareholders’ Meeting) may distribute amounts on account of the dividends provided that the following conditions\nare met: (i) there is sufficient liquidity for the distribution; and (ii) the amount to be distributed will not exceed the profit obtained\nduring the current financial year after deducting losses of preceding years, amounts to be contributed to legal or statutory reserves\nand estimated taxes to be paid on such profits. Shareholders participate in such dividends from the date agreed by the General Shareholders’\nMeeting.\n\n \n\nThe Spanish Companies Act\nrequires that each company allocates at least 10% of its net income each year to a legal reserve until the balance of such reserve is\nequivalent to at least 20% of such issued share capital. A legal reserve is not available for distribution to its shareholders except\nupon liquidation. As of the date of this report, the Company’s legal reserve had not reached the legally-established minimum. According\nto the Spanish Companies Act, dividends may only be paid out of profits or distributable reserves (after the compulsory allocation to\nmandatory reserves, including the legal reserve, in as much as the latter does not exceed 20% of its issued share capital, and only if\nthe value of the net worth is not, and as a result of distribution will not be, less than the share capital). In addition, no profits\nmay be distributed unless the amount of distributable reserves is at least equal to the amount of the research and development expenses\nrecorded as an asset on the balance sheet. In accordance with Article 947 of the Spanish Commercial Code, the right to a dividend lapses\nand reverts to the Company if it is not claimed within five years after it becomes payable. Upon liquidation of the Company, shareholders\nwould be entitled to receive proportionately any assets remaining after the payment of the Company’s debts, taxes and expenses\nof the liquidation.\n\n \n\nThe Company is not aware\nof any restriction on the collection of dividends by non-resident shareholders. All holders will receive dividends through and its member\nentities, without prejudice to potential withholdings on account of the Non Resident Income Tax that may apply. See section titled “Taxation.”\n\n \n\nThe ability of the Company\nto distribute dividends in the near future will depend on a number of factors, including (but not limited to) the amount of its distributable\nprofits and reserves and its investment plans, earnings, level of profitability, cash flow generation, restrictions on payment of dividends\nunder all applicable laws (see details set out in section “Dividend policy”).\n\n \n\n80\n\n \n\n \n\nShareholders’ meetings and voting rights\n\n \n\nPursuant to the Amended\nBylaws, rules of the General Shareholders’ Meeting of the Company and the Spanish Companies Act, ordinary annual General Shareholders’\nMeeting are held during the first six months of each financial year on a date fixed by the Board of Directors. Extraordinary General\nShareholders’ Meeting may be called by the Board of Directors whenever it deems appropriate, or at the request of shareholders\nrepresenting at least 3% of the Company’s share capital.\n\n \n\nFollowing Admission, notices\nof all General Shareholders’ Meeting will be published on the corporate website of the Company, at least one month prior to the\ndate when the meeting is to be held, except as discussed in the following paragraph. Exceptionally, under the Spanish Companies Act,\nwhen the Company provides all shareholders with an electronic vote, an extraordinary General Shareholders’ Meeting may be called\n15 days before the date on which the meeting is to be held.\n\n \n\nAction is taken at ordinary\nGeneral Shareholders’ Meetings on the following matters: (i) the approval of the management carried out by the directors during\nthe previous year; (ii) the approval of the financial statements from the previous financial year; and (iii) the application of the previous\nfinancial year’s income or loss. All other matters can be considered at either an extraordinary or ordinary General Shareholders’\nMeeting if the matter is within the authority of the meeting and is included on the agenda (with certain exceptional items which do not\nneed to be included on the agenda to be validly passed, such as the dismissal of a Director or the decision to bring the liability action\nagainst the Company’s directors). Liability actions against the directors shall be brought by the Company pursuant to a General\nShareholders’ Meeting decision, which may be adopted at the request of any shareholder even where not included on the agenda.\n\n \n\nThe Amended Bylaws cannot\nrequire qualified majority for the adoption of such resolution. The decision to bring an action or reach a settlement shall entail the\nremoval of the relevant directors. The approval of the financial statements shall not preclude action for liability nor constitute a\nwaiver of the action agreed or brought. According to the Spanish Companies Act -and in addition to the matters referred to in the previous\nparagraphs and any other matters as provided by law, the Company’s Amended Bylaws or the General Shareholders’ Meeting Regulations-\nthe following matters among others fall within the authority of the General Shareholders’ Meetings: (a) appointment and removal\nof directors, as well as the ratification of directors designated through a co-option procedure; (b) appointment and removal of accounts\nauditors and, if applicable, of the liquidators; (c) approval of the financial statements of the previous year, of the allocation of\nresults and of the corporate management; (d) any increase or decrease in the capital stock, including a delegation to the Board of Directors\nof the power to increase the capital stock; (e) elimination or limitation of preferential subscription rights; (f) authorization for\nthe derivative acquisition of own shares; (g) approval and amendment of the General Shareholders’ Meeting Regulations; (h) amendments\nof the Bylaws; (i) approval of the policy on directors’ remunerations, in accordance with the terms set out in the Spanish Companies\nAct; (j) approval of the Company’s Directors remuneration systems, in the form of shares or rights over shares or linked to the\nvalue of the shares; (k) granting the Directors the exemptions regarding the prohibitions deriving from the duty of loyalty, when the\ngranting of said exemptions lies with the general meeting, as well as the exemption regarding non-compete obligation duties; (l) a merger,\nspin-off, transformation, dissolution and global assignment of the Company’s assets and liabilities; (m) a transfer of the Company’s\nregistered address abroad; (n) transformation of the Company into a holding company, through “subsidiarization”, the incorporation\nor transfer into dependent companies of essential activities developed by the Company itself until then, even if the latter remains as\nthe full legal owner thereof. An activity is presumed to be essential when the relevant amount of the transaction exceeds 25% of the\ntotal assets in the balance sheet; (o) the acquisition, disposal or contribution of essential assets to another company. An asset is\npresumed to be essential when the relevant amount of the transaction exceeds 25% of the value of the total assets according to the last\nbalance sheet approved; (p) the winding up of the Company; (q) operations with an effect equivalent to the Company’s liquidation\nand the approval of the liquidation balance sheet; (r) approval of the termination or amendment of the Investment Management Agreement;\nand (s) approval of the termination or amendment of Investment Strategy.\n\n \n\nAlso, the General Shareholders’\nMeetings shall vote separately on substantially independent matters. Even if included in the same item on the agenda, the following shall\nbe voted separately: (i) the appointment, re-election, ratification or separation of directors; (ii) the advisory vote on the annual\nreport on directors’ remuneration; and (iii) in resolutions to amend the bylaws, each substantially independent article or group\nof articles.\n\n \n\n81\n\n \n\n \n\nEach share represented by\nan ADR entitles the holder five votes as per the conversion ratio of five shares per ADR and there is no limit as to the maximum number\nof voting rights that may be held by each shareholder or by companies of the same group. Any shareholder regardless of the number of\nshares it owns may, in the manner provided in the notice for such meeting, vote at the General Shareholders’ Meeting. In order\nto exercise their right of attendance, all shareholders must have their shares duly registered in the book-entry records maintained by\nCitibank on which a General Shareholders’ Meeting is scheduled. Any shareholder holding Ordinary Shares via ADRs will have the\nright to attend a General Shareholders’ Meeting. All shareholders may be represented by a proxy. Proxies must be granted in writing\nor in electronic form acceptable under the internal regulations of the Company and are valid for a single General Shareholders’\nMeeting, except if given in favour of the shareholder’s spouse (or person who has an equivalent link according to the applicable\nlaws), ascendants or descendants, or in favor of a third party authorized pursuant to a public deed to manage the assets of the relevant\nshareholder, in which case it will be valid for all shareholders’ meeting. Proxies may be given to any person, whether or not a\nshareholder, and may be revoked, either expressly or by attendance by the relevant shareholder at the meeting. Proxy holders are required\nto disclose any conflict of interest prior to their appointment.\n\n \n\nIn case a conflict of interest\narises after the proxy holder’s appointment, such conflict of interest shall be immediately disclosed to the relevant shareholder.\nIn both cases, the proxy holder shall not exercise the shareholder’s rights unless the latter has given specific voting instructions\nfor each resolution in respect of which the proxy holder is to vote on behalf of the shareholder. A conflict of interest in this context\nmay in particular arise where the proxy holder: (i) is a controlling shareholder of the Company, or is another entity controlled by such\nshareholder; (ii) is a member of the administrative, management or supervisory bodies of the Company, or of a controlling shareholder\nor another entity controlled by such shareholder; (iii) is an employee or auditor, of the Company, or of a controlling shareholder or\nanother entity controlled by such Shareholder; or (iv) is a natural person related to those mentioned in (i) to (iii) above (persona\nfísica vinculada), as this concept is defined under the Spanish Companies Act (such as spouse or similar, at the time or within\nthe two preceding years, as well as ascendants, descendants, siblings and their respective spouses).\n\n \n\nA person acting as a proxy\nholder may hold a proxy from more than one shareholder without limitation as to the number of shareholders so represented. Where a proxy\nholder holds proxies from several shareholders, he/she will be able to cast votes for a shareholder differently from votes cast for another\nShareholder.\n\n \n\nOn August 28, 2023, in order\nto comply with Nasdaq Listing Rule 5620(c) to reflect that the Company’s bylaws provide for a quorum of at least 33 1/3 percent\nof the outstanding shares of the Company’s common voting stock, the Company amended its bylaws to the extent as described in this\nparagraph. The Amended Bylaws of the Company provide that, on the first call of an ordinary or extraordinary General Shareholders’\nMeeting, the presence in person or by proxy of shareholders representing at least 40% of its voting capital will constitute a quorum.\nIf on the first call a quorum is not present, the meeting can be reconvened by a second call, which shall be validly constituted when\nthe shareholders present or represented by proxy hold at least 33.33% of the voting capital. Resolutions are passed by simple majority\nof the votes cast, which implies having more votes in favour than against. However, according to the Spanish Companies Act, resolutions\nin a General Shareholders’ Meeting to modify the bylaws of the Company (including increases and reductions of share capital), to\nissue bonds and, where competence is not legally attributed to any other of the Company’s corporate bodies, to suppress or limit\non the pre-emptive right over new shares, to approve transformations, mergers, spin-offs, global assignments of assets and liabilities\nor the transfer of the registered address of the Company abroad, require the presence in person or by proxy of shareholders representing\nat least 50% of the voting capital of the Company on first call, and the presence in person or by proxy of shareholders representing\nat least 33.33% of the voting capital of the Company on second call.\n\n \n\nOn first call, resolutions\nshall be adopted by absolute majority. On second call, and in the event that less than 50% of the voting capital of the Company is represented\nin person or by proxy, such resolutions may only be passed upon the vote of shareholders representing two-thirds of the Company’s\ncapital present or represented at such meeting.\n\n \n\nThe interval between the\nfirst and the second call for a General Shareholders’ Meeting must be at least 24 hours. Voting on the resolutions included in\nthe agenda of a General Shareholders’ Meeting may be exercised by Shareholders by post or electronic means received by the Company\nprior to the General Shareholders’ Meeting, and provided that the identity of the Shareholder who exercises his right to vote is\nduly verified and the formalities determined by the Board of Directors through resolution and subsequent notification in the call announcement\nof the General Shareholders’ Meeting are complied with. In such resolution, the Board of Directors will define the applicable conditions\nto the voting via electronic means in order to ensure the proper identification of the shareholder or its representative.\n\n \n\n82\n\n \n\n \n\nUnder the Spanish Companies\nAct, shareholders who voluntarily aggregate their shares so that the share capital so aggregated is equal to or greater than the result\nof dividing the total share capital by the number of directors have the right, provided there are vacancies on the Board of Directors,\nto appoint a corresponding proportion of the members of the Board of Directors (disregarding the fractions). Shareholders who exercise\nthis right may not vote on the appointment of other directors.\n\n \n\nA resolution passed in a\nGeneral Shareholders’ Meeting is binding on all shareholders, although a resolution which is (i) contrary to Spanish law or the\nBylaws of the Company, or (ii) prejudicial to the interest of the Company and is beneficial to one or more shareholders or third parties,\nmay be contested within the period of a year following the passing of the contested resolution (except resolutions that are contrary\nto public order in respect of which such right does not lapse). Damage to the Company’s interest is also caused when the resolution,\nwithout causing damage to corporate assets, is imposed in an abusive manner by the majority. An agreement is understood to have been\nimposed in an abusive manner when, rather than responding reasonably to a corporate need, the majority adopts the resolution in their\nown interests and to the unjustifiable detriment of the other shareholders. In the case of listed companies, the required fraction of\nthe Company’s share capital needed to be able to contest is 1/1000. The right to contest would apply to shareholders who held such\nstatus at the time when the resolution was adopted (provided they hold at least 0.1% of the share capital), directors and interested\nthird parties. In the event of resolutions contrary to public order, the right to contest would apply to any shareholders (even if they\nacquired such condition after the resolution was taken), and any director or third party. In certain circumstances (such as change or\nsignificant amendment of the corporate purpose, transformation or transfer of registered address abroad), the Spanish Companies Act gives\ndissenting or absent shareholders (including non-voting shareholders) the right to withdraw from the Company. If this right were exercised,\nthe Company would be obliged to purchase the relevant shares at the average market price of the shares in the last quarter in accordance\nwith the procedures established under the Spanish Companies Act.\n\n \n\nShareholder information rights \n\n \n\nUntil the seventh day before\nthe General Shareholders’ Meeting is due to be held, shareholders may request in writing from the Directors, any information or\nclarification they deem necessary regarding the items to be discussed at the relevant General Shareholders’ Meeting as per the\nagenda. The Directors must provide the requested information in writing by the day of the General Shareholders’ Meeting. During\nthe General Shareholders’ Meeting, shareholders may verbally request any information or clarification they deem necessary in relation\nto the items included on the agenda. If it were not possible to provide the requested information during the meeting itself, the Directors\nmust provide the requested information in writing within seven days of the celebration of the General Shareholders’ Meeting. The\nDirectors will not be obliged to provide the requested information if it was deemed unnecessary for the recognition of the requesting\nshareholder’s rights or if there were objective reasons to consider that the information was going to be used in detriment of the\ninterests of the Company or that providing the requested information may harm the Company; provided that, the requested information may\nnot be withheld when the request is upheld by shareholders representing at least 25% of the share capital.\n\n \n\nPre-emptive rights and increases of share capital\n\n \n\nPursuant to the Spanish\nCompanies Act, shareholders have pre-emptive rights to subscribe for any new shares issued by the Company via monetary contributions\nand for any new bonds convertible into shares. Such pre-emptive rights may be waived under special circumstances by a resolution passed\nat a General Shareholders’ Meeting or the Board of Directors (when the Company is listed and the General Shareholders’ Meeting\ndelegates to the Board of Directors the right to increase the share capital or issue convertible bonds and waive pre-emptive rights),\nin accordance with Articles 308, 417, 504, 505, 506 and 511 of the Spanish Companies Act.\n\n \n\nAs of the date hereof, the\nCompany has no convertible or exchangeable bonds outstanding and have not issued any warrants over its shares, except the Representative\nwarrants described in this report. Also, shareholders have the right of free allotment recognized in the Spanish Companies Act in the\nevent of capital increase against reserves.\n\n \n\nFurthermore, the preemptive\nrights, in any event, will not be available in an increase in share capital to meet the requirements of a convertible bond issue, a merger\nin which Ordinary Shares are issued as consideration or where the contribution to be made is in kind. The rights are transferable, may\nbe traded on the ADRs to be updated and may be of value to existing shareholders because new Ordinary Shares may be offered for subscription\nat prices lower than prevailing market prices.\n\n \n\nAs of the date of this report,\nthe Board of Directors has been authorized by the Company’s sole shareholder to issue new Ordinary Shares of up to 50% of the Company’s\nshare capital immediately following the initial public offering.\n\n \n\n83\n\n \n\n \n\nThe Board of Directors is\nalso authorized to exclude preemptive rights in connection with up to 20% of the total number of new Ordinary Shares that may be issued\npursuant to the aforementioned authorization, provided that such exclusion is in the Company’s corporate interest. In addition,\nthe Board of Directors has been authorized by its shareholders for a term of five years to issue bonds that are convertible into the\nOrdinary Shares or which grant bondholders the right to be attributed part of the Company’s earnings.\n\n \n\nShareholder actions\n\n \n\nUnder the Spanish Companies\nAct Directors are liable to the Company, the shareholders and the creditors for acts or omissions that are illegal or violate the Bylaws\nand for failure to carry out their legal duties with diligence. Under Spanish law, shareholders must generally bring actions against\nthe Directors as well as any other actions against the Company or challenging corporate resolutions before the courts of the judicial\ndistrict of the Company’s registered address (currently Valencia (Spain)).\n\n \n\nWhen in violation of the\nlaw or of the Bylaws, directors are presumed to have acted negligently, but this presumption can be rebutted. Directors have such liability\neven if the transaction in connection with which the acts or omissions occurred is approved or ratified by the shareholders. The liability\nof the directors is joint and several, except to the extent any director can demonstrate that he or she did not participate in decision-making\nrelating to the transaction at issue, was unaware of its existence or, being aware of it, did all that was possible to mitigate any damages\nor expressly disagreed with the decision making relating to the transaction.\n\n \n\nRegistration and Transfers\n\n \n\nThe shares are in registered\nbook-entry form and are indivisible. Joint holders of one share must designate a single person to exercise their shareholders’\nrights, but they are jointly and severally (solidariamente) liable to the Company for all the obligations arising from their status as\nshareholders. ADRs structure Iberclear, which manages the Spanish clearance and settlement system of the Spanish Stock Exchanges, maintains\nthe central registry reflecting the number of shares held by each of its member entities (entidades participantes). Each member entity,\nin turn, maintains a registry of the owners of such shares. Since the shares of the Company are in registered book-entry form, an electronic\nshareholder registry will be kept to which effect Iberclear shall report to the Company all transactions entered into by its shareholders\nin respect of its shares.\n\n \n\nThe shares are transferable\nin accordance with the Spanish Companies Act, the Securities Market and Investment Serives Act, Law 6/2023, SEC rules, and any implementing\nregulation.\n\n \n\nADRs as a general rule,\ntransfers of shares quoted on the Spanish Stock Exchanges must be made through or with the participation of a member of a Stock Exchange.\nBrokerage firms, or dealer firms, Spanish credit entities, investment services entities authorized in other Member States and investment\nservices entities authorized by their relevant authorities and in compliance with the Spanish regulations are eligible to be members\nof the Spanish Stock Exchanges. Transfer of shares quoted on the Spanish Stock Exchanges may be subject to certain fees and expenses.\n\n \n\nRestrictions on foreign investment\n\n \n\nExchange controls and foreign\ninvestments were, with certain exceptions, completely liberalized by Royal Decree 571/2023 of July 4 (Real Decreto 571/2023) that came\ninto force as of September 1 2023 revoking priorRoyal Decree 664/1999, of April 23 (Real Decreto 664/1999, de 23 de abril), which was\napproved in conjunction with Law 18/1992, of July 1 (the “Spanish Foreign Investment Law”), bringing the existing legal framework\non foreign investments in line with the provisions of the Treaty of the EU.\n\n \n\nAccording to the new Real\nDecreto 571/2023, subject to the restrictions described below, foreign investors may freely invest in shares of Spanish companies as\nwell as transfer invested capital, capital gains and dividends out of Spain without limitation (subject to applicable taxes and exchange\ncontrols) and only need to file a notification with the Spanish Registry of Foreign Investments maintained by the Ministry of Industry,\nCommerce and Tourism following the investment or divestiture, if any, solely for statistical, economic and administrative purposes in\ncase, as per such transaction, the foreign investor reaches a total participation equal to or above 10% of the share capital of the Spanish\nCompany. Where the investment or divestiture is made in shares of Spanish companies listed on any of the Spanish Stock Exchanges, the\nduty to provide notice of a foreign investment or divestiture lies with the relevant entity with whom the shares in book-entry form have\nbeen deposited or which has acted as an intermediary in connection with the investment or divestiture.\n\n \n\n84\n\n \n\n \n\nIf the foreign investor is a resident of a tax\nhaven, as defined under Spanish law (Royal Decree 1080/1991 of July 5), notice must be provided to the Registry of Foreign Investments\nprior to making the investment, as well as after consummating the transaction. However, prior notification is not necessary in the following\ncases:\n\n \n\n \n●\ninvestments in listed securities, whether or not trading on an official\nsecondary market, as well as investments in participations in investment funds registered with the CNMV; and\n\n \n\n \n●\nforeign shareholdings that do not exceed 50% of the capital of the\nSpanish company in which the investment is made.\n\n \n\nAdditional regulations to\nthose described above apply to investments in some specific industries, including air transportation, mining, manufacturing and sales\nof weapons and explosives for civil use and national defense, radio, television and telecommunications and gambling. These restrictions\ndo not apply to investments made by EU residents, other than investments by EU residents in activities relating to the Spanish defense\nsector or the manufacturing and sale of weapons and explosives for non-military use.\n\n \n\nThe Spanish Council of Ministers\nmay suspend the aforementioned provisions relating to foreign investments for reasons of public policy, health or safety, either generally\nor in respect of investments in specified industries, in which case any proposed foreign investments falling within the scope of such\na suspension would be subject to prior authorization from the Spanish government.\n\n \n\nLaw 19/2003, of July 4,\non the establishment of a regulatory regime relating to capital flows to and from legal or natural persons abroad and the prevention\nof money laundering, or Law 19/2003, generally provides for the liberalization of the regulatory environment with respect to acts, businesses,\ntransactions and other operations between Spanish residents and non-residents in respect of which charges or payments abroad will occur,\nas well as money transfers, variations in accounts or financial debit or credits abroad. These operations must be reported to the Ministry\nof the Economy and Business and the Bank of Spain only for informational and statistical purposes. The most important developments resulting\nfrom Law 19/2003 are the obligations on financial intermediaries to provide to the Spanish Ministry of Economy and Business and the Bank\nof Spain information corresponding to client transactions.\n\n \n\nExchange control regulations\n\n \n\nPursuant to Royal Decree\n1816/1991, of December 20, relating to economic transactions with non-residents as amended by Royal Decree 1360/2011 of October 7, and\nEC Directive 88/361/EEC, charges, payments or transfers between non-residents and residents of Spain must be made through a registered\nentity, such as a bank or another financial institution registered with the Bank of Spain or the CNMV (entidades registradas), through\nbank accounts opened abroad with a foreign bank or a foreign branch of a registered entity, in cash or by check payable to bearer. All\ncharges, payments or transfers which exceed €6,010 (or its equivalent in another currency), if made in cash or by check payable\nto bearer, must be notified to the Spanish exchange control authorities.\n\n \n\nShareholders’ agreements\n\n \n\nThe Securities Market Act\nand Articles 531, 533 and 535 of the Spanish Companies Act require parties to disclose certain types of shareholders’ agreements\nthat affect the exercise of voting rights at a General Shareholders’ Meeting or contain restrictions or conditions on the transferability\nof shares or bonds that are convertible or exchangeable into shares of listed companies.\n\n \n\nIf the Company’s shareholders\nenter into such agreements with respect to the Ordinary Shares, they must disclose the execution, amendment or extension of such agreements\nto the Company and to the CNMV, file such agreements with the appropriate commercial registry and publish them through a relevant information\nnotice (comunicación de información relevante). Failure to comply with these disclosure obligations renders any such shareholders’\nagreement unenforceable and constitutes a violation of the Securities Market Act. Such a shareholder agreement will have no effect with\nrespect to the regulation of the right to vote in General Shareholders’ Meetings and restrictions or conditions on the free transferability\nof shares and bonds convertible into shares until such time as the aforementioned notifications, deposits and publications are made.\nUpon request by the interested parties, the CNMV may waive the requirement to report, deposit and publish the agreement when publishing\nthe shareholders’ agreement could cause harm to the affected company. To the best of the Company’s knowledge, there are no\nshareholders’ agreements in force in relation to the Company or its subsidiaries.\n\n \n\n85\n\n \n\n \n\nShare Repurchases\n\n \n\nPursuant to the Spanish\nCompanies Act, the Company may only repurchase the Company’s own shares within certain limits and in compliance with the following\nrequirements:\n\n \n\n \n●\nthe repurchase must be authorized by the General Shareholders’\nMeeting in a resolution establishing the maximum number of shares to be acquired, the titles for the acquisition, the minimum and\nmaximum acquisition price and the duration of the authorization, which may not exceed five years from the date of the resolution;\n\n \n\n \n●\nthe repurchase, including the shares already acquired and currently\nheld by the Company, or any person or company acting in its own name but on the Company’s behalf, must not bring its net worth\nbelow the aggregate amount of the Company’s share capital and legal or other non-distributable reserves. For these purposes,\nnet worth means the amount resulting from the application of the criteria used to draw up the financial statements, subtracting the\namount of profits directly allocated to that net worth, and adding the amount of share capital subscribed but not called and the\nshare capital nominal and issue premiums recorded in the Company’s accounts as liabilities. In addition:\n\n \n\n \n●\nthe aggregate nominal value of the shares directly or indirectly repurchased,\ntogether with the aggregate nominal value of the shares already held by the Company and its subsidiary, must not exceed 10% of the\nCompany’s share capital; and\n\n \n\n \n●\nthe shares repurchased for valuable consideration must be fully paid-up.\nA repurchase shall be considered null and void if (i) the shares are partially paid-up, except in the case of free repurchase, or\n(ii) the shares entail ancillary obligations.\n\n \n\nTreasury shares do not have\nvoting rights or economic rights (for example, the right to receive dividends and other distributions and liquidation rights), except\nthe right to receive bonus shares, which will accrue proportionately to all of the Company’s shareholders. Treasury shares are\ncounted for purposes of establishing the quorum for General Shareholders’ Meeting as well as majority voting requirements to pass\nresolutions at General Shareholders’ Meeting.\n\n \n\n**C. Material Contracts**\n\n \n\nWe have not entered into\nany material contracts other than in the ordinary course of business and other than those described in Item 4 “Information on the\nCompany,” Item 5 “Operating and Financial Review and Prospects-F. Tabular Disclosure of Contractual Obligations,” Item\n7 “Major Shareholders and Related Party Transactions,” or filed (or incorporated by reference) as exhibits to this annual\nreport or otherwise described or referenced in this annual report\n\n \n\n**D. Exchange Controls**\n\n \n\nNot Applicable\n\n \n\n**E. Taxation**\n\n \n\nSpanish Taxation\n\n \n\nThis document covers the\nSpanish tax consequences of the acquisition, ownership and disposition of our ordinary shares and applies to holders that are not tax-resident\nin Spain.\n\n \n\nAs used in this particular\nsection, the term “non-Spanish tax resident holder” or “non-resident holder” means a beneficial owner of our\nordinary shares that meets the following requirements:\n\n \n\n \ni.\nIs an individual or a corporation not resident in Spain for Spanish\ntax purposes; and\n\n \n\n \nii.\nThe ownership of our ordinary shares is not effectively connected with\neither a permanent establishment in Spain through which such owner carries on or has carried on business, or a fixed base in Spain\nfrom which such owner performs or has performed independent personal services.\n\n \n\n86\n\n \n\n \n\nThis document does not consider\nall aspects of Spanish taxation that may be relevant to particular non-resident holders, some of whom may be subject to special rules.\nIn particular, this document does not address the specific Spanish tax consequences applicable to particular investors such us partnerships,\ntrusts, or other “look-through” entities who hold ordinary shares through such entities.\n\n \n\nThis document is a draft\nbased on Spanish tax legislation currently in effect on November 14, 2022.\n\n \n\nEach non-resident holder\nshould consult with its own tax advisor, as to the particular tax consequences of the purchase, ownership or disposition of our ordinary\nshares.\n\n \n\n*Income Taxes - Taxation of Dividends*\n\n \n\nWe do not anticipate paying\nany cash dividends on our ordinary shares in the foreseeable future. See “Dividend Policy.”\n\n \n\nIn the event, however, that\nwe pay dividends on our ordinary shares, under Spanish law, the dividends distributed by a Spanish Company are, in general terms, subject\nto Spanish Non-Residents Income Tax on the gross amount of the dividends distributed, currently taxed at a 19% rate, unless the investor\nis entitled to an exemption or a reduced rate under a Convention for the Avoidance of Double Taxation (“CADT”) between Spain\nand its country of residence.\n\n \n\nNon-resident holders should\nconsult their tax advisors with respect to the applicability and the procedures under Spanish law for obtaining the benefit of an exemption\nor a reduced rate under a CADT.\n\n \n\n*Income Taxes - Preemptive rights*\n\n \n\nThe grant of preemptive rights\nto subscribe new shares made with respect to our ordinary shares is not treated as a taxable event under Spanish law and, therefore, is\nnot subject to Spanish Non-Residents Income Tax. The exercise of such preemptive rights for the subscription of new shares is not considered\na taxable event under Spanish law and, therefore, is not subject to Spanish Non-Residents Income Tax.\n\n \n\nThe sale of preemptive rights\nto subscribe new shares will be considered as taxable capital gain for the amount received. In this respect, review “Income Taxes\n- Taxation of Capital Gains” below.\n\n \n\n*Income Taxes - Taxation of Capital Gains*\n\n \n\nUnder Spanish Non-Residents\nIncome Tax Law, any capital gain derived from the sale or exchange of shares of a Spanish Company is considered to be Spanish source income\nand, therefore, is taxable in Spain.\n\n \n\nSpanish Non-Residents Income\nTax is currently levied at a 19% tax rate on capital gains obtained by non-resident holders, unless the investor is entitled to an exemption\nor a reduced rate under a Convention for the Avoidance of Double Taxation (“CADT”) between Spain and its country of residence.\n\n \n\nNon-resident holders should\nconsult their tax advisors with respect to the applicability and the procedures under Spanish law for obtaining the benefit of an exemption\nor a reduced rate under a CADT.\n\n \n\n*Spanish Wealth Tax*\n\n \n\nUnless an applicable CADT\nprovides otherwise, individual non-resident holders who hold ordinary shares located in Spain are subject to the Spanish Wealth Tax (Spanish\nLaw 19/1991), which imposes a tax on assets located in Spain at the end of each year.\n\n \n\nFor non-resident holders,\nthe applicable legislation, exemptions and tax rates will depend on the location of the assets. In this case, the Company is located in\nComunidad Valenciana for tax purposes.\n\n \n\n87\n\n \n\n \n\n*Spanish Inheritance and Gift Taxes*\n\n \n\nUnless an applicable CADT\nprovides otherwise, transfers of ordinary shares on death or by gift to individuals are subject to Spanish Inheritance and Gift Taxes,\nrespectively (Spanish Law 29/1987), if the ordinary shares are located in Spain, regardless of the residence of the transferee.\n\n \n\nFor non-resident holders,\nthe applicable legislation, exemptions and tax rates will depend on the location of the assets. In this case, the Company is located in\nComunidad Valenciana for tax purposes.\n\n \n\nNon-resident holders should\nconsult their tax advisors with respect to the applicability of the Spanish Inheritance and Gift Taxes.\n\n \n\n*Spanish Transfer Tax*\n\n \n\nA transfer by a non-resident holder of our ordinary\nshares will be exempt from any Spanish Transfer Tax (*Impuesto sobre Transmisiones Patrimoniales*) as well as exempt from Value Added\nTax if, at the time of such transfer, real estate in Spain does not amount to more than 50% of our assets.\n\n \n\nReal estate located in Spain currently does not,\nand we do not expect that Spanish real estate will in the foreseeable future, amount to more than 50% of our assets. Additionally, no\nStamp Duty will be levied on a transfer by a nonresident holder of our ordinary shares.\n\n \n\n**United States Federal Income Tax Considerations**\n\n \n\nThe following discussion\nis a summary of U.S. federal income tax considerations generally applicable to the ownership and disposition of our Ordinary Shares (including\nOrdinary Shares held in the form of ADSs and ADRs) by a U.S. Holder (as defined below) that acquires our Ordinary Shares in our initial\npublic offering and holds our Ordinary Shares as “capital assets” (generally, property held for investment) under the U.S.\nInternal Revenue Code of 1986, as amended, or the Code. This discussion is based upon existing U.S. federal tax law, which is subject\nto differing interpretations or change, possibly with retroactive effect. No ruling has been sought from the Internal Revenue Service,\nor the IRS, with respect to any U.S. federal income tax considerations described below, and there can be no assurance that the IRS or\na court will not take a contrary position. This discussion, moreover, does not address the U.S. federal estate, gift, and alternative\nminimum tax considerations, the Medicare tax on certain net investment income, information reporting or backup withholding or any state,\nlocal, and non-U.S. tax considerations, relating to the ownership or disposition of our Ordinary Shares. The following summary does not\naddress all aspects of U.S. federal income taxation that may be important to particular investors in light of their individual circumstances\nor to persons in special tax situations such as:\n\n \n\n \n●\nbanks and other financial institutions;\n\n \n\n \n●\ninsurance companies;\n\n \n\n \n●\npension plans;\n\n \n\n \n●\ncooperatives;\n\n \n\n \n●\nregulated investment companies;\n\n \n\n \n●\nreal estate investment trusts;\n\n \n\n \n●\nbroker-dealers;\n\n \n\n88\n\n \n\n \n\n \n●\ntraders that elect to use a mark-to-market method of accounting;\n\n \n\n \n●\ncertain former U.S. citizens or long-term residents;\n\n \n\n \n●\ntax-exempt entities (including private foundations);\n\n \n\n \n●\nindividual retirement accounts or other tax-deferred accounts;\n\n \n\n \n●\npersons liable for alternative minimum tax;\n\n \n\n \n●\npersons who acquire their Ordinary Shares pursuant to any employee share option or otherwise as compensation;\n\n \n\n \n●\ninvestors that will hold their Ordinary Shares as part of a straddle, hedge, conversion, constructive sale or other integrated transaction for U.S. federal income tax purposes;\n\n \n\n \n●\ninvestors that have a functional currency other than the U.S. dollar;\n\n \n\n \n●\npersons that actually or constructively own 10% or more of our Ordinary Shares (by vote or value); or\n\n \n\n \n●\npartnerships or other entities taxable as partnerships for U.S. federal income tax purposes, or persons holding the Ordinary Shares through such entities,\n\n \n\nall of whom may be subject to tax rules that differ\nsignificantly from those discussed below.\n\n \n\nEach U.S. Holder is urged\nto consult its tax advisor regarding the application of U.S. federal taxation to its particular circumstances, and the State, local, non-U.S.,\nand other tax considerations of the ownership and disposition of our Ordinary Shares.\n\n \n\n*General*\n\n \n\nFor purposes of this discussion,\na “U.S. Holder” is a beneficial owner of our Ordinary Shares that is, for U.S. federal income tax purposes:\n\n \n\n \n●\nan individual who is a citizen or resident of the United States;\n\n \n\n \n●\na corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created in, or organized under the laws of the United States or any State thereof or the District of Columbia;\n\n \n\n \n●\nan estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or\n\n \n\n \n●\na trust (i) the administration of which is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust, or (ii) that has otherwise validly elected to be treated as a U.S. person under the Code.\n\n \n\n \n●\nIf a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of our Ordinary Shares, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. Partnerships holding our Ordinary Shares and their partners are urged to consult their tax advisors regarding an investment in our Ordinary Shares.\n\n \n\n89\n\n \n\n \n\n*Passive Foreign Investment Company Considerations*\n\n \n\nA non-U.S. corporation, such\nas our Company, will be classified as a PFIC for U.S. federal income tax purposes for any taxable year if either (i) 75% or more of its\ngross income for such year consists of certain types of “passive” income or (ii) 50% or more of the value of its assets (determined\non the basis of a quarterly average) during such year is attributable to assets that produce or are held for the production of passive\nincome, or the asset test. Passive income generally includes, among other things, dividends, interest, rents, royalties, and gains from\nthe disposition of passive assets. Passive assets are those which give rise to passive income, and include assets held for investment,\nas well as cash, assets readily convertible into cash, and working capital. The Company’s goodwill and other unbooked intangibles\nare taken into account and may be classified as active or passive depending upon the relative amounts of income generated by the Company\nin each category. We will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of\nany other corporation in which we own, directly or indirectly, 25% or more (by value) of the stock.\n\n \n\nBased upon our current and\nprojected income and assets, the expected proceeds from our initial public offering, and projections as to the market price of our Ordinary\nShares immediately following the initial public offering, we do not expect to be a PFIC for the current taxable year or the foreseeable\nfuture. However, no assurance can be given in this regard because the determination of whether we are or will become a PFIC is a factual\ndetermination made annually that will depend, in part, upon the composition and classification of our income and assets. Because there\nare uncertainties in the application of the relevant rules, it is possible that the IRS may challenge our classification of certain income\nand assets as non-passive, which may result in our being or becoming classified as a PFIC in the current or subsequent years. Furthermore,\nfluctuations in the market price of our Ordinary Shares may cause us to be a PFIC for the current or future taxable years because the\nvalue of our assets for purposes of the asset test, including the value of our goodwill and unbooked intangibles, may be determined by\nreference to the market price of our Ordinary Shares from time to time (which may be volatile). In estimating the value of our goodwill\nand other unbooked intangibles, we have taken into account our anticipated market capitalization immediately following the close of our\ninitial public offering. Among other matters, if our market capitalization is less than anticipated or subsequently declines, we may be\nor become a PFIC for the current or future taxable years. The composition of our income and assets may also be affected by how, and how\nquickly, we use our liquid assets and the cash raised in our initial public offering. Under circumstances where our revenues from activities\nthat produce passive income significantly increases relative to our revenues from activities that produce non-passive income, or where\nwe determine not to deploy significant amounts of cash for active purposes, our risk of becoming a PFIC may substantially increase.\n\n \n\nIf we are a PFIC for any\nyear during which a U.S. Holder holds our Ordinary Shares, we generally will continue to be treated as a PFIC for all succeeding years\nduring which such U.S. Holder holds our Ordinary Shares unless, in such case, we cease to be treated as a PFIC and such U.S. Holder makes\na deemed sole election.\n\n \n\nThe discussion below under\n“-Dividends” and “-Sale or Other Disposition” is written on the basis that we will not be or become classified\nas a PFIC for U.S. federal income tax purposes. The U.S. federal income tax rules that apply generally if we are treated as a PFIC are\ndiscussed below under “-Passive Foreign Investment Company Rules” beginning on page 91.\n\n \n\n*Dividends*\n\n \n\nAny cash distributions paid\non our Ordinary Shares out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles,\nwill generally be includible in the gross income of a U.S. Holder as dividend income on the day actually or constructively received by\nthe U.S. Holder. Because we do not intend to determine our earnings and profits on the basis of U.S. federal income tax principles, any\ndistribution we pay will generally be treated as a “dividend” for U.S. federal income tax purposes. Dividends received on\nour Ordinary Shares will not be eligible for the dividends received deduction allowed to corporations in respect of dividends-received\nfrom U.S. corporations.\n\n \n\nIndividuals and other non-corporate\nU.S. Holders may be subject to tax on any such dividends at the lower capital gain tax rate applicable to “qualified dividend income,”\nprovided that certain conditions are satisfied, including that (i) our Ordinary Shares on which the dividends are paid are readily tradable\non an established securities market in the United States, (ii) we are neither a PFIC nor treated as such with respect to a U.S. Holder\nfor the taxable year in which the dividend is paid and the preceding taxable year, and (iii) certain holding period requirements are met.\nOur application to list our ADSs on Nasdaq Capital Market has been approved, we believe that the ADSs representing the Ordinary Shares\nshould generally be considered to be readily tradeable on an established securities market in the United States. There can be no assurance\nthat our Ordinary Shares will continue to be considered readily tradable on an established securities market in later years. U.S. Holders\nare urged to consult their tax advisors regarding the availability of the lower rate for dividends paid with respect to our Ordinary Shares.\n\n \n\n90\n\n \n\n \n\nFor U.S. foreign tax credit\npurposes, dividends paid on our Ordinary Shares will generally be treated as income from foreign sources and will generally constitute\npassive category income. U.S. Holders may be entitled to a foreign tax credit in respect of some portion of Spanish or other non-U.S.\nwithholding taxes imposed on dividends paid on our Ordinary Shares. However, the rules governing the availability of the foreign tax credit\nand the limitations thereon are highly complex, and U.S. Holders are urged to consult their tax advisors regarding the availability of\nthe foreign tax credit under their particular circumstances.\n\n \n\n*Sale or Other Disposition*\n\n \n\nA U.S. Holder will generally\nrecognize gain or loss upon the sale or other disposition of Ordinary Shares in an amount equal to the difference between the amount realized\nupon the disposition and the U.S. Holder’s adjusted tax basis in such Ordinary Shares. Such gain or loss will generally be capital\ngain or loss. Any such capital gain or loss will be long term if the Ordinary Shares have been held for more than one year. Non-corporate\nU.S. Holders (including individuals) generally will be subject to U.S. federal income tax on long-term capital gain at preferential rates.\nThe deductibility of a capital loss may be subject to limitations. Any such gain or loss that the U.S. Holder recognizes will generally\nbe treated as U.S. source income or loss for foreign tax credit limitation purposes, which could limit the availability of foreign tax\ncredits. Each U.S. Holder is advised to consult its tax advisor regarding the tax consequences if a foreign tax is imposed on a disposition\nof our Ordinary Shares, including the applicability of any tax treaty and the availability of the foreign tax credit under its particular\ncircumstances.\n\n \n\n*Passive Foreign Investment Company Rules*\n\n \n\nIf we are classified as a\nPFIC for any taxable year during which a U.S. Holder holds our Ordinary Shares, and unless the U.S. Holder makes a mark-to-market election\n(as described below), the U.S. Holder will generally be subject to special tax rules on (i) any excess distribution that we make to the\nU.S. Holder (which generally means any distribution paid during a taxable year to a U.S. Holder that is greater than 125 percent of the\naverage annual distributions paid in the three preceding taxable years or, if shorter, the U.S. Holder’s holding period for the\nOrdinary Shares), and (ii) any gain realized on the sale or other disposition, including, under certain circumstances, a pledge, Ordinary\nShares. Under the PFIC rules:\n\n \n\n \n●\nthe excess distribution or gain will be allocated ratably over the U.S. Holder’s holding period for the Ordinary Shares;\n\n \n\n \n●\nthe amount allocated to the current taxable year and any taxable years in the U.S. Holder’s holding period prior to the first taxable year in which we are classified as a PFIC (each, a “pre-PFIC year”), will be taxable as ordinary income; and\n\n \n\n \n●\nthe amount allocated to each prior taxable year, other than a pre-PFIC year, will be subject to tax at the highest tax rate in effect for individuals or corporations, as appropriate, for that year, increased by an additional tax equal to the interest on the resulting tax deemed deferred with respect to each such taxable year.\n\n \n\nAs an alternative to the\nforegoing rules, a U.S. Holder of “marketable stock” (as defined below) in a PFIC may make a mark-to- market election with\nrespect to such stock. If a U.S. Holder makes this election with respect to our Ordinary Shares, the holder will generally (i) include\nas ordinary income for each taxable year that we are a PFIC the excess, if any, of the fair market value of Ordinary Shares held at the\nend of the taxable year over the adjusted tax basis of such Ordinary Shares and (ii) deduct as an ordinary loss the excess, if any, of\nthe adjusted tax basis of the Ordinary Shares over the fair market value of such Ordinary Shares held at the end of the taxable year,\nbut such deduction will only be allowed to the extent of the net amount previously included in income as a result of the mark-to-market\nelection. The U.S. Holder’s adjusted tax basis in the ADSs would be adjusted to reflect any income or loss resulting from the mark-to-market\nelection. If a U.S. Holder makes a mark-to- market election in respect of our Ordinary Shares and we cease to be classified as a PFIC,\nthe holder will not be required to take into account the gain or loss described above during any period that we are not classified as\na PFIC. If a U.S. Holder makes a mark-to-market election, any gain such U.S. Holder recognizes upon the sale or other disposition of our\nOrdinary Shares in a year when we are a PFIC will be treated as ordinary income and any loss will be treated as ordinary loss, but such\nloss will only be treated as ordinary loss to the extent of the net amount previously included in income as a result of the mark-to-market\nelection.\n\n \n\nThe mark-to-market election\nis available only for “marketable stock,” which is stock that is traded in other than de minimis quantities on at least 15\ndays during each calendar quarter, or regularly traded, on a qualified exchange or other market, as defined in applicable United States\nTreasury regulations. Our ADSs representing our Ordinary Shares qualify as being marketable stock and/or regularly traded while listed\non Nasdaq Capital Market.\n\n \n\nBecause a mark-to-market\nelection cannot technically be made for any lower-tier PFICs that we may own, a U.S. Holder may continue to be subject to the PFIC rules\nwith respect to such U.S. Holder’s indirect interest in any investments held by us that are treated as an equity interest in a PFIC\nfor U.S. federal income tax purposes.\n\n \n\n91\n\n \n\n \n\nWe do not intend to provide\ninformation necessary for U.S. Holders to make qualified electing fund elections which, if available, would result in tax treatment different\nfrom (and generally less adverse than) the general tax treatment for PFICs described above.\n\n \n\nIf a U.S. Holder owns our\nOrdinary Shares during any taxable year that we are a PFIC, the holder must generally file an annual IRS Form 8621. You should consult\nyour tax advisor regarding the U.S. federal income tax consequences of owning\n\n \n\n**F. Dividends and Paying Agents**\n\n \n\nNot applicable.\n\n \n\n**G. Statement by Experts**\n\n \n\nNot applicable.\n\n \n\n**H. Documents on Display**\n\n \n\nWe have filed this annual\nreport on Form 20-F with the SEC under the Exchange Act. Statements made in this report as to the contents of any document referred to\nare not necessarily complete. With respect to each such document filed as an exhibit to this report, reference is made to the exhibit\nfor a more complete description of the matter involved, and each such statement shall be deemed qualified in its entirety by such reference.\n\n \n\nWe are subject to the informational requirements\nof the Exchange Act as a foreign private issuer and file reports and other information with the SEC. Reports and other information filed\nby us with the SEC, including this report, may be viewed from the SEC’s Internet site at http://www.sec.gov. In addition, we will\nprovide hardcopies of our annual report free of charge to shareholders upon request.\n\n \n\nAs a foreign private issuer, we are exempt from\nthe rules under the Exchange Act prescribing the furnishing and content of quarterly reports and proxy statements, and officers, directors\nand principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange\nAct.\n\n \n\n**I. Subsidiary Information**\n\n \n\nNot applicable.\n\n \n\n92"}