SCHMID (SHMD) Q4 2024 earnings summary

Executive summary

• On January 21, 2026, $30 million of 7.0% Convertible Senior PIK Toggle Notes due 2028 were issued, split into two $15 million tranches, with the second tranche contingent on registration effectiveness.

• The notes are convertible into ordinary shares, with conversion prices based on fixed premiums, VWAP, or minimum thresholds, and are subject to anti-dilution and beneficial ownership limits.

• Warrants to purchase ordinary shares were issued alongside the notes, exercisable until December 15, 2028, at $9.65 or a fixed premium price, with cashless exercise options and anti-dilution protections.

• A registration rights agreement requires the company to file and maintain an effective registration statement for the resale of shares underlying the notes and warrants, with penalties for delays.

Capital allocation and financing

• The notes were issued at 98% of principal, with interest payable in cash or PIK, and step-up interest if registration is delayed.

• A subordination agreement was executed, subordinating certain shareholder and affiliate loans to the notes, restricting payments until note obligations are satisfied.

• Black Forest Special Situations I received 1,250,000 options to purchase shares at $4.1956 per share as part of a €2.5 million loan facility.

Significant events and developments

• The second $15 million tranche of notes is contingent on SEC registration effectiveness; failure to achieve this by June 30, 2026, triggers mandatory redemption payments.

• The notes and warrants include robust anti-dilution, adjustment, and fundamental transaction protections, including cash settlement at Black-Scholes value in certain change-of-control events.

• The registration rights agreement provides for penalties if the company fails to maintain effective registration or current public information.