Schmid Group Announced An Investment Agreement For Senior Convertible Notes Of $30M

The Notes will be issued pursuant to an indenture at 98% of principal amount and are funded in two tranches: (i) $15.0 million will be funded two business days after the execution of the Investment Agreement on January 21, 2026 and (ii) $15.0 million will be funded following the effectiveness of a registration statement covering the resale of the underlying shares in relation to the Notes.

The 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. The Notes have a two-year maturity, i.e. they will mature on January 21, 2028, unless previously converted into shares of the Company.

The Notes are convertible, at the option of the Investor, 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, subject to a minimum conversion price and certain daily conversion limits as further specified in the Investment Agreement.

In connection with the issuance of the Notes, the Company will also issue warrants to the Investor to purchase shares of the Company in an amount determined by reference to the principal amount of the Notes. The Warrants are exercisable until December 15, 2028, at an exercise price equal to the lower of the applicable fixed premium conversion prices under the Notes, exercisable for cash or, at the Company's election, on a cashless basis.

In connection with the execution of the Investment Agreement, the Company will also enter into a registration rights agreement with the Investor pursuant to which the Company agrees 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.

The net proceeds from the issuance of the Notes will be used for general corporate purposes, including working capital, capital expenditures, and potential acquisitions or investments.