F-1/A: SCHMID Group N.V. Files Amendment No. 2 to Form F-1, Registers Resale of Ordinary Shares and Warrants

SCHMID Group N.V. has filed an amendment to its Form F-1 registration statement to register the resale of ordinary shares and warrants by selling securityholders.

Summary

• SCHMID Group N.V. filed Amendment No. 2 to its Form F-1 registration statement on September 5, 2024.
• The registration covers the issuance of up to 21,000,000 ordinary shares upon exercise of warrants and the resale of up to 56,975,890 ordinary shares and 9,750,000 private warrants by selling securityholders.
• The ordinary shares and public warrants are listed on The Nasdaq Global Select Market under the symbols SHMD and SHMD.W, respectively.
• As of September 3, 2024, the closing sale price of SCHMID's ordinary shares was $3.85 per share and public warrants were $0.31 per warrant.
• The selling securityholders may offer and sell the securities at varying prices.
• SCHMID will not receive any proceeds from the sale of ordinary shares or private warrants by the selling securityholders, except with respect to amounts received upon exercise of the warrants.
• The registration statement covers approximately 94.9% of the total ordinary shares outstanding as of September 5, 2024 (assuming all private warrants are exercised).
• The likelihood that warrant holders will exercise their warrants depends on the market price of SCHMID's ordinary shares, which is currently below the exercise price of $11.50.
• SCHMID is an emerging growth company and a foreign private issuer, which allows for reduced public company reporting requirements.
• Anette Schmid, Christian Schmid and the Schmid Community of Heirs collectively hold 75.6% of the issued and outstanding shares, making SCHMID a controlled company under Nasdaq rules.
• The Business Combination with Pegasus Digital Mobility Acquisition Corp. closed on April 30, 2024.
• The company's principal executive offices are located in Freudenstadt, Germany.

Sentiment

Score: 4

Explanation: The document presents a mixed sentiment. While it highlights the potential for growth and innovation, it also acknowledges the risks associated with the company's financial situation and the competitive landscape. The high percentage of shares being registered for resale and the current share price being below the warrant exercise price are also negative factors.

Positives

• The registration statement allows selling securityholders to offer and sell their securities, potentially increasing liquidity in the market.
• The company has completed its Business Combination with Pegasus Digital Mobility Acquisition Corp.
• SCHMID is an emerging growth company and a foreign private issuer, which allows for reduced public company reporting requirements.

Negatives

• The market price of SCHMID's ordinary shares is currently well below the warrant exercise price of $11.50, making exercise of the warrants unlikely.
• The selling securityholders could resell 35,975,890 Ordinary Shares to be offered under this registration statement, which would constitute 94.9% the total Ordinary Shares outstanding as of September 5, 2024.
• The Ordinary Shares that are being registered for resale under this registration statement represent approximately 94.9% of the total Ordinary Shares outstanding as of September 5, 2024 (assuming that all Private Warrants are exercised).
• The selling securityholders paid differing amounts for the securities being offered hereunder, therefore the risk of dilution to shareholders is increased, as more selling securityholders may be more likely to sell their securities at a variety of share price points.

Risks

• Sales of a substantial number of shares by selling securityholders could cause the price of SCHMID's ordinary shares to fall.
• The Ordinary Shares that are being registered for resale under this registration statement represent approximately 94.9% of the total Ordinary Shares outstanding as of September 5, 2024 (assuming that all Private Warrants are exercised).
• The likelihood that warrant holders will exercise their warrants depends on the market price of SCHMID's ordinary shares.
• There is a risk that such a sale would occur and depress the share price, and even simply the perception that such sales may occur, may cause the market prices of our securities to decline significantly and could impair our ability to raise capital through the sale of additional equity securities.
• The selling securityholders paid differing amounts for the securities being offered hereunder, therefore the risk of dilution to shareholders is increased, as more selling securityholders may be more likely to sell their securities at a variety of share price points.

Future Outlook

The document does not provide specific forward-looking statements about SCHMID's future financial performance, but it does mention the potential for growth in the ET market and the company's plans to invest in automation and software.

Industry Context

The document mentions that SCHMID operates in the competitive electronics and photovoltaics industries, highlighting the importance of innovation and product quality. It also notes the trend of nearshoring global semiconductor supply chains.

Comparison to Industry Standards

• The document mentions competition from large Chinese players in the photovoltaic industry.
• It also references third-party data from Prismark Partners regarding the total addressable market for PCB and substrate equipment.
• The document mentions Intels move to more advanced glass substrates that use next generation chiplet based CPUs or so called CoWoS (chip on wafer on substrate concepts).

Related Party Transactions

• Christian Schmid, Anette Schmid and the Schmid Community of Heirs, the majority and controlling shareholders of SCHMID, did not pay a cash amount for their Ordinary Shares, but contributed the shares of Gebr. Schmid GmbH in exchange for the Ordinary Shares at Closing.
• XJ Harbour HL Limited did not pay a cash amount for their Ordinary Shares, but agreed under a Subscription Agreement to sell their 24.1% stake in the Gebr. Schmid GmbH subsidiary Schmid Technology (Guangdong) Co., Ltd.. to SCHMID for their Ordinary Shares and three cash payments by SCHMID.
• Both Pegasus Digital Mobility Sponsor LLC and Appleby agreed to set off debt owed to them by Pegasus in exchange for Ordinary Shares, at an effective price of $5.10 per share.
• In addition, the private warrants held by Christian and Anette Schmid were transferred by Sponsor as part of the compensation under the Business Combination.
• Sir Ralf Speth, Dr. Stefan Berger, F. Jeremey Mistry, John Doherty, Jeffrey H. Foster, Steven Norris and Florian Wolf also received private warrants from Sponsor, for their role as directors and officers of Pegasus.

Stakeholder Impact

• The sales of a large number of Ordinary Shares could result in a significant decline in the public trading price of our Ordinary Shares.
• The great majority of the shares to be registered under this registration statement are held or controlled by Anette Schmid and Christian Schmid, the majority shareholders for SCHMID.
• Certain of our shareholders purchased their respective Ordinary Shares at prices lower than the current market price for our Ordinary Shares and may therefore experience a positive rate of return on their investment, even if our public shareholders, who invested approximately $10 per Ordinary Share prior to the Business Combination experience a negative rate of return on their investment.

Next Steps

• The selling securityholders may offer and sell the securities covered by the prospectus.
• SCHMID may amend or supplement the prospectus from time to time.
• SCHMID may use the net proceeds from the exercise of the warrants for general corporate purposes.

Key Dates

Keywords

ordinary shares, warrants, selling securityholders, business combination, SCHMID Group, registration statement, private warrants, public warrants, resale, SHMD, SHMD.W