34.FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT

Carrying Amounts and Fair Values

The following tables disclose the carrying amounts of each class of financial instruments together with its corresponding fair value and the aggregated carrying amount per category.

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The carrying amounts of cash and cash equivalents, trade and other receivables, loans from banks and trade payables, are considered reasonable estimates of their fair values because of the short maturities of these items.

The fair value of the loan granted to a shareholder was calculated by discounting future cash flows with a risk-adjusted interest rate curve. As the credit risk of the shareholder is unobservable and assumed to be equivalent to the Standard & Poor’s rating class of CCC, the credit risk is considered to have a material impact on the fair value. Therefore, the fair values of the shareholder loan are categorized in level 3 of the fair value hierarchy.

Derivatives

Incentive options and conversion rights (Black forest term loan facility):

The warrants and the embedded conversion right of the convertible loan are classified as Level 3 of the fair value hierarchy. The warrants are valued using a Monte Carlo simulation model under risk-neutral Geometric Brownian Motion dynamics. A Black–Scholes closed-form valuation is performed as a cross-check. The fair value of the embedded conversion right within the EUR-

denominated convertible loan is determined using a Least-Squares Monte Carlo (Longstaff–Schwartz) simulation model. The conversion payoff depends on two correlated risk factors: the USD-denominated share price and the EUR/USD exchange rate. Both are modeled as correlated Geometric Brownian Motions under risk-neutral dynamics. The host debt component is discounted at a credit-risk adjusted rate calibrated to the transaction price at inception. The main input parameters include the share price at the valuation date, expected share price volatility, risk-free interest rates, EUR/USD spot rate, FX volatility, stock-FX correlation, and the calibrated credit spread. The share price volatility (calculated using historical share price data) and the credit spread are not observable in the market. A sensitivity analysis was performed with respect to the share price, the expected share price volatility, and the credit spread.

XJ Harbour Share Price Protection and Cap:

The derivates resulting from the share price protection arrangement are classified as Level 3 of the fair value hierarchy. The fair value is calculated using a Monte Carlo simulation model under risk-neutral Geometric Brownian Motion dynamics. A Black–Scholes closed-form valuation is performed as a cross-check. The main input parameters include the share price at the valuation date, the contractual strike price, the contractual cap value, the risk-free interest rate, and share price volatility. The share price volatility (calculated using historical share price data) is not observable in the market. A sensitivity analysis was performed with respect to the share price and the expected share price volatility.

The below tables show the effect that an increase in historical volatility of the interest rates would have on the fair values of the embedded derivatives as of December 31, 2025.

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There were no transfers between levels 1, 2 and 3 for recurring fair value measurements during the year.

Fair value level 3 assets reconciliation:

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Fair value level 3 liabilities reconciliation:

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Items of income, expenses, gains or losses resulting from financial instruments

The net gains or losses for each of the financial instrument measurement categories differentiated by the respective sources were as follows:

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The total interest income for financial assets that are not measured at FVTPL is €66 thousand as of the year ended December 31, 2025 (2024: €860 thousand). The total interest expense for financial liabilities that are not measured at FVTPL is €2,951 thousand as of the year ended December 31, 2025 (2024: €4,863 thousand).

Financial Instrument Risk Management Objectives and Policies

Due to its international operational businesses, SCHMID is exposed to market risk (especially foreign currency risk) and credit risk. In the area of financing, liquidity risks and interest rate risks play a major role. SCHMID’s senior management oversees the management of these risks. In prior years no formalized risk management system existed, but financial risks as far as identified were handled case-by-case. Equity price risk is considered insignificant for SCHMID.

Credit Risk

Credit risk is the risk that SCHMID might incur a financial loss as a consequence of the non-payment or partial payment of outstanding receivables by counterparties and from replacement risks for open transactions. SCHMID is exposed to credit risks associated with its operating activities, the loan granted to one of its shareholders, trade receivables as well as cash and cash equivalents.

SCHMID applies appropriate measures to manage credit risks inherent to its trade receivables. SCHMID requests customer ratings from well-known rating agencies and responds to higher probabilities of default with modified payment terms. Loss rates are based on actual credit loss experience over the past seven years. These rates are multiplied by scalar factors to reflect differences between economic conditions during the period over which the historical data has been collected, current conditions and SCHMID’s view of economic conditions over the expected lives of the receivables.

The allowances for ECL determined for the different classes of financial assets developed as follows:

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With regards to cash and cash equivalents SCHMID allocates the credit risk by using several banks. Furthermore, it is SCHMID policy to hold cash and cash equivalents only with financial institutions that have at least an investment grade rating. SCHMID regularly monitors its cash and cash equivalents and takes corrective actions should it identify any possible changes in creditworthiness of these financial institutions. Therefore and due to its short-term character, no significant credit risk arises from cash and cash equivalents, and no ECL allowance has been recorded for 2025 and 2024 respectively.

The following tables provide information about the gross carrying amounts by credit-risk rating classes for the several types of financial assets that are not measured at FVTPL and therefore generally subject to the impairment regulations of IFRS 9.

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Liquidity Risk

Liquidity risk is the risk that a company will encounter difficulty in meeting its obligations associated with its financial liabilities as they fall due. SCHMID is constantly working to ensure that the supply of liquidity is mainly sufficient to settle financial liabilities that are due for payment. Liquidity is evaluated and maintained using forecasts based on fixed planning horizons covering several months and through the cash and cash equivalent balances that are available.

For more detail on the financial situation, please refer to the explanation on Going Concern (see note 2. Basis of Presentation).

The following table provides details of the (undiscounted) cash outflows of financial liabilities (including interest payments).

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On April 24, 2026 SCHMID entered into separate subscription, set‑off and debt assumption agreements with Anette Schmid, Christian Schmid, Christine Schmid and Schmid Grundstücke GmbH & Co. KG, all of whom are shareholders or related parties of the Company. Under these arrangements, existing financial liabilities with an aggregate amount of €30.8 million (Loans from shareholders: €21.9 million; Loans from related parties: €6.5 million; Loans from other third parties: €2.4 million) are intended to be settled through the issuance of new ordinary shares of the Company (see note 28. Events after the reporting period).

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Foreign Currency Risk

SCHMID operates globally and is exposed to foreign exchange risk arising from exposure to various currencies in the ordinary course of business. SCHMID’s exposures primarily consist of the Euro (“EUR”) and US Dollar (“USD”), Chinese Yen (“CNY”), Hong Kong Dollar (“HKD”) and Korean Won (“KRW”). Foreign exchange risk arises from commercial transactions that resulted in recognized financial assets and liabilities denominated in a currency other than the local functional currency. In addition, SCHMID is exposed to foreign exchange rate risk due to several financing contracts that are denominated in foreign currency or that are dependent on foreign currency exchange rates.

The following table demonstrates the material net exposures SCHMID entities have due to trade receivables and payables, cash and cash equivalents as well as other financial assets in a currency different their local functional currency. Due to consolidation these exposures would also have an impact to SCHMID’s profit or loss.

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The following table demonstrates the impact that a reasonably possible change in each material currency pair would have on SCHMID’s profit or loss before tax. Therefore, for each currency exchange rate, the foreign currency is shifted against the respective local entity’s functional currency. The resulting impact in local currency is then translated into EUR.

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Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. As SCHMID in 2025 has no loans with variable interest rates, the exposure to interest rate risk is insignificant.

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Capital Management

For the purpose of SCHMID’s capital management, capital includes all share capital, and other equity reserves attributable to the equity holders. The primary objectives of capital management are to support operating activities and maximize shareholder value through investment in the development activities of SCHMID.

SCHMID’s finance department reviews the total amount of cash of SCHMID on a monthly basis. As part of this review, management considers the total cash and cash equivalents, the cash outflow, currency translation differences and funding activities.

The Company is not subject to externally imposed capital requirements see note 29. Non-current and current financial liabilities for further details. No changes were made in the objectives, policies or processes for managing cash during the years ended December 31, 2025 and 2024.

Reconciliation of changes in liabilities arising from financing activities

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