SFC Energy : Report of the Management Board to the General Meeting regarding agenda item 8 on the exclusion of subscription rights in accordance with sections 221 (4) sentence 2, 186 (4) sentence 2 AktG

Annual General Meeting of SFC Energy AG on May 16, 2024

Report of the Management Board to the General Meeting regarding agenda item 8 on the exclusion of subscription rights in accordance with sections 221 (4) sentence 2, 186 (4) sentence 2 AktG

Under the proposed resolution the Management Board shall be authorized, subject to approval by the Supervisory Board, to issue, on one or several occasions until May 15, 2026, bearer convertible and/or warrant-linked bonds (or combinations of these instruments) with or without a definite maturity date in an aggregate nominal amount of up to EUR 45,000,000.00 and to grant holders and creditors of bonds warrant and/or conversion rights to acquire or convert their bonds into up to 1,736,369 no- par value bearer shares of the Company with a proportionate investment in the share capital of up to a total of EUR 1,736,369.00, as set forth in detail in the terms and conditions of the bonds, and to agree relevant conversion requirements with the holders and creditors of the bonds.

In addition to traditional methods of raising debt and equity capital, the issuance of bonds of the types mentioned above allows the Company to take advantage of attractive financing alternatives in the capital market if and when they arise, strengthen the Company's capital base by issuing so- called hybrid financing instruments and, in doing so, pave the way for the Company's future success. For the aforementioned reasons, a proposal is made for the General Meeting to grant authorization to issue bonds.

By issuing bonds, a company can raise debt capital which, depending on the terms and conditions of the bonds, can be categorized as equity or quasi-equity capital for both rating and balance-sheet purposes. The conversion and/or warrant premiums received as well as the counting of such bonds as part of the Company's equity will help to strengthen its capital base. The possibility of establishing conversion requirements in addition to granting conversion and/or warrant rights and the possibility of combining convertible bonds and warrant-linked bonds broaden the range of options for structuring these financing instruments. In addition, the authorization will allow the Company to place bonds itself or through its direct or indirect subsidiaries. Other than in euros, bonds may also be issued in the legal currencies of OECD countries with or without definite maturity dates.

To increase flexibility, the terms and conditions of bonds that grant conversion and/or warrant rights may allow the Company to pay holders of conversion and/or warrant rights an equivalent amount in cash rather than giving them no-par value bearer shares in the Company.

The conversion and/or warrant exercise price of bonds that grant conversion or warrant rights or establish conversion requirements must not be lower than 80% of the Company's share price close to the time the bonds are placed or - if a conversion requirement is established - close to the final maturity of the bonds. In respect of bonds establishing a conversion requirement, under certain circumstances set forth in detail in the terms and conditions of the bonds the share price at the time of conversion may be used as a basis for determining the conversion and/or warrant exercise price. If an adjustment is not already mandated by law and section 9 (1) AktG notwithstanding, the conversion and/or warrant rights can be adjusted such that their value is maintained in the event a dilution of the economic value of existing conversion and/or warrant rights (e.g. as a result of a capital in- crease) occurs during the term of the bond, provided, however, that no subscription rights are granted as compensation.

Fundamentally, shareholders must be granted subscription rights. However, an exclusion of subscription rights shall be possible under the following conditions:

If bonds that grant conversion or warrant rights or establish conversion requirements are to be is- sued, the Management Board shall be authorized, with approval by the Supervisory Board, to exclude subscription rights in accordance with section 186 (3) sentence 4 AktG, provided that the bonds are issued against cash payment and provided further that the new shares to be issued upon exercise of the conversion or warrant rights or in fulfilment of the conversion requirements account

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for a proportionate amount of the capital stock of the Company not exceeding in aggregate a proportionate amount of 10% of the capital stock issued at the time this authorization takes effect or, if lower, at the time this authorization is exercised. This 10% cap for simplified exclusion of subscription rights shall be reduced by the aggregate amount of capital stock accounted for by newly issued shares or treasury shares previously acquired by the Company that are issued or sold since May 16, 2024 with subscription rights being excluded pursuant to section 186 (3) sentence 4 AktG. These deductions serve to ensure that no bonds are issued with exclusion of subscription rights to the extent that such issuance, taking account of capital increases or certain placements of treasury shares and in direct or analogous application of section 186 (3) sentence 4 AktG, would result in an exclusion of shareholders' rights to subscribe for new shares or treasury shares of the Company which in aggregate account for more than 10% of the Company's shares outstanding.

By way of qualification, the proposed resolution under agenda item 8 a) provides that an inclusion of shares according to the preceding provision due to the exercise of authorizations (i) for the issuing of new shares pursuant to sections 203 (1) sentence 1, (2) sentence 1, 186 (3) sentence 4 AktG and/or (ii) for the selling of Company shares pursuant to sections 71 (1) no. 8 sentence 5, 186 (3) sentence 4 AktG and/or (iii) for the issuing of convertible bonds and/or warrant-linked bonds pursuant to sections 221 (4) sentence 2, 186 (3) sentence 4 AktG ceases to have effect for the future if and insofar as the relevant authorization(s), the implementation of which caused such inclusion of shares, is/are reissued by the General Meeting in accordance with the legal regulations. In this case or in these cases, the General Meeting has again decided on the possibility of simplified exclusion of subscription rights, meaning that the reason for the inclusion of shares no longer applies. Where

1. new shares are again sold under a simplified exclusion of subscription rights in accordance with another authorized capital under the Articles of Association, (ii) convertible bonds and/or warrant- linked bonds are again issued under the simplified exclusion of subscription rights or (iii) the Com- pany is again entitled to sell Company shares subject to a simplified exclusion of subscription rights, this possibility shall again exist for issuing convertible bonds and/or warrant-linked bonds. Upon the new authorization in relation to the simplified exclusion of subscription rights taking effect, the bar that arises as a result of the exercise of the authorization to issue new shares or to issue convertible bonds and/or warrant-linked bonds or as a result of the selling of Company shares lapses in relation to issuing convertible bonds and/or warrant-linked bonds. The requirements for a majority for such a resolution are identical to those of a resolution on the authorization to issue convertible bonds and/or warrant-linked bonds with the option of simplifying the exclusion of subscription rights. There- fore, the resolution of the General Meeting on creating (i) a new authorization to issue new shares pursuant to sections 203 (1) sentence 1, (2) sentence 1, 186 (3) sentence 4 AktG (therefore, a new authorized capital), (ii) a new authorization to issue convertible bonds and/or warrant-linked bonds pursuant to sections 221 (4) sentence 2, 186 (3) sentence 4 AktG or (iii) a new authorization to dis- pose of treasury shares in accordance with sections 71 (1) no. 8 sentence 5, 186 (3) sentence 4 AktG should also be seen as a confirmation of the authorizing resolution regarding the issuing of convertible bonds and/or warrant-linked bonds subject to the simplified exclusion of subscription rights in accordance with sections 221 (4) sentence 2, 186 (3) sentence 4 AktG, provided that the legal requirements are observed. If an authorization to exclude subscription rights is exercised again in direct or analogous application of section 186 (3) sentence 4 AktG, the deduction is carried out again.

In the event of an exclusion of subscription rights, the issue price of bonds must not fall significantly below their market value under analogous application of section 186 (3) sentence 4 AktG. This requirement addresses the shareholders' need to have their shareholdings protected against dilution. To ensure that this requirement for the issuance of bonds is met, the theoretical market value of bonds with conversion or warrant rights and/or conversion requirements shall be determined using generally accepted methods of mathematical finance. The issue price to be determined must not be considerably lower than this market value. In that case, shareholders' protection against a dilution of their shareholdings will be ensured and they will not suffer any economic disadvantages as a result of an exclusion of their subscription rights, as the value of a subscription right would practically be reduced to zero. Shareholders who want to maintain their percentage holding of the capital stock of the Company or purchase bonds in proportion to their percentage shareholding can do so through purchases on the open market.

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The foregoing options for exclusion of subscription rights give the Company the flexibility to promptly take advantage of favorable conditions in the capital markets and they also allow the Company to flexibly and promptly take advantage of low levels of interest rates and/or favorable demand conditions to issue financial instruments. This is due to the fact that, unlike in an issuance of bonds to which subscription rights are attached, the issue price can be determined immediately before placement which helps to avoid an increased price risk during a subscription period and to maximize the issue proceeds in the interest of all shareholders. Further advantages in terms of the costs of raising capital and the costs of placement result from the fact that there is no run-up period in connection with the subscription rights. By placing bonds with no subscription rights attached, both the safety margin that would otherwise be required and the placement risk are reduced so that capital can be raised more cheaply for the benefit of both the Company and its shareholders.

In addition, the Management Board shall be authorized, subject to approval by the Supervisory Board, to exclude fractional amounts from subscription rights. Such fractional amounts may result from the size of the relevant bond issue and the necessity to determine a practicable conversion ratio. In such cases, an exclusion of subscription rights will simplify execution of the bond issuance. The fractional amounts that are excluded from the subscription rights of shareholders shall be realized in the best interest of the Company by selling them in the market or otherwise.

A further proposal is that the Management Board, subject to approval by the Supervisory Board, be authorized to exclude shareholders' subscription rights to grant to holders of existing conversion and/or warrant rights subscription rights to acquire such a number of new shares as they would be entitled to after exercising their warrant and/or conversion rights or fulfilling their conversion require- ments. The terms and conditions of the warrants and of conversion typically contain provisions designed to protect the holders or creditors of warrant or conversion rights against dilution. This facilitates placement of these financial instruments in the market. Granting subscription rights to holders of existing warrant or conversion rights can help to prevent the warrant-exercise price and/or the conversion price having to be reduced for holders of existing warrant or conversion rights in the event the authorization is exercised. Thus, the issue price of the no-par value bearer shares to be issued upon exercise of warrants or conversion may be raised. As this will also facilitate placement of the bond issue, the exclusion of subscription rights is in the shareholders' interest to ensure an optimal financing structure for the Company.

Bonds may also be issued against payment in kind. Where appropriate, this will allow utilizing bonds as an acquisition currency (for instance in connection with business combinations, corporate acquisitions or acquisitions of other assets) or for refinancing purposes (e.g. in the context of existing lending relationships through contribution of assets against allocation of bonds). In addition, in negotiations the need may arise to provide consideration in full or in part in forms other than cash. Thus, the ability to offer bonds as consideration could provide an edge when competing for attractive acquisition targets and increases the flexibility to execute acquisitions that use little liquidity. In ad- dition, bonds may prove to be an effective refinancing instrument. In any event, the Management Board shall carefully examine whether or not to exercise the authorization to issue bonds against payment in kind under exclusion of subscription rights. It will do so only if this is in the best interest of the Company and, hence, of its shareholders.

Should the proposed authorization be exercised, the Management Board shall report thereon at the General Meeting following such exercise.

The proposal submitted under agenda item 8 c) to create an additional conditional capital (Condi- tional Capital 2024) serves to ensure issuance of no-par value bearer shares to the holders or creditors of bonds issued by the Company or its direct or indirect subsidiaries in reliance on the authorization proposed to be granted under agenda item 8 a) at the General Meeting to be held on May 16, 2024, that grant conversion rights into, or warrant rights to subscribe for, new no-par value bearer shares of the Company or that establish conversion requirements. Alternatively, within the

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limits imposed by law, the authorized capital of the Company or treasury shares can be used to settle option or conversion rights or to fulfil conversion requirements.

Brunnthal, April 2024

SFC Energy AG

The Management Board

sgd. Dr. Peter Podesser

sgd. Daniel Saxena

sgd. Hans Pol

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