Item 5. Market for Registrant’s Common Equity
Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market for Ordinary Shares
Our Ordinary Shares are quoted on OTCQB under the symbol “SEVCF”. Because our Ordinary Shares are quoted on the OTCQB, our Ordinary Shares may be less liquid, receive less coverage by security analysts and news media and generate lower prices than might otherwise be obtained if they were listed on a national securities exchange. Further, quotations on the OTCQB reflect inter-dealer prices, without retail mark-up, markdown or commission and may not reflect actual transactions. From November 17, 2021 through February 25, 2024, our Ordinary Shares were listed on the Nasdaq Global Market under the symbol “SEV.” On July 21, 2023, trading of our Ordinary Shares on the Nasdaq Global Market was suspended. On December 11, 2023, we received a decision of the Panel advising us that the Panel had determined to delist the Ordinary Shares from the Nasdaq Global Market. Nasdaq filed a Form 25 Notification of Delisting with the SEC on February 15, 2023 to complete the delisting.
Record Holders
As of March 6, 2025, there were 18 holders of record of our Ordinary Shares, one of which was Cede & Co., a nominee for Depository Trust Company (“DTC”), and one holder of record of our High Voting Shares. Ordinary Shares that are held by financial institutions as nominees for beneficial owners or in “street name” are deposited into participant accounts at DTC and are considered to be held of record by Cede & Co. as one shareholder.
Dividends
We have never paid or declared any cash dividends on our Ordinary Shares in the past, and we do not anticipate paying any cash dividends on our Ordinary Shares in the foreseeable future. We intend to retain all available funds and any future earnings to fund the development and expansion of our business. As a Dutch entity and under Dutch law, we may only pay dividends to the extent our shareholders’ equity ( eigen vermogen ) exceeds the sum of the paid-in and called-up share capital plus the reserves required to be maintained by Dutch law or by our articles of association and (if it concerns a distribution of profits) after adoption of the annual accounts by the general meeting from which it appears that such dividend distribution is allowed. Subject to such restrictions, any future determination to pay dividends or other distributions from our reserves will be at the discretion of our management board with the approval of our supervisory board and will depend upon a number of factors, including our results of operations, financial condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors our management board and supervisory board deem relevant.
Recent Sales of Unregistered Securities
During the fiscal year ended December 31, 2024, the Company issued the following unregistered securities:
Convertible Debenture SEV-4:
Issuance Date: February 5, 2024.
Type of Securities: Secured Convertible Debenture.
Principal Amount: $4,317,600.
Purchaser: YA II PN, Ltd.
Consideration Received: $4,317,600 in cash.
Exemption from Registration: The securities were issued in reliance upon an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D promulgated thereunder. The exemption was based on the purchaser being an accredited investor and the transaction not involving a public offering.
Terms of Conversion: At any time after the issuance date, the holder may convert any portion of the outstanding and unpaid principal and/or accrued interest (the “Conversion Amount”) into Ordinary Shares at a rate (the “Conversion Rate”) equal to the Conversion Amount divided by the lower of (x) the Fixed Conversion Price or (y) the Variable Conversion Price; provided, that the Variable Conversion Price may not be lower than (i) a price equal to 20% of the closing price of the Ordinary Shares on the trading day immediately prior to the issuance date of the debenture (the “Debenture Floor Price”) and (ii) the nominal value of one Ordinary Share.
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Convertible Debenture SEV-5:
Issuance Date: August 30, 2024.
Type of Securities: Secured Convertible Debenture.
Principal Amount: $3,338,100.
Purchaser: YA II PN, Ltd.
Consideration Received: $3,338,100 in cash.
Exemption from Registration: Similar to the February issuance above, this debenture was issued pursuant to an exemption provided under Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D promulgated thereunder. The purchaser qualified as an accredited investor, and no general solicitation or public advertising was involved in connection with this issuance.
Terms of Conversion: At any time after the issuance date, the holder may convert any portion of the Conversion Amount into Ordinary Shares at the Conversion Rate, which is equal to the Conversion Amount divided by the lower of (x) the Fixed Conversion Price or (y) the Variable Conversion Price; provided, that the Variable Conversion Price may not be lower than (i) the Debenture Floor Price and (ii) the nominal value of one Ordinary Share.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
In connection with the Yorkville Restructuring Investment, the Founders entered into respective Sale and Transfer Agreements, pursuant to which they agreed to cumulatively transfer 17,306,251 Ordinary Shares and all of their cumulative 3,000,000 High Voting Shares to SVSE, whose sole member is George O’Leary, the Company’s Chief Executive Officer and sole Managing Director. The transfers of the High Voting Shares and the Ordinary Shares to SVSE were reflected in the Company’s share register on February 1, 2024 and March 25, 2024, respectively.
Item 6. [Reserved]
Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and results of operations together with our audited consolidated financial statements and related notes included elsewhere in this Annual Report. This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties, as well as assumptions, that if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “ Risk Factors ” and in other parts of this Annual Report.
Overview
We are a technology company focused on the development and commercialization of solar integration solutions for commercial vehicles. Our proprietary solar charge controller (MCU) technology enables the seamless integration of solar energy into high- and low-voltage vehicle architectures, reducing fuel consumption and emissions for diesel-powered vehicles and extending battery life for electric vehicles.
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Our product portfolio includes complete solar solutions for refrigerated trailers, electric buses, commercial vans and trucks, as well as standalone components, such as solar charge controllers (MCUs) and solar modules. We also provide engineering services to assist OEMs and fleet operators in integrating solar technology into their vehicle production processes.
Since our pivot to solar-only solutions in early 2023, we have continued to refine and expand our offerings, with an increased focus on OEM partnerships to drive adoption of factory-installed solar solutions. While we have generated limited revenue to date, we believe that our technology has large market potential in addressing the growing demand for cost-saving and emission-reducing energy solutions for commercial fleets.
Historically, we have incurred operating losses since our inception; however, in 2024, we recorded an operating profit due to the impact of revaluation gains following the reconsolidation of our operating subsidiary after the termination of the Self-Administration Proceedings in early 2024. This one-time accounting impact significantly influenced our reported net income for the year ending December 31, 2024. Excluding this effect, our core operations remain in an investment and scaling phase, and we expect to continue incurring operating losses going forward as we expand our product offerings, scale production and establish strategic partnerships.
As of December 31, 2024, we had cash and cash equivalents of €1.4 million, and we anticipate that our current funding arrangements, including the Yorkville Commitment and the Debt Conversion, if we are able to successfully satisfy the conditions precedent thereto, will be sufficient to support our business operations through the first quarter of 2026. However, we will have to either secure a sufficient number of future customer contracts or secure additional financing to execute our long-term growth strategy, and our ability to secure such funding will depend on, among other things, market conditions, operational milestones and investor confidence.
We operate as a single business segment, managing our financing, research and development and product commercialization on a consolidated basis. Our financial results reflect a transition from pre-revenue technology development to commercial-scale implementation, and we expect continued volatility as we scale operations.
Components of our Results of Operations
Revenue
We have not yet generated material revenue from our solar technology solutions. Historically, our revenue has been derived primarily from prototype sales and pilot installations of our solar retrofit solutions, including the Solar Bus Kit. In 2024, we expanded our product offerings to include additional commercial vehicle categories, such as trucks, refrigerated trailers and electric vans. While these developments position us for potential future revenue growth, we expect revenue generation to remain limited in the near term as we focus on finalizing product developments, securing large-scale partnerships with OEMs and fleet operators and ramping up commercial deployments.
Given our transition to an asset-light business model, revenue growth will depend on our ability to successfully scale our solar technology offerings through direct sales and strategic partnerships. Additionally, regulatory approvals and customer adoption rates will play a critical role in the timing and magnitude of revenue recognition in the coming years. We anticipate that revenue fluctuations may occur as we move from initial pilot programs toward broader commercialization.
While we anticipate an increase in revenue as adoption of our solar solutions expands, our future revenue growth is subject to factors including successful commercialization of our technology, scaling production, obtaining additional regulatory approvals and securing long-term contracts with OEMs and fleet operators. Additionally, revenue growth may be affected by macroeconomic conditions, supply chain constraints and shifts in government incentives for renewable energy technologies.
Our expected revenue streams include the sale of complete solar solutions, standalone solar products such as solar modules and solar charge controllers, as well as data services and engineering services that support OEM integration and fleet adoption. Our revenue recognition follows standard contract-based policies, with revenue recognized upon delivery of products or completion of contractual obligations.
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Cost of Sales
For the year ended December 31, 2024, we did not record any cost of sales, as we are still in the early commercialization phase of our solar technology. Historically, our cost of sales has been minimal, reflecting the limited revenue generation from prototype projects and early-stage product deployments. As we scale production and move toward broader commercialization, we expect cost of sales to increase in line with higher manufacturing volumes, supply chain expenditures and product fulfillment costs.
Research and Development Expenses
We did not record research expenses in prior years, as we did not engage in fundamental research activities. Our development expenses primarily consist of (i) personnel expenses for our development team, including salaries, bonuses and related share-based compensation, (ii) costs associated with prototype development and solar integration, (iii) professional services and (iv) other expenses. Development costs are expensed as incurred, as the recognition criteria for capitalization have not been met. In 2024, research and development expenses declined as we shifted from early-stage development to commercialization. We intend to focus future investments on optimizing our solar charge controller technology, enhancing solar integration efficiency and supporting OEM partnerships.
Selling, General and Administrative Expenses
We recognize selling, general and administrative expenses (“SG&A”) on an accrual basis when incurred. These expenses primarily include employee compensation, consultant and professional service fees, legal and compliance costs, marketing and promotional activities, intellectual property-related expenses and general overhead costs. As we continue to scale our operations and expand our market presence, we anticipate SG&A expenses to reflect investments in business development, commercialization efforts and strategic partnerships. Additionally, as a public company, we expect continued costs related to regulatory compliance, financial reporting and investor relations.
Other Operating Income/Expenses
Other operating income primarily includes government grants, reimbursements for personnel expenses and any non-recurring income. Other operating expenses mainly consist of foreign exchange losses from currency conversions and other non-operating costs. These items may vary from period to period depending on external factors such as exchange rate fluctuations and grant allocations.
Gain from Reconsolidation of Subsidiary
On February 29, 2024, the Subsidiary exited its Self-Administration Proceedings via the Plan. As a result, all outstanding debts between the Company and the Subsidiary were extinguished, and the Subsidiary was reconsolidated into our consolidated financial statements effective March 1, 2024.
The reconsolidation resulted in a net gain of approximately €62.6 million, reflecting the revaluation of the Subsidiary’s net assets and the extinguishment of parental guarantees and related liabilities. This gain is recorded in our 2024 operating results and represents the financial impact of regaining control over the Subsidiary.
While this gain had a significant positive effect on our reported 2024 operating results, it does not reflect ongoing business operations or recurring profitability. We expect that our future financial performance will be driven by commercialization of our solar solutions, expansion of OEM partnerships and disciplined cost management.
Interest and Similar Expenses
Interest expenses primarily consist of costs associated with interest-bearing liabilities, including convertible debentures and other financing instruments used to support our operations. These expenses reflect the cost of capital required to fund our business activities and ongoing development efforts.
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Results of Operations
The following table summarizes our consolidated results of operations for the periods indicated:
For the year ended
December 31,
2024
2023
Change
(in € millions)
Revenue
0.0
0.0
0.0
Cost of sales
(0.0
)
(0.1
)
0.1
Gross profit
0.0
0.0
0.0
Operating expenses
Selling and distribution expenses
(0.7
)
(1.1
)
0.4
General and administrative expenses
(4.6
)
(13.2
)
8.6
Research and development
(1.1
)
(16.1
)
15.0
Gain (Loss) on reconsolidation/deconsolidation
62.6
(21.8
)
84.3
Other operating income
0.4
1.0
(0.6
)
Operating income / (loss)
56.5
(51.3
)
107.8
Other income / (expense)
Income/(expense) from changes in fair value of convertible debt carried at fair value
8.9
5.4
3.5
(Loss) / Gain on foreign currency translation
(0.4
)
0.2
(0.6
)
Gain / (Loss) before tax
65.0
(45.6
)
110.6
Taxes on income and earnings
–
–
Deferred taxes on expense
–
–
Gain / (Loss) for the period
65.0
(45.6
)
110.6
Other comprehensive income (loss) that will not be reclassified to profit or loss
–
–
Total comprehensive income / (loss) for the period
65.0
(45.6
)
110.6
Revenue
For the year ended December 31, 2024, we recorded no revenue, while for the year ended December 31, 2023, we recorded revenue of €42 thousand. Our focus during these periods was on refining our solar technology, obtaining regulatory approvals and securing strategic partnerships. While we have successfully developed and tested our ViPV solutions and solar charge controllers, commercial-scale adoption and revenue generation are expected to begin in future periods as we transition from pilot projects to broader market deployment.
Cost of Sales
For the year ended December 31, 2024, we recorded no cost of sales, as we did not generate revenue during this period. For the year ended December 31, 2023, we recorded cost of sales in the amount of €70 thousand.
Research and Development Expenses
For the year ended December 31, 2024, cost of development expenses decreased to approximately €1.1 million from €16.1 million for the year ended December 31, 2023. The decrease primarily reflects the completion of major development efforts in prior years, allowing us to focus on specific improvements and refinements to our solar technology. In contrast, 2023 development expenses included costs associated with transitioning from the Sion passenger car program to capital-light solar technology business.
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Selling, General, and Administrative Expenses (SG&A)
For the year ended December 31, 2024, SG&A expenses totaled approximately €5.3 million, compared to €14.3 million for the year ended December 31, 2023. The decrease primarily reflects the impact of prior restructuring efforts and cost reductions following the Self-Administration Proceedings.
The largest components of SG&A expenses in 2024 were payroll and social contributions, and legal, audit and other advisory services. In comparison, 2023 SG&A expenses included costs associated with the transition to a solar-only business model and expenses related to the restructuring process.
Other Operating Income/Expenses
For the year ended December 31, 2024, other operating income and other operating expenses resulted in a net balance of approximately €0.4.
For the year ended December 31, 2023, other operating income and expenses resulted in a net balance of approximately €1.0 million.
Gain (Loss) on deconsolidation/reconsolidation
For the year ended December 31, 2024, we recognized a gain of approximately €62.6 million in connection with the reconsolidation of the Subsidiary following its exit from its Self-Administration Proceedings. This gain primarily reflects the extinguishment of certain liabilities and the re-recognition of net assets upon regaining control of the Subsidiary.
For the year ended December 31, 2023, we recorded a deconsolidation loss of €21.8 million following the loss of control of the Subsidiary on May 19, 2023, triggered by the opening of the former Self-Administration Proceedings and the appointment of a preliminary court-appointed custodian (vorläufiger Sachwalter ). As a result, the Company derecognized the assets and liabilities of the Subsidiary from its consolidated statement of financial position, leading to significant movements in both assets and liabilities and a resulting gain.
Income/(expense) from changes in fair value of convertible notes payable carried at fair value
For the year ended December 31, 2024, we recognized a gain of approximately €8.9 million from the fair value measurement of financial liabilities. This gain primarily relates to the revaluation of convertible debentures issued in connection with our financing arrangements, which are accounted for at fair value through profit or loss under U.S. GAAP.
For the year ended December 31, 2023, we recorded a gain of approximately €5.4 million from the revaluation of convertible debentures under the same fair value accounting treatment.
Gain (Loss) on Foreign Currency Translation
For the year ended December 31, 2024, we recorded a foreign currency translation loss of approximately €0.4 million, primarily resulting from unfavorable exchange rate movements impacting Euro-denominated balances. We recognized a net gain from foreign currency translation of approximately €0.2 million for the year ended December 31, 2023.
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Net Income
For the year ended December 31, 2024, we reported net income of €65.0 million, marking a significant shift from the net loss of €45.6 million recorded for the year ended December 31, 2023. This increase in net income was primarily driven by the €62.6 million reconsolidation gain recognized upon regaining control of our Subsidiary after the completion of its Self-Administration Proceedings.
Excluding this gain, we would have continued to report an operating loss, reflecting the early-stage nature of our business and ongoing investments in technology development, commercialization and operational scaling.
Looking ahead, we anticipate incurring operating losses in future periods as we continue to scale our operations, invest in research and development and expand our commercial footprint. Our long-term financial performance will depend on successful commercialization of our ViPV solutions, revenue growth from OEM partnerships and standalone product sales and efficient cost management.
Liquidity and Capital Resources
As of December 31, 2024, our cash was €1.4 million, compared to €7.4 million as of December 31, 2023. Cash consists of cash in bank accounts.
We do not currently generate material revenue from operations and continue to incur operating expenses related to the commercialization of our solar technology, general and administrative functions and development activities. Our liquidity position is highly dependent on external financing, including equity and equity-linked financings, debt instruments and strategic partnerships.
Sources and Uses of Liquidity
Historically, we have financed our operations through:
●
Equity and equity-linked financings, including our IPO in November 2021, a follow-on offering in May 2022 and a committed equity facility entered into in June 2022.
○
On November 17, 2021, the Company consummated its IPO of 10,000,000 Ordinary Shares at a price of $15.00 per share. In addition, the underwriters in our IPO exercised their greenshoe option to purchase an additional 1,500,000 Ordinary Shares at a price of $13.95 per share. In total, the Company raised $160 million (€142 million) through the IPO, after deducting underwriting discounts and commissions.
○
The Company successfully completed a follow-on offering on May 3, 2022 of 10,930,000 Ordinary Shares at a price of $4.00 per share, which amount included shares sold pursuant to the partial exercise of the underwriters’ over-allotment option. Pursuant to the offering, the Company received proceeds of $42 million (€39 million) after deducting underwriting discounts and commissions.
○
On June 13, 2022, the Company entered into an ordinary share purchase agreement with Joh. Berenberg, Gossler & Co. KG (“Berenberg”), which governed a committed equity facility (the “CEF”) for the Company. The CEF provided the Company with the right, but not the obligation, to sell and issue up to $150 million of its Ordinary Shares over a period of 24 months to Berenberg, subject to certain limitations and conditions. During 2022, the Company sold to Berenberg a total of 8,748,433 Ordinary Shares for total gross proceeds of $17 million (€17 million).
●
The 2022 Convertible Debentures issued to Yorkville pursuant to the securities purchase agreement in December 2022 and subsequent amendment in 2024.
○
On December 7, 2022, the Company entered into a securities purchase agreement with Yorkville under which the Company agreed to sell and issue to Yorkville the 2022 Convertible Debentures in a gross aggregate principal amount of up to $31.1 million (€29.4 million).
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○
In the context of the former Self-Administration Proceedings and in connection with the First Commitment, the Companies entered into the Yorkville Investment Agreements with Yorkville in mid-November 2023, and on April 30, 2024, the Company and Yorkville entered into an amendment to the Funding Commitment Letter in connection with the Second Commitment.
○
The convertible debenture with respect to the First Tranche of the Yorkville Restructuring Investment was issued to Yorkville on February 6, 2024 for approximately $4.3 million and the convertible debenture with respect to the Second Tranche was issued to Yorkville on August 30, 2024 for approximately $3.3 million.
○
On December 30, 2024, the Company and Yorkville entered into the Securities Purchase Agreement, pursuant to which the Company agreed to sell and issue to Yorkville the New Commitment Debenture in the aggregate principal amount of $5 million.
○
On February 12, 2025, the Company and Yorkville entered into the First Omnibus Amendment, pursuant to which the parties agreed to modify the terms of the Securities Purchase Agreement to, among other things, provide for an immediate advance of $1,000,000 of the Yorkville Commitment in the form of the First Advance Debenture.
○
On March 25, 2025, the Company and Yorkville entered into the Third Omnibus Amendment, pursuant to which the parties agreed to modify the terms of the Securities Purchase Agreement to, among other things, provide for an immediate advance of $1 million of the Yorkville Commitment in the form of the Second Advance Debenture.
○
On December 30, 2024, the Company and Yorkville also entered into the Exchange Agreement, pursuant to which the Company agreed to issue, subject to the satisfaction of certain closing conditions, 1,242 Preferred Shares to Yorkville solely in exchange for the surrender and cancellation of all of the debentures held by Yorkville, including the 2022 Convertible Debentures, the 2024 Convertible Debentures, the New Commitment Debenture (if issued) and the Advance Debentures.
●
Limited grant funding from government and public research institutions, supporting the development of our proprietary solar technology.
●
Limited revenues from sale of prototypes, our solar products and services.
Our cash outflows have primarily been driven by:
●
Research and development expenditures, including product testing, solar module validation and MCU development.
●
General and administrative costs, such as payroll, legal and advisory services and public company compliance costs.
●
Investment in commercialization efforts, including OEM partnerships and vehicle integration projects.
Future Capital Needs and Outlook
While our current funding structure, which is based on the receipt of the unfunded portion of the Yorkville Commitment and implementation of the Debt Conversion, if we are able to successfully satisfy the conditions precedent thereto, is expected to provide sufficient capital through the end of the first quarter of 2026, we will have to either secure a sufficient number of future customer contracts or secure additional external financing to support our scaling and commercialization efforts.
We are actively evaluating a mix of financing options, including:
●
Additional equity or debt financings, subject to market conditions.
●
Non-dilutive funding sources, such as government grants and strategic collaborations.
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●
Revenue generation from sales of our solar solutions and engineering services, which we expect to ramp up over time.
Our future financing requirements will depend on many factors, including, among others:
●
the market’s willingness to adopt solar-powered mobility solutions;
●
our ability to successfully commercialize our proprietary solar technology in time or at all;
●
our ability to meet the initial listing requirements for admission of our Ordinary Shares to trading on the Nasdaq Capital Market;
●
our ability to develop installation processes and capabilities within our projected costs and timelines;
●
the costs of raw materials or certain products;
●
our ability to obtain or agree on acceptable terms and conditions on all or a significant portion of the government grants, loans and other incentives for which we may apply;
●
our ability to establish a network for aftersales customer service or otherwise successfully address the service and maintenance requirements of our customers;
●
any product liability or other lawsuits related to our products; and
●
the costs of operating as a public company.
If we are unable to secure additional funding on acceptable terms, we may be required to adjust our growth strategy, delay development projects or pursue alternative financing solutions.
Going Concern Considerations
We have historically relied on external financing to fund our operations, and as of December 31, 2024, we had cash of €1.4 million. Based on our current operating plan and if we are able to successfully access the unfunded portion of the Yorkville Commitment and implement the Debt Conversion, we anticipate that our existing cash resources, together with the remaining unfunded portion of the Yorkville Commitment, will be sufficient to fund our business operations through the end of the first quarter of 2026.
However, our ability to continue as a going concern is dependent on the uplisting of our Ordinary Shares to the Nasdaq Capital Market, which we cannot guarantee will occur, and on our ability to either secure a sufficient number of future customer contracts or secure additional capital. If we are unable to obtain sufficient funding, we may need to modify our operating plans, reduce costs or pursue alternative financing strategies. Management continues to evaluate financing alternatives, and we remain confident in our ability to raise the necessary capital to execute our business plan, especially if we are able to satisfy the initial listing requirements of the Nasdaq Capital Market. Based upon this uncertainty, our management has concluded that there is substantial doubt that the company will continue as a going concern.
Cash Flows
The table below summarizes our cash flows (used in) from operating, investing and financing activities for the years ended December 31, 2024 and 2023.
For the year ended December 31,
2024
2023
(in € millions)
Net cash used in operating activities
(14.7
)
(11.4
)
Net cash provided by / (used in) investing activities
1.2
(11.3
)
Net cash from financing activities
7.0
–
Net decrease in cash
(6.5
)
(22.7
)
Effect of currency translation on cash and cash equivalents
0.4
(0.2
)
Cash and cash equivalents at the beginning of the period
7.4
30.3
Cash at end of the period
1.4
7.4
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Net cash used in operating activities
Net cash used in operating activities increased from €11.4 million in 2023 to €14.7 million in 2024. The increase was primarily driven by higher cash outflows related to changes in working capital, including timing of payables and other operating liabilities.
Net cash used in investing activities
Net cash provided by investing activities was €1.2 million in 2024, primarily attributable to the reconsolidation of the Subsidiary cash balance. Net cash used in investing activities in 2023 was €11.3 million with most of the cash outflows related to deconsolidation of the Subsidiary cash balance and purchases of property, plant and equipment.
Net cash from (used in) financing activities
Net cash provided by financing activities was €7.0 million in 2024, resulting from proceeds received in connection with the issuance of convertible notes. In 2023, net cash provided by financing activities was immaterial.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP. Prior to 2024, we prepared our financial statements in accordance with International Financial Reporting Standards as permitted in the United States based on our qualification as a foreign private issuer under the rules and regulations of the SEC. In connection with the loss of our status as a foreign private issuer effective on January 1, 2025, we, as a domestic filer, prepared our financial statements in accordance with U.S. GAAP. The transition was applied retrospectively to the extent required under U.S. GAAP for comparative periods presented in this report.
The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. We base our estimates on historical experience, known trends and other market-specific or relevant factors that we believe to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. If actual results differ from our estimates, or to the extent these estimates are adjusted in future periods, our results of operations could either benefit from or be adversely affected by any such change in estimate.
Our most critical accounting estimates include revenue recognition, valuation of stock-based compensation and fair value assessments of financial instruments. Changes in these estimates and assumptions could materially affect our reported results. For instance, a change in the estimated fair value of financial instruments could result in significant variations in net income.
See Note 2 to our consolidated financial statements included in Part II, Item 8 of this Annual Report for a summary of significant accounting policies and the effect on our consolidated financial statements.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
As a smaller reporting company, we are not required to provide the information required by this Item.
Item 8. Financial Statements and Supplementary Data.
The financial statements required to be filed pursuant to this Item 8 are appended to this Annual Report. An index of those financial statements is found in Item 15.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.