{"url_path":"/sec/adsew/10-k/2026/item-4","section_key":"item-4","section_title":"Item 4 INFORMATION ON THE COMPANY**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1879248/0001213900-26-057891-index.html","accession_number":"0001213900-26-057891","cik":"0001879248","ticker":"ADSE","issuer_name":"Ads-Tec Energy Public Ltd Co","edgar_url":"https://www.sec.gov/Archives/edgar/data/1879248/0001213900-26-057891-index.html","primary_entity_key":"0001879248","primary_entity_name":"Ads-Tec Energy Public Ltd Co"},"word_count":10280,"has_tables":true,"body_markdown":"**ITEM 4. INFORMATION ON THE COMPANY**\n\n** **\n\n**4.A. History and Development of the Company**\n\n \n\nADS-TEC ENERGY PLC, a public\nlimited company incorporated in Ireland (“ADSE Holdco”, the “Company”, “we”,\n“us”, “our” or similar terms), was incorporated in Ireland on July 26, 2021 as a public limited\ncompany. ADSE Holdco serves as a holding company for ADSE GM and its subsidiaries. Prior to the Business Combination Transactions in December\n2021, we did not conduct any material activities other than those incidental to our formation and certain matters related to such business\ncombination, such as the making of certain required securities law filings. Upon the consummation of the Business Combination Transactions\nin December 2021, ADSE GM became the direct, wholly owned subsidiary of ADSE Holdco and holds all material assets and conducts all business\nactivities and operations of ADSE Holdco, and the securityholders of ADSE GM and European Sustainable Growth Acquisition Corp. became\nsecurityholders of ADSE Holdco. The Company’s principal executive office is located at 10 Earlsfort Terrace, Dublin 2, D02 T380,\nIreland. The Company’s telephone number is +353 1 920 1000.\n\n  \n\nADSE Holdco is subject to\ncertain of the informational filing requirements of the Exchange Act. Since ADSE Holdco is a “foreign private issuer”, it\nis exempt from the rules and regulations under the Exchange Act prescribing the furnishing and content of proxy statements. The principal\nshareholders of ADSE Holdco are exempt from the reporting provisions, and the members of the board of directors, the officers, and the\nprincipal shareholders of ADSE Holdco are exempt from the “short-swing” profit recovery provisions contained in Section 16\nof the Exchange Act with respect to their acquisition and disposition of the Ordinary Shares. In addition, ADSE Holdco is not required\nto file reports and financial statements with the SEC as frequently or as promptly as U.S. public companies whose securities are registered\nunder the Exchange Act. However, ADSE Holdco is required to file with the SEC an Annual Report on Form 20-F containing financial statements\naudited by an independent accounting firm and is subject to the provisions of the Irish Companies Act.\n\n \n\nThe SEC also maintains a website\nat *http://www.sec.gov* that contains reports and other information that ADSE Holdco files with or furnishes electronically to the\nSEC. Such information can also be found on ADSE Holdco’s website (https://www.ads-tec-energy.com/en/). The information on or accessible\nthrough our website is not part of and is not incorporated by reference into this Annual Report.\n\n** **\n\n**4.B. Business Overview**\n\n** **\n\n**Introduction**\n\n \n\nADSE develops and provides\nbattery-based energy infrastructure solutions designed to support the electrification of mobility and the increasing integration of renewable\nenergy sources. Its core activities include battery-buffered ultra-fast charging solutions and battery energy storage systems (“BESS”),\nwith more than 2,500 charge points delivered and over 2.5 GWh of installed storage capacity to date, complemented by software platforms,\nlifecycle services and, increasingly, infrastructure-related activities, including the operation of energy assets and the development\nof large-scale storage projects.\n\n \n\nThe Company operates in markets\nundergoing a structural transformation toward a more decentralized, carbon-neutral and electrified energy system. This transformation\nis driven by the growing electrification of mobility and industry and the increasing integration of renewable energy sources, which are\nleading to higher and more volatile electricity demand and placing increasing strain on existing energy infrastructure. In particular,\nthe rapid growth of electric vehicles is expected to require a substantial expansion of charging infrastructure, with approximately 3.5\nmillion public charging points required in Europe by 2030. In parallel, the intermittency of renewable energy and rising demand peaks\ncontribute to increased volatility in power supply and consumption, driving demand for battery storage and integrated energy systems,\nwith battery storage deployment reaching record annual additions of more than 27 GWh in Europe in 2025.\n\n \n\nADSE’s product and service\noffering comprises the sale of battery-buffered charging systems and battery energy storage systems for commercial, industrial and infrastructure\napplications, which are typically sold to customers under hardware sales contracts on a project or multi-site rollout basis. These hardware\nsolutions are complemented by digital energy management platforms and lifecycle services, including monitoring, maintenance and service\nagreements, which support system performance over time and contribute to recurring revenue streams. In addition, the Company has begun\nexpanding its business model to include Own & Operate (“O&O”) activities, under which it participates more directly\nin the operation of infrastructure assets and related revenue streams, including charging, energy trading and other energy-related services.\nThe Company is also engaged in the development of large-scale battery storage projects, including a unique project with a planned capacity\nof approximately 1 GW and up to 4 GWh, and this expansion reflects a broader shift from a primarily hardware-driven model toward a more\ndiversified business model with a growing focus on recurring revenues.\n\n \n\n32\n\n \n\n \n\nIn this context, ADSE’s\nsolutions are designed to address the structural constraints of existing energy infrastructure, particularly the mismatch between available\ngrid capacity and increasing, time-sensitive power demand. The Company’s platform enables electricity to be stored locally and delivered\nat high power independently of immediate grid availability, while also allowing energy flows to be monitored, controlled and optimized\nover time. To support this functionality, ADSE develops key elements of its systems in-house, including battery systems, control architecture\nand digital management software, which are integrated into a combined hardware and software solution. This integrated approach enables\nthe deployment and operation of scalable charging and storage infrastructure across a range of applications, including both customer-owned\nsystems and infrastructure projects operated by the Company, and supports the generation of multiple value streams from energy usage and\nmanagement.\n\n \n\nThe Company’s recent\nfinancial performance reflects the transition it is currently undergoing. Following a period of continuous growth, with revenues increasing\nfrom approximately EUR 26.4 million in 2022 to EUR 110.0 million in 2024, revenues declined to approximately EUR 31.6 million in 2025,\naccompanied by a decrease in operating results. This development was primarily driven by the combined impact of the insolvency of a key\ncustomer in the charging hardware business and the Company’s ongoing shift toward new business lines that had not yet translated\ninto revenues. As these business lines continue to develop and scale, the Company expects an increasing contribution from recurring revenue\nstreams and a gradual transition toward a more stable and diversified revenue base over time.\n\n \n\n**Industry Background and Market Opportunity**\n\n \n\nThe global energy system is\nundergoing a fundamental transformation toward a more decentralized, carbon-neutral and electrified model. This transition is driven by\nthe increasing integration of renewable energy sources, such as wind and solar power, as well as the ongoing electrification of mobility\nand industry. As a result, existing energy infrastructures, originally designed for centralized generation and predictable consumption\npatterns, are increasingly challenged by more volatile generation profiles and rising, less predictable demand peaks, creating growing\nimbalances between energy supply and demand and placing strain on existing grid capacity.\n\n \n\nOne of the key drivers of\nthis transformation is the electrification of transport, which is driving the rapid development of the electric vehicle (“EV”)\nmarket. The ramp-up of electric mobility over the past decade has evolved from a niche phenomenon into a large-scale industrial transformation,\ncharacterized by exponential growth dynamics, increasing market maturity, and strong structural tailwinds. While early adoption was primarily\npolicy-driven and concentrated in a few leading markets, recent data indicates that the transition is now entering a broader phase of\nglobal scaling.\n\n \n\nGlobally, the EV market has\ndemonstrated sustained high growth rates. According to the International Energy Agency, the global EV fleet is expected to expand from\nfewer than 45 million vehicles in 2023 to approximately 250 million by 2030 and more than 500 million by 2035, implying annual growth\nrates of over 20%. This trajectory reflects not only regulatory support but also improving economics, technological progress, and increasing\nconsumer acceptance. Complementary forecasts by Gartner estimate that around 85 million EVs will already be on the road by 2025, representing\na 33% year-on-year increase.\n\n \n\nHowever, the ramp-up is not\nlinear. Industry analyses consistently describe the transition as S-shaped, with an initial slow adoption phase followed by rapid acceleration\nand eventual maturation. Current market dynamics suggest that many regions—particularly Europe and China—are now entering\nthe steep growth phase. For example, EV sales grew by over 40% year-on-year in early 2025 across major markets, indicating strong momentum\ndespite short-term fluctuations. At the same time, adoption remains heterogeneous, with leading markets significantly ahead of laggards\ndue to differences in policy frameworks, infrastructure availability, and consumer incentives.\n\n \n\nInsights from Horváth\n& Partners provide an important microeconomic perspective on this transition. Their recent surveys show that consumer willingness\nto adopt EVs is rising sharply, even in markets that have experienced temporary slowdowns. In Germany, for instance, the share of consumers\nconsidering the purchase of an electric vehicle doubled to 58% in early 2025, while the proportion of outright rejecters declined significantly.\nAcross Europe, approximately one-third of consumers indicate a willingness to choose a battery electric vehicle as their next car, with\nsignificantly higher shares in leading markets such as Scandinavia.\n\n \n\n33\n\n \n\n \n\nThis data highlights a critical\ninflection point: while short-term sales may fluctuate due to subsidy changes or macroeconomic conditions, underlying demand is structurally\nincreasing. Horváth’s findings suggest that the market is transitioning from a subsidy-driven phase to a demand-driven phase,\nwhere total cost of ownership (TCO), usability, and infrastructure availability become the decisive factors.\n\n \n\nFrom a structural perspective,\nthree key drivers underpin the continued acceleration of electric mobility:\n\n \n\nFirst, improving economics\nare closing the gap between EVs and internal combustion engine (ICE) vehicles. In several segments, particularly fleet applications, EVs\nalready achieve TCO parity or superiority due to lower energy and maintenance costs. This is especially relevant for high-utilization\nvehicles such as delivery vans and service fleets, where operating cost advantages scale rapidly.\n\n \n\nSecond, technology and infrastructure\nare co-evolving. The expansion of charging infrastructure is not only responding to EV adoption but actively enabling it, creating a reinforcing\nfeedback loop. Academic research confirms a strong causal relationship between charging infrastructure availability and EV uptake, particularly\nin early and growth phases of the market.\n\n \n\nThird, policy and regulatory\nframeworks continue to provide long-term direction, even if short-term incentives fluctuate. Many countries have defined clear targets\nfor phasing out ICE vehicles, creating planning certainty for manufacturers and infrastructure providers.\n\n \n\nAt the same time, the ramp-up\nis subject to cyclical and regional variations. Some forecasts, such as those by Goldman Sachs, point to a potential moderation in adoption\nspeed in certain markets due to policy adjustments or affordability constraints, with EVs projected to reach around 25% of global vehicle\nsales by 2030. These variations, however, should be interpreted as temporary deviations within a long-term structural growth trajectory,\nrather than a reversal of the electrification trend.\n\n \n\nIn summary, the ramp-up of\nelectric mobility can be characterized as a structural, multi-decade transition that is currently moving from early adoption into mass-market\nscaling. The forecasts from Horváth & Partners reinforce the view that underlying consumer demand is accelerating, even in\nthe face of short-term market volatility. Combined with strong global growth projections and improving economic fundamentals, this suggests\nthat electric mobility will continue to expand rapidly, thereby intensifying demands on energy infrastructure and reinforcing the need\nfor solutions that can address grid constraints and variability.\n\n \n\nThe rapid electrification\nof transport—particularly in commercial fleets—is fundamentally reshaping the economics of charging infrastructure. In this\ncontext, battery-buffered DC fast charging is emerging not merely as a technological alternative, but as the economically superior and\nultimately dominant solution compared to AC wallboxes and conventional grid-bound DC charging.\n\n \n\nThe core value proposition\nlies in solving the infrastructure bottleneck between power demand and grid capacity. As fleets transition from internal combustion engine\n(ICE) vehicles to electric vehicles (EVs), charging demand becomes both highly concentrated and time-sensitive. Depot-based fleets—ranging\nfrom passenger vehicles to light commercial trucks—often require simultaneous charging during limited dwell times. Traditional AC\ncharging (3.7–22 kW) fails to meet these operational requirements, as it cannot support high asset utilization or rapid turnaround.\nThis directly constrains fleet productivity and delays EV adoption.\n\n \n\nConventional high-power DC\ncharging, while addressing speed, introduces a different economic constraint: prohibitively high grid connection costs and demand charges.\nScaling such infrastructure requires significant upfront capital expenditure (CAPEX) for grid upgrades, transformers, and permitting,\nas well as ongoing operational expenditure (OPEX) driven by peak demand tariffs. These factors materially weaken project returns and slow\ndeployment.\n\n \n\n34\n\n \n\n \n\nBattery-buffered DC fast charging\nfundamentally changes this equation. By decoupling energy intake from energy delivery, these systems enable ultra-fast charging (up to\n320 kW) while operating on significantly lower grid connection capacity (22-110kW). This creates three critical economic advantages:\n\n \n\n1.CAPEX Reduction: Avoidance or deferral of costly grid upgrades can reduce initial infrastructure investment\nsubstantially, improving project IRR and shortening payback periods.\n\n \n\n2.OPEX Optimization: Peak shaving and load management reduce demand charges or optimize purchase pricing\nfor electricity, which are often a dominant component of electricity costs in commercial settings.\n\n \n\n3.Higher Asset Utilization: Faster charging enables more vehicles to be served per charger per day, increasing\nrevenue per installed asset and improving capital efficiency.\n\n \n\nAs a result, battery-buffered\nsystems can deliver materially lower total cost of ownership (TCO) at both the infrastructure and fleet level. For fleet operators, this\ntranslates into a compelling business case: EVs already benefit from lower energy and maintenance costs compared to ICE vehicles, and\nbuffered fast charging ensures that operational constraints—such as downtime and charging bottlenecks—do not erode these advantages.\nThis is particularly critical in high-utilization segments such as last-mile delivery, service fleets, and light commercial transport,\nwhere uptime directly drives revenue.\n\n \n\nImportantly, the macroeconomic\nenvironment further strengthens this investment thesis. Persistently high and volatile prices for oil, gas, gasoline, and diesel continue\nto increase the operating costs of ICE fleets. At the same time, these energy sources remain exposed to geopolitical risks and supply\nchain disruptions—most notably chokepoints such as the Strait of Hormuz. Electricity, by contrast, is inherently more local, diversifiable,\nand increasingly renewable. When combined with on-site generation (e.g., solar PV) and battery storage, charging infrastructure can achieve\na high degree of energy independence and price stability, insulating operators from global commodity volatility.\n\n \n\nBeyond cost savings, battery-buffered\nsystems also unlock new revenue streams and business models. Stored energy can be optimized through time-of-use arbitrage, participation\nin ancillary service markets, or integration into virtual power plants. This transforms charging infrastructure from a pure cost center\ninto a multi-functional energy asset, capable of generating recurring revenues over its lifecycle.\n\n \n\nFrom a strategic standpoint,\nbattery-buffered DC fast charging represents a scalable, future-proof infrastructure layer. It enables rapid deployment in grid-constrained\nenvironments—urban areas, logistics hubs, retail locations—where demand for EV charging is growing fastest but grid expansion\nis slowest. This positions the technology as a critical enabler of mass EV adoption. Battery-buffered DC fast charging is not simply a\ntechnical enhancement—it is a structural solution to the economic and infrastructural constraints of electrification. By reducing\nCAPEX, optimizing OPEX, increasing asset utilization, and enabling new revenue streams, it delivers a superior investment profile compared\nto both AC charging and conventional DC infrastructure. In a world of rising fossil fuel costs, increasing electrification, and constrained\ngrids, it is poised to become the dominant architecture for next-generation charging infrastructure.\n\n \n\nBeyond the electrification\nof transport, similar structural dynamics are also shaping energy demand more broadly across commercial and industrial applications. The\nincreasing penetration of renewable energy sources, combined with higher and more volatile electricity consumption driven by electrification,\nis placing additional strain on existing energy systems. In this context, battery energy storage systems (“BESS”) are becoming\nan increasingly important component of energy infrastructure, enabling greater flexibility, improved grid stability and more efficient\nmanagement of energy supply and demand across commercial and industrial sites.\n\n \n\nThe European market for BESS\nis currently undergoing a phase of rapid expansion. In recent years, BESS has evolved from a niche flexibility solution into a core infrastructure\ncomponent of the energy transition. The market is already valued at around USD 25 billion and is expected to grow significantly, supported\nby falling battery costs and supportive regulatory frameworks such as the EU Renewable Energy Directive, which mandates a substantial\nincrease in renewable energy shares by 2030.\n\n \n\n35\n\n \n\n \n\nA defining characteristic\nof the current market is the shift toward large-scale deployment and system relevance. Installed battery capacity in Europe has increased\ndramatically—reaching more than 77 GWh in 2025—and is expected to grow several-fold over the next decade. Annual additions\nare accelerating, with more than 27 GWh deployed in 2025 alone, primarily driven by utility-scale systems . Long-term projections indicate\na sixfold increase in annual installations by 2029 and total installed capacity approaching 400 GWh, underlining the scale of the transformation\n. This growth is fundamentally linked to the rapid expansion of renewable energy, particularly solar and wind, which already account for\na substantial share of electricity generation but require storage to manage intermittency and stabilize the grid.\n\n \n\nWithin this broader market,\ntwo system categories emerge as particularly relevant: mid-scale systems around 600 kWh and containerized large-scale systems in the range\nof 5 MWh per unit. These two segments serve different but increasingly complementary applications.\n\n \n\nMid-scale systems (~600 kWh)\nare primarily deployed in the commercial and industrial (C&I) segment and increasingly in charging infrastructure and distributed\nenergy systems. Their key value lies in behind-the-meter optimization, including peak shaving, self-consumption optimization, and resilience.\nIn Europe, this segment is still underpenetrated compared to residential storage, with attachment rates in the C&I sector remaining\nbelow 5%, indicating significant growth potential. As electricity price volatility and dynamic tariffs increase, these systems enable\nbusinesses to actively manage energy costs and reduce exposure to peak pricing. When combined with EV charging, particularly high-power\ncharging, 600 kWh-class systems allow for local buffering, reducing grid connection requirements and enabling new electrification use\ncases.\n\n \n\nIn contrast, large-scale systems\n(~5 MWh per unit) are the building blocks of utility-scale and infrastructure projects. These systems are typically deployed in modular\nconfigurations, where multiple units are aggregated into projects ranging from tens to hundreds of megawatt-hours, and increasingly into\nthe gigawatt-hour scale. Their primary applications include grid balancing, frequency regulation, renewable integration, and energy trading.\nA key market trend is the increasing size of projects and co-location with renewable assets, particularly solar PV and wind farms, allowing\nexcess generation to be stored and dispatched when needed . This trend is reinforced by the economic attractiveness of co-located systems:\nstudies show that solar PV combined with battery storage can achieve significantly lower levelized costs of electricity compared to fossil-based\ngeneration alternatives.\n\n \n\nA critical development across\nboth segments is the concept of scalability and revenue stacking. Individual battery units—whether 600 kWh or 5 MWh—are increasingly\ndeployed as part of larger, orchestrated systems that can deliver multiple value streams simultaneously. These include arbitrage (buy\nlow, sell high), ancillary services (frequency containment reserves), capacity markets, and grid congestion management. The ability to\nstack revenues is becoming a key driver of project economics and investor interest, transforming BESS from a single-use asset into a multi-functional\nenergy platform.\n\n \n\nFrom a policy perspective,\nthe European BESS market is strongly shaped by the continent’s strategic objective to reduce dependence on fossil fuels and external\nenergy imports, particularly in the aftermath of geopolitical disruptions affecting oil and gas supply. The EU and its member states are\nactively promoting energy storage as a means of increasing energy sovereignty, stabilizing electricity systems, and enabling higher shares\nof locally produced renewable energy. Initiatives such as the European Commission’s Battery Booster strategy and funding programs\nfor battery manufacturing and deployment reflect this priority. At the same time, several countries have introduced capacity mechanisms,\nlong-term contracts, and subsidies to incentivize large-scale storage deployment.\n\n \n\nThis political push is closely\nlinked to a broader structural shift: electricity is increasingly seen as a strategic, locally controllable energy carrier, in contrast\nto oil and gas, which are subject to global supply chains and geopolitical chokepoints. The rapid expansion of solar generation combined\nwith battery storage in Central Europe, for example, has already enabled significant reductions in fossil fuel dependence and demonstrated\nthe potential for domestically produced energy systems.\n\n \n\nWhile the market still faces\nchallenges, including regulatory fragmentation across member states, permitting delays, grid connection bottlenecks and a lack of standardized\nmarket frameworks for monetizing storage services, these constraints are increasingly recognized and addressed at both EU and national\nlevels, contributing to a gradual improvement in the regulatory and investment environment and supporting the continued expansion of battery\nstorage across Europe.\n\n \n\n**Our Solution and Business Model**\n\n \n\nThe Company’s solution\nhas been developed in response to the structural constraints of the evolving energy system, in particular the increasing need to manage\nenergy flows in environments characterized by electrification, volatility and limited grid capacity. At the core of its approach is the\nintegration of battery-based energy storage directly into energy applications, enabling electricity to be stored and used flexibly at\nthe point of consumption.\n\n \n\n36\n\n \n\n \n\nBy combining energy storage\nwith energy delivery, the Company’s systems allow high power to be provided independently of the instantaneous availability of grid\ncapacity. This is particularly relevant in the context of electric mobility, where charging infrastructure must deliver high power in\nenvironments with limited grid capacity. The integration of battery storage into such systems enables ultra-fast charging in these locations\nand addresses a key bottleneck in the scaling of electric mobility. This approach is reinforced by the concept of “battery-based\nintelligent flexibility,” which positions battery storage systems as a key technology for dynamically managing energy flows.\n\n \n\nBuilding on this solution,\nthe Company’s business model focuses on scaling and commercializing an integrated platform that combines hardware, software and\nenergy-related services. A central component of the Company’s approach is the expansion of its ultra-fast charging business in the\ncontext of electric mobility. In this area, ADSE relies on battery-buffered fast-charging systems, which enable high-power charging in\nlocations where existing grid infrastructure is insufficient. By combining charging infrastructure with energy storage, the Company addresses\na major bottleneck in the scaling of electric mobility while positioning itself in a growing market segment.\n\n \n\nAnother key element of the\nCompany’s approach is the development and commercialization of BESS, which are deployed both in decentralized applications and in\nlarge-scale infrastructure projects. The Company is increasingly focusing on larger storage projects in the double-digit megawatt range\nas well as on long-term developments with capacities in the gigawatt-hour scale. These projects contribute to grid stabilization and enable\nparticipation in energy markets and ancillary services.\n\n \n\nFurthermore, the Company is\ntransitioning from a pure technology provider to a more vertically integrated model. This development includes not only the delivery of\nhardware but increasingly also services such as project planning, financing, operation and digital energy management. In this context,\nthe establishment of recurring revenue streams is becoming increasingly important. The Company aims to generate a growing share of its\nrevenues from long-term service contracts, the operation of its own assets and energy-related activities such as energy trading.\n\n \n\nThis approach is further supported\nby a consistent internationalization approach and the use of digital technologies, particularly cloud-based platforms and digital twins\nfor optimizing operational processes. Taken together, these elements are intended to support the Company’s development as a provider\nof integrated energy infrastructure solutions and to enable participation across multiple stages of the energy value chain. \n\n \n\n**Our Strengths**\n\n \n\nThe following competitive\nstrengths have contributed to our success thus far and position us well for future growth.\n\n \n\n*Proven Technological and\nOperational Track Record.*ADSE has longstanding experience in the development and integration of battery and energy systems, with\napproximately 20 years of experience in designing and producing energy and battery solutions. This experience is complemented by more\nthan 15 years of operational expertise in lithium-ion storage technologies, including systems deployed in frequency regulation applications\nfor over a decade. This track record provides the Company with practical expertise in system design, integration and long-term operation,\nwhich is particularly relevant for the execution of complex and large-scale projects.\n\n* *\n\n*Commercial Deployment at\nScale Across Use Cases*. The Company’s technology is commercially deployed across a broad range of applications and markets.\nADSE has delivered more than 3,700 battery-buffered charge points across more than 40 countries, representing approx. 300 MWh of installed\ncapacity. In addition, its battery storage systems have been deployed at scale, with more than 2.5 GWh of installed storage capacity and\na track record that includes the delivery of more than 30 utility-scale projects. These deployments span multiple use cases, including\nautomotive OEM dealerships, urban charging infrastructure and charging solutions for commercial vehicles in grid-constrained environments,\nand demonstrate the functionality of the Company’s systems under real-world operating conditions.\n\n \n\n37\n\n \n\n \n\n*Integrated Platform with\nIn-House Capabilities and Recurring Revenue Potential.*A key strength of ADSE is its integrated technology platform, which combines\nbattery systems, power electronics and software solutions and is developed largely in-house. The Company develops key components of its\nsystems internally, including battery systems, control technology and software, which supports coordination across system components and\nreduces dependence on external suppliers. The platform is designed to be modular and scalable, allowing it to be deployed across commercial\nand industrial applications as well as large-scale infrastructure projects. In addition to the supply of hardware systems, the Company\nprovides service agreements, monitoring and operational support and is expanding into the operation of energy infrastructure, including\nthrough its Own & Operate model. This integrated approach enables the Company to participate across different stages of the value\nchain and supports the development of recurring revenue streams and longer-term customer relationships.\n\n \n\n*Established Customer Relationships\nand Market Presence*. The Company serves a diversified customer base, including industrial companies, utilities and infrastructure\noperators, and maintains relationships with a number of established counterparties across its markets. These relationships support the\ndeployment of its systems across multiple geographies and use cases.\n\n \n\n*Capability to Develop and\nOperate Large-Scale Energy Infrastructure*. The Company is developing a unique large-scale battery energy storage project in Germany\nwith a planned capacity of approximately 1 GW and up to 4 GWh. This project includes direct connection to the transmission grid and long-term\nsite control and reflects the Company’s ability to develop and participate in utility-scale energy infrastructure. Furthermore,\nADSE is expecting to own and operate up to 49% of this project, which will generate long-term recurring revenues and financial strength.\n\n \n\n*Experienced Management\nTeam and Institutional Shareholder Base.*The Company is led by an experienced management team with long-standing involvement in the\nbusiness and significant industry expertise. Members of the executive team have extensive experience, in many cases exceeding 25 to 30\nyears, across industrial, automotive, energy and technology sectors. The Company’s Chief Executive Officer has been involved in\nthe ADSE for decades and has played a central role in the development of the energy business, supporting continuity in strategic execution.\nThe Company also benefits from a concentrated shareholder base that includes both founder-related ownership and institutional investors.\nThis includes strategic and financial investors with experience in industrial and technology sectors, which supports governance, access\nto capital and long-term development of the business.\n\n \n\n**Our Strategy**\n\n \n\nADSE’s strategy is focused\non the implementation and scaling of its integrated energy infrastructure platform across its core business lines, with a particular emphasis\non restoring revenue growth, expanding recurring revenue streams and advancing large-scale energy infrastructure projects. The following\nelements represent the key operational priorities for the near- to medium-term development of the business.\n\n \n\n*Restoring Growth in Core\nProduct Sales*. The Company is focused on increasing sales of its battery-buffered charging systems and battery storage solutions by\nexpanding its customer base, strengthening its commercial organization and further developing its product offering. In particular, the\nCompany is targeting key customer segments such as fleet operators, retail locations and infrastructure providers, and is working to convert\nits existing sales pipeline into executed contracts.\n\n \n\n*Development and Scaling\nof Additional Business Lines*. The Company is progressing the development and commercialization of additional business lines, including\nservice and maintenance offerings and software-enabled energy management solutions, O&O activities and the ADSE’s large-scale\nutility BESS project with ~1GW and 4GWh (the “SKM Project”). These activities are being developed in parallel, with a focus\non establishing scalable operating structures and generating incremental revenue contributions over time.\n\n \n\n*Expansion of Service and\nLifecycle Offerings.*The Company is increasing its focus on service and lifecycle offerings associated with its installed base of\ncharging and battery storage systems. This includes expanding the scope and penetration of long-term service and maintenance contracts,\nstrengthening its service organization and increasing the number of systems under active service agreements. In parallel, the Company\nis further developing its digital service capabilities, including monitoring, diagnostics and energy management solutions, with the objective\nof enhancing system performance, supporting customer operations and generating recurring service revenues over time.\n\n \n\n38\n\n \n\n \n\n*Rollout of the Own &\nOperate (O&O) Model*. The Company is implementing the rollout of its O&O model, under which it deploys and operates charging\ninfrastructure at selected locations in Germany. This includes securing suitable sites, deploying charging systems and establishing operational\ncapabilities for asset management. The Company focuses on locations with attractive utilization potential and is expanding its network\nof site partners to support the rollout.\n\n \n\n*Advancement of the SKM\nProject to Ready-to-Build (RTB)*. A key priority is achieving ready-to-build (RTB) status for the SKM Project within the planned timeframe.\nTo this end, the Company is focused on completing the remaining development workstreams, including the finalization of the construction\npermitting process and the establishment of binding grid connection arrangements, including the negotiation of final technical and commercial\nterms with the transmission system operator. In parallel, the Company continues to engage with suppliers, engineering partners and other\ncounterparties to ensure execution readiness for the construction phase.\n\n \n\n*Financing and Partnership\nStrategy for the SKM Project*. The Company is implementing a structured funding approach for the SKM Project, combining external equity\nparticipation and long-term project financing. The Company actively engages with potential investors and lenders to secure the capital\nrequired for construction and long-term operation of the project. In connection with the achievement of RTB status, the Company plans\nto proceed with construction and to pursue the sale of a minority stake in the project to a third-party equity partner, in order to secure\nadditional capital and share project-related risks.\n\n \n\n*Geographic Expansion and\nOperational Scaling.*The Company continues to expand its activities beyond its core markets, particularly in Europe and North America,\nand is working to establish scalable operational processes to support this expansion. This includes strengthening local sales and service\ncapabilities and adapting its offerings to local regulatory and market requirements.\n\n** **\n\n**Products and Services**\n\n \n\nThe Company’s products\nand services are designed to address the evolving requirements of energy infrastructure and electrification and reflect the strategy described\nabove. ADSE offers a portfolio that includes battery-buffered charging solutions, commercial and industrial battery energy storage systems,\nand a range of lifecycle and digital services, complemented by infrastructure-related activities such as the operation of energy assets\nand the development of large-scale battery storage projects. These offerings are deployed across a range of commercial, industrial and\ninfrastructure applications and support both one-off system sales and the generation of recurring revenue streams.\n\n \n\nThe Company generates revenues\nfrom these product and service categories across multiple geographic markets. The following tables present (i) revenue from contracts\nwith customers disaggregated by major product categories and (ii) the breakdown of total revenues by geographic region for each of the\nlast three financial years:\n\n \n\n \n\nMajor Products (kEUR) \n2025  \n2024  \n2023 \n\nCharging \n 18,740  \n 102,533  \n 89,323 \n\nService \n 10,277  \n 5,603  \n 2,004 \n\nCommercial and industrial \n 2,190  \n 1,677  \n 15,788 \n\nOther \n 352  \n 200  \n 227 \n\nTotal \n 31,559  \n 110,013  \n 107,384 \n\n \n\n**Revenue by Region (kEUR)**** **\n**2025**** **** **\n**2024**** **** **\n**2023**** **\n\nGermany \n 15,654  \n 83,662  \n 77,449 \n\nRest of Europe \n 12,939  \n 20,507  \n 24,541 \n\nUnited States of America \n 2,454  \n 5,623  \n 4,971 \n\nRest of the world \n 512  \n 221  \n 423 \n\nTotal \n 31,559  \n 110,013  \n 107,384 \n\n \n\n39\n\n \n\n \n\nThe following sections describe\nthe Company’s principal product and service offerings in more detail.\n\n \n\n*Battery-buffered charging solutions*\n\n \n\nWith its battery-buffered\ncharging portfolio, ADSE focuses on the following market segments and target groups:\n\n \n\n \n\n** **\n\nThe ADSE charging product\nportfolio offers battery-supported fast charging solutions for electromobility with up to 320 kW charging power. The combination with\nenergy storage enables applications in areas where the grid performance is insufficient to directly provide ultra-fast charging. ADSE\noffers stationary (ChargeBox), semi-mobile (ChargePost) and mobile solutions (ChargeTrailer, a mobile ultra-high-power charging park with\n10 DC outlets per trailer).\n\n \n\nThe portfolio comprises three\nplatforms:\n\n* *\n\n*ChargeBox.*This is\nthe existing system which is certified in Europe (CE) and the US (UL). The product is in full production and we currently have capacity\nto produce up to 5,000 systems per year. It can be connected to existing low power grids, starting with approximately 39kW at 400 V. The\nChargeBox is perfect for separated installations of up to two dispensers and the ChargeBox which contains the battery and power inverters.\nBased on a very small footprint (approx. 1.2 x 1.2 meters), the ChargeBox can be installed almost anywhere where space is scarce. Up to\ntwo dispensers (charging cable outlets) can be installed separated up to 100m with a small footprint of approximately 400 x 400mm.\n\n* *\n\n*ChargePost.*The ChargePost\nis a product that became available in late 2022. It can be connected to existing low power grids and requires virtually no additional\nconstruction work in most situations, starting with approximately 22kW at 400 V. Furthermore, the ChargePost can have 75’’\nadvertisement screens allowing our partners and customers an additional revenue stream out of the investment. Grid services such as bidirectional\noperations and physical services such as frequency regulation or reactive power supply will be able to be operated on this system. The\nChargePost is a semi-mobile ultra-high-power charger which can easily follow the demand by providing up to 300kW charging power even on\nlow powered grids. Key benefit of the ChargePost is, that the owner and operator will be able to make revenues even if no EV will be charged.\nThis multi-revenue stacking is possible since the integrated battery-storage system can be used for energy trading and feeding back the\nenergy into the grid. In combination with selling advertising spaces and fast-charge an EV, the owner and operator is able to maximize\nthe profitability of the own business model.\n\n \n\n40\n\n \n\n \n\nThe ChargePost can be placed\nin space-restricting locations, such as city centres, gas stations, shopping malls, residential areas and in companies for permanent or\ntemporary use. One advantage for network operators is that they can be relocated if certain sites develop more strongly than others. Operators\nmay optimize their investment in case the location shows a weaker utilization than expected.\n\n* *\n\n*ChargeTrailer.*The\nChargeTrailer is a high power charging system in the form of a standard truck trailer size and weight. Ten electric vehicles can be charged\nsimultaneously with up to 320 kW each. The battery modules currently have a storage capacity of 2.1MWh. It is effectively a mobile ultra-high\npower charge park. The charging technology is suitable to a variety of use cases including the installation on high-traffic routes during\nholiday periods, for marketing or press events, for driving events of electrified vehicles and as a charging facility at festivals. The\ntrailers are planned by ADSE’s customers to travel all over Europe providing temporary charging power.\n\n \n\nThe truck has several integrated\ninverters, air-conditioning, an energy management unit, a security firewall, as well as a communication unit via mobile radio and DC-charging\ntechnology. The ChargeTrailer offers a scalable AC connection to the 400 V distribution grid. The ChargeTrailer is designed for outdoor\nuse.\n\n \n\n** **\n\n \n\n**ChargePost**\n\n* *\n\n41\n\n \n\n* *\n\n**\n\n**ChargeBox**\n\n* *\n\n* *\n\n**ChargeTrailer**\n\n** **\n\nIn addition to the portfolio\ndescribed above, the Company is expanding its business model to include O&O activities. Until now, ADSE has been a provider of intelligent,\nbattery-based, decentralized platform solutions for B2B customers like oil & gas companies, utilities, c-stores, supermarkets, DIY\nstores, fleet operators and many more. This means that B2B customers purchase ADSE products on a one-off basis. ADSE also offers service\nlevel agreements, which secure the operation of critical infrastructure for their B2B customers over decades and in turn ensure recurring\nrevenues on ADS-TEC’s balance sheet.\n\n \n\n42\n\n \n\n \n\nOwner and operator of the\ninstalled systems are either the B2B customers themselves or an association of different players who are responsible for individual applications.\nFor example, one Charge Point Operator (CPO), one company who is responsible for the energy trading and one company who is responsible\nfor selling and operating the advertising screens (DOOH – Digital out of Home).\n\n \n\nADSE’s current business\nmodel is therefore dependent on the number of one-off systems sold, as well as on the SLAs offered, which generate recurring revenue for\nADSE.\n\n \n\nThis proven business model\nis supplemented by the following services for selected projects: Financing, installation and commissioning as well as operation of the\nassets for charging, energy trading and advertising applications (DOOH). To roll-out the O&O model, ADSE has already secured more\nthan 150 sites at exclusive retailer locations in Germany. As the Company continues to deploy battery-buffered solutions and increase\nthe number of systems installed in the field, recurring revenues from ultra-fast charging, energy trading and advertising are expected\nto increase over time.\n\n  \n\n*Commercial & Industrial BESS solutions (battery energy storage\nsystems)*\n\n \n\nWith its C&I portfolio,\nADSE focuses on the following market segments and target groups:\n\n \n\n \n\nOur product offerings in C&I\ninclude the BESS5000 and the BESS760.\n\n* *\n\nTo address the market demand,\nADSE offers the following portfolio: For large-scale applications, ADSE supplies custom battery systems as complete 20- or 40-foot container\nsolutions with up to the MW and MWh capacity. The modular design and the comprehensive IT management system allow virtually unlimited\nscalability of the container solution. Projects with the BESS5000 or BESS760 will be realized with power electronics and inverters from\nvarious manufacturers. \n\n* *\n\n43\n\n \n\n* *\n\nWith the BESS5000 and the\nBESS760, ADSE is well-suited to address key challenges for the transition to a majority-electric world.\n\n** **\n\n \n\n \n\nIn addition, the Company offers\ndigital services that support a range of customer projects, from charging infrastructure to large-scale BESS applications. The energy\nmanagement product portfolio ranges from offline versions of a decentralized individual system to complex connected systems. ADSE’s\ncurrent portfolio includes its own BMS with a Digital Twin, Big-LinX Energy and the Energy Management System.\n\n \n\nThe integrated BMS is an in-house\nsolution that facilitates monitoring of battery cells during the operation. Big-LinX Energy is a cloud-based solution for monitoring the\nsystem from anywhere and enables the administration and remote management of the installed systems. In addition, the Energy Management\nsystem enables the operator to locally control the systems. Since ADSE has access to the software, it is possible to provide interfaces\nand customized adaptations, which allow operators and power companies to interconnect with ADSE platforms and integrate these into their\nown energy management systems.\n\n** **\n\n*Services*\n\n \n\nThe service offering of ADSE\nis designed as a comprehensive, lifecycle-oriented support model that complements its hardware and software platforms for battery storage\nand ultra-fast charging. Rather than positioning services as an add-on, the Company emphasizes a holistic “service from a single\nsource” approach, aiming to ensure high system availability, operational efficiency, and long-term economic performance for its\ncustomers. As a result, the service portfolio combines technical support, digital monitoring, contractual service structures, spare parts\nlogistics and customer training.\n\n \n\nAt the core of this offering\nis the idea of acting as a long-term partner across the entire lifecycle of energy systems, from installation and commissioning through\noperation, optimization, and eventual upgrades. Customers are supported by a dedicated service organization (“ServiceCrew”)\nthat provides both technical and commercial assistance, enabling operators of charging infrastructure and battery storage systems to focus\non their core business while ADSE ensures system performance and reliability.\n\n \n\nA central pillar of the service\nportfolio is the combination of remote and on-site services. Remote services include real-time monitoring, diagnostics, and troubleshooting,\nallowing experts to identify and resolve issues quickly without physical intervention. This capability significantly reduces downtime,\nimproves response times, and enhances overall system availability. On-site services complement this with physical maintenance, inspections,\nrepairs, and system upgrades, ensuring stable and optimized operation over time.\n\n \n\n44\n\n \n\n \n\nAnother key element is the\nprovision of structured service agreements, which are designed to offer predictable performance and cost control. These agreements typically\nrange from basic remote support packages to more comprehensive options that include preventive maintenance, continuous monitoring, and\neven guaranteed system availability. In addition, customers can extend warranties—up to ten years—providing long-term security\nand aligning service costs with asset lifecycles.\n\n \n\nThe service offering is further\ncomplemented by spare parts management, ensuring the availability of original components and rapid replacement in case of wear or failure.\nThis includes consulting, tailored spare parts packages, and global delivery, all aimed at minimizing operational disruptions and maintaining\nsystem integrity over time.\n\n \n\nIn addition, ADSE places strong\nemphasis on customer enablement through training programs. These trainings are designed to equip customer teams with the knowledge required\nto operate systems efficiently, perform basic maintenance, and handle standard fault scenarios independently. This not only increases\nsystem uptime but also reduces operational dependency and costs.\n\n \n\nImportantly, the service portfolio\nis closely integrated with the Company’s broader technological approach. Since ADSE develops its battery storage and charging platforms\nin-house—including software, cloud connectivity, and digital twin capabilities—its services extend beyond traditional maintenance\nto include data-driven optimization and continuous performance improvement. This integration enables higher transparency, predictive maintenance,\nand ultimately a stronger focus on total cost of ownership (TCO) for customers.\n\n \n\n*A large-scale utility BESS project with ~1GW and 4GWh (SKM project)*\n\n \n\nThe Company is developing\na large-scale battery storage project in Baden-Württemberg, Germany, with a planned capacity of approximately 1 GW and an initial\nstorage volume of approximately 4 GWh. The project is intended to be deployed as a utility-scale battery energy storage system.\n\n \n\nIt is designed as an integrated\nenergy system, combining large-scale battery storage with photovoltaic generation. This co-location enhances economic performance by enabling\noptimized energy sourcing (e.g., charging from on-site solar) and improved revenue stacking across multiple markets, and also reflects\na broader strategic shift toward hybrid energy infrastructure, where storage is tightly coupled with renewable generation.\n\n \n\nThe SKM Project is structured\nto operate as a long-term infrastructure asset and is intended to support multiple applications, including participation in energy trading,\nancillary services and capacity markets, subject to applicable market conditions and regulatory frameworks. In this context, it is expected\nto contribute to the Company’s broader objective of expanding recurring and infrastructure-related revenue streams.\n\n \n\nADSE is involved across multiple\nstages of the project lifecycle, including development, technical planning and the preparation of construction and operational structures,\nwith the goal of achieving greater predictability of returns and the ability to capture value across multiple stages of the asset lifecycle.\n\n \n\nThe SKM Project is currently\nin the development phase. To date, the Company has secured key elements required for project development, including site selection and\nlong-term land access through contractual arrangements. In addition, the Company has progressed the grid connection process and has obtained\ngrid connection capacity reservation, subject to the finalization of the grid connection agreement. The Company has also made progress\nin the permitting process, including the preparation and submission of required documentation and engagement with relevant authorities.\n\n \n\nThe project remains subject\nto the completion of the construction permitting process and the receipt of final regulatory approvals. In parallel, the Company is advancing\ntechnical planning and has initiated discussions with suppliers of battery systems, transformers and other electrical components, as well\nas with engineering and construction partners, in preparation for the potential construction phase.\n\n \n\n45\n\n \n\n \n\n**Customers**\n\n \n\nADSE operates a B2B model\nand does not sell directly to private end customers. Its products and services are provided to commercial and institutional customers,\nincluding utilities, oil and gas companies, charge point operators, fleet operators, commercial and industrial customers, supermarkets\nand retail operators, and energy service companies.\n\n \n\nCustomer relationships are\ntypically structured around the supply and deployment of the Company’s systems. Customers generally purchase hardware under sales\ncontracts and, in some cases, enter into long-term service and maintenance agreements. In addition, the Company has begun to operate infrastructure\non behalf of customers under its O&O model. Customer engagements are often structured as multi-site deployments or broader rollout\nprograms, particularly for larger customers.\n\n \n\nThe Company’s revenues\nare primarily generated through large project-based contracts and multi-site rollouts. As a result, revenue generation depends on the\ntiming and execution of individual projects, as well as the Company’s ability to convert its sales pipeline into executed contracts.\nThis may result in variability in revenues across reporting periods.\n\n \n\nADSE’s customer base\nincludes a limited number of key customers that may account for a significant portion of revenues in a given period. In the past, the\nCompany’s revenues have been concentrated among a small number of customers, with four major customers accounting for approximately\n77% of total revenue in 2024 and approximately 49% in 2025. In 2025, approximately 77% of total revenue was generated from the Company’s\nten largest customers, with four customers each accounting for approximately 10% of total revenue. While the Company has taken steps to\ndiversify its customer base, revenues remain concentrated to some extent, reflecting the size and nature of individual projects and multi-site\nrollout programs.\n\n \n\n**Raw Materials and Suppliers**\n\n \n\nADSE sources primarily in\nEuropean Union and Asia a number of key raw materials, parts and supplies for the assembly of its products. The most significant inputs\nrelate to lithium-ion battery technology and power electronics, which represent a substantial portion of the overall system cost.\n\n \n\n-Battery cells are a core component of both charging systems and battery energy storage systems (BESS)\nand represent a significant portion of material costs. The Company does not manufacture battery cells itself but procures them from external\nsuppliers for integration into its systems.\n\n \n\n-The systems rely on high-performance power conversion equipment, including inverters, converters and related\nelectronic control units, which are sourced from specialized suppliers and are critical to system efficiency and reliability.\n\n \n\n-Control systems, digital architecture (including BMS and EMS functionality), and monitoring platforms\nrequire electronic components and semiconductors.\n\n \n\n-Enclosures, cooling systems, cabling and structural housing components are required for both charging\ninfrastructure and containerized storage systems and are sourced from industrial suppliers.\n\n \n\nThe Company relies on third-party\nsuppliers for key components used in its charging and battery storage systems. While ADSE strives to source standard components where\npossible, many components are sourced from single suppliers for which it may not be possible to find an alternative source in a short\nperiod of time. Due to ADSE competencies in design and manufacturing and using own generated patents, it expects that in principle almost\nany supplier can be replaced over time. However, such replacements may require additional development work, which may have negative impact\non ADSE’s ability to deliver products and its profitability. In addition, supplier changes may have impact on certification and\ncustomer acceptance. Further raw material may be subject to high price volatility.\n\n \n\n46\n\n \n\n \n\nRaw materials, parts and supplies\nobtained from third-party vendors contained and may contain defects resulting in the malfunction of ADSE’s products. ADSE could\nbe subject to claims that its products are defective or have malfunctioned, or even that persons were injured or purported to be injured\nas a result of such defects, and ADSE’s customers may bring legal claims against ADSE to attempt to hold it liable. Any insurance\nthat ADSE carries may not be sufficient or it may not apply to all situations. To the extent that such malfunctions are related to components\nobtained from third-party vendors, such vendors may not assume responsibility for such malfunctions. See “Item 3.D. Risk Factors\n*- Our technology has had and in the future could have undetected defects, errors or bugs in hardware or software which has and could\nreduce market adoption, damage our reputation with current or prospective customers, and/or expose us to product liability and other claims\nthat could materially and adversely affect our business*.”\n\n** **\n\n**Manufacturing**\n\n \n\nADSE performs the final assembly\nof its products in order to maintain quality control, protect engineering know-how and ensure scalability in response to anticipated growth\nin demand for energy infrastructure solutions. It is the Company’s strong conviction that the demand for technology enabling the\ntransition into the energy market will grow strongly across all product segments quickly growing into a regulated mass market of energy\ninfrastructure. ADSE has therefore consequently targeted flexible but scalable assembly facilities. The Company’s facilities are\ndesigned using industrial best-practice principles, with rigorous process discipline and continuous improvement methodologies to support\nefficiency and quality control. The production and assembly setup is modular and replicable, allowing facilities to be cloned and expanded\nwithin a relatively short timeframe to increase capacity or support geographic expansion.\n\n \n\nADSE benefits from its highly\ndeveloped production process which combines the advantages from assembly and in-house engineering. Production facilities are currently\nlocated around Dresden, Germany, and are designed to support future expansion in line with market growth.\n\n** **\n\n**Our Technology**\n\n \n\nADSE develops all key components\nrequired to ensure operational capability in-house. This includes highly efficient and compact inverters, industrial PCs, routers, and\nfirewalls, as well as the associated software solutions (BMS, EMS, remote monitoring backends, etc.). Battery modules are also designed\nwithin ADSE to fit its own product portfolio (charging) in order to enable highly integrated platform solutions for B2B customers. The\ntechnology was nominated for the German Future Award in 2022 and won numerous awards in 2024 and 2025 (German Innovation Award, Green\nProduct Award, German Environmental Award, Best of Mobility Award, Red Dot Award). In addition, some of the key components and technologies\nare protected by patents.\n\n \n\n**Research & Development**\n\n \n\nThe development division of\nADSE plays a strategically critical role within the Company’s transformation from a hardware-focused technology provider into a\nfully integrated energy infrastructure and platform company. In the context of rapidly evolving energy markets, increasing system complexity,\nand intensifying competition in battery storage and charging infrastructure, the development organization is not merely a technical support\nfunction but a central driver of innovation, differentiation, and long-term enterprise value creation.\n\n \n\nStrategically, the development\ndepartment can be positioned as the company’s core innovation and system integration engine, responsible for translating market\nrequirements, regulatory developments, and emerging energy system trends into scalable technological solutions. Its role extends far beyond\ntraditional product engineering and includes the orchestration of hardware, software, power electronics, battery management, cloud connectivity,\nand energy optimization into integrated energy platforms. This capability is particularly important in the battery energy storage system\n(BESS) market, where competitive advantage increasingly depends not only on battery cells themselves but on the intelligence, flexibility,\nand efficiency of the overall system architecture.\n\n \n\nOver the past three years,\nthe Company’s research and development policy has been to focus on expanding its product portfolio, enhancing existing systems and\nsupporting the transition toward new business lines, including large-scale energy infrastructure projects and software-enabled energy\nmanagement solutions.\n\n \n\n47\n\n \n\n \n\nResearch and development activities\ninclude engineering, product development, quality assurance, testing and product management, as well as costs for samples and supporting\ninfrastructure, including information technology systems. These activities are largely conducted in-house and are closely integrated with\nthe Company’s product development and commercialization efforts. The Company’s policy is to focus primarily on development\nactivities rather than standalone research, and ADSE generally does not conduct research activities as such.\n\n \n\n**Employees and Human Capital Management**\n\n \n\nAs of December 31, 2025, ADSE\nhad 302 (2024: 302) employees. The majority of employees are located in Germany, where the Company’s headquarters, engineering functions\nand production facilities are based. The Company also maintains operations in the U.S. and other European jurisdictions, with 291 (2024:\n296) in Europe and 11 (2024: 6) in the U.S. The Company’s employees are primarily engaged in research and development and engineering;\nproduction and assembly; sales and marketing; general and administrative functions.\n\n \n\nThe Company has expanded its\nworkforce in prior years to support growth in charging and storage activities. At the same time, management has implemented structural\ncost improvement measures, including personnel adjustments, to align the organization with current market conditions and improve cost\nefficiency.\n\n \n\nThe Company’s success\ndepends on the continued services of key management and highly skilled employees, particularly in engineering, battery technology and\nsoftware development. ADSE considers its relations with its employees to be good and has not experienced any work stoppages, slowdowns\nor other serious labor problems that have materially impeded ADSE’s business operations.\n\n \n\nADSE’s human capital\nmanagement objectives include, as applicable, identifying, recruiting, retaining, incentivizing, and integrating ADSE’s new and\nexisting employees.\n\n \n\n**Government, Regulation and Incentives**\n\n \n\nADSE is subject to many forms\nof government regulation in its current markets, primarily the European Union, but also in new markets like the United States. There is\nnot a primary agency that oversees the industry, but instead ADSE must comply with various federal, state and local rules and regulations.\nThe regulatory overlay relates to many areas of ADSE’s operations, but primarily to safety concerns surrounding the manufacture\nand implementation of its products and systems. Violations of the applicable regulations may result in substantial civil and criminal\nfines, penalties and/or orders to cease operations or to conduct or pay for corrective work. Customer demand for ADSE’s products\nis and is expected to remain influenced by government regulations and economic incentives promoting fuel efficiency and alternate forms\nof energy, and the availability of tax and other governmental incentives to purchase and operate electric vehicles.\n\n \n\n**Environmental Issues**\n\n \n\nADSE and its operations, as\nwell as those of ADSE’s contractors, suppliers and customers, are subject to certain environmental laws and regulations, including\nlaws related to the use, handling, storage, transportation and disposal of hazardous substances and wastes as well as electronic wastes\nand hardware, whether hazardous or not. These laws may require ADSE or others in ADSE’s value chain to obtain permits and comply\nwith procedures that impose various restrictions and obligations that may have material effects on ADSE’s operations. The installation\nof high power charger and battery storage systems at a particular site is generally subject to oversight and regulation in accordance\nwith provincial, state and local laws and ordinances relating to building codes, safety, environmental protection and related matters,\nand typically requires various local and other governmental approvals and permits that may vary by jurisdiction.\n\n \n\nEnvironmental and health and\nsafety laws and regulations can be complex and may be subject to change, such as through new requirements enacted at the supranational,\nnational, sub-national and/or local level or new or modified regulations that may be implemented under existing law. Future legislation\nand regulations relating to hardware manufacturing, electronic waste or batteries, could cause additional expenditures, restrictions and\ndelays in connection with ADSE’s operations as well as other future projects.\n\n \n\nFurther, ADSE currently relies\non third parties to ensure compliance with certain environmental laws, including those related to the disposal of hazardous and non-hazardous\nwastes. Any failure to properly handle or dispose of such wastes, regardless of whether such failure is ADSE’s or its contractors,\nmay result in liability under environmental laws, under which liability may be imposed without regard to fault or degree of contribution\nto the investigation and clean-up of contaminated sites, as well as impacts to human health and damages to natural resources. Additionally,\nADSE may not be able to secure contracts with third parties to continue their key supply chain and disposal services for our business,\nwhich may result in increased costs for compliance with environmental laws and regulations. See also “Risk Factors - *Existing\nand future environmental health and safety laws and regulations could result in increased compliance costs or additional operating costs\nor construction costs and restrictions. Failure to comply with such laws and regulations may result in substantial fines or other limitations\nthat may adversely impact our financial results or results of operation.”*\n\n** **\n\n48\n\n \n\n** **\n\n**Competition**\n\n \n\nADSE operates in highly competitive\nand rapidly evolving markets, in Europe and increasingly in the U.S. The Company is diversified across the areas of charging for e-mobility\nand commercial & industrial applications and considers itself well-positioned in the event of a market change or competitive dynamics\nin any of those segments individually.\n\n \n\nThe Company faces competition\nfrom a range of market participants that differ by segment and technological focus. In the EV charging market, competitors include established\ncharging hardware manufacturers, large industrial technology companies, energy companies expanding into charging infrastructure and emerging\ntechnology-focused entrants. In the battery storage market, competitors include global battery system integrators, energy technology groups,\ninverter manufacturers and large industrial automation companies offering grid-scale and commercial storage solutions.\n\n \n\nCompetition in the Company’s\nmarkets is based on a combination of technological performance, system reliability, total cost of ownership, scalability, integration\ncapability and long-term service support. Customers in both charging and storage markets typically evaluate suppliers based on charging\nspeed or storage capacity, compatibility with grid constraints, lifecycle economics and the ability to support multi-site or large-scale\ndeployments.\n\n \n\nIn the EV infrastructure charging\nmarket (non-residential), ADSE focuses on battery-buffered ultra-fast charging systems. This comprises charging systems with charging\npower above 150kW. Due to its ability to provide ultra-fast charging even at power limited grids and hence its specific use cases, ADSE\nregards battery-buffered ultra-fast chargers as a distinct market segment of ultra-fast chargers.\n\n \n\nADSE believes there are several\npotential competitors that may offer battery-based products similar to ADSE’s products in the future. In terms of technical specifications\nin particular, due to the combination of high available charging (to the EV) and recharging power (from the grid into the ADSE battery\nstorage) with a small footprint and low noise emission, ADSE believes it is well-positioned compared to current and future competitors.\nIn 2022, ADSE was nominated for the German Future Award for Innovation and Technology, demonstrating its position as a leading technology\ncompany. ADSE has continuously developed its technology and achieved further recognition; including the German Innovation Award (2024);\nthe Green Product Award (2024); the German Environmental Award (2024), the Red Dot Award (2024) and the Best-of-Mobility Award (2025).\nBy continued R&D efforts, ADSE strives to incorporate new technical developments in battery technology into its products.\n\n \n\nWhile ADSE sees battery-buffered\nultra-fast chargers as a separated market segment, non-battery buffered grid connected ultra-fast chargers do in principle compete with\nbattery-based ultra-fast chargers in those cases in which enough power at the current grid connection is available, or an upgrade of the\ngrid is economically reasonable or preferred by the investor for some reason. This may often be the case in typical applications such\nas central charge parks or super chargers on near highway locations. ADSE sees compact and ultra-fast chargers with integrated battery\nbuffers in many cases still as the more economic and more suitable solution, especially when high power rates are not requested continuously\nor at least for the majority of the time.\n\n \n\nAs the number of EVs continues\nto grow, so will the need for a charging infrastructure, including ultra-fast chargers. Solutions that do not have an integrated energy\nstorage capability rely on the available grid capacity, or need expensive and long-term expansion of the grid network to offer ultra-fast\ncharging. Solutions may also require a separate energy storage system with related investment costs and space requirements. Therefore,\nADSE sees itself in a good competitive position for the necessary extension of the EV-charging infrastructure based on existing grid conditions.\n\n \n\nWith the increasing EV population,\nthe number of wallboxes sold for home charging will likely increase as well. While home charging in principle may reduce the usage of\npublic charging, ADSE sees a strong market opportunity for public charging driven by the higher number of EVs in the market. Overall,\ndue to the different use cases and technology, ADSE does not see AC-wallboxes as separate and not directly competing market. In contrast,\nADSE sees a potential of DC charging at home or at company sites as a potential market opportunity in future.\n\n \n\nFurthermore, ADSE sees a potential\nmarket opportunity in replacing outdated and slow DC chargers with 50kW charging power. ADSE offers an advantage because the existing\nand limited power from these locations is enough to install ADSE’s charging solutions while offering improved ultra-fast charging\nto the EV drivers (up to 320kW).\n\n \n\n49\n\n \n\n \n\nIn addition to the incumbent\nmarket participants the possibility persists of new players entering a still developing market and gaining market share with innovative\nproducts. However, due to the advanced expertise and knowledge as well as the ecosystem platform technology and long-term services, ADSE\nexpects to be able to effectively compete even with such new potential market entrants.\n\n \n\nIn the Commercial & Industrial\nsegment, ADSE focuses on applications in which it believes it has a competitive advantage due to the overall platform integration accompanied\nby digital and physical services. For that reason, ADSE is able to offer the “ability to act” for nearly every use case in\nthe area of their customers’ projects.\n\n** **\n\n**4.C. Organizational Structure**\n\n \n\nADSE’s organizational\nchart is below:\n\n \n\n** **\n\n** **\n\n**4.D. Property, Plants and Equipment**\n\n \n\nADSE GM’s headquarters\nare located in Nürtingen, Germany. Our properties consist of office space within general, commercial office buildings. The Company\nalso maintains three further facilities, two of which are located in Germany (Klipphausen and Köngen) and one is located in U.S.\n(Auburn (AL)). These sites are used for production, as offices, as warehouses, as laboratories, and/or for prototyping (Köngen).\n\n \n\nBelow is a list of our material\nleased property as of the date of this Annual Report, including the type of property, our business area, location and approximate square\nmeterage.\n\n \n\n**Type of property**\n \n**Location**\n \n**Square Meterage**\n \n \n**Leased**\n\nOffice and Laboratory\n \nNürtingen, Germany\n \n \n2,162\n \n \nLong-term\n\nProduction and Warehouse\n \nKlipphausen, Germany\n \n \n8,550\n \n \nLong-term\n\nWarehouse, Laboratory and Prototyping\n \nKöngen, Germany\n \n \n1,402\n \n \nShort-term\n\nWarehouse\n \nAuburn (AL), USA\n \n \n1,858\n \n \nShort-term\n\n \n\nExcept for the third property\nlisted in the table above (which lease term is three months), lease agreements for our premises are generally long-term leases with terms\nof between 1 and 10 years.\n\n \n\nThe production capacity is\nup to 6,125 ChargePost units per year depending on the applied shift model and the product type.\n\n \n\nAs of the date of this Annual\nReport, the Company is not aware of any environmental issues that may affect the utilization of any of the premises described above and\nhas no intention to engage in the construction, expansion or improvement of any real estate or facilities.\n\n \n\n50"}