Other expenses primarily consist of expenses for general warranties, travel costs and outbound freight.

Finance income from remeasurement of warrant liabilities in the first half of 2025 in the amount of kEUR 24,909 results from the remeasurement of the fair value of public and private warrant liabilities, warrant liabilities from shareholder loans and warrant liabilities from the convertible note and was caused by a a declining share price of ADSE shares. The foreign currency gains mainly result from the valuation of the warrants which are denominated in USD.

In the first half of 2024, finance expense from remeasurement of warrant liabilities in the amount of kEUR 34,667 results from the remeasurement of the fair value of public and private warrant liabilities, warrant liabilities from shareholder loans and warrant liabilities from capital increases.

In 2025, interest expenses from shareholder loans amount to kEUR 19,332 (2024: kEUR-4,662 ). This results mainly from the amortization of day one losses (kEUR 10,293) and the effective interest of the shareholder loan (kEUR 8,903).

During the first half of 2025, ADSE recognized write-downs of inventories in an amount of kEUR 2,555 as an expense in the cost of sales in the statement of profit or loss.

ADSE concluded shareholder loan agreements with various lenders on August 18, 2023, which were amended and restated on August 26, 2024. In addition, three further agreements were concluded on August 26, 2024. Pursuant to the loan agreements, ADSE US and ADSE GM have agreed to issue lender warrants which will be issued by ADSE Holdco as Irish guarantor to the respective lenders and subscribed by ADSE US resp. ADSE GM. At initial recognition, the warrants had a higher fair value than the shareholder loans, which generated a day one loss. As this day one loss is based on unobservable inputs, it needs to be deferred and recognized until maturity to the extent that it arises from a change in a factor (including time) that market participants would take into account when pricing the liability.

The amount recognized on the balance sheet on June 30, 2025 has declined significantly as compared to December 31, 2024 due to amortization over time and in addition due to amortization following the repayment of shareholder loans in the first half of the financial year 2025 prior to maturity.

Other accrued items related to lender warrants refer to warrants for which the exercise conditions were not met as of June 30, 2025 and December 31, 2024 since the related shareholder loans were not drawn. The fluctuation results from foreign currency effects.

As of June 30, 2025, restricted cash mainly relates to money received in the course of the financing via convertible notes. This money was paid into a control account of the Company and will be released to the Company upon the achievement of agreed-upon milestones. On July 2, 2025, an amount of kEUR 17,014 was released after satisfaction of the first milestones.

The changes in the various components of equity are shown in ADSE’s statements of changes in equity for the past two half-year periods.

In 2024 714,290 warrants were exercised in the first half year which led to an increase in capital reserves of kEUR 7,145. These warrants were issued related to a capital increase at the end of fiscal year 2023.

In the first half of financial year 2025, the exercise of public, private and shareholder warrants increased the number of outstanding shares by 2,468,837 shares and led to an increase in capital reserves of kEUR 34,168. Moreover, the conversion of debt from the convertible note into equity resulted in an issue of 922,195 shares which increased the capital reserve by kEUR 7,011.

Public and private warrants

As of 30 June, 2025, the fair value of public and private warrant liabilities amounts to kEUR 13,628 (31 December, 2024: kEUR 40,731) and relates to 7,826,371 public warrants and 119,866 private warrants including 100,000 lender warrants issued. In comparison to December 31, 2024, 2,014,299 public warrants were exercised at an exercise price of 11.50 USD per warrant. 1,701,745 warrants were moved from public warrants to private warrants and were exercised on a cashless basis leading to an issue of 347,871 shares.

Warrants relating to shareholder loans

In the first half of financial year 2025, 106,667 warrants related to the first shareholder loan with an exercise price of USD 3.00 were exercised. The exercise term of the remaining 1,573,333 warrants related to the first shareholder loan was extended from May 5, 2025 until August 31, 2025.

Warrants relating to Convertible Note

On April 30, 2025 the Company issued 1,116,072 warrants together with the closing of a financing transaction via convertible notes to certain institutional lenders. One warrant entitles the lender to purchase one ordinary share, par value USD 0.00001 per ordinary share. The warrants may be exercised at an exercise price of USD 16.88 at any time until April 30, 2030. If, on the 75th Trading Day after May 1, 2025, the exercise price then in effect is greater than the market price of ADSE stock at that date, the exercise price shall automatically be lowered to the market price and the number of warrant shares that may be subscribed for upon exercise of this warrant adjusted proportionately, so that after such adjustment the aggregate exercise price payable for the adjusted number of warrant shares shall be the same as the aggregate exercise price in effect immediately prior to such adjustment.

The fair value of these warrants as of the issue date was determined using a Monte Carlo Simulation which resulted in an aggregate fair value of kEUR 6,773 as of that date.

On August 20, 2025 the exercise of the warrants was adjusted to USD 10.31 and the number increased to 1,827,284 in line with the warrant agreement.

On May 01, 2025, ADSE secured financing through convertible note agreements with different institutional lenders in a total principal amount of kUSD 53,753 (kEUR 47,389). The notes were issued with a discount of 7% and bear interest of 2% per annum. They can either be converted into equity or redeemed in cash over a period of three years until May 01, 2028. Together with the convertible notes, 1,116,072 warrants were issued resulting in a disagio of the notes in an amount of kEUR 6,773. Transaction costs are being discounted from the notes as well. Both are amortized together with the issue discount using the effective interest rate method.

Until June 30, 2025, the lenders have converted a total principal amount of kUSD 7,593 (kEUR 6,556) as well as interest in the amount of kUSD 692 (kEUR 598) into equity.

The shareholder loans are classified as current loans and borrowings. As of the reporting date, the amount includes the book value of shareholder loans of kEUR 5,426 and interest payable of kEUR 310 (December 31, 2024: book value of kEUR 11,971 and interest payable of kEUR 1,363). In the first half of 2025, various tranches with a total nominal amount of kEUR 14,357 (kUSD 15,577) were repaid together with interest.

Disclosure on individual items of the consolidated financial statements

The significant development in the area of other financial receivables is attributable to research grants, which were paid out in the first quarter of the fiscal year. The decline of trade payables is due to the payment of high trade payables from the purchase of inventory. The increase in loans and borrowings is due to new financing. Please refer to note 4.2.6 for further information on loans and borrowings.

Revenues from two major customers of ADSE represented kEUR 6,615 and kEUR 1,312 respectively (2024: two customers, kEUR 11,185 and kEUR 54,641) of ADSE’s total revenues.