Contract analysis

I. PURPOSE This memorandum sets forth the comprehensive plan for the privileged internal investigation that Calderwood & Harkness LLP ("C&H" or the "Firm") will conduct on behalf of Halcyon Semiconductor AG ("HSAG") and Halcyon Semiconductor Inc. ("HSI," and together with HSAG, the "Company" or "Halcyon") in connection with the inquiry initiated by the National Security Division ("NSD") of the United States Departmen

II. BACKGROUND A. The Company Halcyon Semiconductor AG is an Aktiengesellschaft organized under the laws of Switzerland, with its registered office at Bahnhofstrasse 42, 8001 Glenrock Assurance, Switzerland, and its principal office and primary fabrication facility located at Semperstrasse 15, 01069 Dresden, Germany. HSAG is listed on the Frankfurt Stock Exchange under the ticker symbol XETRA: HCA. Founded in 2003, H

III. SCOPE OF INVESTIGATION The investigation will encompass the following workstreams. Each workstream is described in detail below, together with the specific tasks, key questions, and evidentiary targets associated with it. A. The Seventeen Shipments The core of the investigation is a complete chronological reconstruction of all seventeen shipments from HSAG's Dresden fabrication facility, through Archipelago in S

1. Review of the Archipelago-Sentinel Contractual Arrangement. The investigation team will obtain and review the complete contractual documentation governing the relationship between Archipelago and Sentinel Compliance Data Services Ltd. This includes the Master Services Agreement between the two parties, any applicable statements of work or service orders, and — critically — the specific service level agreements ("S

2. Analysis of the June 27, 2025 Shipment. As noted above, preliminary information indicates that the June 27, 2025 shipment was based on a purchase order that had been pre-approved on June 13, 2025, and that Archipelago's system did not perform a re-screening at the ship-confirm stage. The investigation will determine whether Archipelago had a written policy, standard operating procedure, or contractual obligation r

3. Analysis of the July 15 and August 3, 2025 Shipments. These shipments were based on new orders entered after the June 26 Sentinel database update. The investigation will conduct a technical review of Archipelago's order management system and the Sentinel screening module to determine the precise cause of the screening failure. The preliminary hypothesis — a character-encoding or data-ingestion mismatch between sim

4. Assessment of HSAG/HSI Independent Screening. The investigation will separately assess whether HSAG's or HSI's own internal screening processes should have independently flagged Zhonghe as a restricted party, regardless of any screening performed (or failed to be performed) by Archipelago. Specifically, the investigation will determine what HSI's internal restricted-party screening protocol was during the relevant

5. Review of the Authorized Distributor Agreement. The investigation team will review the Authorized Distributor Agreement between HSAG and Archipelago (originally dated April 1, 2021, as amended through Amendment No. 3, effective September 1, 2024) with particular focus on the export compliance addenda, including the allocation of compliance responsibilities between HSAG and Archipelago, the specific compliance obli

1. Witness Interviews. The investigation team will interview all personnel involved in the sales, order processing, export compliance screening, and shipping of the seventeen shipments. The initial interview list includes, at a minimum, the following individuals: • Ryan Oshiro, Director, Asia-Pacific Sales, HSI — Mr. Oshiro is the senior sales relationship owner for both the Zhonghe and Lansheng accounts. He is expec

2. Communications Review. The investigation team will review email communications, instant messages (including Northgate Data Systems, Meridian Solutions, and any other messaging platform used by the Company), and calendar entries of relevant custodians for the period January 1, 2024 to the present. The review will employ targeted keyword search terms and date-range filtering to identify communications relevant to th

3. Key Knowledge/Intent Questions. The knowledge and intent assessment will be organized around the following core questions, which the investigation will seek to resolve definitively: (i) Did any employee, officer, or agent of HSAG, HSI, or Archipelago have actual knowledge of Zhonghe's Entity List status at the time of any of the three post-listing shipments (June 27, July 15, and August 3, 2025)? If so, who had su

4. Significance of Intent Assessment. The intent assessment is critical for several interrelated reasons: (a) Willfulness is a key factor in the BIS penalty guidelines and in DOJ's determination whether to pursue criminal versus administrative resolution. Under BIS's enforcement guidelines, a finding of willfulness can result in significantly higher penalties and increases the likelihood of a denial of export privile

1. Comprehensive Sanctions Screening. The investigation team will screen all PRC end users identified in connection with the seventeen shipments, their known principals (including directors, officers, and significant shareholders), and their known affiliates against the following OFAC-administered lists: • The Specially Designated Nationals and blocked Persons List ("SDN List"); • The Sectoral Sanctions Identificatio

2. Specific Entities and Persons to Be Screened. The following entities and individuals will be the primary focus of sanctions screening: • Zhonghe Microelectronics Co., Ltd., together with its known directors, officers, and shareholders (to the extent their identities can be determined through publicly available corporate filings, commercial databases, and the Company's own records); • Lansheng Harborline Technologi

3. Analysis of Applicable Sanctions Programs. The investigation team will assess whether any of the seventeen shipments implicate specific sanctions programs administered by OFAC, including: • Executive Order 13959 / Executive Order 14032 (NS-CMIC / Chinese Military-Industrial Complex Companies): These executive orders restrict certain investment transactions involving companies identified as Chinese military-industr

4. Application of the Fifty Percent Rule. The investigation will assess the applicability of OFAC's "50 Percent Rule," as set forth in OFAC's Revised Guidance on Entities Owned by Persons Whose Property and Interests in Property Are blocked (August 13, 2014). Under this rule, the property and interests in property of an entity that is 50% or more owned, directly or indirectly, by one or more blocked persons are consi

5. Separate OFAC Memorandum. Upon completion of the OFAC screening and analysis, the investigation team will prepare a separate privileged memorandum analyzing the Company's OFAC and sanctions exposure, or confirming the absence thereof. The target delivery date for this memorandum is late November 2025. The memorandum will serve as a basis for the Company's assessment of whether any OFAC-related notifications or dis

6. OFAC Voluntary Self-Disclosure Assessment. The investigation team will evaluate whether a voluntary self-disclosure to OFAC is warranted. Our preliminary assessment, based on the limited information currently available, is that a VSD to OFAC is unlikely to be necessary, as we do not anticipate finding violations of OFAC-administered sanctions. However, this assessment is subject to revision based on the results of

1. Engagement of Independent Compliance Consultant. At C&H's recommendation, Halcyon has retained Ashford Pennington LLC ("Ashford Pennington"), an independent export-controls and sanctions compliance consultancy, to conduct an independent assessment of the Company's export compliance program. Ashford Pennington is led by its Principal Consultant, Dr. Miriam Hecht, who has over twenty-five years of experience in expo

2. Areas of Compliance Program Assessment. The compliance program assessment, conducted jointly by C&H and Ashford Pennington, will address the following areas: • Organizational structure of trade compliance functions at HSAG and HSI: This includes an assessment of reporting lines (whether the trade compliance function reports to the legal department, the operations function, or another organizational unit), staffing

3. Identification of Remedial Measures. Based on the findings of the compliance program assessment, the investigation team, in coordination with Ashford Pennington, will identify specific remedial measures to be implemented. Based on preliminary findings, we anticipate that the following measures will be among those recommended: • Dual-screening: HSAG and/or HSI to perform independent restricted-party screening of al

1. Braxton Merritt LLP (Lead Partner: Elena Voss; 450 Park Avenue, 31st Floor, New York, NY 10022). Braxton Merritt is Halcyon's long-standing U.S. corporate and securities counsel. In connection with this matter, Braxton Merritt is coordinating with C&H on the assessment of disclosure obligations under SEC Regulation FD and Frankfurt Stock Exchange ad-hoc disclosure rules, including the requirements of Article 17 of

2. Kessler Pratt & Whitfield LLP (Lead Partner: Dr. Tobias Engel; Neue Mainzer Strasse 28, 60311 Frankfurt am Main, Germany). KPW is advising Halcyon on parallel German and European Union export-control compliance matters. The transactions at issue — shipments from HSAG's Dresden facility to Singapore — may implicate not only U.S. export-control law (under the EAR's extraterritorial reach and reexport provisions) but

3. Pinnacle Ridgeway Partners (Lead Audit Partner: Graham Sinclair; Paradeplatz 8, 8001 Glenrock Assurance, Switzerland). Pinnacle Ridgeway is HSAG's independent auditor. Pinnacle Ridgeway has been informed of the DOJ inquiry in connection with its assessment of potential contingency disclosures in HSAG's FY 2025 financial statements. Under IAS 37 (Provisions, Contingent Liabilities, and Contingent Assets), HSAG may

4. Lodestar National Bank (Relationship Manager: Danielle Osborne; 401 South Tryon Street, Charlotte, NC 28202). Lodestar National Bank is HSI's primary U.S. commercial bank and holds HSI's principal operating accounts. Lodestar also provides HSI with a $300 million revolving credit facility under a credit agreement that contains, among other covenants, a compliance-with-law covenant and a material-litigation notice

IV. DOCUMENT COLLECTION AND REVIEW A. Data Sources The investigation will draw on the following primary data sources. Additional sources may be identified as the investigation progresses, and the investigation team reserves the right to expand the data collection as warranted.

1. HSAG SAP GTS (Global Trade Services) System. The SAP GTS system is HSAG's primary trade management platform and contains all transaction records for controlled products, including products classified under ECCN 3A001. The investigation team will collect all transaction records for ECCN 3A001 products shipped to PRC destinations for the period January 2023 to present. This expanded collection period (extending twel

2. HSI Quillon Data Systems. HSI uses Pinnacle Health IT as its customer relationship management platform. The investigation team will collect customer account records for both Zhonghe Microelectronics and Lansheng Harborline Technologies Technologies, including account onboarding records, contact information, order history, correspondence logs, meeting notes, and any due diligence records generated during the custom

3. HSAG and HSI Email Systems (Strathmore Data Systems / M365). The investigation team will collect targeted custodian email collections from the following initial custodians: • Ryan Oshiro (HSI) • Janet Liang (HSI) • Pamela Neuhaus (HSI) • Annika Brauer (HSAG) • Additional custodians to be identified during the initial review phase The collection period for email data will be January 1, 2024 to the present, with the

4. Archipelago Component Solutions Pte. Ltd. Records. Records from Archipelago will be obtained under Halcyon's contractual audit rights in the Authorized Distributor Agreement (dated April 1, 2021, as amended through Amendment No. 3, effective September 1, 2024). The records to be obtained include: order management system logs (including order