PRIVILEGED AND CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP One Liberty Plaza, 42nd Floor New York, NY 10006
MEMORANDUM
TO: Vivienne St. Claire, Responsible Partner; Robert Adeyemi, Billing Partner
FROM: Claire Dempsey, Lead Associate; Audrey Zhou, Working Associate
DATE: February 14, 2026
RE: Halcyon Semiconductor AG — Due Diligence Memorandum: Related-Party Transactions
MATTER NO.: 1032-00003
SUBJECT: Analysis of Related-Party Transactions and Disclosure Obligations for US ADR IPO (Form F-1 / Form 20-F)
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I. Executive Summary
This memorandum sets forth Calderwood & Harkness LLP's due diligence findings regarding related-party transactions involving Halcyon Semiconductor Aktiengesellschaft ("Halcyon," the "Company," or "HSAG"), a German Aktiengesellschaft registered in Munich (HRB 217458, Amtsgericht München), with its principal executive offices at Maximilianstraße 72, 80539 Munich, Germany. This memorandum has been prepared at the direction of the Responsible Partner and Billing Partner in connection with the Company's proposed initial public offering of American Depositary Shares ("ADSs") in the United States and is protected by the attorney-client privilege and the work product doctrine.
Context of the Transaction. Halcyon is pursuing an initial public offering of ADSs in the United States pursuant to a Level III American Depositary Receipt program, with an anticipated gross offering size of approximately $900,000,000, consisting of a combination of primary shares issued by the Company and secondary shares sold by existing shareholders (principally Rheintal Industrieholding GmbH and Kestrel Capital Partners AG). The Company intends to file a Registration Statement on Form F-1 with the U.S. Securities and Exchange Commission (the "SEC") and, upon effectiveness, will be subject to ongoing reporting requirements under Form 20-F as a foreign private issuer ("FPI"). Each ADS is expected to represent two ordinary shares of the Company, with The Bank of New York Mellon acting as depositary.
Scope of Review. The scope of our review encompasses the identification and analysis of all transactions between Halcyon (and its direct and indirect subsidiaries) and related parties, as that term is defined under applicable accounting standards and securities regulations. Related parties include, without limitation: (i) major shareholders holding 5% or more of the Company's outstanding ordinary shares; (ii) members of the Company's Vorstand (Management Board) and Aufsichtsrat (Supervisory Board); (iii) immediate family members of any Vorstand or Aufsichtsrat member; (iv) entities controlled by, or under common control with, any of the foregoing persons; and (v) the Company's post-employment benefit plans. Our review covers the three most recent fiscal years (FY2023, FY2024, and FY2025 (unaudited)) and any currently proposed transactions, consistent with the disclosure requirements of Item 7.B of Form 20-F.
Primary Disclosure Framework. The following legal and regulatory standards govern the identification, evaluation, and disclosure of related-party transactions in connection with this offering:
• Item 7.B of Form 20-F (Related Party Transactions), which requires disclosure of material transactions with related parties during the three most recent fiscal years;
• IAS 24 (Related Party Disclosures) under International Financial Reporting Standards ("IFRS") as adopted by the European Union, which governs the recognition and disclosure of related-party relationships and transactions in the Company's audited financial statements;
• German Aktiengesetz (AktG), particularly §§ 111a–111c (implementing the EU Shareholder Rights Directive II), which establish substantive and procedural requirements for Aufsichtsrat approval of related-party transactions exceeding specified thresholds;
• SEC Regulation S-K, Item 404, the principles of which inform Form 20-F disclosure, even though foreign private issuers comply through the Item 7.B framework; and
• Nasdaq Listing Rules, including Rule 5630, governing audit committee oversight of related-party transactions.
Overall Conclusion. Our due diligence has identified several categories of related-party transactions that require disclosure in the Form F-1 registration statement and subsequent Form 20-F annual reports. The most significant from a disclosure and risk perspective is the structural relationship between CEO Dr. Friedrich Wendt and Rheintal Industrieholding GmbH, the Company's largest shareholder (22.3% pre-IPO), which is controlled by Dr. Wendt's sister, Margarethe Wendt. This relationship, together with certain consulting and advisory services arrangements between the Company and Rheintal, will require prominent prospectus disclosure and may attract SEC staff scrutiny during the registration statement review process. Additional related-party transactions have been identified involving Kestrel Capital Partners AG (the Company's second-largest shareholder), intercompany arrangements with the Company's wholly-owned subsidiaries, executive compensation arrangements, the Halcyon Employee Stock Ownership Trust, and indemnification and D&O insurance arrangements. None of the identified transactions appear to present impediments to the offering, but certain transactions warrant enhanced disclosure, ongoing monitoring, and, in the case of potential officer or director loans, confirmation of compliance with Section 402 of the Sarbanes-Oxley Act of 2002.
Documents Reviewed. In preparing this memorandum, we have reviewed the documents and materials set forth in Appendix A hereto, including the Company's corporate governance reports, annual financial statements and accompanying IAS 24 notes (FY2023 and FY2024), unaudited interim financial information for FY2025, the Company's shareholder register (Aktienregister), selected Supervisory Board meeting minutes, management service agreements (Vorstandsverträge), intercompany agreements, responses to Calderwood & Harkness's due diligence request list (Category IX — Related-Party Transactions), and the Company's Satzung (Articles of Association). We have also conducted interviews with Wilhelm Ostermann, General Counsel and Chefjustitiar of Halcyon, and Katarina Dalmqvist, Chief Financial Officer (Finanzvorstand). German law advice on the matters discussed herein has been provided by Bähr Stein Rechtsanwälte, Munich (Dr. Christoph Maurelban, Partner; Johanna Weiß, Senior Associate), and we have incorporated their analysis where indicated.
II. Identification of Related Parties
This Section identifies all persons and entities that, based on our review, qualify as related parties of Halcyon under IAS 24, applicable SEC regulations, and the German Aktiengesetz. The identification of related parties is a threshold exercise that determines the scope of the related-party transactions analysis set forth in Section III below.
A. Major Shareholders
1. Rheintal Industrieholding GmbH
Full Legal Name: Rheintal Industrieholding Gesellschaft mit beschränkter Haftung
Entity Type: Gesellschaft mit beschränkter Haftung (GmbH) (German limited liability company), registered with the commercial register (Handelsregister) of the Amtsgericht Düsseldorf under HRB 84293
Registered Address: Königsallee 60, 40212 Düsseldorf, Germany
Ownership in Halcyon: Rheintal Industrieholding GmbH ("Rheintal") holds 47,945,000 ordinary shares of the Company, representing approximately 22.3% of the 215,000,000 ordinary shares currently outstanding. Rheintal is the single largest shareholder of the Company. The shares were acquired through a combination of original subscription in connection with the Company's capital increases in 2004, 2008, and 2014, and open-market purchases conducted between 2015 and 2019.
Nature of Entity: Rheintal is a private family holding company of the Wendt family. Its primary assets consist of its shareholding in Halcyon, a diversified portfolio of minority investments in German industrial companies (principally in the automotive, precision engineering, and advanced materials sectors), and approximately €140 million in liquid assets managed by Gryphon Vermögensverwaltung GmbH, a Düsseldorf-based wealth management firm. Rheintal does not itself conduct operating business activities; it functions as a pure holding and investment vehicle for the Wendt family.
Managing Director (*Geschäftsführer*): Margarethe Wendt (age 55), who is the sole Geschäftsführerin of Rheintal. Margarethe Wendt is the sister of Dr. Friedrich Wendt, the Chief Executive Officer (Vorstandsvorsitzender) of Halcyon. This family relationship creates a dual nexus between Rheintal and the Company — Rheintal is related both as a significant shareholder (>20%) and through the family connection between its controlling person and the Company's CEO.
Selling Shareholder Status: Rheintal is expected to sell approximately 8,500,000 existing ordinary shares (representing 4,250,000 ADSs, based on the anticipated 2:1 ADS-to-ordinary-share ratio) in the offering. Following the offering and assuming no exercise of the underwriters' option to purchase additional ADSs, Rheintal's ownership is expected to be approximately 16.1% (39,445,000 ordinary shares out of 245,000,000 ordinary shares outstanding, reflecting the issuance of 30,000,000 new ordinary shares). Rheintal will be subject to a 180-day lock-up agreement in favor of Westbridge Securities LLC, as representative of the underwriters, with respect to its remaining shares.
Classification as Related Party Under IAS 24: Yes. Rheintal is a related party of Halcyon under IAS 24.9 on multiple independent bases: (i) Rheintal holds more than 20% of the Company's ordinary shares, establishing a rebuttable presumption of significant influence under IAS 28.5 (and, by extension, related-party status under IAS 24.9(b)(i)); and (ii) Rheintal is controlled by a close family member (sister) of a member of the Company's key management personnel (CEO Dr. Friedrich Wendt), satisfying IAS 24.9(a)(iii). Each basis independently establishes related-party status.
2. Kestrel Capital Partners AG
Full Legal Name: Kestrel Capital Partners Aktiengesellschaft
Entity Type: Aktiengesellschaft (AG) (Swiss stock corporation), registered with the Commercial Register of the Canton of Glenrock Assurance
Registered Address: Bahnhofstrasse 36, 8001 Glenrock Assurance, Switzerland
Ownership in Halcyon: Kestrel Capital Partners AG ("Kestrel") holds 20,855,000 ordinary shares of the Company, representing approximately 9.7% of the 215,000,000 ordinary shares currently outstanding. Kestrel is the second-largest shareholder of the Company. Kestrel's shares were acquired in a single block transaction in 2017 from a consortium of early-stage venture capital investors, supplemented by additional purchases in 2019 and 2020.
Managing Partner: Henrik Sørensen, who serves as Managing Partner and Chief Investment Officer of Kestrel Capital Partners AG. Mr. Sørensen holds Danish and Swiss citizenship and is based in Glenrock Assurance. Kestrel is a private equity and growth capital firm with approximately €4.2 billion in assets under management, focused on European technology and advanced manufacturing companies.
Selling Shareholder Status: Kestrel is expected to sell approximately 4,300,000 existing ordinary shares (representing 2,150,000 ADSs) in the offering. Following the offering and assuming no exercise of the underwriters' option to purchase additional ADSs, Kestrel's ownership is expected to be approximately 6.8% (16,555,000 ordinary shares out of 245,000,000 ordinary shares outstanding). Kestrel will be subject to a 180-day lock-up agreement in favor of Westbridge Securities LLC with respect to its remaining shares.
Classification as Related Party Under IAS 24: This determination requires analysis. Kestrel's 9.7% ownership stake, standing alone, is below the 20% threshold that gives rise to a rebuttable presumption of significant influence under IAS 28.5. However, IAS 28.5 enumerates several additional indicators of significant influence beyond mere percentage of ownership, including: (a) representation on the board of directors or equivalent governing body; (b) participation in policy-making processes, including participation in decisions about dividends or other distributions; (c) material transactions between the entity and the investee; (d) interchange of managerial personnel; and (e) provision of essential technical information.
Based on our review, Kestrel has board representation on the Company's Aufsichtsrat through Dr. Tobias Brenner (see Section II.C below), whom Kestrel nominated pursuant to the informal understanding described in Section III.B.1 below. In addition, Kestrel has been actively involved in the Company's corporate governance, including participation in discussions regarding the Company's capital structure, dividend policy, and the timing and structure of the IPO. On the basis of Kestrel's board representation and its active involvement in corporate governance matters, we conclude that Kestrel exercises significant influence over the Company within the meaning of IAS 28.5, and is therefore a related party of Halcyon under IAS 24.9(b)(i). We note that this conclusion should be confirmed by the Company's auditors, Blackmere & Whitfield GmbH Wirtschaftsprüfungsgesellschaft.
3. Halcyon Employee Stock Ownership Trust (ESOT)
Description: The Halcyon Employee Stock Ownership Trust (the "ESOT" or the "Trust") was established in 2015 as a vehicle for employee equity participation in the Company. The ESOT is structured as a contractual trust arrangement (Contractual Trust Arrangement, or CTA) governed by German law, with Rheinische Treuhand AG serving as trustee.
Ownership in Halcyon: The ESOT holds 6,665,000 ordinary shares of the Company, representing approximately 3.1% of the 215,000,000 ordinary shares currently outstanding. The shares were acquired through directed capital increases in 2015, 2018, and 2021, at prices determined by independent valuation.
Beneficiaries: The beneficiaries of the ESOT are current and former employees of Halcyon and its subsidiaries, including members of the Vorstand. Awards under the ESOT vest over a four-year period, subject to continued employment and certain performance conditions.
Classification as Related Party Under IAS 24: Yes. The ESOT is a related party of Halcyon under IAS 24.9(b)(vii) as a post-employment benefit plan for the benefit of employees of the Company (or of any entity that is a related party of the Company). The ESOT also constitutes a related party to the extent that Vorstand members are beneficiaries of the Trust.
B. Key Management Personnel (Vorstand)
Under IAS 24.9(a)(i), key management personnel — defined as those persons having authority and responsibility for planning, directing, and controlling the activities of the entity, directly or indirectly — are related parties of the entity. All members of the Company's Vorstand (Management Board) qualify as key management personnel. The current members of the Vorstand are as follows:
1. Dr. Friedrich Wendt — Chief Executive Officer (*Vorstandsvorsitzender*). Age 58. Dr. Wendt has served as CEO of Halcyon since 2004, when he joined the Company following its acquisition of certain semiconductor assets from Rheingold Mikroelektronik GmbH, where he had served as Managing Director. Dr. Wendt holds a PhD in electrical engineering from Technische Universität Dresden (1995) and an MBA from WHU – Otto Beisheim School of Management (2001). Dr. Wendt is the brother of Margarethe Wendt, who is the sole Geschäftsführerin and controlling person of Rheintal Industrieholding GmbH, the Company's largest shareholder. This family relationship is a central focus of the related-party analysis set forth in this memorandum.
2. Katarina Dalmqvist — Chief Financial Officer (*Finanzvorstand*). Age 49. Ms. Dalmqvist joined Halcyon in 2019 from Regenhardt Industries AG, where she served as Vice President of Corporate Finance. She holds an MBA from INSEAD (2005) and a Bachelor of Science in economics from the Stockholm School of Economics (1999). Ms. Dalmqvist serves as the Company's principal financial and accounting officer and oversees the investor relations function.
3. Dr. Marcus Helder — Chief Technology Officer (*Technikvorstand*). Age 52. Dr. Helder is a co-founder of Halcyon, having established the Company in 1997 together with Prof. Dr. Karl-Heinz Brückner (now retired). Dr. Helder holds a PhD in materials science from the Eidgenössische Technische Hochschule (ETH) Glenrock Assurance (1998). Dr. Helder oversees the Company's research and development activities, including its silicon carbide (SiC) and gallium nitride (GaN) power semiconductor technology programs. As a co-founder, Dr. Helder's relationship with the Company is subject to additional analysis regarding founder-specific agreements and intellectual property assignments, as discussed in Section III.C.3 below.
4. Ingrid Baumann — Chief Operating Officer (*Betriebsvorstand*). Age 46. Ms. Baumann has been with Halcyon for 18 years, having joined in 2008 as a plant manager at the Company's Dresden fabrication facility. She was appointed to the Vorstand in 2018. Ms. Baumann holds a degree in industrial engineering (Diplom-Wirtschaftsingenieurin) from RWTH Aachen University (2003).
5. Wilhelm Ostermann — General Counsel (*Chefjustitiar*) and Compliance Officer. Age 54. Mr. Ostermann joined Halcyon in 2012. He is a German-qualified Rechtsanwalt (admitted to the bar in Düsseldorf, 1998) and holds both a first and second state examination in law (Erstes und Zweites Juristisches Staatsexamen) from Westfälische Wilhelms-Universität Münster. Mr. Ostermann serves as the Company's primary internal legal advisor and oversees the Company's compliance program. He has been a principal point of contact for Calderwood & Harkness's due diligence review.
All five members of the Vorstand are classified as related parties of the Company under IAS 24.9(a)(i) as key management personnel. Their compensation arrangements, equity participation, and any personal transactions with the Company are subject to the disclosure requirements discussed herein.
C. Supervisory Board (Aufsichtsrat)
The Company's Aufsichtsrat (Supervisory Board) consists of twelve members, as required by the German Mitbestimmungsgesetz (Co-Determination Act of 1976) given the Company's approximately 8,400 employees. Under the Mitbestimmungsgesetz, the Aufsichtsrat of a German stock corporation with more than 2,000 employees must be composed on a parity basis, with six members elected by the shareholders and six members elected by the employees. The current composition of the Aufsichtsrat, based on our review of the shareholder register, corporate governance report, and meeting minutes, is as follows:
Shareholder Representatives:
1. Prof. Dr. Anneliese Voss — Chair (*Aufsichtsratsvorsitzende*). Age 63. Prof. Dr. Voss is the former Dean of the Faculty of Engineering at Universität Stuttgart, a position she held from 2010 to 2017. She has served as an independent member of the Aufsichtsrat since 2018 and was elected Chair in 2020. Prof. Dr. Voss holds no shares in the Company and has no material business relationships with the Company or any of its affiliates. She also serves on the supervisory boards of Freiburg Energy Systems AG and Karlsruhe Photonics GmbH, neither of which is a material customer, supplier, or business partner of Halcyon.
2. Dr. Tobias Brenner. Age 47. Dr. Brenner is a Managing Director of Kestrel Capital Partners AG. He was nominated to the Aufsichtsrat by Kestrel in 2018 and has served continuously since that date. Dr. Brenner holds a PhD in financial economics from the London School of Economics (2004). He does not hold shares in the Company in his individual capacity; his economic interest in Halcyon is through Kestrel. Dr. Brenner's presence on the Aufsichtsrat is a significant factor in our conclusion that Kestrel exercises significant influence over Halcyon for purposes of IAS 24. Dr. Brenner also serves on the boards of Stellaris Robotics AG (Glenrock Assurance) and Euroflux Semiconductor S.A. (Luxembourg), the latter of which is a competitor of Halcyon in the European power semiconductor market. This interlock merits prospectus disclosure as discussed in Section III.D below.
3. Margarethe Wendt. Age 55. Ms. Wendt is the Geschäftsführerin of Rheintal Industrieholding GmbH, the Company's largest shareholder. She was nominated to the Aufsichtsrat by Rheintal in 2014 and has served continuously since that date. As noted above, Ms. Wendt is the sister of Dr. Friedrich Wendt, the Company's CEO. Ms. Wendt's dual role as both Aufsichtsrat member and Managing Director of the Company's largest shareholder, combined with her family relationship to the CEO, creates the most significant related-party relationship identified in this due diligence review. Ms. Wendt is not independent under Nasdaq Rule 5605(a)(2), Exchange Act Rule 10A-3, or the German Corporate Governance Code (Deutscher Corporate Governance Kodex), and she does not serve on the audit committee or the compensation committee of the Aufsichtsrat.
4. Jürgen Kaltmeyer. Age 60. Mr. Kaltmeyer is the former CEO of Oberhausen Automotive GmbH, a major German automotive tier-1 supplier. He has served on the Aufsichtsrat since 2021 as an independent director. Mr. Kaltmeyer also serves on the supervisory board of Oberhausen Automotive GmbH (as non-executive Chairman). Oberhausen Automotive is a customer of Halcyon, purchasing approximately €8.2 million of power semiconductor modules in FY2024. This cross-directorship interlock requires further analysis of materiality and disclosure as discussed in Section III.D.2 below.
5. Dr. Eleonore Richter. Age 51. Dr. Richter is a partner at Weberhaus Venture Partners, a Munich-based venture capital firm. She has served on the Aufsichtsrat since 2022 as an independent director. Dr. Richter does not hold shares in the Company and has no material business relationships with the Company or any of its affiliates, other than her service on the Aufsichtsrat. She is considered independent under Nasdaq Rule 5605(a)(2).
6. Dr. Hans-Peter Vollmer. Age 68. Dr. Vollmer is a retired partner of Drayton Consulting Group (Munich office). He has served on the Aufsichtsrat since 2016. Dr. Vollmer does not currently hold shares in the Company. Drayton Consulting Group has provided consulting services to Halcyon on an ad hoc basis; the materiality of these engagements is under review. Dr. Vollmer's independence assessment should take into account any continuing relationship between Westvale Advisors and the Company.
Employee Representatives:
7. Klaus Mühlhausen — Vice-Chair (*Stellvertretender Aufsichtsratsvorsitzender*). Age 57. Mr. Mühlhausen is the Chair of the Halcyon Works Council (Betriebsratsvorsitzender) at the Company's Munich headquarters. He has served on the Aufsichtsrat since 2016 as an employee representative.
8. Sabine Eckhardt. Age 44. Ms. Eckhardt is a senior process engineer at the Company's Dresden fabrication facility. She has served on the Aufsichtsrat since 2020 as an employee representative.
9. Thomas Drexler. Age 50. Mr. Drexler is a representative of the IG Metall trade union. He has served on the Aufsichtsrat since 2018 as a trade union representative (one of the employee-side seats allocated to trade union representatives under the Mitbestimmungsgesetz).
10. Andrea Bergmann. Age 39. Ms. Bergmann is a quality assurance team leader at the Company's Brno facility (Halcyon Automotive Components s.r.o.). She has served on the Aufsichtsrat since 2022 as an employee representative.
11. Michael Scholz. Age 62. Mr. Scholz is a senior technician at the Company's Munich headquarters. He has served on the Aufsichtsrat since 2014 as an employee representative.
12. Petra Ziegler. Age 48. Ms. Ziegler is a representative of the IG Metall trade union, serving as the second trade union representative on the Aufsichtsrat. She has served since 2020.
All twelve members of the Aufsichtsrat are classified as related parties of the Company under IAS 24.9(a)(i) as key management personnel. The shareholder representatives nominated by Rheintal (Margarethe Wendt) and Kestrel (Dr. Tobias Brenner) are of particular significance given the interlocking relationships described above. Employee representatives are related parties in their capacity as Aufsichtsrat members; any transactions between such persons and the Company beyond their ordinary employment relationships must be identified and assessed.
Interlock Analysis Summary: The following interlocks have been identified:
• Margarethe Wendt: Aufsichtsrat member; Geschäftsführerin of Rheintal (22.3% shareholder); sister of CEO Dr. Friedrich Wendt.
• Dr. Tobias Brenner: Aufsichtsrat member; Managing Director of Kestrel (9.7% shareholder); also serves on the board of Euroflux Semiconductor S.A. (competitor).
• Jürgen Kaltmeyer: Aufsichtsrat member; Chairman of supervisory board of Oberhausen Automotive GmbH (customer; ~€8.2M in FY2024 purchases).
• Dr. Hans-Peter Vollmer: Aufsichtsrat member; former Westvale Advisors partner; Westvale Advisors engagements with Halcyon under review.
D. Family Members of Key Management Personnel
Under IAS 24.9(a)(ii), the close family members of key management personnel are also related parties of the entity. Close family members include those family members who may be expected to influence, or be influenced by, the individual in their dealings with the entity. This includes, at a minimum, the individual's spouse or domestic partner, children, children of the individual's spouse or domestic partner, and dependents of the individual or the individual's spouse or domestic partner. Siblings and parents may also qualify, depending on the specific facts and circumstances.
Margarethe Wendt. As noted above, Margarethe Wendt is the sister of CEO Dr. Friedrich Wendt and serves as the sole Geschäftsführerin of Rheintal Industrieholding GmbH. This creates a dual related-party nexus: Ms. Wendt is a close family member of a key management person (the CEO), and she is the controlling person of the Company's largest shareholder. Any transaction between the Company and Ms. Wendt, whether in her personal capacity or through Rheintal, is a related-party transaction.
Other Family Members. Based on the responses to the related-party questionnaires distributed to all Vorstand and Aufsichtsrat members (questionnaire responses remain partially outstanding — see Section VII, Open Items), we have not identified any other family members of Vorstand or Aufsichtsrat members who hold positions at, or conduct transactions with, Halcyon or its subsidiaries. However, we note that questionnaire responses from three Aufsichtsrat members (Jürgen Kaltmeyer, Andrea Bergmann, and Michael Scholz) remain outstanding as of the date of this memorandum, and our analysis should be updated upon receipt. In addition, Dr. Friedrich Wendt's spouse, Dr. Claudia Wendt, is a tenured professor of materials science at Ludwig-Maximilians-Universität München. While we have identified no transactions between Dr. Claudia Wendt (or LMU München) and the Company, the Company has sponsored a research collaboration with LMU München's Institute of Advanced Materials (annual contribution of approximately €180,000 in FY2024), which may require further inquiry depending on Dr. Claudia Wendt's involvement in the relevant research group.
E. Subsidiaries and Affiliated Entities
Halcyon has five material wholly-owned subsidiaries. Transactions between the parent company and its subsidiaries are related-party transactions under IAS 24, although intercompany transactions between entities within the consolidated group are eliminated upon consolidation and are therefore not required to be disclosed in the notes to the consolidated financial statements under IAS 24.18A. Nevertheless, certain intercompany arrangements may warrant prospectus disclosure to the extent they are material to understanding the Company's operational structure, tax position, or risk profile.
The following is a list of the Company's material subsidiaries:
Each of these subsidiaries is a related party of Halcyon AG under IAS 24 by virtue of being a member of the same group. The intercompany transactions between these entities and the parent company are discussed in Section III.E below.
III. Identified Related-Party Transactions
This Section presents the results of our identification and analysis of specific related-party transactions. We have organized this discussion by counterparty, beginning with the transactions that are most significant from a disclosure and risk perspective.
A. Transactions Involving Rheintal Industrieholding GmbH
1. Historical Consulting and Advisory Services Arrangement
Description. Rheintal Industrieholding GmbH has historically provided strategic consulting and advisory services to Halcyon relating to industrial partnerships and supply chain management in the automotive sector. The arrangement dates to 2010, when it was established in connection with Halcyon's entry into the automotive power semiconductor market. Under the arrangement, Rheintal provides the Company with access to Rheintal's network of automotive industry contacts, facilitates introductions to potential customers and strategic partners, and provides periodic strategic advisory reports on market developments in the automotive supply chain. The services are provided primarily by Margarethe Wendt and two other senior professionals employed by or engaged as consultants to Rheintal.
Contractual Terms. The current consulting arrangement is governed by a Strategic Advisory Services Agreement dated January 1, 2022 (the "Rheintal Advisory Agreement"), with an initial term of three years and automatic annual renewal thereafter, subject to 90 days' written notice of termination by either party. The agreement may also be terminated for cause, as defined therein. The agreement provides for an annual consulting fee, payable in quarterly installments. Based on our review of the Rheintal Advisory Agreement and the Company's financial records, the annual fees paid to Rheintal under this arrangement were as follows:
The annual fee has increased at a rate of approximately 5% per year, which the Company attributes to the expansion of the scope of services (including the addition of advisory services related to the Company's entry into the Chinese automotive market in 2023).
Arm's-Length Analysis. The Company has represented that the terms of the Rheintal Advisory Agreement are consistent with those that would be available from unrelated third-party consulting firms providing comparable services. In support of this assertion, the Company has provided a benchmarking analysis prepared by its internal finance team comparing the Rheintal fees to publicly available fee data for comparable strategic advisory engagements in the European automotive technology sector. We have reviewed this benchmarking analysis and note the following: (i) the fee levels appear to be within the general range of fees charged by third-party consulting firms for comparable mandates (the benchmarking analysis indicates a range of €1.2 million to €2.1 million per annum for engagements of comparable scope); (ii) however, the benchmarking analysis relies on a limited sample of comparable transactions, and the fee escalation mechanism (5% per annum) was not separately benchmarked; (iii) the analysis does not address whether the Company conducted a competitive process or solicited alternative bids before entering into or renewing the arrangement with Rheintal.
We note that IAS 24.21 prohibits an entity from disclosing that related-party transactions were made on terms equivalent to those that prevail in arm's-length transactions unless such terms can be substantiated. The Company should work with its auditors, Blackmere & Whitfield, to ensure that any arm's-length characterization included in the IAS 24 notes to the financial statements is adequately supported by the benchmarking analysis and any additional evidence of arm's-length terms.
Supervisory Board Approval. Based on our review of Aufsichtsrat minutes, the original consulting arrangement was approved by the Aufsichtsrat in December 2009, with Margarethe Wendt abstaining from the vote. The current Rheintal Advisory Agreement (effective January 1, 2022) was approved by the Aufsichtsrat at its meeting on November 15, 2021, again with Margarethe Wendt abstaining. We have reviewed the relevant portions of the Aufsichtsrat minutes and note that the approval process appears to comply with the requirements of AktG §§ 111a–111c, including the fairness assessment required by § 111b(1). We are awaiting confirmation from Bähr Stein Rechtsanwälte regarding the adequacy of the approval process under German law. This is an open item.
Disclosure Obligation. This transaction is required to be disclosed under Item 7.B of Form 20-F. The prospectus should describe the nature of the consulting arrangement, the identity of the counterparty (including the family relationship between Margarethe Wendt and the CEO), the material terms of the Rheintal Advisory Agreement, and the aggregate amounts paid in each of FY2023, FY2024, and FY2025. The disclosure should also describe the Aufsichtsrat approval process and the conflict-of-interest protocols applicable to this transaction.
2. Shared Services and Administrative Arrangements
Description. Our review has identified limited shared services and administrative arrangements between Halcyon and Rheintal. Specifically, Rheintal historically occupied approximately 220 square meters of office space in the Company's Munich headquarters at Maximilianstraße 72. This arrangement was terminated in July 2023, when Rheintal relocated its Munich-based staff to separate premises. During the period that the shared office arrangement was in effect, Halcyon charged Rheintal a monthly office services fee intended to cover rent, utilities, IT connectivity, and reception and security services.
Based on the Company's records, the aggregate office services fees charged to Rheintal were as follows:
The Company has represented that the office services fee was calculated on a per-square-meter basis at rates consistent with market rents for comparable commercial office space in the Munich city center. We have not independently verified this representation, but the amounts involved are modest and the arrangement has been terminated.
In addition, we note that Rheintal utilized the Company's IT helpdesk services on an ad hoc basis during the period of the shared office arrangement, at no separately identified charge. The Company's IT department estimates the value of these services at less than €15,000 per annum. We do not consider this arrangement to be material, but it should be disclosed in the aggregate as part of the prospectus description of the shared services arrangement.
No other shared services, shared personnel, or administrative arrangements between Halcyon and Rheintal have been identified, based on the Company's responses to our due diligence requests and our interviews with Mr. Ostermann and Ms. Dalmqvist.
3. Wendt Family Relationship and Potential Conflicts of Interest
The relationship between Dr. Friedrich Wendt (CEO) and Margarethe Wendt (Managing Director of Rheintal; Aufsichtsrat member) is the central related-party issue in this offering. The structural elements of this relationship are as follows:
• Dr. Friedrich Wendt is the Chief Executive Officer of Halcyon and has authority over the Company's day-to-day operations, strategic direction, and relationships with major customers and business partners.
• Margarethe Wendt controls Rheintal Industrieholding GmbH, the Company's single largest shareholder (22.3% pre-IPO / approximately 16.1% post-IPO).
• Margarethe Wendt serves on the Company's Aufsichtsrat, giving her direct oversight authority over the Vorstand, including her brother.
• Rheintal provides consulting services to the Company under the Rheintal Advisory Agreement (see Section III.A.1 above) and is a selling shareholder in the offering.
This constellation of relationships creates a structural conflict of interest that must be prominently disclosed in the prospectus. The potential conflicts include:
(a) Dr. Wendt's ability to influence the Company's decision to enter into, renew, or modify the Rheintal Advisory Agreement, which directly benefits Rheintal and, indirectly, his sister;
(b) Margarethe Wendt's ability, as an Aufsichtsrat member, to influence decisions affecting Dr. Wendt's compensation, continued appointment, and the Company's strategic direction, while simultaneously controlling Rheintal and benefiting from Rheintal's commercial relationship with the Company;
(c) The potential for misalignment between Rheintal's interests as a major shareholder (e.g., preference for dividends, reluctance to dilute its stake through future equity issuances) and the interests of public shareholders; and
(d) The potential for non-public information to flow between Dr. Wendt and Margarethe Wendt given their family relationship, raising insider trading and Regulation FD concerns post-listing.
Governance Safeguards. The Company has represented that the following conflict-of-interest protocols are in place:
• Dr. Friedrich Wendt recuses himself from all Vorstand deliberations and decisions involving Rheintal Industrieholding GmbH or Margarethe Wendt. Our review of Vorstand meeting minutes for FY2023 and FY2024 confirms that Dr. Wendt recused himself from discussions relating to the renewal of the Rheintal Advisory Agreement. However, we note that the Vorstand minutes are not consistently detailed on this point, and the minutes for certain meetings reference discussions of "strategic partnerships" that may have involved Rheintal-related topics without expressly noting whether Dr. Wendt was present or absent.
• Margarethe Wendt abstains from Aufsichtsrat votes on matters involving her interests, including approval of the Rheintal Advisory Agreement and matters relating to Dr. Wendt's compensation.
• The Company's Geschäftsordnung für den Vorstand (Vorstand Rules of Procedure) includes a general provision requiring Vorstand members to disclose conflicts of interest to the Aufsichtsrat without delay, consistent with AktG requirements.
• The Company's Corporate Governance Statement (Erklärung zur Unternehmensführung) references compliance with the German Corporate Governance Code recommendations on conflicts of interest (Section C.4 of the DCGK 2022).
German Law Requirements. Under the AktG, Vorstand members are subject to a duty of loyalty (Treuepflicht) and must disclose conflicts of interest. The Aufsichtsrat is responsible for monitoring compliance with these obligations. AktG §§ 111a–111c, implementing the EU Shareholder Rights Directive II, require Aufsichtsrat approval for related-party transactions with a value exceeding 1.5% of the Company's consolidated Bilanzsumme (total balance sheet assets). Based on our review, the annual fees under the Rheintal Advisory Agreement (€1.6 million) are below this threshold (estimated at approximately €63.7 million based on the Company's FY2024 consolidated balance sheet total of approximately €4.247 billion), but the transactions have nevertheless been submitted to the Aufsichtsrat for approval as a matter of good governance. Bähr Stein Rechtsanwälte has confirmed that the Aufsichtsrat approval process for the Rheintal Advisory Agreement appears to comply with the requirements of §§ 111a–111c AktG.
SEC Disclosure Requirements. SEC rules require clear identification of the family relationship between the CEO and the controlling person of the Company's largest shareholder. The prospectus should include: (i) a description of the family relationship in the "Related Party Transactions" section; (ii) a description of the family relationship and its potential implications in the "Risk Factors" section; (iii) identification of the Wendt family relationship in the directors and officers biographical section; and (iv) a description of the governance safeguards in the "Corporate Governance" section. Based on our experience, we anticipate that the SEC staff may issue comments requesting enhanced or more prominent disclosure of this relationship and the associated risks.
4. Selling Shareholder Arrangements
Rheintal Industrieholding GmbH is expected to sell approximately 8,500,000 existing ordinary shares (representing 4,250,000 ADSs) in the offering. The following arrangements between Rheintal and the Company in connection with the offering have been identified or are expected to be entered into:
Registration Rights. As of the date of this memorandum, no formal registration rights agreement exists between Halcyon and Rheintal. However, the Company has indicated that it intends to enter into a Registration Rights Agreement with Rheintal (and Kestrel) upon or prior to the closing of the offering, pursuant to which Rheintal will be granted: (i) two demand registration rights (exercisable commencing 180 days after the closing of the offering); (ii) unlimited piggyback registration rights in connection with any future registered offering by the Company; and (iii) customary shelf registration rights. The Registration Rights Agreement is currently being negotiated and has not been finalized. We recommend that this agreement be reviewed in detail once in final form and that its material terms be disclosed in the prospectus.
Expense Reimbursement. The Company has agreed to reimburse Rheintal for reasonable documented out-of-pocket expenses incurred in connection with the offering, including legal fees and accounting fees, up to a cap of €500,000. This arrangement is expected to be documented in the Registration Rights Agreement or a separate side letter.
Indemnification. The Registration Rights Agreement is expected to include customary cross-indemnification provisions between the Company and Rheintal relating to the accuracy of information provided for inclusion in the registration statement.
Lock-Up Agreement. Rheintal will enter into a 180-day lock-up agreement with Westbridge Securities LLC, as representative of the underwriters, pursuant to which Rheintal will agree not to sell, offer to sell, contract to sell, pledge, grant any option to purchase, or otherwise dispose of any ordinary shares or ADSs of the Company, or any securities convertible into or exercisable or exchangeable for ordinary shares, for a period of 180 days following the date of the final prospectus, subject to customary exceptions.
B. Transactions Involving Kestrel Capital Partners AG
1. Investor Rights and Board Nomination Arrangements
Our review has identified an Investor Rights Letter dated June 15, 2017 (the "Kestrel Letter Agreement") between Halcyon and Kestrel, executed in connection with Kestrel's original acquisition of its stake in the Company. The Kestrel Letter Agreement provides for the following rights:
(a) Board Nomination Right. Kestrel has the right to nominate one member to the Company's Aufsichtsrat for so long as Kestrel holds at least 7.5% of the Company's outstanding ordinary shares. As noted above, Kestrel has exercised this right by nominating Dr. Tobias Brenner, who has served on the Aufsichtsrat since 2018. Following the offering, Kestrel's ownership is expected to be approximately 6.8%, which is below the 7.5% threshold. Accordingly, Kestrel's board nomination right would lapse following the offering (assuming no exercise of the underwriters' over-allotment option or subsequent share purchases by Kestrel). We note, however, that the Kestrel Letter Agreement includes a 12-month grace period following a reduction in Kestrel's holdings below the 7.5% threshold, during which Kestrel retains the nomination right. This means Dr. Brenner may continue to serve on the Aufsichtsrat for up to 12 months following the offering, even if Kestrel's stake falls below 7.5%.
(b) Information Rights. Kestrel has the right to receive quarterly financial reports and other information from the Company, to the extent not otherwise publicly available, subject to customary confidentiality restrictions. These information rights are expected to terminate upon the completion of the offering, pursuant to a termination provision tied to the Company's listing on a national securities exchange.
(c) Anti-Dilution and Preemptive Rights. The Kestrel Letter Agreement includes a contractual preemptive right entitling Kestrel to participate in future equity issuances on a pro rata basis. This preemptive right is in addition to the statutory preemptive rights (Bezugsrecht) available under AktG § 186. The contractual preemptive right terminates upon the completion of the offering.
(d) Consent Rights. The Kestrel Letter Agreement includes a limited consent right requiring the Company to obtain Kestrel's prior written consent before entering into any transaction that would result in a change of control or sale of substantially all of the Company's assets. This consent right terminates upon the completion of the offering.
The Kestrel Letter Agreement is a related-party arrangement that requires prospectus disclosure. The material terms of the agreement, including the board nomination right, information rights, preemptive rights, and consent rights, should be described in the "Related Party Transactions" section of the prospectus. The prospectus should also note the expected termination of certain rights upon completion of the offering and the 12-month grace period for the board nomination right.
2. Selling Shareholder Arrangements
Kestrel is expected to sell approximately 4,300,000 existing ordinary shares (representing 2,150,000 ADSs) in the offering. The arrangements between Kestrel and the Company in connection with the offering mirror those described for Rheintal in Section III.A.4 above:
Registration Rights. Kestrel is expected to be a party to the Registration Rights Agreement described in Section III.A.4, with rights substantively similar to those granted to Rheintal (demand registration rights, piggyback rights, and shelf registration rights).
Expense Reimbursement. The Company has agreed to reimburse Kestrel for reasonable documented out-of-pocket expenses incurred in connection with the offering, up to a cap of €350,000.
Indemnification. Kestrel will receive customary cross-indemnification provisions in the Registration Rights Agreement.
Lock-Up Agreement. Kestrel will enter into a 180-day lock-up agreement with Westbridge Securities LLC on terms substantially identical to the Rheintal lock-up described above.
C. Transactions Involving Key Management Personnel
1. Executive Compensation Arrangements
Each of the five Vorstand members has entered into a management service agreement (Vorstandsvertrag) with the Company, approved by the Aufsichtsrat (through its compensation committee) in accordance with AktG § 84. The compensation arrangements include fixed base salary, variable annual bonus (tied to the achievement of financial and non-financial performance targets), long-term incentive plan ("LTIP") awards (consisting of performance stock units granted under the Company's 2022 Long-Term Incentive Plan), pension contributions (under the Company's defined contribution pension plan), and other benefits (including company car, housing allowance for Ms. Dalmqvist, and supplemental health insurance).
The aggregate compensation of the Vorstand members, as disclosed in the Company's corporate governance reports and IAS 24 notes, was as follows:
We note that a separate Due Diligence Memorandum — Employee Benefit Plans and Compensation is being prepared by the Calderwood & Harkness benefits team (Graham Templeton, Senior Associate) and will address the compensation arrangements in detail, including individual-level compensation disclosure, the terms of the LTIP, pension plan design, and severance and change-of-control provisions. This memorandum addresses the compensation arrangements only to the extent necessary to identify them as related-party transactions and assess the associated disclosure requirements.
Particular Attention: Dr. Friedrich Wendt's Compensation. Given the Rheintal/Wendt family connection, Dr. Wendt's individual compensation is likely to attract heightened scrutiny from the SEC staff and from public investors. The prospectus should disclose Dr. Wendt's individual compensation in sufficient detail to allow investors to assess whether his compensation is influenced by the Rheintal relationship. Based on the Company's records, Dr. Wendt's individual compensation for FY2024 was approximately €3,250,000 (consisting of €1,100,000 fixed base salary, €975,000 variable bonus, €1,050,000 LTIP awards at grant-date fair value, and €125,000 in pension contributions and other benefits). We have not identified any evidence that Dr. Wendt's compensation is materially higher than that of CEOs of comparable European semiconductor companies, but this assessment should be confirmed by the Company's compensation consultant (Seraphim Advisory Partners GmbH).
2. Loans to or from Officers and Directors
We have conducted a review of the Company's records and related-party questionnaire responses to determine whether any loans, advances, or guarantees exist between the Company and any Vorstand or Aufsichtsrat member.
Current Status. Based on the information reviewed to date, we have not identified any outstanding loans from the Company to any Vorstand or Aufsichtsrat member, or vice versa. The Company's General Counsel, Mr. Ostermann, has represented orally that no such loans exist and that the Company's internal policy prohibits personal loans to Vorstand or Aufsichtsrat members. However, we have not yet received written confirmation from all Vorstand and Aufsichtsrat members on this point. This is a critical open item.
Sarbanes-Oxley Section 402. Section 402 of the Sarbanes-Oxley Act of 2002 prohibits an SEC-reporting issuer from, directly or indirectly, extending or maintaining credit, arranging for the extension of credit, or renewing an extension of credit in the form of a personal loan to or for any director or executive officer. This prohibition applies to Halcyon upon the effectiveness of the Form F-1 registration statement. It is imperative that the Company confirm, in writing, that no prohibited loan arrangements exist or will exist at the time of effectiveness. If any such arrangements are identified, they must be unwound or restructured prior to effectiveness.
German Law. AktG § 89 restricts the extension of credit by a stock corporation to members of its Vorstand. Any such credit extension requires the prior consent of the Aufsichtsrat and must comply with specified terms and conditions. The restriction also applies to credit extended to family members of Vorstand members and to third parties acting for the account of a Vorstand member. We are not aware of any credit extensions that would implicate § 89, but we have asked Bähr Stein Rechtsanwälte to confirm this independently based on their review of the Company's records.
Recommendation. We strongly recommend that written confirmations be obtained from each Vorstand and Aufsichtsrat member confirming the absence of any loans, advances, guarantees, or other credit arrangements with the Company. These confirmations should be obtained no later than March 1, 2026, in advance of the first draft F-1 circulation target.
3. Dr. Marcus Helder — Co-Founder Arrangements
Dr. Marcus Helder co-founded Halcyon in 1997, together with Prof. Dr. Karl-Heinz Brückner (now retired and no longer a shareholder or related party). In connection with the founding of the Company, Dr. Helder assigned certain intellectual property to the Company. The following arrangements relating to Dr. Helder's co-founder status have been identified:
(a) intellectual Property Assignment Agreement. Dr. Helder entered into an intellectual Property Assignment Agreement (Vereinbarung über die Übertragung geistigen Eigentums) with the Company dated March 15, 1997 (the "IP Assignment Agreement"), pursuant to which he assigned to the Company all of his right, title, and interest in certain patents and patent applications relating to silicon carbide crystal growth technology developed by Dr. Helder during his doctoral research at ETH Glenrock Assurance. The IP Assignment Agreement was entered into for consideration of 500,000 ordinary shares of the Company (representing approximately 5% of the then-outstanding share capital), which have since been diluted to a significantly smaller percentage. The IP Assignment Agreement includes a perpetual, irrevocable, worldwide assignment, with no retained licenses or reversion rights in favor of Dr. Helder. We have reviewed the IP Assignment Agreement and confirmed with the Company's patent counsel (Kröger & Winterfeld, Munich) that the assignment appears to be effective and complete.
(b) Founder's Share Right. The Company's Satzung does not include any founder shares (Gründeraktien) or founder-specific economic rights. Dr. Helder's ordinary shares rank pari passu with all other ordinary shares of the Company. We have not identified any side letter, supplemental agreement, or unwritten understanding granting Dr. Helder any special economic rights, priority in distributions, enhanced voting rights, or other preferential treatment.
(c) Post-Employment IP Licensing. We have confirmed that Dr. Helder has not licensed any intellectual property to the Company on a personal basis outside of the IP Assignment Agreement. All IP developed by Dr. Helder in his capacity as a Vorstand member and employee of the Company is owned by the Company pursuant to the IP Assignment Agreement, Dr. Helder's Vorstandsvertrag, and applicable German employment invention law (Gesetz über Arbeitnehmererfindungen). We note that, as a Vorstand member, Dr. Helder is not technically an "employee" under the Arbeitnehmererfindungsgesetz, but his Vorstandsvertrag includes an express IP assignment provision that achieves the same result contractually.
Disclosure Obligation. The IP Assignment Agreement is a historical transaction that should be disclosed in the prospectus as part of the description of the Company's intellectual property and in the "Related Party Transactions" section, given that it was entered into between the Company and a current member of key management personnel. The consideration (500,000 ordinary shares) should be disclosed, together with a description of the nature of the assigned IP.
4. ESOT Participation
All five Vorstand members are eligible beneficiaries of the Halcyon Employee Stock Ownership Trust. Based on the Company's records, the following ESOT awards are currently outstanding for Vorstand members:
These awards were granted under the Company's ESOT at prices determined by independent valuation at the time of each grant. The aggregate fair value of the Vorstand members' ESOT awards at the time of grant was approximately €4.8 million. The ESOT participation of Vorstand members constitutes a related-party transaction requiring disclosure under IAS 24 and Item 7.B of Form 20-F. Detailed disclosure of the ESOT terms and the Vorstand members' participation will be included in the separate Due Diligence Memorandum — Employee Benefit Plans and Compensation.
D. Supervisory Board Member Interlocks and Other Directorships
1. Prof. Dr. Anneliese Voss — Independence Analysis
Prof. Dr. Anneliese Voss has served as Chair of the Aufsichtsrat since 2020 and as a member since 2018. Based on our review, Prof. Dr. Voss meets the independence requirements applicable to the Company's listing under the following standards:
(a) Nasdaq Rule 5605(a)(2). An independent director is one who, in the opinion of the board of directors, has no relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Prof. Dr. Voss has no material business relationship with the Company, is not employed by or affiliated with any entity that is a material customer, supplier, or business partner of the Company, and has no family relationship with any member of the Vorstand or any significant shareholder.
(b) Exchange Act Rule 10A-3. Prof. Dr. Voss is not an affiliated person of the Company (other than in her capacity as a director), does not accept any consulting, advisory, or other compensatory fee from the Company (other than Aufsichtsrat compensation), and is not an affiliated person of any subsidiary of the Company. She qualifies as independent under Rule 10A-3 for purposes of audit committee membership.
(c) German Corporate Governance Code (DCGK 2022). Prof. Dr. Voss meets the independence criteria set forth in Section C.6 of the DCGK 2022, including the requirement that an independent Aufsichtsrat member have no personal or business relationship with the Company, its management, or a controlling shareholder that could create a material conflict of interest.
We have confirmed that Prof. Dr. Voss's other board positions — at Freiburg Energy Systems AG and Karlsruhe Photonics GmbH — do not create any material interlock with Halcyon. Neither entity is a customer, supplier, competitor, or business partner of the Company. Prof. Dr. Voss's Aufsichtsrat compensation for FY2024 was approximately €185,000 (consisting of fixed annual fee plus committee chair supplements).
2. Other Supervisory Board Members — Cross-Directorships
As described in Section II.C above, we have identified the following cross-directorships and interlocks for the shareholder representatives on the Aufsichtsrat:
(a) Dr. Tobias Brenner — Kestrel Capital Partners AG / Euroflux Semiconductor S.A. Dr. Brenner serves as Managing Director of Kestrel Capital Partners AG and also serves on the board of Euroflux Semiconductor S.A. (Luxembourg), a competitor of Halcyon in the European power semiconductor market. This dual interlock raises the following issues:
• Kestrel Interlock. Dr. Brenner's presence on the Aufsichtsrat, as a representative of the Company's second-largest shareholder, creates an interlock that establishes Kestrel's significant influence over the Company (see Section II.A.2 above). This interlock must be disclosed in the prospectus.
• Euroflux Interlock. Dr. Brenner's concurrent service on the board of a competitor raises potential conflict-of-interest issues. While Dr. Brenner has represented (through Kestrel's counsel) that he does not share confidential information between the two companies, the interlock is unusual and should be prominently disclosed. We recommend that the Company consider whether Dr. Brenner should be subject to enhanced information barriers or, alternatively, whether he should step down from the Euroflux board prior to the IPO.
• Disclosure. The Kestrel and Euroflux interlocks should be disclosed in the Aufsichtsrat member biographies, in the "Related Party Transactions" section, and potentially in the "Risk Factors" section.
(b) Margarethe Wendt — Rheintal Industrieholding GmbH. As discussed extensively above, Ms. Wendt's dual role as Aufsichtsrat member and Managing Director of Rheintal, combined with her family relationship to the CEO, is the most significant interlock identified. No additional cross-directorships have been identified for Ms. Wendt.
(c) Jürgen Kaltmeyer — Oberhausen Automotive GmbH. Mr. Kaltmeyer serves as non-executive Chairman of the supervisory board of Oberhausen Automotive GmbH, which is a customer of the Company. Oberhausen Automotive purchased approximately €8.2 million of power semi