What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2026-04-01 compared with 2025-04-17 · 142 added, 158 removed, 105 unchanged (74% of the section changed)

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Market for Ordinary Shares

Our Ordinary Shares are quoted on OTCQB under the symbol “SEVCF”.

Because our Ordinary Shares are quoted on the OTCQB, our Ordinary Shares may be less liquid, receive less coverage by security analysts and news media and generate lower prices than might otherwise be obtained if they were listed on a national securities exchange.

Further, quotations on the OTCQB reflect inter-dealer prices, without retail mark-up, markdown or commission and may not reflect actual transactions.

Our Ordinary Shares are listed on the Nasdaq Stock Market LLC, and commenced trading on the Nasdaq Capital Market under the symbol “SSM” on September 5, 2025.

From November 17, 2021 through February 25, 2024, our Ordinary Shares were listed on the Nasdaq Global Market under the symbol “SEV.” On July 21, 2023, trading of our Ordinary Shares on the Nasdaq Global Market was suspended.

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Nasdaq filed a Form 25 Notification of Delisting with the SEC on February 15, 2023 to complete the delisting.

On July 2, 2024 our Ordinary Shares commenced quoting on OTCQB under the ticker symbol “SEVCF” and continued to be quoted on OTCQB until September 5, 2025 when our Ordinary Shares commenced trading on the Nasdaq Capital Market as described above.

Record Holders

As of March 6, 2025, there were 18 holders of record of our Ordinary Shares, one of which was Cede & Co., a nominee for Depository Trust Company (“DTC”), and one holder of record of our High Voting Shares.

As of March 25, 2026, there were 15 holders of record of our Ordinary Shares, one of which was Cede & Co., a nominee for Depository Trust Company (“DTC”), one holder of record of our High Voting Shares and one holder of record of our Preferred Shares.

Ordinary Shares that are held by financial institutions as nominees for beneficial owners or in “street name” are deposited into participant accounts at DTC and are considered to be held of record by Cede & Co.

as one shareholder.

We have never paid or declared any cash dividends on our Ordinary Shares in the past, and we do not anticipate paying any cash dividends on our Ordinary Shares in the foreseeable future.

To date, we have not paid any dividends on our shares, and we do not anticipate paying any cash dividends on our shares in the foreseeable future.

We intend to retain all available funds and any future earnings to fund the development and expansion of our business.

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Subject to such restrictions, any future determination to pay dividends or other distributions from our reserves will be at the discretion of our management board with the approval of our supervisory board and will depend upon a number of factors, including our results of operations, financial condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors our management board and supervisory board deem relevant.

Securities Authorized for Issuance under Equity Compensation Plans

See Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters , of Part III of this Annual Report for information relating to securities authorized for issuance under our equity compensation plans.

Recent Sales of Unregistered Securities

During the fiscal year ended December 31, 2024, the Company issued the following unregistered securities:

Convertible Debenture SEV-4:

Issuance Date:

February 5, 2024.

Type of Securities:

Secured Convertible Debenture.

Principal Amount:

YA II PN, Ltd.

Consideration Received:

$4,317,600 in cash.

Exemption from Registration:

The securities were issued in reliance upon an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D promulgated thereunder.

The exemption was based on the purchaser being an accredited investor and the transaction not involving a public offering.

Terms of Conversion:

At any time after the issuance date, the holder may convert any portion of the outstanding and unpaid principal and/or accrued interest (the “Conversion Amount”) into Ordinary Shares at a rate (the “Conversion Rate”) equal to the Conversion Amount divided by the lower of (x) the Fixed Conversion Price or (y) the Variable Conversion Price;

provided, that the Variable Conversion Price may not be lower than (i) a price equal to 20% of the closing price of the Ordinary Shares on the trading day immediately prior to the issuance date of the debenture (the “Debenture Floor Price”) and (ii) the nominal value of one Ordinary Share.

Convertible Debenture SEV-5:

Issuance Date:

August 30, 2024.

Type of Securities:

Secured Convertible Debenture.

Principal Amount:

YA II PN, Ltd.

Consideration Received:

$3,338,100 in cash.

Exemption from Registration:

Similar to the February issuance above, this debenture was issued pursuant to an exemption provided under Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D promulgated thereunder.

The purchaser qualified as an accredited investor, and no general solicitation or public advertising was involved in connection with this issuance.

Terms of Conversion:

At any time after the issuance date, the holder may convert any portion of the Conversion Amount into Ordinary Shares at the Conversion Rate, which is equal to the Conversion Amount divided by the lower of (x) the Fixed Conversion Price or (y) the Variable Conversion Price;

provided, that the Variable Conversion Price may not be lower than (i) the Debenture Floor Price and (ii) the nominal value of one Ordinary Share.

Please refer to our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC for information regarding our sales of unregistered securities during the fiscal year ended December 31, 2025.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

In connection with the Yorkville Restructuring Investment, the Founders entered into respective Sale and Transfer Agreements, pursuant to which they agreed to cumulatively transfer 17,306,251 Ordinary Shares and all of their cumulative 3,000,000 High Voting Shares to SVSE, whose sole member is George O’Leary, the Company’s Chief Executive Officer and sole Managing Director.

The transfers of the High Voting Shares and the Ordinary Shares to SVSE were reflected in the Company’s share register on February 1, 2024 and March 25, 2024, respectively.

We did not repurchase any of our equity securities during the fourth quarter of the fiscal year ended December 31, 2025, and no repurchases were made on our behalf by any affiliated purchaser.

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations.

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This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties, as well as assumptions, that if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements.

Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “ Risk Factors ” and in other parts of this Annual Report.

We are a technology company focused on the development and commercialization of solar integration solutions for commercial vehicles.

Our proprietary solar charge controller (MCU) technology enables the seamless integration of solar energy into high- and low-voltage vehicle architectures, reducing fuel consumption and emissions for diesel-powered vehicles and extending battery life for electric vehicles.

Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “ Cautionary Note Regarding Forward-Looking Statements ” and “ Risk Factors ” and in other parts of this Annual Report.

For the year ended December 31, 2025, we were a technology company focused on the development and commercialization of solar integration solutions for commercial vehicles.

Our proprietary solar charge controller (MCU) technology enabled the seamless integration of solar energy into high- and low-voltage vehicle architectures, reducing fuel consumption and emissions for diesel-powered vehicles and extending battery life for electric vehicles.

Subsequent to December 31, 2025, the Company adopted the Treasury Strategy and initiated an exit from its legacy solar operations.

Our product portfolio includes complete solar solutions for refrigerated trailers, electric buses, commercial vans and trucks, as well as standalone components, such as solar charge controllers (MCUs) and solar modules.

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Historically, we have incurred operating losses since our inception;

however, in 2024, we recorded an operating profit due to the impact of revaluation gains following the reconsolidation of our operating subsidiary after the termination of the Self-Administration Proceedings in early 2024.

This one-time accounting impact significantly influenced our reported net income for the year ending December 31, 2024.

Excluding this effect, our core operations remain in an investment and scaling phase, and we expect to continue incurring operating losses going forward as we expand our product offerings, scale production and establish strategic partnerships.

As of December 31, 2024, we had cash and cash equivalents of €1.4 million, and we anticipate that our current funding arrangements, including the Yorkville Commitment and the Debt Conversion, if we are able to successfully satisfy the conditions precedent thereto, will be sufficient to support our business operations through the first quarter of 2026.

However, we will have to either secure a sufficient number of future customer contracts or secure additional financing to execute our long-term growth strategy, and our ability to secure such funding will depend on, among other things, market conditions, operational milestones and investor confidence.

We operate as a single business segment, managing our financing, research and development and product commercialization on a consolidated basis.

however, in 2024, we recorded an operating profit due to the impact of revaluation gains following the reconsolidation of Sono Motors GmbH after the termination of the Self-Administration Proceedings in early 2024.

This one-time accounting impact significantly influenced our reported net income for the year ended December 31, 2024.

In 2025, we recorded an operating loss of €7.7 million, although our net income for the same period was positive and amounted to €4.0 million, primarily due to recorded gains in the fair value of convertible debentures carried at fair value.

Subsequent to December 31, 2025, we implemented a series of actions that we believe fundamentally alter our cost structure and liquidity profile on a going-forward basis.

In March 2026, we raised gross proceeds of approximately $5.0 million, consisting of a $3.0 million convertible debenture and a pre-funded warrant issued in a private placement for aggregate proceeds of approximately $2.0 million, adopted our Treasury Strategy and entered into an institutional framework with Blockchain.com (BVI) II Limited in the form of the ISDA Master Agreement and the related Schedule and Credit Support Annex, to facilitate related derivative and hedging transactions in connection with our digital asset holdings, and terminated current and future funding commitments to the Subsidiary (Sono Motors GmbH) and initiated our exit from the legacy solar operations conducted through the Subsidiary, which is expected to materially reduce the Company’s ongoing cash outflows.

Management believes these actions, taken together, may provide sufficient resources to fund our streamlined operating plan for at least twelve months from the date the financial statements are issued.

However, our ability to maintain adequate liquidity remains subject to significant uncertainties, including the price volatility and liquidity characteristics of digital assets, the potential collateral requirements under our Treasury Strategy, the timing and costs associated with exiting our legacy solar operations, which we are currently unable to estimate, and the maturity of our outstanding convertible debenture in March 2027.

See “ Liquidity Outlook and Ability to Continue as a Going Concern ” below.

As of December 31, 2025, we operated as a single business segment, managing our financing, research and development and product commercialization on a consolidated basis.

Our financial results reflect a transition from pre-revenue technology development to commercial-scale implementation, and we expect continued volatility as we scale operations.

Subsequent to December 31, 2025, we determined in the first quarter of fiscal 2026 to adopt the Treasury Strategy and exit our legacy solar business, as described above.

See “— Recent Developments ” below for additional information.

Components of our Results of Operations

We have not yet generated material revenue from our solar technology solutions.

Historically, our revenue has been derived primarily from prototype sales and pilot installations of our solar retrofit solutions, including the Solar Bus Kit.

In 2024, we expanded our product offerings to include additional commercial vehicle categories, such as trucks, refrigerated trailers and electric vans.

While these developments position us for potential future revenue growth, we expect revenue generation to remain limited in the near term as we focus on finalizing product developments, securing large-scale partnerships with OEMs and fleet operators and ramping up commercial deployments.

Given our transition to an asset-light business model, revenue growth will depend on our ability to successfully scale our solar technology offerings through direct sales and strategic partnerships.

Additionally, regulatory approvals and customer adoption rates will play a critical role in the timing and magnitude of revenue recognition in the coming years.

We anticipate that revenue fluctuations may occur as we move from initial pilot programs toward broader commercialization.

While we anticipate an increase in revenue as adoption of our solar solutions expands, our future revenue growth is subject to factors including successful commercialization of our technology, scaling production, obtaining additional regulatory approvals and securing long-term contracts with OEMs and fleet operators.

Additionally, revenue growth may be affected by macroeconomic conditions, supply chain constraints and shifts in government incentives for renewable energy technologies.

Our expected revenue streams include the sale of complete solar solutions, standalone solar products such as solar modules and solar charge controllers, as well as data services and engineering services that support OEM integration and fleet adoption.

Our revenue recognition follows standard contract-based policies, with revenue recognized upon delivery of products or completion of contractual obligations.

Historically, our revenue has been derived primarily from prototype sales and pilot installations of our solar retrofit solutions, including the Solar Bus Kit, across commercial vehicle categories such as buses, trucks, refrigerated trailers and electric vans.

We have not generated material revenue from our solar technology solutions to date, and revenue for the year ended December 31, 2025 remained limited, reflecting the early-stage nature of our commercial deployments.

Subsequent to December 31, 2025, following our adoption of the Treasury Strategy and the initiation of our exit from legacy solar operations, we do not expect to generate revenue from solar technology activities in future periods.

Going forward, the Company's financial performance will depend principally on the cash flows generated through the Treasury Strategy rather than product or service revenues.

Cost of Sales

For the year ended December 31, 2024, we did not record any cost of sales, as we are still in the early commercialization phase of our solar technology.

Historically, our cost of sales has been minimal, reflecting the limited revenue generation from prototype projects and early-stage product deployments.

As we scale production and move toward broader commercialization, we expect cost of sales to increase in line with higher manufacturing volumes, supply chain expenditures and product fulfillment costs.

For the year ended December 31, 2025, we incurred limited cost of sales, reflecting the limited initial revenue generation from prototype projects and early-stage product deployments.

Our cost of sales consisted mostly of material costs and personnel expenses.

Subsequent to December 31, 2025, following our adoption of the Treasury Strategy and the initiation of our exit from legacy solar operations, we do not expect to incur any cost of sales in future periods.

Research and Development Expenses

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Development costs are expensed as incurred, as the recognition criteria for capitalization have not been met.

In 2024, research and development expenses declined as we shifted from early-stage development to commercialization.

We intend to focus future investments on optimizing our solar charge controller technology, enhancing solar integration efficiency and supporting OEM partnerships.

Selling, General and Administrative Expenses

We recognize selling, general and administrative expenses (“SG&A”) on an accrual basis when incurred.

These expenses primarily include employee compensation, consultant and professional service fees, legal and compliance costs, marketing and promotional activities, intellectual property-related expenses and general overhead costs.

As we continue to scale our operations and expand our market presence, we anticipate SG&A expenses to reflect investments in business development, commercialization efforts and strategic partnerships.

Additionally, as a public company, we expect continued costs related to regulatory compliance, financial reporting and investor relations.

In 2025, research and development expenses increased, reflecting our technology optimization efforts as well as efforts directed on establishing long-term partnerships and collaborations with OEMs.

Subsequent to December 31, 2025, following our adoption of the Treasury Strategy and the initiation of our exit from legacy solar operations, we do not expect to incur any research and development expenses in future periods

Selling and Distribution Expenses

We recognize selling and distribution expenses on an accrual basis when incurred.

These expenses primarily include personnel expenses associated with our sales and business development functions, advertising and marketing costs incurred in connection with promoting our solar technology solutions and establishing new commercial partnerships, and other selling-related costs.

Subsequent to December 31, 2025, following our adoption of the Treasury Strategy and the initiation of our exit from legacy solar operations, we anticipate selling and distribution expenses to decrease significantly in future periods as commercial activities associated with our solar technology business are wound down.

General and Administrative Expenses

We recognize general and administrative expenses on an accrual basis when incurred.

These expenses primarily include professional fees (comprising consultant, legal, audit and compliance costs), personnel costs, insurance, software fees and subscriptions, and other general overhead costs.

As a public company listed on the Nasdaq Capital Market, we also incur ongoing costs related to regulatory compliance, financial reporting, investor relations and corporate governance.

We anticipate general and administrative expenses to continue to reflect the costs associated with maintaining our public company infrastructure and supporting our broader operational and strategic objectives.

Other Operating Income/Expenses

Other operating income primarily includes government grants, reimbursements for personnel expenses and any non-recurring income.

Other operating income primarily includes government grants and any non-recurring income.

Other operating expenses mainly consist of foreign exchange losses from currency conversions and other non-operating costs.

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While this gain had a significant positive effect on our reported 2024 operating results, it does not reflect ongoing business operations or recurring profitability.

We expect that our future financial performance will be driven by commercialization of our solar solutions, expansion of OEM partnerships and disciplined cost management.

We expect that our future financial performance will depend principally on the cash flows generated through the Treasury Strategy.

In line with these expectations there was no gain from reconsolidation recorded for the fiscal year ended December 31, 2025.

Interest and Similar Expenses

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For the year ended

(in € millions)

(in € thousands)

Cost of sales

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Research and development

Gain (Loss) on reconsolidation/deconsolidation

Gain on reconsolidation

Other operating income

Operating income / (loss)

Operating (loss) / income

Other income / (expense)

Income/(expense) from changes in fair value of convertible debt carried at fair value

(Loss) / Gain on foreign currency translation

Gain / (Loss) before tax

Taxes on income and earnings

Deferred taxes on expense

Gain / (Loss) for the period

Other comprehensive income (loss) that will not be reclassified to profit or loss

Total comprehensive income / (loss) for the period

For the year ended December 31, 2024, we recorded no revenue, while for the year ended December 31, 2023, we recorded revenue of €42 thousand.

Income from changes in fair value of convertible debt carried at fair value

Gain / (loss) on foreign currency translation

For the year ended December 31, 2025, we recorded €149 thousand of revenue, while for the year ended December 31, 2024, we recorded no revenue.

Our focus during these periods was on refining our solar technology, obtaining regulatory approvals and securing strategic partnerships.

While we have successfully developed and tested our ViPV solutions and solar charge controllers, commercial-scale adoption and revenue generation are expected to begin in future periods as we transition from pilot projects to broader market deployment.

While we have successfully developed and tested our ViPV solutions and solar charge controllers, commercial-scale adoption and revenue generation are expected to develop and evolve in future periods as we transition from pilot projects to broader market deployment.

Cost of Sales

For the year ended December 31, 2024, we recorded no cost of sales, as we did not generate revenue during this period.

For the year ended December 31, 2025, we recorded cost of sales in the amount of €92 thousand.

For the year ended December 31, 2024, we recorded no cost of sales, as we did not generate revenue during this period.

Research and Development Expenses

For the year ended December 31, 2024, cost of development expenses decreased to approximately €1.1 million from €16.1 million for the year ended December 31, 2023.

The decrease primarily reflects the completion of major development efforts in prior years, allowing us to focus on specific improvements and refinements to our solar technology.

In contrast, 2023 development expenses included costs associated with transitioning from the Sion passenger car program to capital-light solar technology business.

Selling, General, and Administrative Expenses (SG&A)

For the year ended December 31, 2024, SG&A expenses totaled approximately €5.3 million, compared to €14.3 million for the year ended December 31, 2023.

The decrease primarily reflects the impact of prior restructuring efforts and cost reductions following the Self-Administration Proceedings.

The largest components of SG&A expenses in 2024 were payroll and social contributions, and legal, audit and other advisory services.

In comparison, 2023 SG&A expenses included costs associated with the transition to a solar-only business model and expenses related to the restructuring process.

For the year ended December 31, 2025, cost of development expenses increased to approximately €1,817 thousand from €1,118 thousand for the year ended December 31, 2024, representing a growth of 63%.

The increase primarily reflects our technology optimization efforts, efforts directed on establishing long-term partnerships and collaborations with OEMs, as well as specific improvements and refinements to our solar technology.

Selling and Distribution Expenses

For the year ended December 31, 2025, Selling and Distribution expenses amounted to €877 thousand, compared to €678 thousand for the year ended December 31, 2024, representing a growth of 29%.

The increase is primarily attributable to higher personnel expenses of €128 thousand, reflecting the expansion of our commercialization efforts, as well as an increase in advertising and marketing costs of €53 thousand driven by our expanded efforts to establish new partnerships and pursue new project opportunities.

General, and Administrative Expenses (G&A)

For the year ended December 31, 2025, G&A expenses totaled approximately €5,073 thousand, compared to €4,648 thousand for the year ended December 31, 2024, representing an increase of 9%.

The increase was primarily driven by a growth in professional fees and software fees and subscriptions.

The largest components of G&A expenses in 2025 were payroll and social contributions, and legal, audit and other advisory services, similar to our 2024 G&A expenses structure.

Other Operating Income/Expenses

For the year ended December 31, 2024, other operating income and other operating expenses resulted in a net balance of approximately €0.4.

For the year ended December 31, 2023, other operating income and expenses resulted in a net balance of approximately €1.0 million.

Gain (Loss) on deconsolidation/reconsolidation

For the year ended December 31, 2025, other operating income and other operating expenses resulted in a net balance of approximately €13 thousand.

For the year ended December 31, 2024, other operating income and expenses resulted in a net balance of approximately €398 thousand.

The decrease of approximately €385 thousand, or 97%, was primarily attributable to a significant reduction in government grants recognized during 2025 compared to 2024, which had been a principal contributor to other operating income in the prior year.

Gain (Loss) on reconsolidation

For the year ended December 31, 2025, there was no gain or loss recorded in connection with the reconsolidation of the Subsidiary, since the reconsolidation was finalized in 2024.

For the year ended December 31, 2024, we recognized a gain of approximately €62.6 million in connection with the reconsolidation of the Subsidiary following its exit from its Self-Administration Proceedings.

This gain primarily reflects the extinguishment of certain liabilities and the re-recognition of net assets upon regaining control of the Subsidiary.

For the year ended December 31, 2023, we recorded a deconsolidation loss of €21.8 million following the loss of control of the Subsidiary on May 19, 2023, triggered by the opening of the former Self-Administration Proceedings and the appointment of a preliminary court-appointed custodian (vorläufiger Sachwalter ).

As a result, the Company derecognized the assets and liabilities of the Subsidiary from its consolidated statement of financial position, leading to significant movements in both assets and liabilities and a resulting gain.

Income/(expense) from changes in fair value of convertible notes payable carried at fair value

For the year ended December 31, 2024, we recognized a gain of approximately €8.9 million from the fair value measurement of financial liabilities.

This gain primarily reflected the extinguishment of certain liabilities and the re-recognition of net assets upon regaining control of the Subsidiary.

Income from changes in fair value of convertible notes payable carried at fair value

For the year ended December 31, 2025, we recorded a gain of approximately €11,108 thousand from the fair value measurement of financial liabilities.

This gain primarily relates to the revaluation of convertible debentures issued in connection with our financing arrangements, which are accounted for at fair value through profit or loss under U.S.

For the year ended December 31, 2023, we recorded a gain of approximately €5.4 million from the revaluation of convertible debentures under the same fair value accounting treatment.

For the year ended December 31, 2024, we recognized a gain of approximately €8,923 thousand from the fair value measurement of financial liabilities.

This gain primarily relates to the revaluation of convertible debentures issued in connection with our financing arrangements, which are accounted for at fair value through profit or loss under U.S.

Gain (Loss) on Foreign Currency Translation

For the year ended December 31, 2024, we recorded a foreign currency translation loss of approximately €0.4 million, primarily resulting from unfavorable exchange rate movements impacting Euro-denominated balances.

We recognized a net gain from foreign currency translation of approximately €0.2 million for the year ended December 31, 2023.

For the year ended December 31, 2024, we reported net income of €65.0 million, marking a significant shift from the net loss of €45.6 million recorded for the year ended December 31, 2023.

This increase in net income was primarily driven by the €62.6 million reconsolidation gain recognized upon regaining control of our Subsidiary after the completion of its Self-Administration Proceedings.

Excluding this gain, we would have continued to report an operating loss, reflecting the early-stage nature of our business and ongoing investments in technology development, commercialization and operational scaling.

Looking ahead, we anticipate incurring operating losses in future periods as we continue to scale our operations, invest in research and development and expand our commercial footprint.

Our long-term financial performance will depend on successful commercialization of our ViPV solutions, revenue growth from OEM partnerships and standalone product sales and efficient cost management.

For the year ended December 31, 2025, we recorded a foreign currency translation gain of approximately €604 thousand, primarily resulting from favorable exchange rate movements impacting Euro-denominated balances.

We recognized a foreign currency translation loss of approximately €405 thousand for the year ended December 31, 2024.

For the year ended December 31, 2025, we reported net income of €4,015 thousand, marking a significant decrease from the net income of €65,026 thousand recorded for the year ended December 31, 2024.

While net income for the year ended December 31, 2024 was driven by the gain from the consolidation of the Subsidiary as well as by the income from changes in fair value of convertible debt carried at fair value, in the year ended December 31, 2025 we recorded no gains on reconsolidation and the net income for this period is attributed mostly to the income from changes in fair value of convertible debt carried at fair value.

For the year ended December 31, 2025, we reported an operating loss of €7,697 thousand, reflecting the early-stage nature of our business and investments in technology development, commercialization and operational scaling.

Looking ahead, subsequent to December 31, 2025, the Company adopted the Treasury Strategy and initiated an exit from its legacy solar operations.

As a result, we anticipate that future operating losses will be materially reduced compared to historical periods, as the primary source of our historical cash consumption has been eliminated.

Our long-term financial performance will depend on the successful implementation of the Treasury Strategy, the cash flows generated through our digital asset holdings, and efficient management of our streamlined holding company cost structure.

There can be no assurance that the Treasury Strategy will generate the anticipated returns or that additional financing will not be required.

See "Liquidity Outlook and Ability to Continue as a Going Concern" below and “Note 16 Subsequent Events” for additional information..

Liquidity and Capital Resources

As of December 31, 2024, our cash was €1.4 million, compared to €7.4 million as of December 31, 2023.

As of December 31, 2025, our cash was €206 thousand, compared to €1,354 thousand as of December 31, 2024.

Cash consists of cash in bank accounts.

We do not currently generate material revenue from operations and continue to incur operating expenses related to the commercialization of our solar technology, general and administrative functions and development activities.

Our liquidity position is highly dependent on external financing, including equity and equity-linked financings, debt instruments and strategic partnerships.

We have not generated material revenue from operations and we continue to incur operating expenses related to our holding company overhead and public company compliance costs.

Following the adoption of the Treasury Strategy and the cessation of funding to the Subsidiary (Sono Motors GmbH) in the first quarter of 2026, our liquidity position is principally dependent on the performance of our digital asset holdings and the cash flows generated through the Treasury Strategy, supplemented as necessary by external financing, including equity and equity-linked financings and debt instruments.

Sources and Uses of Liquidity

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During 2022, the Company sold to Berenberg a total of 8,748,433 Ordinary Shares for total gross proceeds of $17 million (€17 million).

The 2022 Convertible Debentures issued to Yorkville pursuant to the securities purchase agreement in December 2022 and subsequent amendment in 2024.

On December 7, 2022, the Company entered into a securities purchase agreement with Yorkville under which the Company agreed to sell and issue to Yorkville the 2022 Convertible Debentures in a gross aggregate principal amount of up to $31.1 million (€29.4 million).

The 2022 Debentures issued to Yorkville pursuant to the securities purchase agreement in December 2022 and subsequent issuances in 2024 and 2025.

On December 7, 2022, the Company entered into a securities purchase agreement with Yorkville under which the Company agreed to sell and issue to Yorkville the 2022 Debentures in a gross aggregate principal amount of up to $31.1 million (€29.4 million).

In the context of the former Self-Administration Proceedings and in connection with the First Commitment, the Companies entered into the Yorkville Investment Agreements with Yorkville in mid-November 2023, and on April 30, 2024, the Company and Yorkville entered into an amendment to the Funding Commitment Letter in connection with the Second Commitment.

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On December 30, 2024, the Company and Yorkville entered into the Securities Purchase Agreement, pursuant to which the Company agreed to sell and issue to Yorkville the New Commitment Debenture in the aggregate principal amount of $5 million.

On February 12, 2025, the Company and Yorkville entered into the First Omnibus Amendment, pursuant to which the parties agreed to modify the terms of the Securities Purchase Agreement to, among other things, provide for an immediate advance of $1,000,000 of the Yorkville Commitment in the form of the First Advance Debenture.

On March 25, 2025, the Company and Yorkville entered into the Third Omnibus Amendment, pursuant to which the parties agreed to modify the terms of the Securities Purchase Agreement to, among other things, provide for an immediate advance of $1 million of the Yorkville Commitment in the form of the Second Advance Debenture.

On December 30, 2024, the Company and Yorkville also entered into the Exchange Agreement, pursuant to which the Company agreed to issue, subject to the satisfaction of certain closing conditions, 1,242 Preferred Shares to Yorkville solely in exchange for the surrender and cancellation of all of the debentures held by Yorkville, including the 2022 Convertible Debentures, the 2024 Convertible Debentures, the New Commitment Debenture (if issued) and the Advance Debentures.

On December 30, 2024, the Company and Yorkville also entered into the Exchange Agreement, pursuant to which the Company agreed to issue, subject to the satisfaction of certain closing conditions, 1,242 Preferred Shares to Yorkville solely in exchange for the surrender and cancellation of all of the debentures held by Yorkville, which at that time included the 2022 Debentures, the 2024 Debentures and the New Commitment Debenture (if issued).

On April 24, 2025, the Company and Yorkville entered into the Fourth Omnibus Amendment to Transaction Documents, pursuant to which the parties agreed to modify the terms of the Securities Purchase Agreement to, among other things, provide for an immediate advance by Yorkville to the Company of $500,000 in the form of the Third Debenture.

On May 26, 2025, the Company and Yorkville entered into the Fifth Omnibus Amendment to Transaction Documents, pursuant to which the parties agreed to modify the terms of the Securities Purchase Agreement to, among other things, provide for an immediate advance by Yorkville to the Company of $750,000 in the form of the Fourth Debenture.

On August 6, 2025, the Company and Yorkville entered into the Eighth Omnibus Amendment to Transaction Documents, pursuant to which the parties agreed to modify the terms of the Securities Purchase Agreement to, among other things, provide for an immediate advance by Yorkville to the Company of $190,000 in the form of the Fifth Debenture.

On August 15, 2025, the Company and Yorkville entered into the Ninth Omnibus Amendment to Transaction Documents, pursuant to which the parties agreed to modify the terms of the Securities Purchase Agreement to, among other things, provide for an immediate advance by Yorkville to the Company of EUR300,000 ($350,540 at conversion rate of 1.1685) in the form of the Sixth Debenture.

On September 5, 2025, the Company and Yorkville entered into the Tenth Omnibus Amendment to Transaction Documents, pursuant to which the parties agreed to modify the terms of the Securities Purchase Agreement to, among other things, (1) increase the aggregate principal amount of the Debenture by an additional $2,200,000 for a total of $7,200,000, and (2) provide for an immediate advance by Yorkville to the Company of $3,409,460, which comprises of the remaining $1,209,460 of the original $5,000,000 commitment and the entirety of the additional $2,200,000 commitment, in the form of the Seventh Debenture.

Subsequent to the fiscal year ended December 31, 2025:

On January 26, 2026, the Company issued the Debenture SEV-8 to Yorkville in the aggregate principal amount of $600,000.

On February 19, 2026, the Company issued the Debenture SEV-9 to Yorkville in the aggregate principal amount of $750,000.

On March 10, 2026, the Company issued a pre-funded warrant to Yorkville to purchase up to 283,367 Ordinary Shares at an exercise price of €0.01 per share, for aggregate gross proceeds of approximately $2,000,004.29.

On March 10, 2026, the Company issued a convertible debenture to Yorkville in the aggregate principal amount of $3,000,000, maturing on March 10, 2027 (“Debenture SEV-10”).

Limited grant funding from government and public research institutions, supporting the development of our proprietary solar technology.

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Investment in commercialization efforts, including OEM partnerships and vehicle integration projects.

Future Capital Needs and Outlook

While our current funding structure, which is based on the receipt of the unfunded portion of the Yorkville Commitment and implementation of the Debt Conversion, if we are able to successfully satisfy the conditions precedent thereto, is expected to provide sufficient capital through the end of the first quarter of 2026, we will have to either secure a sufficient number of future customer contracts or secure additional external financing to support our scaling and commercialization efforts.

We are actively evaluating a mix of financing options, including:

Additional equity or debt financings, subject to market conditions.

Non-dilutive funding sources, such as government grants and strategic collaborations.

Revenue generation from sales of our solar solutions and engineering services, which we expect to ramp up over time.

Our future financing requirements will depend on many factors, including, among others:

the market’s willingness to adopt solar-powered mobility solutions;

our ability to successfully commercialize our proprietary solar technology in time or at all;

our ability to meet the initial listing requirements for admission of our Ordinary Shares to trading on the Nasdaq Capital Market;

our ability to develop installation processes and capabilities within our projected costs and timelines;

the costs of raw materials or certain products;

our ability to obtain or agree on acceptable terms and conditions on all or a significant portion of the government grants, loans and other incentives for which we may apply;

our ability to establish a network for aftersales customer service or otherwise successfully address the service and maintenance requirements of our customers;

any product liability or other lawsuits related to our products; and

the costs of operating as a public company.

If we are unable to secure additional funding on acceptable terms, we may be required to adjust our growth strategy, delay development projects or pursue alternative financing solutions.

Going Concern Considerations

We have historically relied on external financing to fund our operations, and as of December 31, 2024, we had cash of €1.4 million.

Based on our current operating plan and if we are able to successfully access the unfunded portion of the Yorkville Commitment and implement the Debt Conversion, we anticipate that our existing cash resources, together with the remaining unfunded portion of the Yorkville Commitment, will be sufficient to fund our business operations through the end of the first quarter of 2026.

However, our ability to continue as a going concern is dependent on the uplisting of our Ordinary Shares to the Nasdaq Capital Market, which we cannot guarantee will occur, and on our ability to either secure a sufficient number of future customer contracts or secure additional capital.

If we are unable to obtain sufficient funding, we may need to modify our operating plans, reduce costs or pursue alternative financing strategies.

Management continues to evaluate financing alternatives, and we remain confident in our ability to raise the necessary capital to execute our business plan, especially if we are able to satisfy the initial listing requirements of the Nasdaq Capital Market.

Based upon this uncertainty, our management has concluded that there is substantial doubt that the company will continue as a going concern.

The table below summarizes our cash flows (used in) from operating, investing and financing activities for the years ended December 31, 2024 and 2023.

Liquidity Outlook and Ability to Continue as a Going Concern

The Company has incurred recurring operating losses and negative cash flows from operations since inception, primarily attributable to the operations of its solar technology subsidiary, Sono Motors GmbH.

For the year ended December 31, 2025, the Company recorded a net operating loss of €7.7 million and negative operating cash flows of €7.3 million, and as of December 31, 2025 had an accumulated deficit of €317.4 million.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

Subsequent to December 31, 2025, the Company has implemented a series of actions intended to improve liquidity and reduce ongoing cash requirements.

These actions, which are more fully described in “ Item 17 – Subsequent Events ” of Part II, Item 8 of this Annual Report, included:

(i) raising gross proceeds of approximately $5.0 million in March 2026, consisting of a $3.0 million convertible debenture and a pre-funded warrant issued in a private placement for aggregate proceeds of approximately $2.0 million;

(ii) adopting the Treasury Strategy, and entering into an institutional framework with Blockchain.com (BVI) II Limited in the form of the ISDA Master Agreement and the related Schedule and Credit Support Annex, to facilitate related derivative and hedging transactions in connection with the Company’s digital asset holdings;

and (iii) terminating current and future funding commitments to the Subsidiary (Sono Motors GmbH) and initiating our exit from the legacy solar operations conducted through the Subsidiary, which is expected to materially reduce the Company’s ongoing cash outflows.

Management believes that these actions, taken together, may provide sufficient resources to fund the Company’s streamlined operating plan under the Treasury Strategy, consisting principally of holding company overhead and public company compliance costs, for at least twelve months from the date the financial statements are issued.

However, the Company’s ability to maintain adequate liquidity remains subject to significant uncertainties, including, among other things, the price volatility and liquidity characteristics of digital assets, the terms and potential collateral requirements of transactions entered into in connection with the Treasury Strategy, the timing and costs associated with exiting the legacy solar operations (which the Company is currently unable to estimate), and that the Company’s outstanding convertible debenture issued to Yorkville in the first quarter of fiscal 2026 will reach maturity in March 2027, which may require us to negotiate a refinancing or conversion of the debenture prior to or at maturity.

See “ Note 16 – Subsequent Events ” in Part II, Item 8 of this Annual Report for information regarding our financing arrangements with Yorkville subsequent to the fiscal year ended December 31, 2025.

The table below summarizes our cash flows provided by / (used in) operating, investing and financing activities for the years ended December 31, 2025 and 2024.

For the year ended December 31,

(in € millions)

Net cash used in operating activities

Net cash provided by / (used in) investing activities

Net cash from financing activities

Net decrease in cash

Effect of currency translation on cash and cash equivalents

(in € thousands)

Cash provided by / (used in):

Operating activities

Investing activities

Financing activities

Effects of currency translation on cash and cash equivalents

Net change in cash

Cash and cash equivalents at the beginning of the period

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Net cash used in operating activities

Net cash used in operating activities increased from €11.4 million in 2023 to €14.7 million in 2024.

The increase was primarily driven by higher cash outflows related to changes in working capital, including timing of payables and other operating liabilities.

Net cash used in operating activities decreased from €14,284 thousand in the year ended December 31, 2024 to €7,254 thousand in the year ended December 31, 2025.

The decrease was primarily driven by lower cash outflows related to changes in working capital.

Net cash used in investing activities

Net cash provided by investing activities was €1.2 million in 2024, primarily attributable to the reconsolidation of the Subsidiary cash balance.

Net cash used in investing activities in 2023 was €11.3 million with most of the cash outflows related to deconsolidation of the Subsidiary cash balance and purchases of property, plant and equipment.

We had no investing activities during the year ended December 31, 2025.

Net cash provided by investing activities was €1,226 thousand in the year December 31, 2024, primarily attributable to the reconsolidation of the Subsidiary cash balance.

Net cash from (used in) financing activities

Net cash provided by financing activities was €7.0 million in 2024, resulting from proceeds received in connection with the issuance of convertible notes.

In 2023, net cash provided by financing activities was immaterial.

Net cash provided by financing activities was €6,078 thousand in the year ended December 31, 2025, resulting primarily from proceeds received in connection with the issuance of convertible notes.

For the year ended December 31, 2024, net cash provided by financing activities was €7,000 thousand, resulting from proceeds received in connection with the issuance of convertible notes.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S.

Prior to 2024, we prepared our financial statements in accordance with International Financial Reporting Standards as permitted in the United States based on our qualification as a foreign private issuer under the rules and regulations of the SEC.

In connection with the loss of our status as a foreign private issuer effective on January 1, 2025, we, as a domestic filer, prepared our financial statements in accordance with U.S.

The transition was applied retrospectively to the extent required under U.S.

GAAP for comparative periods presented in this report.

The preparation of our consolidated financial statements in conformity with U.S.

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If actual results differ from our estimates, or to the extent these estimates are adjusted in future periods, our results of operations could either benefit from or be adversely affected by any such change in estimate.

Our most critical accounting estimates include revenue recognition, valuation of stock-based compensation and fair value assessments of financial instruments.

Our most critical accounting estimate is our fair value assessments of financial instruments.

Changes in these estimates and assumptions could materially affect our reported results.

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See Note 2 to our consolidated financial statements included in Part II, Item 8 of this Annual Report for a summary of significant accounting policies and the effect on our consolidated financial statements.

Recent Developments

Digital Asset Treasury Strategy

In the first quarter of fiscal 2026, we adopted and approved a digital asset treasury strategy and digital asset treasury policy and the purchase by the Company of Bitcoin and other digital assets in connection therewith (the “Treasury Strategy”).

Under the Treasury Strategy, the principal holding in the Company’s treasury reserve on its balance sheet will be allocated to digital assets, principally Bitcoin, by applying a covered-call yield strategy.

The Company may use available liquidity, including proceeds from previously disclosed financing arrangements, to purchase Bitcoin and other digital assets, subject to applicable law and public disclosure requirements.

The Company intends to solicit the ratification by its shareholders of the engagement by the Company in the Treasury Strategy, as previously disclosed.

Exit from Sono Motors GmbH

On March 14, 2026, our supervisory board resolved to terminate all current and future funding commitments to the Subsidiary and to exit the legacy solar operations conducted through the Subsidiary, with immediate effect.

The Company’s decision was driven by the Subsidiary’s historical lack of profitability, which has resulted in the Company having to continuously provide funding to the Subsidiary, and thus incur losses, and a determination by the supervisory board that there was not a clear path for the Subsidiary to achieve profitability in a reasonably desirable timeframe and thus, avoid future losses by the Company.

This decision was made in conjunction with the decision on March 14, 2026 by our management board, with the approval of the supervisory board, to adopt the Treasury Strategy, as previously announced.

The Treasury Strategy is projected to generate cash flow for the Company in the first year of its execution.

The Company is also exploring other strategic alternatives to maximize shareholder value.

The Company is currently unable to make a good faith estimate of the total costs and charges, if any, that may be incurred in connection with the cessation of funding to the Subsidiary and the exit from the Company’s legacy solar business.

The determination of any such costs is subject to significant uncertainties, including, among other things, the timing, scope and manner of any actions undertaken with respect to the Subsidiary following the cessation of funding, as well as the extent of any obligations of the Company in connection therewith.

Potential costs, if any, may include legal, advisory and other professional fees and expenses associated with activities relating to the Subsidiary.

Any such costs and expenditures, if incurred, are expected to be reduced by cash flow to the Company from the Treasury Strategy.

Quantitative and Qualitative Disclosures About Market Risk.

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Item 5. Market for Registrant’s Common Equity