What changed in this filing

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Item 1. Financial Statements

2026-08-14 compared with 2026-05-19 · 466 added, 384 removed, 441 unchanged (66% of the section changed)

3 unchanged sentences

(Amounts in thousands, except share and per share amounts)

March 31, 2026

June 30, 2026

December 31, 2025

3 unchanged sentences

Prepaid expenses and other current assets

Right-of-use asset

Assets of discontinued operations classified as held for sale, including right-of-use assets

LIABILITIES AND SHAREHOLDERS ’ EQUITY

LIABILITIES AND SHAREHOLDERS ’ EQUITY (DEFICIT)

Current Liabilities

1 unchanged sentence

Accrued interest payable

Convertible notes payable, net of discount

Derivative liabilities — embedded conversion features

Convertible notes payable, net

Derivative liabilities, written covered Bitcoin call options

Lease liability

Liabilities of discontinued operations classified as held for sale, including lease liabilities

1 unchanged sentence

Commitments and Contingencies (see Note 14)

Shareholders ’ Equity

Preferred Shares, par value € 300.00 per share, 1,401 shares authorized, 1,401 and 1,401 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

Ordinary Shares, par value € 0.01 per share, 120,000,000 shares authorized, 1,424,834 and 1,424,834 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

High Voting Shares, par value € 0.25 per share, 40,000 shares authorized, 40,000 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

Shareholders ’ Equity (Deficit)

Preferred Shares, par value € 300.00 per share, 1,401 shares authorized, 1,401 and 1,401 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively

Ordinary Shares, par value € 0.01 per share, 120,000,000 shares authorized, 1,424,834 and 1,424,834 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively

High Voting Shares, par value € 0.25 per share, 40,000 shares authorized, 40,000 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively

Additional paid-in capital

1 unchanged sentence

Accumulated other comprehensive income (loss)

Total Shareholders’ Equity

Total Liabilities and Shareholders’ Equity

Total Shareholders’ Equity (Deficit)

Total Liabilities and Shareholders’ Equity (Deficit)

See accompanying Notes to the unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(Amounts in thousands, except share and per share amounts)

For the three months ended March 31,

Continuing operations

For the three months ended

For the six months ended

Digital asset treasury loss, net

General and administrative expenses

Loss from continuing operations

Loss from operations

Other Income (Expenses)

Gain on change in fair value of convertible notes payable carried at fair value

Gain on change in fair value of embedded derivative liabilities

Gain on change in fair value of debt and derivative instruments

Interest expense, including amortization of debt discount

Foreign currency loss, net

Total other income, net

Income (loss) from continuing operations before income taxes

Foreign currency gain (loss), net

Total other income (expenses), net

(Loss) / Income from continuing operations before income taxes

Income tax expense

Income (loss) from continuing operations

(Loss) / Income from continuing operations

Loss from discontinued operations, net of tax

Net income / (loss)

Net income per share to common shareholders - basic:

Loss on deconsolidation of subsidiary

Net (Loss) / Income

Net (loss) / income per share to ordinary and high voting shareholders - basic:

Continuing operations

Discontinued operations

Discontinued operations, including deconsolidation

Net (loss)/income per share - basic

Net income per share to common shareholders - diluted:

Net (loss) / income per share to ordinary and high voting shareholders - diluted:

Continuing operations

Discontinued operations

Discontinued operations, including deconsolidation

Net (loss)/income per share - diluted

Weighted average number of Ordinary shares outstanding:

Weighted average number of ordinary and high voting shares:

See accompanying Notes to the unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(Amounts in thousands, except share and per share amounts)

For the three months ended March 31,

Net income (loss)

For the three months ended

For the six months ended

Net (loss) / income

Other comprehensive income (loss):

Foreign currency translation adjustment

Reclassification of cumulative translation adjustment to net loss on deconsolidation of subsidiary

Total other comprehensive income (loss)

Comprehensive income (loss)

Comprehensive (loss) / income

See accompanying Notes to the unaudited Condensed Consolidated Financial Statements.

SONO GROUP N.V.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS ’ EQUITY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS ’ EQUITY (DEFICIT)

(Amounts in thousands, except share amounts)

1 unchanged sentence

Ordinary Shares

High Voting Shares Outstanding

High Voting Shares

Preferred Shares Outstanding

Preferred Shares

Additional Paid in Capital

Accumulated Deficit

Accumulated Other Comprehensive Income / (Loss)

Total Shareholder’s Equity

Paid-in Capital

Total Equity (Deficit)

Six months ended June 30, 2025

Balance at December 31, 2024

Issuance of Ordinary Shares in connection with December 2024 reverse share split

Other comprehensive income (loss) / translation adjustment

Other comprehensive income, foreign currency translation adjustment

Balance at March 31, 2025

Ordinary Shares Outstanding

Ordinary Shares

Preferred Shares Outstanding

Preferred Shares

Additional Paid in Capital

Accumulated Deficit

Accumulated Other Comprehensive Income / (Loss)

Total Shareholder’s Equity (Deficit)

Other comprehensive loss, foreign currency translation adjustment

Balance at June 30, 2025

Six months ended June 30, 2026

Balance at December 31, 2025

Issuance of pre-funded warrants / allocated APIC

Net income (loss)

Other comprehensive income (loss) / translation adjustment

Issuance of pre-funded warrant

Other comprehensive loss, foreign currency translation adjustment

Balance at March 31, 2026

Other comprehensive income, including 1,223 of cumulative translation adjustment released to net loss on deconsolidation

Balance at June 30, 2026

See accompanying Notes to the unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(Amounts in thousands)

For the three months ended

March 31, 2026

For the three months ended

March 31, 2025

For the six months ended

June 30, 2026

For the six months ended

June 30, 2025

Cash flows from operating activities

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization

Change in fair value of digital assets

Net written covered-call derivative income/loss

Gain on change in fair value of embedded conversion derivative liabilities

Loss on classification as held for sale / impairment of discontinued operation

Gain on change in fair value of convertible notes payable carried at fair value

Interest expense, including amortization of debt discount

Debt discount amortization noncash component

Foreign currency and other noncash items

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Digital asset treasury loss, net (non-cash)

Change in fair value of debt and derivative instruments

Non-cash interest - amortization of debt discount

Loss on deconsolidation of subsidiary

Loss from discontinued operations

Non-cash items settled through balance sheet accounts, net

Changes in operating assets and liabilities:

Prepaid expenses and other current assets

Prepaid taxes and VAT receivables

Accounts payable and accrued liabilities

Other operating assets and liabilities, including discontinued operations

Total changes in operating assets and liabilities

Accrued interest payable

Prepaid expenses, VAT and other assets

Payment of withholding tax payable

Cash funding of discontinued operations

Advance to former subsidiary written off at deconsolidation

Net cash used in operating activities

Cash flows from investing activities

Purchase of digital assets / Bitcoin treasury

Property and equipment / other investing activity of discontinued operations

Purchases of digital assets

Net cash used in investing activities

Cash flows from financing activities

Proceeds from convertible debentures / debt financing

Proceeds from pre-funded warrants

Proceeds from issuance of convertible debentures

Proceeds from pre-funded warrant

Net draws on convertible notes at fair value option

Net cash provided by financing activities

Effect of exchange-rate changes and held-for-sale cash presentation on cash and cash equivalents

Net decrease in cash and cash equivalents

Effect of exchange-rate changes on cash

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

Supplemental disclosure of cash flow information

Supplemental disclosure:

cash paid for interest

Supplemental disclosure of noncash financing and investing activities

Debt discount from derivative bifurcation

Derivative liability initial recognition

Pre-funded warrant APIC allocation

Bitcoin received as written-call premium

Supplemental non-cash items:

Embedded conversion derivative liabilities recognized at issuance

Debt discount recognized at issuance

Right-of-use asset obtained in exchange for operating lease liability

Cumulative translation adjustment released on deconsolidation of subsidiary

See accompanying Notes to the unaudited Condensed Consolidated Financial Statements.

10 unchanged sentences

as of the date of this Quarterly Report is 4965 Trinidad Drive, Land O’ Lakes, FL 34639, United States of America.

As of March 31, 2026, Sono N.V.’s wholly-owned subsidiaries were (i) Sono Motors GmbH, a German limited liability company (Gesellschaft mit beschränkter Haftung) (the “Subsidiary”), registered in the commercial register (Handelsregister) at the local court (Amtsgericht) of Munich, Germany, under HRB 224131, with registered headquarters at Waldmeisterstraße 93, 80935 Munich, Germany, and (ii) Sono Group S.à r.l., a private limited liability company (société à responsabilité limitée) incorporated under the laws of the Grand Duchy of Luxembourg, having its registered office at 8 Avenue de la Gare, L-1610 Luxembourg, Grand Duchy of Luxembourg, which was funded with €12,000 for purposes of providing share capital and had no operations during the three months ended March 31, 2026.

As of March 31, 2026, Sono N.V.

was the ultimate parent of the Subsidiary and Sono Group S.à r.l.

Subsequent to March 31, 2026, Sono N.V.

sold the Subsidiary pursuant to a Share Purchase and Transfer Agreement, dated May 4, 2026 (the “SPA”), as a result of which Sono N.V.

ceased to be the ultimate parent of the Subsidiary on May 4, 2026.

Prior to the May 4, 2026 sale of Sono Motors GmbH, Sono N.V.’s wholly-owned subsidiaries were (i) Sono Motors GmbH, a German limited liability company (Gesellschaft mit beschränkter Haftung) (“Sono Motors GmbH”), registered in the commercial register (Handelsregister) at the local court (Amtsgericht) of Munich, Germany, under HRB 224131, with registered headquarters at Waldmeisterstraße 93, 80935 Munich, Germany, and (ii) Sono Group S.à r.l., a private limited liability company (société à responsabilité limitée) incorporated under the laws of the Grand Duchy of Luxembourg, having its registered office at 8 Avenue de la Gare, L-1610 Luxembourg, Grand Duchy of Luxembourg, which was funded with $14,067.60 (€12,000) for purposes of providing share capital and had no operations during the six months ended June 30, 2026.

On May 4, 2026, Sono N.V.

sold Sono Motors GmbH pursuant to a Share Purchase and Transfer Agreement, dated May 4, 2026 (the “SPA”), as a result of which Sono N.V.

ceased to be the ultimate parent of Sono Motors GmbH on May 4, 2026.

Hereinafter, unless otherwise indicated or the context otherwise requires, the terms “Sono Group”, “Sono”, “the Company”, “we”, “our”, “us” or similar terms, refer to Sono N.V.

together with its consolidated subsidiaries as of March 31, 2026.

together with its consolidated subsidiaries for the periods presented.

Sono Group historically intended to develop and manufacture electric vehicles with integrated solar panels (the “Sion passenger car program”) and to license its solar technology to other Original Equipment Manufacturers (“OEMs”).

1 unchanged sentence

As a consequence, management determined to apply for the opening of self-administration proceedings with respect to Sono N.V.

and the Subsidiary (the “Self-Administration Proceedings”) on May 15, 2023.

The Subsidiary withdrew its application for Preliminary Self-Administration Proceedings on January 31, 2024, and the Subsidiary exited its Self-Administration Proceedings on February 29, 2024.

The Company reconsolidated the Subsidiary effective March 1, 2024 following its exit from the Self-Administration Proceedings.

On March 14, 2026, the Company’s 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.

and Sono Motors GmbH (the “Self-Administration Proceedings”) on May 15, 2023.

withdrew its application for Preliminary Self-Administration Proceedings on January 31, 2024, and Sono Motors GmbH exited its Self-Administration Proceedings on February 29, 2024.

The Company reconsolidated Sono Motors GmbH effective March 1, 2024 following its exit from the Self-Administration Proceedings.

On March 14, 2026, the Company’s supervisory board resolved to terminate all current and future funding commitments to Sono Motors GmbH and to exit the legacy solar operations conducted through Sono Motors GmbH, with immediate effect.

On the same date, the Company’s management board, with the approval of the supervisory board, adopted a digital asset treasury strategy (the “Treasury Strategy”).

1 unchanged sentence

In connection with the Treasury Strategy, on March 10, 2026, the Company entered into a 2002 ISDA Master Agreement, a related Schedule and a Credit Support Annex with Blockchain.com (BVI) II Limited (“Blockchain.com”), facilitating the Company to enter into derivative and/or hedging transactions to manage the risk associated with the Treasury Strategy.

As of March 31, 2026, management concluded that the Subsidiary met the criteria to be classified as held for sale and that the planned disposition (which was completed subsequent to quarter end on May 4, 2026, as further described under Note 16 (Subsequent Events)) represents a strategic shift that has had, or will have, a major effect on the Company’s operations and financial results.

Accordingly, the results of operations of the Subsidiary have been presented as discontinued operations, and the related assets and liabilities have been presented as assets and liabilities of discontinued operations classified as held for sale, for all periods presented.

Subsequent to March 31, 2026, on May 4, 2026, the Company sold and transferred 100% of the outstanding share capital of the Subsidiary to third-party purchasers.

See Note 3 (Liquidity and Going Concern Analysis), Note 4 (Discontinued Operations and Assets and Liabilities Held for Sale), Note 5 (Digital Assets), Note 6 (Written Covered Bitcoin Call Options), Note 8 (Convertible Notes, Embedded Derivatives and Pre-Funded Warrants) and Note 16 (Subsequent Events) for additional information.

As of March 31, 2026, management concluded that Sono Motors GmbH met the criteria to be classified as held for sale and that the planned disposition (which was completed on May 4, 2026, as further described in Note 4 (Discontinued Operations and Assets and Liabilities Held for Sale)) represents a strategic shift that has had, or will have, a major effect on the Company’s operations and financial results.

Accordingly, the results of operations of Sono Motors GmbH have been presented as discontinued operations, and the related assets and liabilities have been presented as assets and liabilities of discontinued operations classified as held for sale, for all periods presented.

On May 4, 2026, the Company sold and transferred 100% of the outstanding share capital of Sono Motors GmbH to third-party purchasers.

See Note 3 (Liquidity and Going Concern Analysis), Note 4 (Discontinued Operations and Assets and Liabilities Held for Sale), Note 5 (Digital Assets), Note 6 (Written Covered Bitcoin Call Options), and Note 8 (Convertible Notes, Embedded Derivatives and Pre-Funded Warrants) for additional information.

These unaudited condensed consolidated financial statements reflect all adjustments, including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows for the periods presented in accordance with accounting principles generally accepted in the United States of America (“U.S.

On a consolidated basis, the Company’s operations during the three months ended March 31, 2026 and the three months ended March 31, 2025 are comprised of the parent company, Sono N.V., and the Subsidiary.

On a consolidated basis, the Company’s operations during the periods presented are comprised of the parent company, Sono N.V., and, through the May 4, 2026 sale and deconsolidation of Sono Motors GmbH, Sono Motors GmbH.

All significant intercompany transactions and balances have been eliminated upon consolidation.

Certain amounts in the prior period unaudited condensed consolidated financial statements have been reclassified to conform to the current period presentation, including the presentation of the Subsidiary as a discontinued operation.

In addition, effective January 1, 2026, the Company changed its reporting currency from the euro to the U.S.

11 unchanged sentences

In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments necessary for a fair presentation, consisting of normal recurring adjustments and the non-recurring classification, reporting-currency, fair-value, discontinued-operations and financing-related adjustments described in these notes.

Results for the three months ended March 31, 2026 are not necessarily indicative of results for the full fiscal year.

Results for the three and six months ended June 30, 2026 are not necessarily indicative of results for the full fiscal year.

Certain prior-period amounts have been reclassified to conform to the current-period presentation.

10 unchanged sentences

determined that its functional currency is the U.S.

As of March 31, 2026, the Subsidiary continues to have the euro as its functional currency.

Through the May 4, 2026 sale of Sono Motors GmbH, Sono Motors GmbH continued to have the euro as its functional currency.

Assets and liabilities of euro-functional operations are translated into U.S.

24 unchanged sentences

Written covered Bitcoin call options and embedded conversion derivative liabilities are classified within Level 3 when valuation uses significant unobservable inputs, including volatility, term, conversion or settlement assumptions, and probability-weighted outcomes.

The Company values written covered Bitcoin call options using a Black-Scholes option pricing model, with key inputs including the Bitcoin spot price, option strike price, contractual term, and implied volatility derived from observable Bitcoin options market data where available.

The embedded conversion derivative liabilities are valued using a Monte Carlo simulation model, with key unobservable inputs including the Company's estimated credit-adjusted discount rate, probability-weighted conversion assumptions, and expected term.

Changes in these inputs could result in materially different fair value measurements.

Credit risk and concentrations

6 unchanged sentences

Lease expense is recognized on a straight-line basis over the lease term.

The Company determined its incremental borrowing rate at the commencement of the Munich lease on May 1, 2026 by reference to the rate at which the Company could borrow funds on a collateralized basis over a similar term and in a similar economic environment to the lease, taking into consideration the Company's credit profile, the EUR-denominated nature of the lease, the going concern conditions existing at the commencement date, and the terms of the Company's outstanding convertible debentures as a market reference point for the Company’s cost of borrowing.

The Company has elected the short-term lease recognition exemption for leases with terms of twelve months or less.

As of March 31, 2026, the Company’s lease balances, including right-of-use assets, relate to the Subsidiary and are included in discontinued operations and the disposal group classified as held for sale.

Through May 4, 2026, the Company’s lease balances, including right-of-use assets, related to Sono Motors GmbH and were included in discontinued operations and the disposal group classified as held for sale;

effective May 1, 2026, the right-of-use asset and lease liability for the Munich lease were re-established within continuing operations.

The Company accounts for income taxes using the asset and liability method under ASC 740, Income Taxes.

Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards.

Deferred tax balances are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be settled or realized.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period in which the enactment date occurs.

The Company establishes a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized.

As of June 30, 2026 and December 31, 2025, the Company maintains full valuation allowances against its deferred tax assets, reflecting the uncertainty regarding their realizability given the Company's history of cumulative losses and going concern conditions.

The Company does not currently have any unrecognized tax benefits.

See Note 11 (Income Taxes) for additional information.

Reporting Operating Segment

The Company reports its segment information to reflect the manner in which the Company's Chief Operating Decision Maker ("CODM") reviews and assesses performance.

The Company's Chief Executive Officer has the responsibility as the CODM to review and assess the performance of the Company as a whole.

The primary financial measures used by the CODM to evaluate performance and allocate resources are net income (loss) and operating income (loss).

Recently Adopted and Recently Issued Pronouncements

15 unchanged sentences

Management considered the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows, and the Company’s obligations due within twelve months after the issuance date of these unaudited condensed consolidated financial statements.

As of March 31, 2026, the Company had cash and cash equivalents of $ 237 thousand, an accumulated deficit of $ 335.4 million, $ 4,709 thousand of Bitcoin measured at fair value, $ 4,350 thousand of convertible debenture principal outstanding, $ 1,129 thousand of convertible notes payable, net of discount, and $ 3,708 thousand of embedded conversion derivative liabilities.

For the three months ended March 31, 2026, the Company recognized a loss from operations of $ 1,480 thousand and a net loss of $ 2,015 thousand.

The Company has incurred recurring operating losses and historically negative cash flows from operations since inception, primarily attributable to the Subsidiary.

As of June 30, 2026, the Company had cash and cash equivalents of $ 166 thousand, an accumulated deficit of $ 339.2 million, $ 4,118 thousand of Bitcoin measured at fair value, $ 5,050 thousand of convertible debenture principal outstanding and $ 5,049 thousand of convertible notes payable, net, including bifurcated embedded conversion derivative liabilities.

For the six months ended June 30, 2026, the Company recognized a loss from continuing operations of $ 3,335 thousand and a net loss of $ 5,792 thousand.

The Company has incurred recurring operating losses and historically negative cash flows from operations since inception, primarily attributable to Sono Motors GmbH.

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

During the three months ended March 31, 2026, management completed financing transactions and strategic actions related to the Company’s transition to the Treasury Strategy and its exit from legacy solar operations.

The Company raised aggregate gross proceeds of approximately $ 6.4 million through the issuance of three secured convertible debentures to Yorkville on January 26, 2026, February 19, 2026 and March 10, 2026, respectively, in the aggregate principal amount of $ 4.35 million (the “Q1 2026 Debentures”) and the issuance to Yorkville on March 10, 2026 of a pre-funded warrant for aggregate proceeds of $ 2.0 million.

During the six months ended June 30, 2026, management completed financing transactions and strategic actions related to the Company’s transition to the Treasury Strategy and its exit from legacy solar operations.

The Company raised aggregate gross proceeds of approximately $ 7.1 million through the issuance of three secured convertible debentures to Yorkville on January 26, 2026, February 19, 2026 and March 10, 2026, respectively, in the aggregate principal amount of $ 4.35 million (the “Q1 2026 Debentures”), the issuance to Yorkville on March 10, 2026 of a pre-funded warrant for aggregate proceeds of $ 2.0 million, and the issuance to Yorkville on April 28, 2026 of an additional secured convertible debenture in the aggregate principal amount of $ 700 thousand (the “April 2026 Debenture”).

A substantial portion of these proceeds was used to implement the Treasury Strategy, including the acquisition of Bitcoin and the establishment of the Company’s institutional framework with Blockchain.com under the ISDA Master Agreement and the related Schedule and Credit Support Annex.

Management also terminated all current and future funding commitments to the Subsidiary and initiated the Company’s exit from the legacy solar operations conducted through the Subsidiary, which is expected to materially reduce the Company’s ongoing cash outflows.

In addition, as further described under Note 16 (Subsequent Events), subsequent to March 31, 2026, the Company completed its exit from the legacy solar operations through the execution and consummation of the SPA pursuant to which the Subsidiary was sold on May 4, 2026, and received an additional tranche of funding from Yorkville in the form of a convertible debenture issued by the Company to Yorkville in the aggregate principal amount of $ 700 thousand.

Management also terminated all current and future funding commitments to Sono Motors GmbH and completed the Company’s exit from the legacy solar operations through the execution and consummation of the SPA pursuant to which Sono Motors GmbH was sold on May 4, 2026, as further described in Note 4 (Discontinued Operations and Assets and Liabilities Held for Sale).

These actions are relevant to management’s liquidity plans but did not alleviate substantial doubt about the Company’s ability to continue as a going concern.

1 unchanged sentence

Although these actions may reduce certain cash outflows and provide additional potential liquidity sources, the Company continues to depend on monetization of digital asset holdings, performance of the Treasury Strategy and availability of external financing, and management did not conclude that substantial doubt was alleviated.

The Company’s ability to maintain adequate liquidity remains subject to significant uncertainties, including 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 pursuant to the Credit Support Annex described in Note 5 (Digital Assets) and Note 6 (Written Covered Bitcoin Call Options), and the maturities of the convertible debentures issued during the three months ended March 31, 2026, which mature in 2027 and may require refinancing or conversion prior to or at maturity.

Management’s plans to address these conditions include obtaining additional financing through further issuances of debt and equity securities, including pursuant to the Company’s effective shelf registration statement, sales of a portion of the Company’s Bitcoin holdings, and premium income generated from writing covered call options pursuant to the Treasury Strategy.

The Company’s Bitcoin holdings serve as collateral for outstanding written covered call options, which are written on a weekly basis, and are available for sale upon expiration of the applicable options.

There can be no assurance that additional financing will be available in amounts or on terms acceptable to the Company, if at all, or that sales of digital assets, at then-prevailing prices, together with premium income, will be sufficient to fund the Company’s obligations as they become due.

In addition, the Company expects to continue to incur professional fees and other transaction costs in connection with the proposed Redomiciliation Transaction described in Note 16 (Subsequent Events), the completion of which is not assured.

The Company’s ability to maintain adequate liquidity remains subject to significant uncertainties, including 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 pursuant to the Credit Support Annex described in Note 5 (Digital Assets) and Note 6 (Written Covered Bitcoin Call Options), and the maturities of the convertible debentures issued during the six months ended June 30, 2026, which mature in 2027 and may require refinancing or conversion prior to or at maturity.

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

See Note 16 (Subsequent Events) for additional information regarding subsequent events relevant to the matters described above.

Discontinued Operations and Assets and Liabilities Held for Sale

The Company was in negotiations to sell the Subsidiary before March 31, 2026, and subsequent to March 31, 2026 executed a share purchase agreement to sell the Subsidiary.

Management concluded that the Subsidiary met the criteria to be classified as held for sale as of March 31, 2026 and that the planned disposition (which was completed subsequent to quarter end on May 4, 2026, as further described under Note 16 (Subsequent Events)) represents a strategic shift that has had, or will have, a major effect on the Company’s operations and financial results.

Management’s held-for-sale conclusion was based on the approval of a plan to sell the Subsidiary, management’s commitment to the plan, active negotiations with a buyer, the availability of the disposal group for immediate sale in its then-present condition subject only to customary closing conditions, the expectation that the sale would be completed within one year, and the determination that actions required to complete the plan indicated it was unlikely that significant changes would be made or that the plan would be withdrawn.

The Company was in negotiations to sell Sono Motors GmbH before March 31, 2026 and executed the SPA on May 4, 2026.

Management concluded that Sono Motors GmbH met the criteria to be classified as held for sale as of March 31, 2026 and that the planned disposition (which was completed on May 4, 2026, as further described in Note 4) represents a strategic shift that has had, or will have, a major effect on the Company’s operations and financial results.

Management’s held-for-sale conclusion was based on the approval of a plan to sell Sono Motors GmbH, management’s commitment to the plan, active negotiations with a buyer, the availability of the disposal group for immediate sale in its then-present condition subject only to customary closing conditions, the expectation that the sale would be completed within one year, and the determination that actions required to complete the plan indicated it was unlikely that significant changes would be made or that the plan would be withdrawn.

Management's analysis confirmed satisfaction of each of the six criteria required under ASC 360-10-45-9 for held-for-sale classification as of March 31, 2026:

(i) management having the authority to approve the plan committed to a plan to sell the disposal group;

(ii) the disposal group was available for immediate sale in its present condition;

(iii) an active program to locate a buyer had been initiated;

(iv) the sale was probable and expected to be completed within one year;

(v) the disposal group was being actively marketed at a price reasonable in relation to its current fair value;

and (vi) it was unlikely that significant changes to the plan would be made or that the plan would be withdrawn.

The disposal group was measured at the lower of carrying amount or fair value less cost to sell.

Based on the planned sale and nominal consideration subsequently documented in the executed SPA, management recognized a $ 519 thousand loss on classification as held for sale within discontinued operations, net of tax, during the three months ended March 31, 2026.

The shareholder loan receivable from the Subsidiary and corresponding payable of the Subsidiary were intra-entity balances and were eliminated in consolidation while the Subsidiary remained consolidated;

The shareholder loan receivable from Sono Motors GmbH and corresponding payable of Sono Motors GmbH were intra-entity balances and were eliminated in consolidation while Sono Motors GmbH remained consolidated;

accordingly, the shareholder loan was not included as a separate consolidated held-for-sale asset or impairment charge.

See Note 16 (Subsequent Events) for the SPA terms governing the post-quarter assignment of the shareholder loan claim.

The results of operations of the Subsidiary have been presented as discontinued operations for all periods presented.

The results of operations of Sono Motors GmbH have been presented as discontinued operations for all periods presented.

The related assets and liabilities have been presented separately as held for sale in the unaudited condensed consolidated balance sheets.

1 unchanged sentence

The discontinued operation was reported within the Company’s single reportable segment.

As of March 31, 2026 and December 31, 2025, certain lease-related amounts recorded by Sono N.V., including approximately $ 0.9 million of right-of-use assets at March 31, 2026, relate to lease arrangements associated with the Subsidiary and the legacy solar business.

Because the right-of-use assets and related lease liabilities are attributable to the discontinued component, the amounts are included in discontinued operations and in the disposal group classified as held for sale.

As of December 31, 2025, certain lease-related amounts recorded by Sono N.V.

related to lease arrangements associated with Sono Motors GmbH and the legacy solar business;

because the right-of-use assets and related lease liabilities were attributable to the discontinued component, those amounts are included in discontinued operations and in the disposal group classified as held for sale.

Following the May 4, 2026 sale of Sono Motors GmbH, the Company remained the lessee under the Munich lease, and the related right-of-use asset and lease liability were re-established within continuing operations effective May 1, 2026;

see Note 10 (Leases).

Major classes of assets of discontinued operations classified as held for sale (USD in thousands)

March 31, 2026

June 30, 2026

December 31, 2025

1 unchanged sentence

Other disposal-group assets

Valuation allowance / impairment recognized on classification as held for sale

Total assets of discontinued operations classified as held for sale

Major classes of liabilities of discontinued operations classified as held for sale (USD in thousands)

March 31, 2026

June 30, 2026

December 31, 2025

2 unchanged sentences

Total liabilities of discontinued operations classified as held for sale

Major line items included in income (loss) from discontinued operations (USD in thousands)

Three months ended March 31, 2026

Three months ended March 31, 2025

Cost of revenue / cost of sales

Selling and distribution expenses

General and administrative expenses

Research and development expenses

Other operating income, net

Loss from operations of discontinued operations

Foreign currency loss, net

Loss on classification as held for sale / impairment of disposal group

Loss from discontinued operations before income taxes

Income tax expense

Three months ended June 30, 2026

Three months ended June 30, 2025

Loss of the disposal group, including operating results, held-for-sale measurement and translation

Loss from discontinued operations, net of tax

Six months ended June 30, 2026

Six months ended June 30, 2025

Loss of the disposal group, including operating results, held-for-sale measurement and translation

Loss from discontinued operations, net of tax

Discontinued operations cash-flow information (USD in thousands)

Three months ended March 31, 2026

Three months ended March 31, 2025

Net cash provided by (used in) operating activities of discontinued operations

Effect of exchange-rate changes on cash of discontinued operations

Net increase (decrease) in cash of discontinued operations

Three months ended June 30,

Six months ended June 30,

Cash of discontinued operations, beginning of period

Cash funding provided by the parent

Operating cash use of the disposal group, net

Cash of the disposal group derecognized at deconsolidation, April 30, 2026

Cash of discontinued operations, end of period

Depreciation and amortization included in discontinued operations

Cash and held-for-sale presentation bridge (USD in thousands)

March 31, 2026

The following table reconciles total cash and cash equivalents, including amounts included in assets of discontinued operations classified as held for sale, to the amounts presented in the condensed consolidated statements of cash flows (USD in thousands):

June 30, 2026

December 31, 2025

Cash and cash equivalents presented in continuing current assets

Cash of discontinued operations included in assets classified as held for sale

Total cash and cash equivalents including discontinued operations cash

Upon the May 4, 2026 sale of the Subsidiary and loss of control of the Subsidiary, the Company will deconsolidate the Subsidiary and recognize any resulting gain or loss within discontinued operations in the second quarter of 2026.

Cash and cash equivalents presented in continuing assets

Cash of discontinued operations included in assets held for sale

Total cash including discontinued operations

The condensed consolidated statements of cash flows presents only cash attributable to continuing operations in the beginning and ending balance line items.

See above for a reconciliation of total cash to the amounts presented.

Upon the May 4, 2026 sale of Sono Motors GmbH and loss of control of Sono Motors GmbH, the Company deconsolidated Sono Motors GmbH, measured as of April 30, 2026, and recognized a loss on deconsolidation of $ 1,101 thousand, presented as a separate line item in the condensed consolidated statements of operations.

The loss includes the reclassification of $1,223 thousand of cumulative foreign currency translation adjustments attributable to Sono Motors GmbH from accumulated other comprehensive income (loss) to earnings upon the loss of control, together with the derecognition of the carrying amounts of the assets and liabilities of Sono Motors GmbH and the nominal consideration received under the Share Purchase and Transfer Agreement.

Digital Assets

During the three months ended March 31, 2026, the Company acquired Bitcoin as part of the Treasury Strategy.

During the six months ended June 30, 2026, the Company acquired Bitcoin as part of the Treasury Strategy.

The Company’s digital asset holdings consist of Bitcoin and are presented separately on the face of the unaudited condensed consolidated balance sheets.

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Digital asset rollforward (USD in thousands, except BTC units and USD price per BTC)

Beginning balance

Bitcoin purchased / deposited during period

Settled BTC premiums received on Q1 written covered calls

Dispositions / physical settlements

Ending BTC holdings at March 31, 2026

Period-end BTC price (USD per BTC)

Ending Bitcoin fair value (69.01 BTC x $68,233.31;

calculated using unrounded BTC units)

Cost basis / carrying value before ASC 350-60 fair value remeasurement

ASC 350-60 fair value remeasurement gain/(loss)

Balance, January 1, 2026

Bitcoin purchased

Option premiums settled in Bitcoin

Bitcoin delivered on calls exercised in the money

Fair value remeasurement, net (including value of May-June in-kind premiums)

Balance, June 30, 2026 (at $ 59,007.48 per Bitcoin)

BTC units in the table are rounded to the nearest hundredth for presentation.

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The settled BTC premium line represents BTC premiums received on written covered calls that expired out of the money before quarter-end.

The digital asset rollforward reflects activity through March 31, 2026 only.

The April 3, 2026 Blockchain.com activity report includes post-quarter activity and therefore does not represent the March 31, 2026 BTC-unit balance.

The March 31, 2026 balance includes the original 68.49313568 BTC collateral deposit plus 0.51462318 BTC of premiums from written covered Bitcoin calls that expired out of the money by quarter-end.

The digital asset rollforward reflects activity through June 30, 2026.

The June 30, 2026 balance includes the original 68.49313568 BTC collateral deposit plus 1.29086595 BTC of cumulative premiums from written covered Bitcoin calls that expired out of the money.

Written Covered Bitcoin Call Options

The Company writes covered Bitcoin call options and receives option premiums.

During the three months ended March 31, 2026, the Company received 0.51462318 BTC of premiums on written covered Bitcoin call options that expired out of the money before quarter-end.

During the six months ended June 30, 2026, the Company received 1.29086595 BTC of premiums on written covered Bitcoin call options that expired out of the money before the end of the applicable option terms.

Written call options are derivative liabilities while outstanding.

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The written-call strategy may generate premium income but may also limit the Company’s participation in increases in Bitcoin prices and expose the Company to derivative valuation, collateral, counterparty, settlement and liquidity risks.

At March 31, 2026, the Company recognized a $ 21 thousand derivative liability for the open April 3, 2026 written covered Bitcoin call option.

The liability was calculated as 0.31053491 BTC multiplied by the March 31, 2026 BTC-USD spot price of $ 68,233.31 , observed at 23:59:59 UTC on March 31, 2026 from the market in which the Company transacts through Blockchain.com, rounded to the nearest thousand.

At June 30, 2026, the Company recognized an $ 8 thousand derivative liability for the open written covered Bitcoin call position.

The liability was measured at fair value using BTC-USD market inputs observed at June 30, 2026 from the market in which the Company transacts through Blockchain.com, rounded to the nearest thousand.

The fair value of written-call liabilities may increase with increases in Bitcoin spot price, implied volatility or remaining contractual term.

Written covered-call derivative liability rollforward (USD in thousands)

Initial liabilities recognized for premiums received by period-end

Ending written-call derivative liability

Realized expiration/settlement gain

Open written-call fair-value loss

Net written-call income

Written-call liabilities recognized at fair value

Liabilities released on expiration or settlement

Written covered-call liability, June 30, 2026 (contract expiring 7/3/26 , strike $ 63,000 )

Covered-call option income, net (within digital asset treasury loss, net)

Losses on calls exercised in the money - Bitcoin delivered

Fair Value Measurements

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Because Bitcoin trades continuously and does not have a single exchange closing time, the Company measures its period-end Bitcoin position using the BTC-USD spot price observed from that principal market at 23:59:59 UTC on the reporting date.

For March 31, 2026, the spot price used was $ 68,233.31 per BTC.

For June 30, 2026, the spot price used was $ 59,007.48 per BTC.

Bitcoin is classified as Level 1 because the valuation uses an observable quoted price in an active market.

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The Company had no assets or liabilities measured at fair value on a recurring basis at December 31, 2025.

The fair value hierarchy and Level 3 rollforward below present the same March 31, 2026 embedded conversion derivative liability balance as the balance sheet caption for derivative liabilities — embedded conversion features and the convertible debt table in Note 8.

The fair value hierarchy and Level 3 rollforward below present the same June 30, 2026 embedded conversion derivative liability balance as the balance sheet caption for derivative liabilities for embedded conversion features and the convertible debt table in Note 8.

(Convertible Notes, Embedded Derivatives and Pre-Funded Warrants).

Fair value hierarchy by instrument (USD in thousands)

March 31, 2026 total fair value

June 30, 2026 total fair value

Bitcoin digital assets

Embedded conversion derivative liability

Embedded conversion derivative liabilities

Written covered Bitcoin call derivative liability

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Written covered Bitcoin call derivative liability

Beginning balance, January 1, 2026

Initial recognition / issuances

Balance, January 1, 2026

Initial recognition at issuance

Change in fair value recognized in earnings, net

Settlements / expirations / conversions

Transfers into or out of Level 3

Ending balance, March 31, 2026

The debt-host allocation / day-one noncash issuance-date adjustment represents the noncash issuance-date allocation effect recognized in connection with bifurcating the embedded conversion derivative liabilities from the convertible-debt host.

Settlements, expirations and releases

Balance, June 30, 2026

Fair value hierarchy

Valuation technique / significant inputs

BTC-USD spot price observed from the market in which the Company transacts through Blockchain.com at 23:59:59 UTC on March 31, 2026;

BTC-USD spot price observed from the market in which the Company transacts through Blockchain.com at 23:59:59 UTC on June 30, 2026;

spot price used was $ 59,007.48 per BTC.

Written covered Bitcoin call options

Open April 3, 2026 written call;

liability equals 0.31053491 BTC x $ 68,233.31 , rounded to $ 21 thousand.

Remaining term at 3/31/26 was three days.

Open written covered Bitcoin call position at June 30, 2026;

liability of $ 8 thousand measured using June 30, 2026 BTC-USD market inputs, including the spot price of $ 59,007.48 per BTC, and the remaining contractual term of the open written call.

Embedded conversion derivative liabilities

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Convertible Notes, Embedded Derivatives and Pre-Funded Warrants

During the three months ended March 31, 2026, the Company issued three convertible debentures and one pre-funded warrant to YA II PN, Ltd.

During the six months ended June 30, 2026, the Company issued four convertible debentures and one pre-funded warrant to YA II PN, Ltd.

The following tables summarize the contractual terms and reconcile the related debt host, embedded conversion derivative liability, accrued interest payable, pre-funded warrant proceeds and APIC allocation to the balance sheet, statement of operations, statement of cash flows and shareholders’ equity presentation.

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March Debenture

April Debenture

Principal amount

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18 % upon event of default

Fixed conversion price

18 % upon event of default

Fixed conversion price (ceiling)

Variable conversion price

85% of lowest daily VWAP over seven trading days, subject to floor

85% of lowest daily VWAP over 7 trading days, subject to floor

Convertible debt, warrant and related financial statement presentation reconciliation (USD in thousands)

Balance Sheet – March 31, 2026

Gross convertible notes payable

2 unchanged sentences

Embedded conversion derivative liability

Convertible notes payable, net, as presented on the condensed consolidated balance sheet

Accrued interest payable

Pre-funded warrant APIC (equity)

Income Statement – Months Ended March 31, 2026

Day-one loss on derivative liability

Gain on change in fair value of embedded derivatives

Pre-funded warrant - additional paid-in capital, at the corrected allocation

Six months ended June 30, 2026:

Gain on change in fair value of embedded conversion derivatives

Coupon interest expense

Debt discount amortization expense

Amortization of debt discount

Total interest expense

The initial fair value of the bifurcated embedded conversion derivative liabilities exceeded the cash proceeds allocated to the debt host because the valuation reflects the variable conversion features, floor prices and probability-weighted settlement outcomes under the convertible debenture terms.

This resulted in a recognized loss of $1,083.

The embedded conversion features were bifurcated and recognized as derivative liabilities measured at fair value.

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Debt discount is amortized to interest expense over the expected term of the convertible debentures.

The balance sheet presentation separates (i) the convertible debt host, net of unamortized discount, (ii) accrued interest payable, and (iii) embedded conversion derivative liabilities.

Accrued interest payable is not included in convertible notes payable, net of discount, because it represents separately accrued contractual coupon interest.

Cash proceeds from convertible debentures and pre-funded warrants are presented as financing cash inflows, the pre-funded warrant APIC allocation is presented within shareholders’ equity, and the embedded conversion derivative liabilities and convertible debt host are presented as separate balance sheet captions.

The balance sheet presents the convertible debt host, net of unamortized discount, together with the bifurcated embedded conversion derivative liabilities in a single caption, convertible notes payable, net.

Accrued interest payable is presented separately because it represents separately accrued contractual coupon interest.

Accounts Payable, Accrued Expenses and Other Liabilities

Accounts payable and accrued expenses detail (USD in thousands)

March 31, 2026

June 30, 2026

December 31, 2025

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Balance sheet caption (USD in thousands)

March 31, 2026

June 30, 2026

December 31, 2025

1 unchanged sentence

Accrued interest payable

VAT and other tax liabilities

Liabilities of discontinued operations classified as held for sale, including lease liabilities

The Company’s lease balances relate to the Subsidiary and the legacy solar business.

As of March 31, 2026, the related right-of-use asset and lease obligations were included in assets and liabilities of discontinued operations classified as held for sale because the lease was associated with the discontinued component.

The lease measurement was calculated using a 122 -month lease term and a weighted-average discount rate of 18.0 %.

Source lease amortization schedules and the December 31, 2025 lease support were maintained in euros;

the amounts disclosed below are presented in U.S.

dollars and rounded to the nearest thousand.

Subsequent to quarter end, the SPA required the parties to use their best efforts to transfer the Munich lease to the Subsidiary as lessee by June 30, 2026, with a full release of the Company from further liability under the lease;

if such transfer is not completed by that date, the Company has the right to terminate the lease agreement.

The Company did not identify a material continuing lease obligation outside the discontinued operations disposal group as of March 31, 2026.

See Note 4 (Discontinued Operations and Assets and Liabilities Held for Sale) and Note 16 (Subsequent Events) for the related disclosures.

The lease liability caption is presented together with other disposal-group liabilities because the disclosed amounts represent the total liabilities of the discontinued operations disposal group associated with the legacy solar business, including lease obligations.

Lease cost and cash paid for lease liabilities for the three months ended March 31, 2026 and 2025 related to the discontinued component and are included in the discontinued operations amounts disclosed in Note 4;

no material continuing lease cost or cash paid for leases was identified outside the discontinued operations disposal group.

Lease-related amounts and inputs included in HFS presentation (USD in thousands, except months and percentages)

March 31, 2026

December 31, 2025

Right-of-use assets included in held-for-sale assets

Lease liabilities and included in held-for-sale liabilities

Weighted-average lease term used in measurement (months)

Withholding and other tax liabilities

Liabilities of discontinued operations held for sale

The Company accounts for leases under ASC 842, Leases.

Right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term.

Because the Company’s lease does not provide an implicit rate, the Company uses its incremental borrowing rate based on information available at commencement.

Lease expense is recognized on a straight-line basis over the lease term.

The Company has elected the short-term lease recognition exemption for leases with terms of twelve months or less.

In addition, the Company elected the practical expedient to combine lease and non-lease components.

The Company’s lease balances relate to the office building lease located at Waldmeisterstraße 93, 80935 Munich, Germany, originally associated with Sono Motors GmbH and the legacy solar business.

The lease commenced March 1, 2021 with a 122 -month term ending April 30, 2031.

Through May 4, 2026, the related right-of-use asset and lease obligations were included in assets and liabilities of discontinued operations classified as held for sale because the lease was associated with the discontinued component;

lease cost and cash paid for lease liabilities for periods through May 31, 2026, including the May 2026 rent settled through Sono Motors GmbH, related to the discontinued component and are included in the discontinued operations amounts disclosed in Note 4 (Discontinued Operations and Assets and Liabilities Held for Sale).

Following the May 4, 2026 sale of Sono Motors GmbH, the Company remained the lessee under the lease, and the related right-of-use asset and lease liability were re-established within continuing operations effective May 1, 2026.

The lease is denominated in euros and provides for fixed monthly payments of EUR 13,954.25 .

The right-of-use asset and lease liability were re-established at EUR 549,522.12 , translated at the April 30, 2026 spot rate of 1.1736 , or $ 645 thousand, and the lease is measured in U.S.

dollars from that date at a fixed monthly amount of $ 16,377 over the 60 months remaining in the lease term at that date, using a weighted-average discount rate of 18.0 %.

Occupancy charges for parking and waste disposal are not included in the measurement of the lease liability and are recognized as variable lease cost as incurred, together with differences between the fixed U.S.

dollar amount and the U.S.

dollar cost of the euro payment settled on the payment date.

The lease has no renewal options that the Company is reasonably certain to exercise and no residual value guarantees.

As of June 30, 2026, the operating lease right-of-use asset and operating lease liability were $ 631 thousand each.

In connection with the Share Purchase and Transfer Agreement described in Note 4 (Discontinued Operations and Assets and Liabilities Held for Sale), the Company and the buyer agreed to use their best efforts to transfer the Munich lease to Sono Motors GmbH as lessee by no later than June 30, 2026, with a full release of the Company from further liability under the lease.

The transfer was not completed as of June 30, 2026.

See Note 4 (Discontinued Operations and Assets and Liabilities Held for Sale) for the related disclosures.

Following the May 4, 2026 sale of Sono Motors GmbH, the Company no longer occupies the Munich premises.

Management identified the vacancy as a triggering event and evaluated the operating lease right-of-use asset for impairment under ASC 360-10-35.

Because the Company retains both the intent and the ability to obtain economic benefit from the leased premises, through a transfer of the lease, a successor lessee or a negotiated termination with the landlord, the right-of-use asset has not been abandoned, and the asset was evaluated under the held and used model.

For purposes of the assessment, the right-of-use asset was evaluated as its own asset group because the cash flows expected from the premises are largely independent of the cash flows of the Company’s other assets.

Management concluded that the carrying amount of the right-of-use asset was recoverable at June 30, 2026, and no impairment was recognized.

The assessment requires significant judgment, including estimates of the amount and timing of the cash flows expected from a transfer, a successor lessee or a negotiated termination, and a change in those estimates could result in an impairment charge in a future period.

Components of lease cost

The components of lease cost recognized in continuing operations were as follows (USD in thousands):

Three months ended June 30, 2026

Six months ended June 30,

Operating lease cost

Variable lease cost

Short-term lease cost

Total lease cost

Operating lease cost of $ 16 thousand represents the June 2026 fixed monthly lease cost under the U.S.

dollar lease schedule, the single month of lease cost recognized in continuing operations for both periods presented;

the May 2026 lease cost was settled through Sono Motors GmbH and is included in loss from discontinued operations, net of tax (Note 4).

Variable lease cost represents the parking and waste-disposal occupancy charges and the settlement difference on the June payment.

Total lease cost equals the June 2026 building lease cost recorded in general and administrative expenses.

Supplemental cash flow and non-cash information

Supplemental cash flow and non-cash information related to the operating lease were as follows (USD in thousands):

Three months ended June 30, 2026

Six months ended June 30,

Operating cash flows from operating leases

Right-of-use asset obtained in exchange for new operating lease liability (non-cash)

Balance sheet classification

The following table presents the classification of the operating lease right-of-use asset and operating lease liability on the condensed consolidated balance sheet (USD in thousands):

June 30, 2026

Operating lease right-of-use asset

Operating lease liability, current portion

Operating lease liability, non-current portion

Total operating lease liability

The current portion of the operating lease liability represents the present value of the 12 monthly payments due within the twelve months following June 30, 2026.

Maturity analysis of operating lease liability

The following table presents the maturity analysis of the Company’s operating lease liability at June 30, 2026, and a reconciliation of the undiscounted lease payments to the present value of the lease payments recognized on the condensed consolidated balance sheet (USD in thousands):

Period ending December 31,

Undiscounted lease payments

imputed interest

Present value of lease payments

Remainder of 2026 (six months)

The present value of lease payments of $ 631 thousand equals the operating lease liability recognized on the condensed consolidated balance sheet at June 30, 2026.

Undiscounted lease payments comprise the 58 monthly payments of $ 16,377 remaining at June 30, 2026, payable through April 30, 2031.

Weighted-average lease term and discount rate

June 30, 2026

Weighted-average remaining lease term (in years)

Weighted-average discount rate

The Company recorded no income tax expense for the three months ended March 31, 2026 or March 31, 2025.

The weighted-average discount rate of 18.0 % reflects the Company's incremental borrowing rate at the May 2026 commencement date of the Munich lease, determined by reference to the Company's current cost of secured borrowing as evidenced by the terms of the convertible debentures issued during 2026, adjusted for the collateralized nature, EUR denomination, and term of the lease obligation, and taking into account the going concern conditions existing at the commencement date.

The Company recorded no income tax expense for the three and six months ended June 30, 2026 or the three and six months ended June 30, 2025.

The Company continues to maintain valuation allowances against deferred tax assets where realization is not more likely than not.

Income tax expense associated with discontinued operations was not material for the periods presented.

Stockholders ’ Equity

During the three months ended March 31, 2026, the Company recognized $ 1,420 thousand of additional paid-in capital related to pre-funded warrants.

The Company accounts for income taxes under the asset and liability method as described in Note 2 (Basis of Presentation, Consolidation and Summary of Significant Accounting Policies).

The Company is subject to income taxation in the Netherlands and, for periods prior to the May 4, 2026 sale of Sono Motors GmbH, in Germany through its subsidiary.

The Company recorded no income tax expense or benefit for the three and six months ended June 30, 2026, or for the three and six months ended June 30, 2025.

The absence of income tax expense reflects the Company's full valuation allowance position against its net deferred tax assets.

The Company continues to maintain full valuation allowances against deferred tax assets in all jurisdictions where realization is not more likely than not, reflecting the Company's history of cumulative losses and the uncertainty regarding future taxable income described in Note 3 (Liquidity and Going Concern Analysis).

Income tax expense or benefit associated with discontinued operations was not material for the periods presented.

The Company does not currently have material unrecognized tax benefits or significant uncertain tax positions.

Shareholders ’ Equity (Deficit)

During the six months ended June 30, 2026, the Company recognized $ 1,964 thousand of additional paid-in capital related to pre-funded warrants.

Nominal values of the Company’s share capital are denominated in euros under Dutch corporate law.

2 unchanged sentences

Share capital

Issued and outstanding at March 31, 2026

Issued and outstanding at June 30, 2026

Issued and outstanding at December 31, 2025

6 unchanged sentences

Diluted net income (loss) per share gives effect to potentially dilutive securities when their effect is dilutive.

For Q1 2026, potentially dilutive securities were excluded because the Company reported a net loss and inclusion would have been anti-dilutive.

For the three and six months ended June 30, 2026 and the three months ended June 30, 2025, potentially dilutive securities were excluded from the computation of diluted net income (loss) per share because the Company reported a net loss for those periods and their inclusion would have been anti-dilutive;

diluted weighted-average shares outstanding therefore equal basic for those periods.

For the six months ended June 30, 2025, the computation of diluted net income per share includes the dilutive effect of potential ordinary shares relating to the convertible notes outstanding during that period.

Net income (loss) per share

Three months ended March 31, 2026

Three months ended March 31, 2025

Three months ended June 30, 2026

Three months ended June 30, 2025

Six months ended June 30, 2026

Six months ended June 30, 2025

Income (loss) from continuing operations

Loss from discontinued operations, net of tax

Loss from discontinued operations, net of tax, including loss on deconsolidation

Net income (loss)

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Weighted average shares outstanding - diluted

Basic net income (loss) per share:

Net income (loss) per share - basic:

Continuing operations

Discontinued operations

Discontinued operations, including deconsolidation

Net income (loss) per share - basic

Diluted net income (loss) per share:

Net income (loss) per share - diluted:

Continuing operations

Discontinued operations

Discontinued operations, including deconsolidation

Net income (loss) per share - diluted

3 unchanged sentences

Management is not currently aware of any matter that it believes would have a material adverse effect on the Company’s condensed consolidated financial statements, except as otherwise disclosed in this Quarterly Report.

The Company’s commitments and contingencies include matters associated with the exit from the Subsidiary, lease-related obligations included in the discontinued operations disposal group, public-company obligations, financing arrangements and the Treasury Strategy.

The Company’s commitments and contingencies include matters associated with the exit from Sono Motors GmbH, lease-related obligations included in the discontinued operations disposal group, public-company obligations, financing arrangements and the Treasury Strategy.

Exit from Sono Motors GmbH.

Matters associated with the May 4, 2026 sale of Sono Motors GmbH, including residual obligations and indemnification matters arising under the sale and purchase agreement.

See Note 4 (Discontinued Operations and Assets and Liabilities Held for Sale) for additional information.

Munich Lease Obligations .

Subsequent to the May 4, 2026 sale of Sono Motors GmbH, the Company remains the lessee under the lease for the Munich premises formerly used by Sono Motors GmbH.

In June 2026, preliminary insolvency proceedings were opened with respect to Sono Motors GmbH.

As a result, the contemplated transfer of the Munich lease to the new owners of Sono Motors GmbH has not been completed, and the Company continues to be obligated under the lease, which has a remaining term through April 30, 2031 and aggregate undiscounted future payments of approximately $949 thousand.

The Company is monitoring the status of the insolvency proceedings and their potential impact on the Company's lease obligations.

See Note 10 (Leases) for the maturity analysis of the Munich lease liability.

Public-Company Obligations.

Matters associated with the Company's ongoing public-company reporting obligations, including obligations and costs related to the proposed Redomiciliation Transaction described in Note 16 (Subsequent Events).

Financing Arrangements.

Matters associated with the Company's convertible debentures issued to Yorkville during 2026, including the debentures' maturity in 2027 and potential obligations upon conversion or at maturity.

See Note 8 (Convertible Notes, Embedded Derivatives and Pre-Funded Warrants) and Note 15 (Related Party Transactions) for additional information.

Treasury Strategy.

Matters associated with the Company's Bitcoin collateral obligations under the ISDA Master Agreement and Credit Support Annex with Blockchain.com, and risks arising from written covered Bitcoin call options.

See Note 2 (Basis of Presentation), Note 3 (Liquidity and Going Concern Analysis), Note 5 (Digital Assets) and Note 6 (Written Covered Bitcoin Call Options) for additional information .

Related Party Transactions

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is the sole holder of the Company’s outstanding Preferred Shares, which constitute 100% of that class of the Company’s issued share capital, and that Yorkville has maintained a long-standing and material financing relationship with the Company.

See Note 8 (Convertible Notes, Embedded Derivatives and Pre-Funded Warrants), Note 12 (Stockholders’ Equity) and Note 16 (Subsequent Events) for additional information.

No additional related-party transactions have been identified other than matters disclosed elsewhere in this Quarterly Report relating to financing, governance and the disposition of the legacy solar operations conducted through the Subsidiary.

See Note 8 (Convertible Notes, Embedded Derivatives and Pre-Funded Warrants) and Note 12 (Shareholders’ Equity) for additional information.

Subsequent Events

The Company has evaluated subsequent events through the date these condensed consolidated financial statements were issued.

The following event occurring subsequent to March 31, 2026 is disclosed below.

Disposition of Sono Motors GmbH.

On May 4, 2026, the Company entered into a Share Purchase and Transfer Agreement (the “SPA”) with (i) Vorratsla-160 M UG (haftungsbeschränkt) (in the future, OZERA UG (haftungsbeschränkt)), a German limited liability company whose sole shareholder is Denis Azhar, and (ii) Vorratsla-161 M UG (haftungsbeschränkt) (in the future, JanSol Invest UG (haftungsbeschränkt)), a German limited liability company whose sole shareholder is Jan Schiermeister (together, the “Purchasers”), and the Subsidiary.

Azhar and Mr.

Schiermeister are the current managing directors of the Subsidiary.

Pursuant to the SPA, the Company sold and transferred to the Purchasers, with immediate legal effect under German law and without conditions precedent, all 33,588 shares representing 100 % of the outstanding share capital of the Subsidiary, with 50 % transferred to each Purchaser.

The purchase price for the shares was € 1.00 in the aggregate.

Simultaneously, the Company sold and assigned to the Purchasers its shareholder loan repayment claim against the Subsidiary, including accrued interest, with an outstanding amount of approximately € 10.5 million as of April 29, 2026, for an aggregate purchase price of € 1.00 .

Each Purchaser’s portion of the shareholder loan repayment claim is subject to (i) a two-year standstill undertaking by the Purchasers and (ii) a qualified subordination (qualifizierter Rangrücktritt) pursuant to German insolvency law under which the claim is subordinated to all other present and future creditors of the Subsidiary.

In connection with the SPA, the Company and the Subsidiary agreed to terminate their corporate services agreement with retroactive effect as of April 30, 2026.

The SPA also requires the parties to use their best efforts to cause the lease agreement for the premises located at Waldmeisterstraße 93, 80935 Munich, Germany, under which the Company is the current lessee, to be transferred to the Subsidiary as lessee by no later than June 30, 2026, with a full release of the Company from any further liability thereunder;

if such transfer is not completed by that date, the Company has the right to terminate the lease agreement.

The Subsidiary granted the Company a worldwide, limited, non-exclusive, non-transferable, royalty-free, irrevocable license to use the “Sono” brand as company name and in connection with the Company's stock exchange listing, securities trading or stock ticker.

The SPA is governed by the laws of Germany, and disputes arising under the SPA are subject to binding arbitration in Munich, Germany.

Following the signing date of the SPA, the Company no longer holds any equity interest in, or exercises any control over, the Subsidiary.

The Company will deconsolidate the Subsidiary upon loss of control in the second quarter of 2026 and will recognize any resulting gain or loss within discontinued operations in the period in which loss of control occurs.

Because the Company recognized a $ 519 thousand loss on classification as held for sale in the first quarter of 2026 to reduce the disposal group based on the planned sale and nominal consideration subsequently documented in the SPA, the Company does not expect to recognize that same amount again as a deconsolidation loss in the second quarter of 2026.

The final gain or loss on deconsolidation will be determined based on the Company’s consolidated U.S.

GAAP carrying amounts at the date control is lost, after considering the held-for-sale impairment recognized in the first quarter, sale-date changes, release of any cumulative translation adjustment attributable to the Subsidiary, taxes, transaction costs, retained obligations and other closing adjustments.

The SPA described above is the operative transaction document for the assignment of the shareholder loan repayment claim, including the approximately € 10.5 million outstanding amount as of April 29, 2026, the aggregate € 1.00 consideration, the two-year standstill and the qualified subordination terms described above.

The shareholder loan receivable recorded by the Company and the corresponding payable recorded by the Subsidiary were intra-entity balances eliminated in consolidation prior to the transaction.

Accordingly, the shareholder loan was not included as a separate consolidated receivable or liability in the held-for-sale impairment or deconsolidation analysis.

For consolidated reporting purposes, the assignment of the shareholder loan claim as part of the SPA affects the sale and deconsolidation analysis in the period in which control is lost, rather than creating a separate receivable in the March 31, 2026 consolidated balance sheet.

Parent-company stand-alone accounting for the shareholder loan may differ from the consolidated accounting treatment described herein.

Additional Financing.

Subsequent to March 31, 2026, on April 28, 2026, the Company received an additional tranche of funding from YA II PN, Ltd.

(“Yorkville”) in the form of a convertible debenture issued by the Company to Yorkville in the aggregate principal amount of $ 700 thousand (the “April 2026 Debenture”).

The April 2026 Debenture matures on April 28, 2027, which maturity date may be extended at the option of Yorkville.

Further, interest accrues on the outstanding principal balance of the April 2026 Debenture at an annual rate of 12 %, which will increase to an annual rate of 18 % upon an Event of Default (as defined in the April 2026 Debenture), for so long as such Event of Default remains uncured.

Yorkville will have the right to convert the April 2026 Debenture into ordinary shares of the Company at the lower of (i) a price per ordinary share equal to $ 18.75 or (ii) 85 % of the lowest daily volume weighted average price of the ordinary shares during the seven consecutive trading days immediately preceding the conversion date or other date of determination (the “Variable Conversion Price”);

provided that the Variable Conversion Price may not be lower than the Floor Price (as defined in the April 2026 Debenture) then in effect or the nominal value of one ordinary share.

Net proceeds to the Company from the April 2026 Debenture were $ 700,000 .

The April 2026 Debenture was issued without registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act as a transaction not involving a public offering and in reliance on similar exemptions under applicable state laws.

Any ordinary shares of the Company issuable upon conversion of the April 2026 Debenture will be issued without registration under the Securities Act in reliance on applicable exemptions therefrom.

The foregoing description of the April 2026 Debenture does not purport to be complete and is qualified in its entirety by reference to the full text of the April 2026 Debenture, which is attached to this Quarterly Report as Exhibit 10.11 and is incorporated herein by reference.

Because the funding under the April 2026 Debenture occurred after March 31, 2026, the additional tranche is not reflected in the Company’s condensed consolidated balance sheet, notes payable balance, fair value measurement or notes payable rollforward as of and for the three months ended March 31, 2026.

Proposed Redomiciliation Transaction

On July 14, 2026, the Company’s management board and supervisory board unanimously approved a proposal to change the legal seat of the Company from the Netherlands, via Luxembourg, to the State of Delaware, to be effected through two substantially concurrent transactions:

(i) a cross-border merger of the Company with and into Sono Group S.à r.l., a wholly owned Luxembourg subsidiary of the Company to be transformed into a public limited company ( soci é t é anonyme ) prior to the merger (“ Sono Luxembourg ”), with Sono Luxembourg being the surviving entity and succeeding the Company as the SEC registrant, and (ii) as soon as practicable thereafter, the conversion of Sono Luxembourg into a corporation organized under the laws of the State of Delaware under the name “Sono Group, Inc.” (collectively, the “ Redomiciliation Transaction ”).

On July 15, 2026, Sono Luxembourg filed with the SEC a registration statement on Form S-4 (File No.

333-297478), as amended by Amendment No.

1 to the registration statement filed with the SEC on August 4, 2026 (the “ Registration Statement ”), which includes a proxy statement/prospectus for the extraordinary general meeting of the Company’s shareholders to be held for the purpose of voting on the Redomiciliation Transaction and the other proposals described in the Registration Statement, and which has not yet been declared effective by the SEC.

Completion of the Redomiciliation Transaction is subject to, among other things, the Registration Statement having been declared effective by the SEC, receipt of the requisite approval by the Company’s shareholders, submission of a notification form to the Nasdaq Capital Market, and the lapse of certain mandatory waiting periods and the fulfillment of statutory formalities under Dutch and Luxembourg law, and there can be no assurance as to whether or when the proposed Redomiciliation Transaction will be completed.

The Redomiciliation Transaction is structured to preserve shareholders’ existing economic and voting interests in the Company, and, if completed, will change only the Company’s jurisdiction of incorporation and legal form and is expected to be accounted for as a reorganization of entities under common control, with no significant impact on the Company’s consolidated financial statements, other than professional fees and other transaction costs, which are expensed as incurred.

For a description of the treatment of each class of the Company’s shares in the Redomiciliation Transaction, refer to the Registration Statement.

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

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q for the three months ended March 31, 2026 (this “ Quarterly Report ” ) and our audited consolidated financial statements and related notes thereto for the fiscal year ended December 31, 2025 included in our Annual Report on Form 10-K filed with the U.S.

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2026 (this “ Quarterly Report ” ) and our audited consolidated financial statements and related notes thereto for the fiscal year ended December 31, 2025 included in our Annual Report on Form 10-K filed with the U.S.

Securities and Exchange Commission (the “ SEC ” ) on April 1, 2026 (our “ 2025 Form 10-K ” ).

This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties.

You should carefully read the section entitled “ Risk Factors ” to gain an understanding of the important factors that could cause actual results to differ materially from our 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 in the section titled “ Risk Factors ” in Part I, Item 1A of our 2025 Form 10-K and those referred to in Part II, Item 1A of this Quarterly Report, including risks relating to the proposed Redomiciliation Transaction described in Note 16 (Subsequent Events), as updated from time to time in our other filings with the SEC.

You should carefully read those sections titled “ Risk Factors ” to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.

Please also see “ Cautionary Note Regarding Forward-Looking Statements ” below.

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( “ Sono N.V.

” ) conducted its business through its subsidiary, Sono Motors GmbH, a German limited liability company (Gesellschaft mit beschr ä nkter Haftung) (the “ Subsidiary ” ).

” ) conducted its business through its subsidiary, Sono Motors GmbH, a German limited liability company (Gesellschaft mit beschr ä nkter Haftung) (Sono Motors GmbH).

Unless otherwise indicated or the context otherwise requires, the terms “ Sono Group ” , “ Sono ” , “ the Company ” , “ we ” , “ our ” , “ us ” or similar terms refer to Sono Group N.V.

together with its consolidated subsidiaries as of March 31, 2026.

On March 14, 2026, the Company ’ s 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.

Subsequent to March 31, 2026, on May 4, 2026, the Company sold and transferred 100% of the outstanding share capital of the Subsidiary to third-party purchasers;

see “ Recent Developments ” below and Note 16 (Subsequent Events) to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report for additional information.

together with its consolidated subsidiaries for the periods presented.

On March 14, 2026, the Company ’ s supervisory board resolved to terminate all current and future funding commitments to Sono Motors GmbH and to exit the legacy solar operations conducted through Sono Motors GmbH with immediate effect.

On May 4, 2026, the Company sold and transferred 100% of the outstanding share capital of Sono Motors GmbH to third-party purchasers;

see “ Recent Developments ” below and Note 4 (Discontinued Operations and Assets and Liabilities Held for Sale) to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report for additional information.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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the price and volatility of Bitcoin and other digital assets, and the related impact on our financial condition, results of operations and liquidity;

our exit from the legacy solar operations conducted through the Subsidiary, which was completed subsequent to the three months ended March 31, 2026 through the execution and consummation of the SPA pursuant to which the Company sold the Subsidiary on May 4, 2026;

our exit from the legacy solar operations conducted through Sono Motors GmbH, which was completed on May 4, 2026 through the execution and consummation of the SPA pursuant to which the Company sold Sono Motors GmbH on May 4, 2026;

the planned solicitation of the ratification by our shareholders of our engagement in the Treasury Strategy at an extraordinary general meeting of shareholders;

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Business Overview

During the period from January 1, 2026 through March 14, 2026, our business consisted of the legacy solar operations conducted through the Subsidiary.

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 our management board that there was not a clear path for the Subsidiary to achieve profitability in a reasonably desirable timeframe, and thereby avoid future losses to the Company.

During the period from January 1, 2026 through March 14, 2026, our business consisted of the legacy solar operations conducted through Sono Motors GmbH.

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

This decision was made in conjunction with the decision on March 14, 2026 by our management board, with the approval of our supervisory board, to adopt the Treasury Strategy effective that same day.

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The ISDA Master Agreement, the Schedule and the Credit Support Annex are governed by the laws of England and Wales.

As of March 31, 2026, the Subsidiary was presented as a discontinued operation and disposal group classified as held for sale.

Through May 4, 2026, Sono Motors GmbH was presented as a discontinued operation and disposal group classified as held for sale;

on May 4, 2026, Sono Motors GmbH was sold and deconsolidated.

Our continuing operations consist of parent-company activities, public-company obligations, financing-related items and our digital asset treasury activities.

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Recent Developments

Disposition of Sono Motors GmbH.

On May 4, 2026, we entered into the SPA with (i) Vorratsla-160 M UG (haftungsbeschränkt), a German limited liability company whose sole shareholder is Denis Azhar, and (ii) Vorratsla-161 M UG (haftungsbeschränkt), a German limited liability company whose sole shareholder is Jan Schiermeister (together, the “Purchasers”), and the Subsidiary.

Azhar and Mr.

Schiermeister are the current managing directors of the Subsidiary.

Pursuant to the SPA, we sold and transferred to the Purchasers, with immediate legal effect under German law and without conditions precedent, all 33,588 shares representing 100% of the outstanding share capital of the Subsidiary, with 50% transferred to each Purchaser.

The purchase price for the shares was €1.00 in the aggregate.

Simultaneously, we sold and assigned to the Purchasers our shareholder loan repayment claim, including accrued interest, with an outstanding amount of approximately €10.5 million as of April 29, 2026, for an aggregate purchase price of €1.00.

In connection with the SPA, we and the Subsidiary agreed to terminate our corporate services agreement with retroactive effect as of April 30, 2026.

The SPA also requires the parties to use their best efforts to cause the lease agreement for the premises located at Waldmeisterstraße 93, 80935 Munich, Germany, under which we are the current lessee, to be transferred to the Subsidiary as lessee by no later than June 30, 2026, with a full release of us from any further liability thereunder;

if such transfer is not completed by that date, we have the right to terminate the lease agreement.

The Subsidiary granted us a worldwide, limited, non-exclusive, non-transferable, royalty-free, irrevocable license to use the “Sono” brand as company name and in connection with our stock exchange listing, securities trading or stock ticker.

The SPA is governed by the laws of Germany, and disputes arising under the SPA are subject to binding arbitration in Munich, Germany.

Following the signing date of the SPA, we no longer hold any equity interest in, or exercise any control over, the Subsidiary.

We will deconsolidate the Subsidiary upon loss of control and recognize any resulting gain or loss within discontinued operations in the period in which the loss of control occurs.

Because we recognized a $519 thousand loss on classification as held for sale in the first quarter of 2026 to reduce the disposal group based on the planned sale and nominal consideration subsequently documented in the SPA, we do not expect to recognize that same amount again as a deconsolidation loss in the second quarter of 2026.

The final gain or loss on deconsolidation will be determined based on our consolidated U.S.

See Note 16 (Subsequent Events) to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report for additional information.

Change in Reporting Currency.

Effective January 1, 2026, we changed our reporting currency from the euro to the U.S.

We have recast all prior-period financial information presented in our condensed consolidated financial statements into U.S.

dollars as if the U.S.

dollar had been our reporting currency since the earliest period presented.

The change in reporting currency does not change the underlying functional-currency determination for each distinct and separable operation.

The Subsidiary continues to have the euro as its functional currency.

See Note 2 (Basis of Presentation, Consolidation and Summary of Significant Accounting Policies) to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report for additional information.

Additional Financing.

Subsequent to March 31, 2026, on April 28, 2026, the Company received an additional tranche of funding from Yorkville in the form of a convertible debenture issued by the Company to Yorkville in the aggregate principal amount of $700 thousand.

The April 2026 Debenture matures on April 28, 2027, which maturity date may be extended at the option of Yorkville.

Further, interest accrues on the outstanding principal balance of the April 2026 Debenture at an annual rate of 12%, which will increase to an annual rate of 18% upon an Event of Default, for so long as such Event of Default remains uncured.

Yorkville will have the right to convert the April 2026 Debenture into ordinary shares of the Company at the lower of (i) a price per ordinary share equal to $18.75 or (ii) 85% of the lowest daily volume weighted average price of the ordinary shares during the seven consecutive trading days immediately preceding the conversion date or other date of determination (the “Variable Conversion Price”);

provided that the Variable Conversion Price may not be lower than the Floor Price then in effect or the nominal value of one ordinary share.

Net proceeds to the Company from the April 2026 Debenture were $700,000.

Any ordinary shares of the Company issuable upon conversion of the April 2026 Debenture will be issued without registration under the Securities Act in reliance on applicable exemptions therefrom.

See Note 16 (Subsequent Events) to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report for additional information.

Proposed Redomiciliation Transaction

(i) a cross-border merger of the Company with and into Sono Luxembourg, a wholly owned Luxembourg subsidiary of the Company to be transformed into a public limited company (société anonyme) prior to the merger, with Sono Luxembourg being the surviving entity and succeeding the Company as the SEC registrant, and (ii) as soon as practicable thereafter, the conversion of Sono Luxembourg into a corporation organized under the laws of the State of Delaware under the name “Sono Group, Inc.”.

Sono Luxembourg has filed with the SEC the Registration Statement, which includes a proxy statement/prospectus for the extraordinary general meeting of the Company’s shareholders to be held for the purpose of voting on the Redomiciliation Transaction and the other proposals described in the Registration Statement, and which has not yet been declared effective by the SEC.

The Company expects to continue to incur professional fees and other transaction costs in connection with the Redomiciliation Transaction, which are expensed as incurred.

See Note 16 (Subsequent Events) to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report for additional information, including the expected accounting treatment of the Redomiciliation Transaction, and Part II, Item 1A of this Quarterly Report for information regarding related risk factors.

Munich Lease and Insolvency of former subsidiary Sono Motors GmbH

In June 2026, preliminary insolvency proceedings ( vorl ä ufiges Insolvenzverfahren ) were opened in Germany with respect to Sono Motors GmbH, the former subsidiary of the Company that was sold on May 4, 2026.

The Company holds no ownership interest in, and has no funding commitments to, Sono Motors GmbH, and Sono Motors GmbH’s results are not included in the Company’s continuing operations.

The Company remains the lessee under the lease agreement for the premises in Munich, Germany formerly used by Sono Motors GmbH in the legacy solar operations.

The contemplated transfer of the lease to Sono Motors GmbH has not been completed as a result of the preliminary insolvency proceedings, and the Company is pursuing a transfer of the lease, a successor lessee or a negotiated termination of the lease with the landlord, while reserving its claims in respect of Sono Motors GmbH’s use of the premises.

There can be no assurance as to the timing or outcome of these efforts, and the Company expects to remain obligated under the lease until a transfer, replacement or termination is completed.

See Note 4 (Discontinued Operations and Assets and Liabilities Held for Sale) to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report for additional information.

Components of Our Results of Operations

We did not generate revenue from continuing operations during the three months ended March 31, 2026 or March 31, 2025.

Revenue generated by the legacy solar operations conducted through the Subsidiary has been presented within discontinued operations for all periods presented.

We did not generate revenue from continuing operations during the three and six months ended June 30, 2026 or the three and six months ended June 30, 2025.

Revenue generated by the legacy solar operations conducted through Sono Motors GmbH has been presented within discontinued operations for all periods presented.

Digital Asset Treasury Loss, Net

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General and administrative expenses include professional fees (including legal, audit, accounting and financing- and transaction-related fees), public-company and SEC reporting costs, insurance, office and rent expense, software and subscriptions and other holding-company overhead.

Gain on Change in Fair Value of Convertible Notes Payable Carried at Fair Value

Gain on change in fair value of convertible notes payable carried at fair value represents period-to-period fair-value remeasurements of certain predecessor convertible notes that were accounted for under the fair-value election.

The fair-value election is not applicable to the convertible debentures issued during the three months ended March 31, 2026, which are accounted for using the debt-host plus embedded-derivative model.

Accordingly, this line item is not expected to recur in respect of the convertible debentures issued during the three months ended March 31, 2026.

Change in Fair Value of Debt and Derivative Instruments

Change in fair value of debt and derivative instruments represents period-to-period fair-value remeasurements of (i) certain predecessor convertible notes that were accounted for under the fair-value election and (ii) the embedded conversion derivative liabilities bifurcated from the convertible debentures issued during 2026, which are accounted for using the debt-host plus embedded-derivative model, in each case with changes in fair value recognized in earnings.

The fair-value election is not applicable to the convertible debentures issued during 2026;

accordingly, remeasurements of convertible notes under the fair-value election are not expected to recur in respect of the convertible debentures issued during 2026.

See Note 8 (Convertible Notes, Embedded Derivatives and Pre-Funded Warrants) to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report.

Gain on Change in Fair Value of Embedded Derivative Liabilities

Gain on change in fair value of embedded derivative liabilities represents period-to-period fair-value remeasurements of the embedded conversion derivative liabilities bifurcated from the convertible debentures issued during the three months ended March 31, 2026, with changes in fair value recognized in earnings.

Interest Expense, Including Amortization of Debt Discount

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Loss From Discontinued Operations, Net of Tax

Loss from discontinued operations, net of tax represents the results of operations of the Subsidiary, which has been presented as a discontinued operation for all periods presented in connection with our decision to terminate funding to, and exit the legacy solar operations conducted through, the Subsidiary.

See Note 4 (Discontinued Operations and Assets and Liabilities Held for Sale) and Note 16 (Subsequent Events) to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report.

Loss from discontinued operations, net of tax represents the results of operations of Sono Motors GmbH, which has been presented as a discontinued operation for all periods presented in connection with our decision to terminate funding to, and exit the legacy solar operations conducted through, Sono Motors GmbH.

See Note 4 (Discontinued Operations and Assets and Liabilities Held for Sale) to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report.

Loss on Deconsolidation of Subsidiary

Loss on deconsolidation of subsidiary represents the loss recognized upon the sale of Sono Motors GmbH on May 4, 2026, measured as the difference between the consideration received and the carrying amount of Sono Motors GmbH's net assets at the date of deconsolidation, including the derecognition of Sono Motors GmbH's assets and liabilities and amounts of accumulated other comprehensive income (loss) attributable to Sono Motors GmbH reclassified to earnings, principally cumulative foreign currency translation adjustments.

This line item relates to the completed exit from the legacy solar operations and is not expected to recur.

See Note 4 (Discontinued Operations and Assets and Liabilities Held for Sale) to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report.

Results of Operations

The following table summarizes our consolidated results of operations for the periods indicated:

Comparison of the three months ended June 30, 2026 and 2025

The following table summarizes our consolidated results of operations for the period indicated:

Three months ended

(in thousands)

Continuing operations

Digital asset treasury income (loss), net

General and administrative expenses

Loss from operations

Change in fair value of debt and derivative instruments

Interest expense, including amortization of debt discount

Foreign currency gain (loss), net

Income (loss) from continuing operations

Loss from discontinued operations, net of tax

Loss on deconsolidation of subsidiary

Digital Asset Treasury Loss, Net

For the three months ended June 30, 2026, digital asset treasury loss, net was $578 thousand, consisting principally of unrealized fair-value remeasurement losses on Bitcoin holdings, partially offset by net premium income from written covered Bitcoin call options.

We did not hold digital assets and did not write covered Bitcoin call options during the three months ended June 30, 2025.

General and Administrative Expenses

Loss from continuing operations

Gain on change in fair value of convertible notes payable carried at fair value

Gain on change in fair value of embedded derivative liabilities

For the three months ended June 30, 2026, general and administrative expenses were $1,401 thousand, compared to $768 thousand for the three months ended June 30, 2025.

The increase principally reflects higher professional fees associated with the convertible debenture and pre-funded warrant financings, the preparation of the proposed Redomiciliation Transaction described in Note 16 (Subsequent Events), the exit from the legacy solar operations and continuing public-company costs.

General and administrative expenses related to the legacy solar operations have been presented within discontinued operations for all periods presented.

Change in Fair Value of Debt and Derivative Instruments

For the three months ended June 30, 2026, we recognized a net gain of $116 thousand on the change in fair value of debt and derivative instruments, compared to a gain of $1,316 thousand for the three months ended June 30, 2025.

The amounts are not directly comparable between periods.

The gain recognized in the 2025 period arose from the fair-value remeasurement of the predecessor convertible debentures, which were accounted for under the fair-value election;

the fair-value election is not applicable to the convertible debentures issued during 2026, which are accounted for using the debt-host plus embedded-derivative model, and the amount recognized in the 2026 period accordingly reflects changes in the fair value of the embedded conversion derivative liabilities associated with those debentures.

The three-month 2026 amount presents the quarter after allocating the correction recorded on April 1, 2026 to the first quarter, to which it relates;

see Note 2 (Basis of Presentation, Consolidation and Summary of Significant Accounting Policies).

See Note 8 (Convertible Notes, Embedded Derivatives and Pre-Funded Warrants) to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report.

Interest Expense, Including Amortization of Debt Discount

For the three months ended June 30, 2026, interest expense, including amortization of debt discount, was $468 thousand, consisting of accrued coupon interest on the convertible debentures and amortization of the related debt discount.

There was no comparable interest expense recognized in continuing operations for the three months ended June 30, 2025, because the predecessor convertible notes were accounted for at fair value, with all changes in fair value recognized within the fair-value line item.

Foreign Currency Loss, Net

Total other income, net

Income (loss) from continuing operations before income taxes

Income tax expense

For the three months ended June 30, 2026, we recorded no foreign currency gain or loss within continuing operations.

For the three months ended June 30, 2025, we recognized net foreign currency gains of $174 thousand within continuing operations.

Loss From Discontinued Operations, Net of Tax

For the three months ended June 30, 2026, loss from discontinued operations, net of tax was $345 thousand, compared to $1,246 thousand for the three months ended June 30, 2025.

The decrease reflects the wind-down of operating activity at Sono Motors GmbH following our March 14, 2026 decision to terminate funding to, and exit, the legacy solar operations, and the May 4, 2026 sale of Sono Motors GmbH, after which Sono Motors GmbH’s results are no longer included in the Company’s results.

Loss on Deconsolidation of Subsidiary

For the three months ended June 30, 2026, we recognized a loss on deconsolidation of Sono Motors GmbH of $1,101 thousand in connection with the May 4, 2026 sale of Sono Motors GmbH, with no comparable amount in the 2025 period.

See Note 4 (Discontinued Operations and Assets and Liabilities Held for Sale) to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report.

For the three months ended June 30, 2026, we reported a net loss of $3,777 thousand, compared to a net loss of $524 thousand for the three months ended June 30, 2025.

The increase in net loss principally reflects the $1,101 thousand loss on deconsolidation of Sono Motors GmbH, a lower net gain on the change in fair value of debt and derivative instruments ($116 thousand in the 2026 period, compared to $1,316 thousand in the 2025 period, which is not directly comparable, as described above), higher general and administrative expenses (an increase of $633 thousand, from $768 thousand in the 2025 period to $1,401 thousand in the 2026 period), the digital asset treasury loss, net, of $578 thousand and interest expense of $468 thousand on the convertible debentures issued during 2026, partially offset by a $901 thousand decrease in loss from discontinued operations.

Comparison of the six months ended June 30, 2026 and 2025

The following table summarizes our consolidated results of operations for the period indicated:

Six months ended

(in thousands)

Digital asset treasury income (loss), net

General and administrative expenses

Loss from operations

Change in fair value of debt and derivative instruments

Interest expense, including amortization of debt discount

Foreign currency gain (loss), net

Income (loss) from continuing operations

Loss from discontinued operations, net of tax

Net income (loss)

Loss on deconsolidation of subsidiary

Digital Asset Treasury Loss, Net

For the three months ended March 31, 2026, digital asset treasury loss, net was $313 thousand, consisting principally of a $326 thousand unrealized fair-value remeasurement loss on Bitcoin holdings, partially offset by net written covered Bitcoin call option income of $14 thousand (consisting of $35 thousand of realized expiration or settlement gain less a $21 thousand unrealized loss on open written-call positions), and other digital asset treasury items.

We did not hold digital assets and did not write covered Bitcoin call options during the three months ended March 31, 2025.

For the six months ended June 30, 2026, digital asset treasury loss, net was $890 thousand, consisting principally of unrealized fair-value remeasurement losses on Bitcoin holdings, partially offset by net premium income from written covered Bitcoin call options.

We did not hold digital assets and did not write covered Bitcoin call options during the three or six months ended June 30, 2025.

General and Administrative Expenses

For the three months ended March 31, 2026, general and administrative expenses were $1,167 thousand, compared to $1,018 thousand for the three months ended March 31, 2025.

The increase principally reflects higher professional fees associated with the adoption of the Treasury Strategy, the entry into the ISDA Master Agreement and related transaction documents, the execution of the convertible debenture and pre-funded warrant financings, and continuing public-company costs.

For the six months ended June 30, 2026, general and administrative expenses were $2,293 thousand, compared to $1,198 thousand for the six months ended June 30, 2025.

The increase principally reflects higher professional fees associated with the Treasury Strategy, the convertible debenture and pre-funded warrant financings, the preparation of the proposed Redomiciliation Transaction described in Note 16 (Subsequent Events), the exit from the legacy solar operations and continuing public-company costs.

General and administrative expenses related to the legacy solar operations have been presented within discontinued operations for all periods presented.

Gain on Change in Fair Value of Convertible Notes Payable Carried at Fair Value

For the three months ended March 31, 2025, we recognized a gain of $10,331 thousand on the fair-value remeasurement of convertible notes accounted for under the fair-value election.

The fair-value election applied to the predecessor convertible debentures and is not applicable to the convertible debentures issued during the first quarter of 2026, which are accounted for using the debt-host plus embedded-derivative model.

Change in Fair Value of Debt and Derivative Instruments

For the six months ended June 30, 2026, we recognized a net gain of $462 thousand on the change in fair value of debt and derivative instruments, compared to a gain of $12,191 thousand for the six months ended June 30, 2025.

As described under "Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025, Change in Fair Value of Debt and Derivative Instruments," the amounts are not directly comparable between periods:

the 2025 gain arose from the fair-value remeasurement of the predecessor convertible debentures under the fair-value election, while the 2026 amount reflects changes in the fair value of the embedded conversion derivative liabilities associated with the convertible debentures issued during 2026, which are accounted for using the debt-host plus embedded-derivative model.

The six-month amount is unaffected by the allocation of the correction described in Note 2.

See Note 8 (Convertible Notes, Embedded Derivatives and Pre-Funded Warrants) to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report.

Gain on Change in Fair Value of Embedded Derivative Liabilities

For the three months ended March 31, 2026, we recognized a gain of $591 thousand on the change in the fair value of the embedded conversion derivative liabilities associated with the convertible debentures issued during the period.

The embedded conversion features were bifurcated from the debt host and accounted for as derivative liabilities at fair value, with changes in fair value recognized in earnings.

We did not have an embedded derivative liability during the three months ended March 31, 2025.

Interest Expense, Including Amortization of Debt Discount

For the three months ended March 31, 2026, interest expense, including amortization of debt discount, was $113 thousand, consisting of $44 thousand of accrued coupon interest on the convertible debentures issued during the period and $69 thousand of debt discount amortization.

There was no comparable interest expense recognized in continuing operations for the three months ended March 31, 2025, because the predecessor convertible notes were accounted for at fair value, with all changes in fair value recognized within the fair-value line item.

For the six months ended June 30, 2026, interest expense, including amortization of debt discount, was $614 thousand, consisting of accrued coupon interest on the convertible debentures and amortization of the related debt discount.

There was no comparable interest expense recognized in continuing operations for the three or six months ended June 30, 2025, because the predecessor convertible notes were accounted for at fair value, with all changes in fair value recognized within the fair-value line item.

Foreign Currency Loss, Net

For the three months ended March 31, 2026, we did not recognize a net foreign currency gain or loss.

For the three months ended March 31, 2025, we recognized a net foreign currency loss of $13 thousand within continuing operations.

For the six months ended June 30, 2026, we recorded no foreign currency gain or loss within continuing operations, and for the six months June 30, 2025, we recognized net foreign currency gains of $516 thousand within continuing operations.

Loss From Discontinued Operations, Net of Tax

For the three months ended March 31, 2026, loss from discontinued operations, net of tax was $1,013 thousand, compared to $1,498 thousand for the three months ended March 31, 2025.

The decrease reflects the wind-down of operating activity at the Subsidiary following our March 14, 2026 decision to terminate funding to, and exit the legacy solar operations conducted through, the Subsidiary, partially offset by a $519 thousand loss on classification as held for sale recognized during the three months ended March 31, 2026.

For the six months ended June 30, 2026, loss from discontinued operations, net of tax was $1,356 thousand, compared to $2,731 thousand for the six months ended June 30, 2025.

Loss on Deconsolidation of Subsidiary

For the six months ended June 30, 2026, we recognized a loss on deconsolidation of Sono Motors GmbH of $1,101 thousand in connection with the May 4, 2026 sale of Sono Motors GmbH, with no comparable amount in the 2025 period.

See Note 4 (Discontinued Operations and Assets and Liabilities Held for Sale) to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report.

Net Income (Loss)

For the three months ended March 31, 2026, we reported a net loss of $2,015 thousand, compared to net income of $7,802 thousand for the three months ended March 31, 2025.

The change is principally driven by the absence in 2026 of the prior-year fair-value gain on convertible notes accounted for under the fair-value election and the $519 thousand loss on classification as held for sale, partially offset by the 2026 gain on change in the fair value of the embedded conversion derivative liabilities and the lower operating loss from discontinued operations.

For the six months ended June 30, 2026, we reported a net loss of $5,792 thousand, compared to net income of $8,778 thousand for the six months ended June 30, 2025.

The change from net income to a net loss principally reflects a substantially lower net gain on the change in fair value of debt and derivative instruments ($462 thousand in the 2026 period, compared to $12,191 thousand in the 2025 period, which is not directly comparable, as described above), the $1,101 thousand loss on deconsolidation of Sono Motors GmbH, offset by a $1,375 thousand decrease in loss from discontinued operations, higher general and administrative expenses ($2,293 thousand in the 2026 period, compared to $1,198 thousand in the 2025 period, an increase of $1,095 thousand), the digital asset treasury loss, net, of $890 thousand, interest expense of $614 thousand on the convertible debentures issued during 2026 and a lower net foreign currency loss of $3 thousand in the 2026 period, compared to a net foreign currency gain of $516 thousand in the 2025 period.

Liquidity and Capital Resources

As of March 31, 2026, our cash and cash equivalents were $237 thousand, compared to $243 thousand as of December 31, 2025.

As of June 30, 2026, our cash and cash equivalents were $166 thousand, compared to $205 thousand as of December 31, 2025.

Cash consists of cash in bank accounts.

We do not currently generate revenue from continuing operations and we continue to incur operating expenses related to holding-company overhead and public-company compliance costs.

Following the adoption of the Treasury Strategy and the cessation of funding to the Subsidiary 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.

Following the adoption of the Treasury Strategy and the cessation of funding to 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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On December 30, 2024, the Company and Yorkville also entered into an exchange agreement (the “Exchange Agreement” and together with the SPA “Transaction Documents”), 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 new convertible debentures issued to Yorkville on February 5, 2024 and August 30, 2024 (the “2024 Debentures”) and the New Commitment Debenture (if issued).

On February 12, 2025, the Company and Yorkville entered into an Omnibus Amendment to Transaction Documents (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 Debenture.

On February 12, 2025, the Company and Yorkville entered into an Omnibus Amendment to Transaction Documents (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 million of the Yorkville Commitment in the form of the First Debenture.

On March 25, 2025, the Company and Yorkville entered into a third Omnibus Amendment to Transaction Documents (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 Debenture.

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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”).

On April 28, 2026, the Company issued a convertible debenture to Yorkville in the aggregate principal amount of $700,000, maturing on April 28, 2027 (“Debenture SEV-11”).

Limited grant funding from government and public research institutions, supporting the development of our proprietary solar technology, which has been classified within discontinued operations.

Limited revenues from sale of prototypes, our solar products and services, which have been classified within discontinued operations.

Our cash outflows during the three months ended March 31, 2026 were principally driven by:

Our cash outflows during the six months ended June 30, 2026 were principally driven by:

General and administrative expenses, primarily professional fees, public-company and SEC reporting costs and other holding-company overhead.

Purchases of Bitcoin in connection with the Treasury Strategy.

Cash used in the operations of the Subsidiary, which have been classified within discontinued operations.

Cash used in the operations of Sono Motors GmbH, which have been classified within discontinued operations.

Liquidity Outlook and Ability to Continue as a Going Concern

The Company has incurred recurring operating losses and historically negative cash flows from operations since inception, primarily attributable to the operations of the Subsidiary, which has been classified as a discontinued operation for all periods presented and, subsequent to March 31, 2026, on May 4, 2026, the Company sold and transferred 100% of the outstanding share capital of the Subsidiary to third-party purchasers.

For the three months ended March 31, 2026, the Company recorded a loss from continuing operations of $1,480 thousand and a net loss of $2,015 thousand, and as of March 31, 2026 had cash and cash equivalents of $237 thousand and an accumulated deficit of $335.4 million.

The Company has incurred recurring operating losses and historically negative cash flows from operations since inception, primarily attributable to the operations of Sono Motors GmbH, which has been classified as a discontinued operation for all periods presented;

on May 4, 2026, the Company sold and transferred 100% of the outstanding share capital of Sono Motors GmbH to third-party purchasers.

For the six months ended June 30, 2026, the Company recorded a loss from continuing operations of $3,335 thousand and a net loss of $5,792 thousand, and as of June 30, 2026 had cash and cash equivalents of $166 thousand, Bitcoin with a fair value of $4,118 thousand and an accumulated deficit of $339.2 million.

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

These actions, which are more fully described under “Sources and Uses of Liquidity” above and in Note 3 (Liquidity and Going Concern Analysis), Note 4 (Discontinued Operations and Assets and Liabilities Held for Sale), Note 8 (Convertible Notes, Embedded Derivatives and Pre-Funded Warrants) and Note 16 (Subsequent Events) to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report, included:

(i) raising aggregate gross proceeds of approximately $6.4 million through the issuance of the Q1 2026 Debentures to Yorkville on January 26, 2026, February 19, 2026 and March 10, 2026, respectively, in the aggregate principal amount of $4.35 million and the issuance to Yorkville on March 10, 2026 of a pre-funded warrant for aggregate proceeds of $2.0 million;

These actions, which are more fully described under “Sources and Uses of Liquidity” above and in Note 3 (Liquidity and Going Concern Analysis), Note 4 (Discontinued Operations and Assets and Liabilities Held for Sale), Note 8 (Convertible Notes, Embedded Derivatives and Pre-Funded Warrants) to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report, included:

(i) raising aggregate gross proceeds of approximately $7.1 million through the issuance of the Q1 2026 Debentures to Yorkville on January 26, 2026, February 19, 2026 and March 10, 2026, respectively, in the aggregate principal amount of $4.35 million, the issuance to Yorkville on March 10, 2026 of a pre-funded warrant for aggregate proceeds of $2.0 million, and the issuance to Yorkville on April 28, 2026 of the April 2026 Debenture in the aggregate principal amount of $700 thousand;

(ii) using a substantial portion of the proceeds to implement the Treasury Strategy, including the acquisition of Bitcoin and entry into an institutional framework with Blockchain.com in the form of the ISDA Master Agreement and the related Schedule and Credit Support Annex;

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

In addition, as further described under “Recent Developments” above, subsequent to March 31, 2026, the Company completed its exit from the legacy solar operations through the execution and consummation of the SPA pursuant to which the Subsidiary was sold on May 4, 2026, and received from Yorkville an additional tranche of funding in the amount of $700 thousand in the form of a convertible debenture.

and (iii) terminating all current and future funding commitments to Sono Motors GmbH and completing the Company’s exit from the legacy solar operations through the execution and consummation of the SPA pursuant to which Sono Motors GmbH was sold on May 4, 2026, which management expects to reduce certain of the Company’s ongoing cash outflows.

These actions are relevant to management’s liquidity plans and operating strategy, but they did not alleviate substantial doubt about the Company’s ability to continue as a going concern.

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 pursuant to the Credit Support Annex, the residual obligations of the Company under the Share Purchase and Transfer Agreement, including the pending transfer of the lease for the Munich premises by no later than June 30, 2026, sale-date deconsolidation effects not already reflected in the first-quarter held-for-sale impairment, and the maturities of the Q1 2026 Debentures in 2027, which may require us to negotiate a refinancing or conversion prior to or at maturity.

In addition, the Company expects to continue to incur professional fees and other transaction costs in connection with the proposed Redomiciliation Transaction described under “Recent Developments” above and in Note 16 (Subsequent Events), the completion of which is not assured.

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 pursuant to the Credit Support Annex, the Company’s continuing obligations under the lease for the Munich premises formerly used by Sono Motors GmbH, the contemplated transfer of which has not been completed as a result of the preliminary insolvency proceedings opened with respect to Sono Motors GmbH in June 2026, as described under “Recent Developments” above, and the maturities in 2027 of the convertible debentures issued during the six months ended June 30, 2026, which may require us to negotiate a refinancing or conversion prior to or at maturity.

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

See Note 3 (Liquidity and Going Concern Analysis) and Note 16 (Subsequent Events) to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report for additional information.

The table below summarizes our cash flows (used in) from operating, investing and financing activities for the three months ended March 31, 2026 and 2025.

For the three months ended March 31,

(in $ thousands)

See Note 3 (Liquidity and Going Concern Analysis) to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report for additional information.

The table below summarizes our cash flows (used in) from operating, investing and financing activities for the six months ended June 30, 2026 and 2025.

For the six months ended June 30,

Cash provided by (used in):

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Financing activities

Effect of exchange-rate changes and held-for-sale cash presentation on cash and cash equivalents

Net decrease in cash and cash equivalents

Effect of exchange-rate changes on cash

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of period

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Net cash provided by / (used in) operating activities

Net cash used in operating activities was $1,356 thousand for the three months ended March 31, 2026, compared to net cash used in operating activities of $2,582 thousand for the three months ended March 31, 2025.

The current period reflects a net loss of $2,015 thousand adjusted for noncash items, including the $1,264 thousand gain on change in fair value of embedded conversion derivative liabilities, the $519 thousand loss on classification as held for sale, $275 thousand of foreign currency and other noncash items, and $200 thousand of net changes in operating assets and liabilities, including discontinued operations.

The prior-year period included the $10,331 thousand noncash gain on change in fair value of convertible notes payable carried at fair value.

Net cash used in operating activities was $2,089 thousand for the six months ended June 30, 2026, compared to net cash used in operating activities of $5,353 thousand for the six months ended June 30, 2025.

The current period reflects a net loss of $5,792 thousand adjusted for noncash items, including the $1,101 thousand loss on deconsolidation of Sono Motors GmbH, $890 thousand of digital asset treasury loss, net, $424 thousand of amortization of debt discount and the $462 thousand net gain on change in fair value of debt and derivative instruments, together with a $1,078 thousand increase in accounts payable and accrued liabilities and $189 thousand of accrued interest payable, partially offset by $708 thousand of cash funding of discontinued operations.

The prior-year period reflects net income of $8,778 thousand adjusted for the $12,191 thousand noncash gain on change in fair value of convertible notes payable carried at fair value, together with the changes in operating assets and liabilities and the funding of the disposal group presented in the unaudited condensed consolidated statements of cash flows.

Net cash used in operating activities presented above reflect only the continuing operations of the Company.

See Note 4 (Discontinued Operations and Assets and Liabilities Held for Sale) for cash flow information related to the discontinued operations of Sono Motors GmbH, including the operating cash use of the disposal group and the cash of Sono Motors GmbH derecognized upon deconsolidation.

Net cash used in investing activities

Net cash used in investing activities was $5,000 thousand for the three months ended March 31, 2026, reflecting purchases of Bitcoin in connection with the Treasury Strategy.

Investing activities provided no cash flows for the three months ended March 31, 2025.

Net cash used in investing activities was $5,000 thousand for the six months ended June 30, 2026, reflecting purchases of Bitcoin in connection with the Treasury Strategy.

Investing activities provided no cash flows for the six months ended June 30, 2025.

Net cash provided by financing activities

Net cash provided by financing activities was $6,350 thousand for the three months ended March 31, 2026, resulting from gross proceeds of $4,350 thousand received in connection with the issuance of the Q1 2026 Debentures and gross proceeds of $2,000 thousand received in connection with the issuance of the Pre-Funded Warrant.

Net cash provided by financing activities was $2,000 thousand for the three months ended March 31, 2025, resulting from gross proceeds of $2,000 thousand from the issuance of convertible debentures to Yorkville in February and March 2025.

Net cash provided by financing activities was $7,050 thousand for the six months ended June 30, 2026, resulting from gross proceeds of $4,350 thousand received in connection with the issuance of the Q1 2026 Debentures, gross proceeds of $2,000 thousand received in connection with the issuance of the Pre-Funded Warrant and gross proceeds of $700 thousand received in connection with the issuance of the April 2026 Debenture.

Net cash provided by financing activities was $5,397 thousand for the six months ended June 30, 2025, resulting from net draws on convertible notes accounted for under the fair-value election.

Critical Accounting Policies and Estimates

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What changed 10-Q

Item 1. Financial Statements