Sono Group N.V.
For the period ended Jun 30, 2026. Filed Aug 14, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 14, 2026
SSM$0.89+2.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-19.
0001171843-26-003535
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-14.
0001171843-26-005543
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 85 previous paragraphs and 79 current paragraphs.
30 unchanged; 26 reworded; 18 added; 22 removed; 7 previous and 5 current paragraphs rearranged.
Tables are not compared: 32 previous and 33 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
Proposed Redomiciliation Transaction
Current report
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 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. 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. 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.
Current report
Munich Lease and Insolvency of former subsidiary Sono Motors GmbH
Current report
In June 2026, preliminary insolvency proceedings (vorläufiges 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.
Current report
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.
Current report
Comparison of the three months ended June 30, 2026 and 2025
Current report
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.
Current report
Net Loss
Current 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.
Current report
Comparison of the six months ended June 30, 2026 and 2025
Current report
General and Administrative Expenses
Current report
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.
Current report
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.
Current report
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. 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.
Current report
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.
Current report
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.
Current report
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 under “Recent Developments” above and in Note 16 (Subsequent Events), the completion of which is not assured.
Current report
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.
Removed paragraphs (22)
Previous report
Disposition of Sono Motors GmbH.
Previous report
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. Mr. 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. 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.
Previous report
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.
Previous report
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.
Previous report
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. 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. 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.
Previous report
Change in Reporting Currency.
Previous report
Effective January 1, 2026, we changed our reporting currency from the euro to the U.S. dollar. 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.
Previous report
Additional Financing.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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. 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.
Previous report
Digital Asset Treasury Loss, Net
Previous report
Gain on Change in Fair Value of Embedded Derivative Liabilities
Previous report
Foreign Currency Loss, Net
Previous report
Digital Asset Treasury Loss, Net
Previous report
Gain on Change in Fair Value of Embedded Derivative Liabilities
Previous report
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.
Previous report
Foreign Currency Loss, Net
Previous report
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.
Previous report
**Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Reworded paragraphs (26)
Previous wording
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. 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. 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, as updated from time to time in our other filings with the SEC. 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. Please also see*“Cautionary Note Regarding Forward-Looking Statements”* below.*
Current wording
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. 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.*
Previous wording
During the period from January 1, 2026 through March 14, 2026, Sono Group N.V. (“Sono N.V.”) conducted its business through its subsidiary, Sono Motors GmbH, a German limited liability company (Gesellschaft mit beschränkter Haftung) (the“Subsidiary”). 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.*
Current wording
During the period from January 1, 2026 through March 14, 2026, Sono Group N.V. (“Sono N.V.”) conducted its business through its subsidiary, Sono Motors GmbH, a German limited liability company (Gesellschaft mit beschränkter 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 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.*
Previous wording
During the period from January 1, 2026 through March 14, 2026, our business consisted of the legacy solar operations conducted through the Subsidiary.
Current wording
During the period from January 1, 2026 through March 14, 2026, our business consisted of the legacy solar operations conducted through Sono Motors GmbH.
Previous wording
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. 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. 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. Under the Treasury Strategy, the principal holding in our treasury reserve on our balance sheet is allocated to digital assets, principally Bitcoin (“Bitcoin” or “BTC”), by applying a covered-call yield strategy. The Treasury Strategy is projected to generate cash flow for the Company in the first year of its execution. The Company is also exploring other strategic alternatives to maximize shareholder value. We intend to solicit the ratification by our shareholders of our engagement in the Treasury Strategy at an extraordinary general meeting of shareholders. Under Dutch law, the ratification by our shareholders of our engagement in the Treasury Strategy is required to successfully implement the Treasury Strategy.
Current wording
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. 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. Under the Treasury Strategy, the principal holding in our treasury reserve on our balance sheet is allocated to digital assets, principally Bitcoin (“Bitcoin” or “BTC”), by applying a covered-call yield strategy. The Treasury Strategy is projected to generate cash flow for the Company in the first year of its execution. The Company is also exploring other strategic alternatives to maximize shareholder value. We intend to solicit the ratification by our shareholders of our engagement in the Treasury Strategy at an extraordinary general meeting of shareholders. Under Dutch law, the ratification by our shareholders of our engagement in the Treasury Strategy is required to successfully implement the Treasury Strategy.
Previous wording
As of March 31, 2026, the Subsidiary was presented as a discontinued operation and disposal group classified as held for sale. Our continuing operations consist of parent-company activities, public-company obligations, financing-related items and our digital asset treasury activities. As a result of these developments, our financial information for the periods presented in this Quarterly Report may in many respects not be comparable to our historical financial information.
Current wording
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. As a result of these developments, our financial information for the periods presented in this Quarterly Report may in many respects not be comparable to our historical financial information.
Previous wording
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.
Current wording
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.
Previous wording
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. 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.
Current wording
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.
Previous wording
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.
Current wording
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.
Previous wording
The following table summarizes our consolidated results of operations for the periods indicated:
Current wording
The following table summarizes our consolidated results of operations for the period indicated:
Previous wording
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.
Current wording
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.
Previous wording
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. General and administrative expenses related to the legacy solar operations have been presented within discontinued operations for all periods presented.
Current wording
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.
Previous wording
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. 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.
Current wording
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.
Previous wording
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.
Current wording
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.
Previous wording
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.
Current wording
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.
Previous wording
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.
Current wording
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.
Previous wording
As of March 31, 2026, our cash and cash equivalents were $237 thousand, compared to $243 thousand as of December 31, 2025. Cash consists of cash in bank accounts.
Current wording
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.
Previous wording
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.
Current wording
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 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.
Previous wording
Our cash outflows during the three months ended March 31, 2026 were principally driven by:
Current wording
Our cash outflows during the six months ended June 30, 2026 were principally driven by:
Previous wording
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. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
Current wording
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.
Previous wording
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. 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; (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. 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.
Current wording
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. 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 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.
Previous wording
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. Based upon this uncertainty, management has concluded that there is substantial doubt that the Company will continue as a going concern.
Current wording
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.
Previous wording
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.
Current wording
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.
Previous wording
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.
Current wording
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.
Previous wording
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.
Current wording
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.
Previous wording
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.
Current wording
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.
Previous wording
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.
Current wording
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.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
Item 2.** Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Current report — wording carried from elsewhere
The following table summarizes our consolidated results of operations for the period indicated:
Current report — wording carried from elsewhere
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.
Current report — wording carried from elsewhere
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.
Current report — wording carried from elsewhere
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.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
Gain on Change in Fair Value of Convertible Notes Payable Carried at Fair Value
Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
Interest Expense, Including Amortization of Debt Discount
Previous report — wording carried elsewhere
Loss From Discontinued Operations, Net of Tax
Previous report — wording carried elsewhere
Gain on Change in Fair Value of Convertible Notes Payable Carried at Fair Value
Previous report — wording carried elsewhere
Interest Expense, Including Amortization of Debt Discount
Previous report — wording carried elsewhere
Loss From Discontinued Operations, Net of Tax