3. Liquidity and Going Concern Analysis

The Company is required to evaluate whether there is substantial doubt about its ability to continue as a going concern each reporting period, including interim periods. In evaluating the Company’s ability to continue as a going concern, management considered the conditions and events that could raise substantial doubt about the Company’s ability to continue as a going concern within 12 months after the Company’s financial statements were issued (April 16, 2026). 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 before August 31, 2026.

The Company is subject to a number of risks, including uncertainty related to product development and generation of revenues and positive cash flow from its Sono Motors GmbH division and a dependence on outside sources of capital. The attainment of profitable operations is dependent on future events, including obtaining adequate financing to fulfill the Company’s growth and operating activities and generating a level of revenues adequate to support the Company’s cost structure.

As of June 30, 2025, the Company had cash balances of EUR0.3 million, a working capital deficit of EUR14.9 million and an accumulated deficit of EUR313.4 million. For the six months ended June 30, 2025, the Company had net income of EUR8.0 million. The Company recorded an operating loss of EUR3.6 million and expects to continue to incur small operating losses and have net cash outflows for at least the next 12 months, offset by cash flows from financing and other business activities. There are no assurances that future advances from our financing partners will occur, however we have received six advances to date including EUR.3 Million on August 18, 2025, nor are we certain that our efforts to uplist to a national exchange will be successful even if we are meeting their specific criteria for uplisting.

Management has evaluated the significance of the conditions described above in relation to the Company’s ability to meet its obligations and concluded that, if additional funding commitments from YA II PN, Ltd (“Yorkville”) are achieved based upon the notification from a national exchange of our uplisting to that national exchange, and if the Company’s commitment for a $5M capital raise upon completion of a current S1 filing and/or other fundraising efforts are successful, all of which cannot be guaranteed, the Company will have sufficient funds to meet its obligations within one year from the date of the consolidated financial statements. Based upon this uncertainty, Management has concluded that there is substantial doubt that the company will continue as a going concern.