NOTE 3 – LIQUIDITY AND GOING CONCERN ANALYSIS

Liquidity and Going Concern

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 twelve months after the date the financial statements are issued, in accordance with ASC 205-40. 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 April 1, 2027.

As of December 31, 2025, the Company had cash and cash equivalents of €206 thousand, an accumulated deficit of €317.4 million, net operating loss of €7.7 million and negative operating cash flows of €7.3 million for the year then ended. The Company has incurred recurring operating losses and negative cash flows from operations since inception, primarily attributable to the operations of its solar technology subsidiary, Sono Motors GmbH. These conditions raised substantial doubt about the Company's ability to continue as a going concern.

Subsequent to December 31, 2025, management implemented a series of actions intended to improve the Company's liquidity position and reduce its ongoing cash requirements. These actions included: (i) raising gross proceeds of approximately $5.0 million in March 2026, consisting of a $3.0 million convertible debenture and a pre-funded warrant issued for aggregate proceeds of approximately $2.0 million; (ii) adopting the Treasury Strategy and entering into an institutional framework with Blockchain.com (BVI) II Limited in the form of the ISDA Master Agreement and the related Schedule and Credit Support Annex, to facilitate related derivative and hedging transactions in connection with the Company's digital asset holdings; and (iii) terminating current and future funding commitments to the Subsidiary (Sono Motors GmbH) and initiating the Company's exit from its legacy solar operations conducted through the Subsidiary, which is expected to materially reduce the Company's ongoing cash outflows.

Management has evaluated the significance of the conditions described above in relation to the Company's ability to meet its obligations and believes that these actions, taken together, may provide sufficient resources to fund its streamlined operating plan, consisting principally of holding company overhead and public company compliance costs, for at least twelve months from the date the financial statements are issued.

However, the Company's ability to maintain adequate liquidity remains subject to significant uncertainties, including 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 timing and costs associated with exiting the legacy solar operations (which the Company is currently unable to estimate), and the maturity of the convertible debenture issued to Yorkville in March 2026, which matures in March 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 the matters described above.