Note 4 - Deconsolidation Due to Loss of Control |
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Dec. 31, 2025 | |||||||||||||||||||||||||||||||||||||||||
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| Deconsolidation [Text Block] |
NOTE 4 – RECONSOLIDATION OF SONO MOTORS GMBH
In February 2023, Sono Group announced its decision to restructure its business model and discontinued the Sion passenger car program. Following subsequent insolvency proceedings under German law, Sono N.V. lost control over its subsidiary Sono Motors GmbH and deconsolidated it effective May 19, 2023, in accordance with ASU 810-10-55. On February 29, 2024, Sono Motors GmbH exited its Self-Administration Proceedings via its plan under the German Insolvency Code, which set out how the Subsidiary intended to restructure its debt and procure the inflow of new cash, including pursuant to a funding commitment from Yorkville. As a result, all outstanding debts between the Company and the Subsidiary were extinguished, and the Subsidiary was reconsolidated into our consolidated financial statements effective March 1, 2024.
The reconsolidation resulted in a net gain of approximately EUR62.6 million, reflecting the revaluation of the Subsidiary’s net assets and the extinguishment of parental guarantees and related liabilities. This gain is recorded in our operating results for the year ended December 31, 2024 and represents the financial impact of regaining control over the Subsidiary.
On March 1, 2024, the Company was deemed to have regained control of Sono Motors. The Company recorded the fair value of net assets consolidated at March 1, 2024. The following table reflects the March 1, 2024 Balance Sheet of Sono Motors:
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