NOTE 3 – COMMITMENTS AND CONTINGENCIES

Litigation and Regulation

Various aspects of our business and service areas are subject to U.S. federal, state, and local regulation, as well as regulation outside the United States. The Company is also subject to legal proceedings which arise in the ordinary course of business.

In August 2024, Zaptera USA, Inc. (“Zaptera”) filed a complaint against Aptera Motors Corp. in the U.S. District Court for the Southern District of California alleging design patent infringement, misappropriation of trade secrets, and declaratory judgment of patent ownership, among other claims.

In April 2026, the Company entered into a settlement agreement with Zaptera. Pursuant to the terms of the settlement, the Company agreed to issue 105,000 shares of Class B Common Stock and warrants to purchase up to 210,000 shares of Class B Common Stock at an exercise price of $2.78 expiring on April 8, 2029. As a result of the settlement, the Company accrued liability and recognized litigation expense equivalent to the estimated fair value of the settlement of approximately $0.6 million during the three months ended March 31, 2026, which was included in “General, selling, and administrative” expenses in the condensed consolidated statements of operations. On April 9, 2026, all claims related to the action were dismissed with prejudice. The fair value of the 105,000 shares was measured based on the closing price of Class B Common Stock on April 8, 2026 of $2.78 per share, resulting in a fair value of $0.3 million. The fair value of the 210,000 warrants was measured using the Black-Scholes option-pricing model with a unit fair value of $1.69, based on a stock price of $2.78, an exercise price of $2.78, a 3three-year term, expected volatility of 93.68% based on a peer-group daily volatility average, a risk-free rate of 3.78%, and no expected dividend yield, resulting in a fair value of $0.4 million. Under the settlement, the Company committed to issue a fixed number of shares and warrants; the related accrued liability was reclassified from accrued liabilities to additional paid-in capital during the three months ended June 30, 2026. As of June 30, 2026, the warrants have been issued and the 105,000 shares of Class B Common Stock are pending issuance.

In January 2025, the Company received a subpoena for documents from the staff of the Securities and Exchange Commission (SEC) related to its securities offerings and the production, design, and manufacture of our vehicles. This subpoena is part of an ongoing SEC investigation. The Company continues to cooperate fully with the investigation and is continuing to produce documents in response to the subpoena and subsequent requests.

The SEC has informed us that the investigation does not mean that it has concluded that anyone has violated the law and that the receipt of the subpoena does not mean that the SEC has a negative opinion of any person, entity, or security. However, the Company can offer no assurances as to the timing, outcome or potential effect, if any, of this ongoing investigation. Responding to the subpoena and related requests continues to require the dedication of management time and attention and has resulted, and may continue to result, in the incurrence of significant expenses, including legal and other professional services fees.

Chery Technology License Agreement

In 2022, the Company entered into a Technology License Agreement (“TLA”) with Chery New Energy Automobile Co. Ltd. (“Chery”). The TLA provides the Company with access to Chery’s established supply chain, which helps streamline procurement and production processes. In addition, it provides the Company with access and option to incorporate certain Chery technologies and parts, such as components of their HVAC (Heating, Ventilation, and Air Conditioning) system, into Aptera’s vehicles. This collaboration aims to accelerate lead-up to production and drive the advancement of solar mobility.

The TLA, as amended in 2023, grants the Company a non-transferable license to use certain Chery automobile parts technology, know-how, and data. As consideration, the Company provided a total of $1.0 million in cash and issued common shares for a value equivalent to $4.0 million during 2022 for milestone 1 and 2 related to the transfer of technical documents for the technology. The TLA also contains contingent considerations to issue shares of class B common Stock to Chery for value equivalent to $5.0 million. This contingent obligation is triggered in two equal installments upon the Company entering into specific parts supply agreements with Chery and receiving the initial batches of parts under those agreements. The timing and ultimate issuance of these shares are dependent on the Company proceeding with these specific purchasing milestones. The Company also holds certain rights of first refusal regarding the shares held by Chery. The contract also calls for royalty per vehicle sold to be paid to Chery based on components or technology used in the final produced vehicles.

Purchase Obligations

The Company regularly enters into purchase obligations with vendors and service providers, which represent expected payments and commitments during the normal course of our business. These purchase obligations are generally cancellable with or without notice and without penalty, although certain vendor agreements provide for cancellation fees or penalties. As of June 30, 2026 and December 31, 2025, we had approximately $5.5 million and $2.1 million in open purchase orders, respectively.