4. Discontinued Operations and Assets and Liabilities Held for Sale

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 was in negotiations to sell Sono Motors GmbH before March 31, 2026 and executed the SPA on May 4, 2026. Management concluded that Sono Motors GmbH met the criteria to be classified as held for sale as of March 31, 2026 and that the planned disposition (which was completed on May 4, 2026, as further described in Note 4) represents a strategic shift that has had, or will have, a major effect on the Company’s operations and financial results.

Management’s held-for-sale conclusion was based on the approval of a plan to sell Sono Motors GmbH, management’s commitment to the plan, active negotiations with a buyer, the availability of the disposal group for immediate sale in its then-present condition subject only to customary closing conditions, the expectation that the sale would be completed within one year, and the determination that actions required to complete the plan indicated it was unlikely that significant changes would be made or that the plan would be withdrawn.

Management's analysis confirmed satisfaction of each of the six criteria required under ASC 360-10-45-9 for held-for-sale classification as of March 31, 2026: (i) management having the authority to approve the plan committed to a plan to sell the disposal group; (ii) the disposal group was available for immediate sale in its present condition; (iii) an active program to locate a buyer had been initiated; (iv) the sale was probable and expected to be completed within one year; (v) the disposal group was being actively marketed at a price reasonable in relation to its current fair value; and (vi) it was unlikely that significant changes to the plan would be made or that the plan would be withdrawn.

The disposal group was measured at the lower of carrying amount or fair value less cost to sell. Based on the planned sale and nominal consideration subsequently documented in the executed SPA, management recognized a $519 thousand loss on classification as held for sale within discontinued operations, net of tax, during the three months ended March 31, 2026. The shareholder loan receivable from Sono Motors GmbH and corresponding payable of Sono Motors GmbH were intra-entity balances and were eliminated in consolidation while Sono Motors GmbH remained consolidated; accordingly, the shareholder loan was not included as a separate consolidated held-for-sale asset or impairment charge.

The results of operations of Sono Motors GmbH have been presented as discontinued operations for all periods presented. The related assets and liabilities have been presented separately as held for sale in the unaudited condensed consolidated balance sheets. Parent-company public-company costs, SEC reporting costs, financing costs, digital-asset treasury costs and general holding-company overhead remain in continuing operations unless directly attributable to the discontinued component. The discontinued operation was reported within the Company’s single reportable segment.

As of December 31, 2025, certain lease-related amounts recorded by Sono N.V. related to lease arrangements associated with Sono Motors GmbH and the legacy solar business; because the right-of-use assets and related lease liabilities were attributable to the discontinued component, those amounts are included in discontinued operations and in the disposal group classified as held for sale. Following the May 4, 2026 sale of Sono Motors GmbH, the Company remained the lessee under the Munich lease, and the related right-of-use asset and lease liability were re-established within continuing operations effective May 1, 2026; see Note 10 (Leases).

The following table reconciles total cash and cash equivalents, including amounts included in assets of discontinued operations classified as held for sale, to the amounts presented in the condensed consolidated statements of cash flows (USD in thousands):

The condensed consolidated statements of cash flows presents only cash attributable to continuing operations in the beginning and ending balance line items. See above for a reconciliation of total cash to the amounts presented.

Upon the May 4, 2026 sale of Sono Motors GmbH and loss of control of Sono Motors GmbH, the Company deconsolidated Sono Motors GmbH, measured as of April 30, 2026, and recognized a loss on deconsolidation of $1,101 thousand, presented as a separate line item in the condensed consolidated statements of operations. The loss includes the reclassification of $1,223 thousand of cumulative foreign currency translation adjustments attributable to Sono Motors GmbH from accumulated other comprehensive income (loss) to earnings upon the loss of control, together with the derecognition of the carrying amounts of the assets and liabilities of Sono Motors GmbH and the nominal consideration received under the Share Purchase and Transfer Agreement.