0001104659-22-070649 | F-1 | XBRL Viewer

Note 4 - Significant Accounting Policies (Details Textual) - EUR (€) € in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 15, 2020
Statement Line Items [Line Items]
Percentage of annual taxable income	0.60%
Tax income offset against tax loss carry forwards	€ 1
Percentage of taxable income subject to corporate income and trade tax	0.40%
Percentage of profit participation rights		0.6407%

Note 7 - Balance Sheet Disclosures - Right-of-use Assets (Details) - EUR (€) € in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Statement Line Items [Line Items]
Expense relating to short-term leases	€ 0	€ 0	€ 84

Note 8 - Disclosure of Financial Instruments and Risk Management (Details Textual) € in Thousands	Dec. 31, 2021 EUR (€)
Statement Line Items [Line Items]
Trade and other receivables denominated in foreign currency	€ 0

Note 7 - Balance Sheet Disclosures - Financial Liabilities (Details) - EUR (€) € in Thousands	Dec. 31, 2021	Dec. 31, 2020
Note 7 - Balance Sheet Disclosures - Financial Liabilities (Details)
Loans and participation rights	€ 3,718	€ 3,665
Loans and participation rights	€ 31	2,240
Mandatory convertible notes		€ 6,859

Note 1 - General Information (Details Textual)	Nov. 30, 2021 $ / shares
Statement Line Items [Line Items]
Share issued, price per share (in dollars per share)	$ 15.00

Note 9 - Other Disclosures (Tables)

12 Months Ended

Dec. 31, 2021

Note 9 - Other Disclosures

Disclosure of employee participation in share-based payment arrangements [text block]


	Cash-settled	Equity-settled
	program	program
Staff members	1	85
Managers	—	3
	1	88

Disclosure of share options granted [text block]


December 31, 2021
Number of options granted		1,805,100
Weighted average fair value at grant date (EUR)		19.26
Expense of the period (kEUR)		1,898
Increase in equity (kEUR)		1,898


December 31, 2020
Number of options granted		1,805,100
Weighted average fair value at grant date (EUR)		19.26
Expense of the period (kEUR)		32,160
Increase in equity (kEUR)		32,160

Note 9 - Other Disclosures - Reconciliation of Liabilities Arising From Financing Activities (Details) - EUR (€) € in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Statement Line Items [Line Items]
EIR method	€ 30	€ 482	€ 192
Non-cash changes, additions	€ 1,496	€ (638)	€ 2,320

Note 9 - Other Disclosures - Fair Value of the Share Options (Details)	12 Months Ended
	Dec. 31, 2021
Note 9 - Other Disclosures - Fair Value of the Share Options (Details)
Lack of marketability discount	14.39%

Note 8 - Disclosure of Financial Instruments and Risk Management - Total Interest Income and Expenses (Details) - EUR (€) € in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Note 8 - Disclosure of Financial Instruments and Risk Management - Total Interest Income and Expenses (Details)
Total interest expense for financial assets at amortized cost	€ 156	€ 43	€ 1

Note 7 - Balance Sheet Disclosures - Intangible Assets (Details) - EUR (€) € in Thousands	Dec. 31, 2021	Dec. 31, 2020
Statement Line Items [Line Items]
Balance as of Jan. 1	€ 27	€ 16
Balance as of Dec. 31	€ 61	€ 27

Note 8 - Disclosure of Financial Instruments and Risk Management - Financial Liabilities (Details) - EUR (€) € in Thousands	Dec. 31, 2021	Dec. 31, 2020
Statement Line Items [Line Items]
Loans and participation rights	€ 4,134	€ 4,260
Mandatory convertible notes		€ 9,286

Note 6 - Disclosures to the Statement of Income and Loss - Unused Tax Losses for which No Deferred Tax Assets Recognized (Details) - EUR (€) € in Thousands	Dec. 31, 2021	Dec. 31, 2020
Statement Line Items [Line Items]
Potential tax benefit at a total tax rate of 32.98 %	€ 36,858	€ 16,885

Note 6 - Disclosures to the Statement of Income and Loss - Selling and Distribution Expenses (Details) - EUR (€) € in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Statement Line Items [Line Items]
Personnel expenses	€ 1,898	€ 32,160	€ 0
Professional services	704	171	103
Other	€ 387	€ 355	€ 337

Note 7 - Balance Sheet Disclosure - Provisions and Contingent Liabilities (Details) - EUR (€) € in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Note 7 - Balance Sheet Disclosure - Provisions and Contingent Liabilities (Details)
Personnel costs, Balance at Jan 1	€ 0	€ 584
Personnel costs, Usage		(584)
Personnel costs, Reversals		0
Personnel costs, Additions		0
Personnel costs, Balance at Dec 31		0
Financial statements, Balance at Jan 1	111	52
Financial statements, Usage	(111)	(46)
Financial statements, Reversals		0
Financial statements, Additions	2,137	105
Financial statements, Balance at Dec 31	2,137	111
Usage	(111)	(630)
Reversals		0
Additions	€ 2,202	€ 105

Note 5 - Segment Information (Details Textual)	12 Months Ended
Note 5 - Segment Information (Details Textual)	Dec. 31, 2021
Statement Line Items [Line Items]
Number of operating segment	1

Note 9 - Other Disclosures - Loans and Advance Payments from Key Management Personnel and Other Related Parties (Details) - EUR (€) € in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Statement Line Items [Line Items]
Advance payments received from key management personnel*	€ 47	€ 52
Total	€ 49	€ 253	€ 191

Note 8 - Disclosure of Financial Instruments and Risk Management - Changes in Level 3 Items (Details) € in Thousands	12 Months Ended
	Dec. 31, 2021 EUR (€)
Statement Line Items [Line Items]
Other comprehensive income	€ (5)
Accumulated deficit	€ 5

Note 6 - Disclosures to the Statement of Income and Loss - General and Administrative Expenses (Details) - EUR (€) € in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Statement Line Items [Line Items]
Professional services	€ 7,030	€ 4,830	€ 670
Personnel expenses	761	7,488	0
Impairment	1,965	0	0
Expenses without sufficient supporting documentation	0	21	70
Other	€ 1,525	€ 405	€ 352

Note 7 - Balance Sheet Disclosures - Other Current Financial Assets (Details) - EUR (€) € in Thousands	Dec. 31, 2021	Dec. 31, 2020
Note 7 - Balance Sheet Disclosures - Other Current Financial Assets (Details)
PayPal reserve	€ 6,000	€ 4,655
Receivables from crowdfunding and deposits	169	179
Debtors creditors	€ 26	€ 539

Note 7 - Balance Sheet Disclosure - Provisions and Contingent Liabilities - Current Other Liabilities (Details) - EUR (€) € in Thousands	Dec. 31, 2021	Dec. 31, 2020
Note 7 - Balance Sheet Disclosure - Provisions and Contingent Liabilities - Current Other Liabilities (Details)
Employee tax liabilities (wage and church tax)	€ 372	€ 146

Note 6 - Disclosures to the Statement of Income and Loss - Additional Information on Nature of Expenses (Details) - EUR (€) € in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Statement Line Items [Line Items]
Personnel expenses	€ 1,898	€ 32,160	€ 0

Note 7 - Balance Sheet Disclosures - Changes in Loans and Participation Rights (Details) - EUR (€) € in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Statement Line Items [Line Items]
Balance at Jan 1	€ 12,766	€ 6,250
Addition	0	10,820
Accrued interest	276	435
Repayment	(2,475)	(3,058)
Conversion to equity	(9,661)	(1,648)
Initial recognition	0	10,739
Subsequent measurement	2,936	482
Derecognition	(2,291)	(3,058)
Balance at Dec 31	€ 3,750	€ 12,766

Note 6 - Disclosures to the Statement of Income and Loss (Tables)

12 Months Ended

Dec. 31, 2021

Note 6 - Disclosures to the Statement of Income and Loss

Disclosures of selling and distribution expenses explanatory [text block]


	2021	2020	2019
	kEUR	kEUR	kEUR
Personnel expenses	1,764	8,490	1,582
thereof related to the CSOP (IFRS 2)	—	6,949	—
Professional services	704	171	103
Advertising	365	84	113
Other	387	355	337
	3,220	9,100	2,135

Disclosure of genral and administrative expenses explantory [text block]


	2021	2020	2019
	kEUR	kEUR	kEUR
Professional services	7,030	4,830	670
Personnel expenses	4,574	9,148	1,325
thereof related to the CSOP (IFRS 2)	761	7,488	—
Impairment	1,965	—	—
Expenses without sufficient supporting documentation	—	21	70
Other	1,525	405	352
	15,094	14,404	2,417

Disclosure of additional information on nature of expenses [text block]


	2021	2020	2019
	kEUR	kEUR	kEUR
Personnel expenses	17,678	39,291	5,151
thereof related to CSOP (IFRS 2)	1,898	32,160	—
Depreciation and amortization	574	384	224
	18,252	39,675	5,375

Disclosure of deductible temporary differences for which no deferred tax assets is recognised [text block]


	Dec. 31, 2021	Dec. 31, 2020
	kEUR	kEUR
Advance payments received from customers	1,928	966
Lease liabilities	1,681	931
Current provisions	168	—
Other non-financial assets	48	—
Current financial liabilities	17	—
Current other liabilities	23	—
Cash & cash deposits	3	1
Other financial assets	19	2
Prepaid expenses	—	193
	3,887	2,093
Potential tax benefit at a total tax rate of 32,98 %	1,282	690

Disclosure of unused tax losses for which no deferred tax assets recognized [text block]


	Dec. 31, 2021	Dec. 31, 2020
	kEUR	kEUR
Unused tax losses for which no deferred tax asset has been recognized (corporate tax)	111,950	51,316
Unused tax losses for which no deferred tax asset has been recognized (trade tax)	111,565	51,083
Potential tax benefit at a total tax rate of 32.98 %	36,858	16,885

Disclosure of reconciliation of income tax explantory [text block]


	2021	2020	2019
	kEUR	kEUR	kEUR
Income (loss) before tax for the period	(63,935)	(56,032)	(9,971)
Expected income tax (income (-)/expense (+) at a tax rate of 32.98 %	(21,086)	(18,479)	(3,288)
Reconciliation:
Changes in unrecognized tax losses	20,061	8,254	3,164
Changes in deferred taxes on timing differences	1,261	690	199
MCN non-tax-deductible expenses	753	—	—
CSOP non-tax-deductible expenses	626	10,606	—
Tax-deductible transaction costs	(937)	(723)	(36)
Non-tax-deductible expenses	37	9	27
Other	(715)	(357)	(66)
Effective income tax income for the period	—	—	—

Note 8 - Disclosure of Financial Instruments and Risk Management - Currency Risk (Details) - 12 months ended Dec. 31, 2021 € in Thousands, $ in Thousands	EUR (€)	USD ($)
Statement Line Items [Line Items]
USD	€ 26,877	$ 30,425
Cash denominated in foreign currencies	26,877
CNY	916	6,616
USD	127	144
SEK	12	120
GBP	2	$ 1
Liabilities denominated in foreign currencies	1,057
USD	(2,432)
CNY	83
SEK	1
Consolidated profit before taxes and equity denominated in foreign currency	(2,348)
USD	2,972
CNY	(102)
SEK	(1)
Consolidated profit before taxes and equity 10% denominated in foreign currency	€ 2,869

Label	Element	Value
Fair Value Measurement Convertible Bond (OCI)	sev_OtherComprehensiveIncomeNetOfTaxFairValueMeasurementConvertibleBond	€ 0
Fair Value Measurement Convertible Bond (OCI)	sev_OtherComprehensiveIncomeNetOfTaxFairValueMeasurementConvertibleBond	0
Fair Value Measurement Convertible Bond (OCI)	sev_OtherComprehensiveIncomeNetOfTaxFairValueMeasurementConvertibleBond	(21,000)
Fair Value Measurement Convertible Bond (OCI)	sev_OtherComprehensiveIncomeNetOfTaxFairValueMeasurementConvertibleBond	0
Fair Value Measurement Convertible Bond (OCI)	sev_OtherComprehensiveIncomeNetOfTaxFairValueMeasurementConvertibleBond	(21,000)
Fair Value Measurement Convertible Bond (OCI)	sev_OtherComprehensiveIncomeNetOfTaxFairValueMeasurementConvertibleBond	16,000
Fair Value Measurement Convertible Bond (OCI)	sev_OtherComprehensiveIncomeNetOfTaxFairValueMeasurementConvertibleBond	16,000
Issue of bonus shares	sev_IncreaseDecreaseThroughTransactionsWithBonus	1,529,000
Issue of bonus shares	sev_IncreaseDecreaseThroughTransactionsWithBonus	(1,529,000)
Interest and similar expense	sev_InterestAndSimilarExpenses	4,781,000
Interest and similar expense	sev_InterestAndSimilarExpenses	2,040,000
Interest and similar expense	sev_InterestAndSimilarExpenses	702,000
Capital and other reserves	sev_CapitalAndOtherReserve	221,785,000
Capital and other reserves	sev_CapitalAndOtherReserve	71,629,000
Interest and similar income	sev_InterestAndSimilarIncome	0
Interest and similar income	sev_InterestAndSimilarIncome	2,000
Interest and similar income	sev_InterestAndSimilarIncome	0
Conversion high voting shares	sev_IssueOfConversionHighVoting	4,500,000
Conversion high voting shares	sev_IssueOfConversionHighVoting	(4,500,000)
Conversion high voting shares	sev_IssueOfConversionHighVoting	0
Conversion high voting shares	sev_IssueOfConversionHighVoting	€ 0

Note 7 - Balance Sheet Disclosures - Cash and Cash Equivalent (Details) - EUR (€) € in Thousands	Dec. 31, 2021	Dec. 31, 2020
Note 7 - Balance Sheet Disclosures - Cash and Cash Equivalent (Details)
Allowance for expected credit losses	€ (8)	€ (2)

Note 7 - Balance Sheet Disclosures (Tables)

12 Months Ended

Dec. 31, 2021

Note 7 - Balance Sheet Disclosures

Disclosure of advance payments received from customers [text block]


	Dec. 31, 2021	Dec. 31, 2020
	kEUR	kEUR
Advance payments received from customers	44,756	38,972
	44,756	38,972


	Balance as of				Balance as of
	Jan. 1, 2021	Additions	Repayment	Net interest	Dec. 31, 2021
	KEUR	kEUR	kEUR	kEUR	kEUR
Advance payments received from customers	38,972	5,198	(912)	1,498	44,756
	38,972	5,198	(912)	1,498	44,756


	Balance as of				Balance as of
	Jan. 1, 2020	Additions	Repayment	Net interest	Dec. 31, 2020
	KEUR	kEUR	kEUR	kEUR	kEUR
Advance payments received from customers	11,164	30,565	(4,117)	1,360	38,972
	11,164	30,565	(4,117)	1,360	38,972

Disclosure of loans and participation rights [text block]


				Subordinated	Mandatory
	Loan	Loan	Loan	loans	convertible	Participation
Nominal amounts	1	2	3*	(crowd-funding)	Notes	rights	Total
	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Jan. 1, 2020**	—	295	2,590	1,967	—	1,383	6,235
Addition	1,225	—	—	2,795	6,800	—	10,820
Accrued interest	46	12	277	101	—	—	435
Repayment	—	(107)	(1,219)	(1,731)	—	—	(3,058)
Conversion to equity	—	—	(1,648)	—	—	—	(1,648)
Dec. 31, 2020	1,271	200	—	3,131	6,800	1,383	12,784
Addition	—	—	—	—	—	—	—
Accrued interest	50	—	—	174	—	52	276
Repayment	(36)	(200)	—	(805)	—	(1,435)	(2,475)
Conversion to equity	—	—	—	—	(6,800)	—	(6,800)
Dec. 31, 2021	1,285	—	—	2,500	—	—	3,785

*	Shareholder transaction in 2020

**	including nominal interest accrued in previous periods if applicable


				Subordinated	Mandatory
	Loan	Loan	Loan	loans	convertible	Participation
Carrying amounts	1	2	3*	(crowd-funding)	Notes	rights	Total
	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Jan. 1, 2020	—	295	2,583	2,026	—	1,346	6,250
Initial recognition	1,225	—	—	2,714	6,800	—	10,739
Subsequent measurement	46	12	284	53	59	28	482
Derecognition	—	(107)	(1,219)	(1,731)	—	—	(3,058)
Conversion to equity	—	—	(1,648)	—	—	—	(1,648)
Dec. 31, 2020	1,271	200	—	3,062	6,859	1,374	12,766
Initial recognition	—	—	—	—	—	—	—
Subsequent measurement	14	—	—	58	2,802	62	2,936
Derecognition	—	(200)	—	(655)	—	(1,436)	(2,291)
Conversion to equity	—	—	—	—	(9,661)	—	(9,661)
Dec. 31, 2021	1,285	—	—	2,465	—	—	3,750

*	Shareholder transaction in 2020

Significant Accounting Policies (Policies)	12 Months Ended
Significant Accounting Policies (Policies)	Dec. 31, 2021
Discloure of Significant Accounting Policies
Description of accounting policy for advance payments received from customers [text block]	4.8Advance payments received from customers Advance payments received from customers are recognized at the time the cash is collected by Sono Group. As Sono Group will begin delivering its Sion electrical vehicles to customers after the start of production, which is currently expected in the second half of 2023, all advance payments are shown as noncurrent, even though some customers may be able to cancel their contract (depending on the general terms in some cases cancellation is possible within the next 12 months) and demand the money back. Due to an original term of the advance payments which is more than 12 months, the advance payments include a significant financing component. The compounding effect is recognized in interest expense and increases the advance payments received from customers. Sales revenues from advance payments received from customers will be recognized at the time of delivery of the car.
Description of accounting policy for significant accounting judgements, estimated and assumptions [text block]	4.13Significant accounting judgments, estimates and assumptions The preparation of consolidated financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgments and estimates in relation to assets, liabilities, contingent liabilities, and expenses. Management bases its judgments and estimates on historical experience and on other various factors it believes to be reasonable under the circumstances, the result of which forms the basis of the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions and may materially affect the financial results or the financial position reported in future periods. In the process of applying the accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognized in the consolidated financial statements.
Description of accounting policy for going concern [text block]	4.13.1Going concern Management assessed Sono Group’s ability to continue as a going concern, evaluating whether there are conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern using all information available about the future, focusing on the twelve-month period following the issuance date of the consolidated financial statements. Historically, Sono Group has financed its operations primarily through capital raises and loans from shareholders and private investors (including its IPO in November 2021) as well as through advance payments received from customers. Since inception Sono Group has incurred recurring losses and negative cash flows from operations, including accumulated net losses of kEUR 147,081 as of December 31, 2021 and expects to continue to generate operating losses and negative cash flows from operations for the foreseeable future. In November 2021, Sono Group received net proceeds from their IPO in the amount of kEUR 142,334. At that time, Sono Management planned and disclosed that the proceeds were to be used to finalize the development of the prototype SVC3 and to maintain liquidity of the Company until May 2023 (including a reserve of mEUR 41 related to the potential repayment of the customer prepayments at any time). Management also began to increase headcount and proceeded with additional development and production activities for the car and solar technology, which increased the rate at which available cash is being expended. With the change of contract manufacturer (see note 9.7 Subsequent events), the planned start of series production had to be postponed from the first half of 2023 to the second half of 2023 and the cost estimates for pre-production activities had to be increased. These changes to the initial plan put increased pressure on the financing of development and operations and will require additional funding to be received in the short term. Sono Group’s financing plan shows substantial financing needs, including increased needs due to a change in its contract manufacturer (see note 9.7 Subsequent events), planned cost increases, additional technical and regulatory requirements, and changes in suppliers in addition to the current economic environment of increasing prices, resulting in significantly higher financing requirements needed to reach the start of serial production in the second half of 2023. Based on numerous risks and uncertainties, Sono Group cannot predict with certainty the total costs to be incurred prior to the commencement of production. Sono Group’s forecasted cash required to fund investments and operations (excluding future financing plans and counter measures to be taken by management) indicates that the Group does not currently have sufficient funds to fund its operations through the twelve-month period from the issuance date of these financial statements. Consequently, the Group’s ability to continue as a going concern is largely dependent on its ability to raise additional funds in the near future through debt or equity transactions, additional advance payments, or other means, to finance investments and operations and ultimately, to achieve serial production of the Sion. In this regard, management plans to seek to raise additional capital of at least mEUR 200 in 2022 through the issuance of new shares in public offerings and/or through equity facility transactions with financial institutions currently offered to Sono Group (and, based on current expectations, would also expect to raise additional capital at a future date prior to commencement of production). In addition, the Group is exploring alternative methods of obtaining financing, including applying for subsidies and grants. There is no certainty that Sono Group will be successful in obtaining sufficient funding through additional public offerings of equity. If Sono Group is unable to obtain additional funding from public offerings, management would consider entering into equity facilities with a financial institution; however, the ability of the Sono Group to raise necessary funds through these or any other means is subject to uncertainty and is not assured. If the Group is unsuccessful in raising the planned capital through equity facilities, Sono Group’s management will be forced, and is committed, to substantial cost-cutting measures in order to maintain minimum liquidity of the Company within the twelve-month period from the issuance date of these financial statements. Risks and uncertainties related to the supply chain, cost development, technical challenges (e.g. homologation certification), the ongoing corona pandemic and the war in Ukraine may also negatively affect the Group’s business, liquidity and financial position going forward (see note 8.1.3 Liquidity risk). As discussed above, Sono Group will need to raise substantial additional capital to finance its future operations, which is not assured, and has consequently concluded that there is substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. 4.13.2Remuneration based on shares (share-based payment) For equity-settled share-based payment transactions (see note 4.11 Share-based payment), on grant date, Sono Group initially measures the fair value of the received services by reference to the fair value of the equity instruments granted. The fair value measurement of the share options for the equity-settled share-based transactions requires assumptions about the input data for using Black-Scholes Model. The expected life of the share options is based on current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility was based on an evaluation of historical volatilities of comparable listed peer group companies. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome. For further details about the input factors used see note 9.3 Remuneration based on shares (share-based payment). 4.13.3Corona pandemic In 2020, COVID-19 caused a global pandemic. At the end of 2021, the pandemic was still present. In response to this pandemic, governments as well as private organizations implemented numerous measures seeking to contain the virus. These measures disrupted the manufacturing, delivery and overall supply chain of vehicle manufacturers and suppliers and led to a global decrease in vehicle sales. These measures have also led to a trend to work-from-home, which could result in a lower demand for cars in the future and negatively impact the Group’s sales and marketing activities. The pandemic may also affect the interest of Sono Group’s customers in their car-sharing and ride-pooling networks. Sono Motors cannot yet foresee the full extent of COVID-19’s impact on its business and operations and such impact will depend on future developments of the outbreak, including new information concerning the global severity of and actions taken to contain the outbreak and any future mutations of the virus, which are highly uncertain and unpredictable. The virus could have a material impact on Sono Group’s ability to raise additional liquidity to the extent needed and capital management. Sono Group will continue to monitor the situation and the effects of this development on its liquidity and capital management. At the same time, Sono Group has taken actions to maintain operations and protect employees from infection. Since 2020, COVID-19 has had a slightly negative impact on orders and advance payments received from customers. Based on the most recent available information, COVID-19 might continue to have a negative effect on orders and advance payments received from customers in 2022. 4.13.4Russo-Ukrainian war In February 2022, the government of Russia invaded Ukraine across a broad front. In response to this aggression, governments around the world have imposed severe sanctions against Russia. These sanctions disrupted the manufacturing, delivery and overall supply chain of vehicle manufacturers and suppliers. We cannot yet foresee the full extent of the sanctions’ impact on our business and operations and such impact will depend on future developments of the war, which is highly uncertain and unpredictable. The war could have a material impact on our results of operations, liquidity, and capital management. We will continue to monitor the situation and the effect of this development on our liquidity and capital management. 4.13.5Sono Points Sono Motors has carried out several crowdfunding campaigns in which the Sion could be reserved against an advance payment received from customers of various amounts. With the reservation, the customer is entitled to the right to enter a contract for the purchase of the Sion. However, Sono Motors is not obliged to deliver a vehicle to the customer. Instead, the customer can withdraw from the reservation if he or she decides not to conclude the purchase contract or Sono Motors has not offered a purchase contract by the respective date defined by the underlying terms and conditions. In December 2020, a crowdfunding campaign with the aim of raising a predefined target amount was launched. In connection with the campaign, so-called Sono Points were introduced and communicated on December 15, 2020. The three founders, Laurin Hahn, Navina Persteiner and Jona Christians, announced that they would be giving a majority of their profit participation rights (for clarification: the voting rights remain with the founders), amounting to 64.07 % of all profit participation rights (as of December 31, 2019) to a “community pool”, from which the so-called Sono Points would be awarded. The number of Sono Points, through which the participants in the crowdfunding and pre-orders can participate in the community pool, is significantly influenced by the time and amount of the individual deposit. The maximum number of possible Sono Points in total is not limited. In case a Sono Point holder should revoke or withdraw from the reservation or should revoke or withdraw from the purchase contract concluded based on the reservation, the Sono Points will expire. According to current legal assessments, management concludes that Sono Points do not impact Sono Group as the obligation relates only to the founders. 4.13.6Recoverability of deferred tax assets in relation to loss carryforwards Management has determined that these tax losses represent start-up losses as a result of establishing Sono Motors’ business. The tax losses can be carried forward indefinitely and have no expiry date. Management does not expect a (proportional) reduction of deductible tax loss carryforwards due to any future corporate restructuring or due to the various capital measures, especially the IPO, in 2021. For further details, please refer to note 1 General information. Management expects that the “hidden reserves clause” can be asserted and that the tax losses can still be carried forward.

Note 6 - Disclosures to the Statement of Income and Loss

12 Months Ended

Dec. 31, 2021

Notes To Financial Statements [Abstract]

Disclosures to the statement of income and loss [text block]

6.Disclosures to the consolidated statements of income or loss

6.1Revenue and cost of goods sold

Revenues in the amount of kEUR 11 (2020: kEUR -, 2019: kEUR -) and cost of goods sold in the amount of kEUR 52 (2020: kEUR -, 2019: kEUR -) relate to the first contracts to explore the integration of Sono Motors’ patented solar technology across other transportation platforms, which were signed and executed in 2021. Revenues in the amount of kEUR 5 (2020: kEUR -, 2019: kEUR -) and cost of goods sold in the amount of kEUR 6 (2020: kEUR -, 2019: kEUR -) are connected with the launch of Sono app which provides an in-app booking and payment system as well as additional insurance if required. Trade receivables in the amount of kEUR 20 (previous year: kEUR -) result from these activities.

As of the reporting date and as of the end of the previous year, no contract assets or liabilities resulted from these activities. As of the reporting date, the aggregate amount of the transaction price allocated to unsatisfied performance obligations amounts to kEUR 42 (previous year: kEUR -). The Group expects to recognize this amount as revenue within one year of the reporting date.

6.2Cost of research and development

The table below presents details on the cost of research and development:


	2021	2020	2019
	kEUR	kEUR	kEUR
Development cost of prototypes	27,632	8,234	2,102
Personnel expenses	11,340	21,652	2,243
thereof related to the CSOP (IFRS 2)	1,137	17,723	—
Software fees and subscriptions	506	91	44
Professional services	352	267	284
Depreciation and amortization	284	171	78
Other	495	54	186
	40,609	30,469	4,937

There are no research expenses included in the profit and loss of Sono Group in the financial year 2021 and prior periods, as the Group does not perform research. As the recognition criteria for development cost have not been met, all development expenses were recognized in profit or loss as incurred in the reporting year and the previous years. The personnel expenses concern employees responsible for development activities and the share of the employee participation program (Conversion Stock Option Program or CSOP) attributable to them (see note 9.3 Remuneration based on shares (share-based payment).

6.3Selling and distribution expenses

The below table displays details included in selling and distribution expenses:


	2021	2020	2019
	kEUR	kEUR	kEUR
Personnel expenses	1,764	8,490	1,582
thereof related to the CSOP (IFRS 2)	—	6,949	—
Professional services	704	171	103
Advertising	365	84	113
Other	387	355	337
	3,220	9,100	2,135

The personnel expenses concern mainly employees responsible for marketing activities like roadshows, test rides and social media and (previous year only) the share of the employee participation program (Conversion Stock Option Program or CSOP) attributable to them (see note 9.3 Remuneration based on shares (share-based payment).

6.4General and administrative expenses

The below table displays details included in general and administrative expenses:


	2021	2020	2019
	kEUR	kEUR	kEUR
Professional services	7,030	4,830	670
Personnel expenses	4,574	9,148	1,325
thereof related to the CSOP (IFRS 2)	761	7,488	—
Impairment	1,965	—	—
Expenses without sufficient supporting documentation	—	21	70
Other	1,525	405	352
	15,094	14,404	2,417

The personnel expenses concern mainly employees responsible for Finance, Human Resources, Business Development, Administration etc. and the share of the employee participation program (Conversion Stock Option Program or CSOP) attributable to them (see note 9.3 Remuneration based on shares (share-based payment). The professional services include accounting, tax and legal services as well as other external services. The increase of expenses for professional services mainly concerns professional services related to the preparation of consolidated financial statements and consolidated interim reports in accordance with IFRS and their audit and review under consideration of PCAOB requirements as well as legal and tax opinions prepared in this context.

In 2021, an impairment loss of kEUR 1,965 for assets intended for the development of prototypes has been recognized in general and administrative expenses. For details, please refer to section 7.2 Property, plant and equipment. An amount of kEUR 2,690 for professional services received in connection with the IPO was not recognized in general and administrative expenses but deducted from capital reserves. Furthermore, kEUR 135 for professional services in connection with the IPO received in the previous year were accrued as a current non-financial asset in the previous year and deducted from capital reserve in the reporting year.

6.5Additional information on the nature of expenses

The below table displays the depreciation and amortization expenses as well as personnel expenses included in cost of research and development, selling and distribution costs and general and administrative expenses:


	2021	2020	2019
	kEUR	kEUR	kEUR
Personnel expenses	17,678	39,291	5,151
thereof related to CSOP (IFRS 2)	1,898	32,160	—
Depreciation and amortization	574	384	224
	18,252	39,675	5,375

The decrease of personnel expenses (kEUR -21,613) is due to the equity-settled employee participation program in 2021 (Conversion Stock Option Program or CSOP), which had a lower effect in 2021, as compared to the previous year (2021: kEUR 1,898, 2020: kEUR 32,160, 2019: kEUR -). The decrease is attributable to the fact that the program has been offered to all participants of the previous employee participation program and new participants, who have not been part of the previous employee participation program, on December 14, 2020 (see note 9.3 Remuneration based on shares (share-based payment) and most share options were fully vested at the end of the previous year. In 2021, expenses were recognized only for a small number of options that had not yet vested at the end of the previous year. The resulting decrease is partly offset by increased personnel costs due to an increase in the number of employees in the reporting year.

6.6Other operating income (expenses)

Other operating income (kEUR 269, 2020: kEUR 334, 2019: kEUR 220) mainly includes government grants (kEUR 71, 2020: kEUR 68, 2019: kEUR 15), miscellaneous other operating income (kEUR 125, 2020: kEUR -; 2019: kEUR -) and agency fees from the Renault ZOE conversion (kEUR 47, 2020: kEUR 240, 2019: kEUR -).

In 2020, Sono Motors entered into a framework agreement with Renault Deutschland AG (Renault) for electric vehicles (Renault ZOE). According to the agreement, customers, who have made advance payments for the Sion, can enter into a lease agreement with Renault for a Renault ZOE and use their advance payments to partly offset their lease payments. Customers can use advance payments made up to EUR 4,000. According to the framework agreement with Renault, Sono Group receives a fixed agency fee per lease contract and transfers the advance payment to Renault. Sono Group recognizes the respective agency fee as operating income and derecognizes the advance payment received in the moment the customer enters into the lease contract with Renault.

The government grants relate to a grant that Sono Motors received from the EU to promote the development of open-source hardware.

Other operating expenses in the reporting year amount to kEUR 452 and result mainly from foreign exchange losses resulting from the conversion of a portion of the IPO proceeds from USD to EUR. In 2020, other operating expenses amounted to kEUR 349 (2019: kEUR -) and solely included expenses related to a project termination with a supplier. In 2019, there were no other operating expenses.

6.7Impairment losses on financial assets

Impairment losses on financial assets (kEUR 6, 2020: kEUR 6, 2019: kEUR -) primarily relate to bank balances (see note 7.7 Cash and cash equivalents). For details on expected credit losses, please refer to note 8.1.2 Credit risk.

6.8Interest and similar income

Interest and similar income (kEUR -, 2020: kEUR 2, 2019: kEUR -) relates to interest income from VAT.

6.9Interest and similar expense

Interest and similar expense (kEUR 4,781, 2020: kEUR 2,040, 2019: kEUR 702) largely consists of interest and other expenses related to financial liabilities (kEUR 3,227, 2020: kEUR 614, 2019: kEUR 287) and the net compounding effect for advance payments received from customers (kEUR 1,497, 2020: kEUR 1,360, 2019: kEUR 415, see note 4.8 Advance payments received from customers).

6.10Tax on income and earnings

Taxes on income kEUR -18 (2020: kEUR -; 2019: kEUR -) relate to deferred tax expenses at the level of Sono N.V. as the recognition of deferred tax assets on loss carryforwards has been recognized proportionately in equity instead of the income statement.

The below tables display the changes in deferred tax assets and liabilities:


	Dec 31, 2021	Dec. 31, 2020	Dec. 31, 2019
	kEUR	kEUR	kEUR
Deferred tax assets
due to tax loss carryforwards	54	—	—
due to advance payments received from customers	1,163	670	221
due to lease liabilities	1,015	646	735
due to current provisions	101	—	—
due to current other non-financial assets	29	—	—
due to current financial liabilities	21	—	—
due to current other liabilities	14	—	—
due to cash & cash deposits	2	1	—
due to current other financial assets	1	1	—
due to prepaid expenses	—	134	—
Deferred tax assets	2,400	1,452	956
Deferred tax liabilities
due to leases	995	639	737
due to cash & cash deposits	47	—	—
due to property, plant and equipment	45	10	8
due to noncurrent other non-financial assets	29	—	—
due to other noncurrent financial liabilities	22	112	12
Deferred tax liabilities	1,138	761	757
Non-recognition of deferred tax assets	(1,262)	(691)	(199)
Recognition of deferred tax assets	1,138	761	757
Deferred tax assets/liabilities, net	—	—	—

Given the loss history of Sono Motors, deferred tax assets are not recognized on the balance sheet. The amount of deferred tax assets / liabilities as of December 31, 2020 and December 31, 2021 is zero.

Of the gross deferred tax assets, kEUR 314 as of December 31, 2021 (previous year: kEUR 806) are current and of the gross deferred tax liabilities, kEUR 47 as of December 31, 2021 (Previous year: kEUR 73) are current. Current deferred taxes are reported under non-current assets and non-current liabilities.

There are no deferred taxes with regard to Outside Basis Differences as those are permanent differences.

The amount of temporary differences on balance sheet positions for which no deferred tax asset has been recognized is displayed in the table below:


	Dec. 31, 2021	Dec. 31, 2020
	kEUR	kEUR
Advance payments received from customers	1,928	966
Lease liabilities	1,681	931
Current provisions	168	—
Other non-financial assets	48	—
Current financial liabilities	17	—
Current other liabilities	23	—
Cash & cash deposits	3	1
Other financial assets	19	2
Prepaid expenses	—	193
	3,887	2,093
Potential tax benefit at a total tax rate of 32,98 %	1,282	690

The amount of unused tax losses for which no deferred tax asset has been recognized is displayed in the table below:


	Dec. 31, 2021	Dec. 31, 2020
	kEUR	kEUR
Unused tax losses for which no deferred tax asset has been recognized (corporate tax)	111,950	51,316
Unused tax losses for which no deferred tax asset has been recognized (trade tax)	111,565	51,083
Potential tax benefit at a total tax rate of 32.98 %	36,858	16,885

As of December 31, 2021, KEUR 937 (Previous year: kEUR 723) deferred tax assets on transactions costs would have been recognized directly in equity if deferred tax assets had been recognized on losses carryforwards in full. As of December 31, 2021, kEUR 54 (previous year: kEUR -) deferred tax assets on loss carryforwards have been recognized, of which kEUR 18 (previous year: kEUR -) deferred tax assets on transactions costs have been recognized directly in equity.

The following table presents a numerical reconciliation of expected to effective income tax.


	2021	2020	2019
	kEUR	kEUR	kEUR
Income (loss) before tax for the period	(63,935)	(56,032)	(9,971)
Expected income tax (income (-)/expense (+) at a tax rate of 32.98 %	(21,086)	(18,479)	(3,288)
Reconciliation:
Changes in unrecognized tax losses	20,061	8,254	3,164
Changes in deferred taxes on timing differences	1,261	690	199
MCN non-tax-deductible expenses	753	—	—
CSOP non-tax-deductible expenses	626	10,606	—
Tax-deductible transaction costs	(937)	(723)	(36)
Non-tax-deductible expenses	37	9	27
Other	(715)	(357)	(66)
Effective income tax income for the period	—	—	—

*	Mandatory Convertible Notes

As Sono N.V. is also fully taxable in Munich, Germany, the tax rate in 2019, 2020 and 2021 is unchanged.

Note 7 - Balance Sheet Disclosures (Details Textual) € in Thousands						1 Months Ended		12 Months Ended			14 Months Ended
	Nov. 17, 2021 EUR (€) shares	Nov. 17, 2021 $ / shares	Nov. 08, 2021 shares	Dec. 10, 2020 EUR (€) shares	Nov. 27, 2020 EUR (€)	Feb. 28, 2022 EUR (€)	Nov. 30, 2021 EUR (€) shares	Dec. 31, 2021 EUR (€) installment	Dec. 31, 2020 EUR (€) installment shares	Dec. 31, 2019 EUR (€)	Dec. 31, 2019 USD ($)	Nov. 30, 2019
Statement Line Items [Line Items]
Depreciation and amortisation, research and development								€ 192	€ 144	€ 61
Depreciation and amortisation, selling and distributions expense								45	77	56
Depreciation and amortisation, general and administrative								€ 178	92	€ 46
Remaining lease terms (Year)								3 years
Reserve Released						€ 5,900
Subscribed capital								€ 8,735	6,468
Increase in number of shares outstanding, new issuances (in shares) \| shares	1,500,000		25,468,644	1,735,197
Capital Authorised								€ 25,200,000	25,200
Shares issued, price per share (in EUR per share) \| $ / shares		$ 13.95
Payments for transaction costs deferred for planned IPO	€ 135			€ 135
Increase in number of shares outstanding, conversion of convertible securities (in shares) \| shares	737,664
Issue of share split					€ 4,500				€ 0
Increase in number of shares outstanding, settlement agreement (in shares) \| shares				480,000
Modification of settlement agreement liability				€ 1,427
Modification of liability, new share issuance				€ 38,200
Number of shares authorised, maximum dividend (in shares) \| shares									4,000,000
Advances, percent cancellable								28.00%	11.00%
Advances, percent cancellable, year one								58.00%	1.00%
Advances, percent cancellable, year two								13.00%	21.00%
Advances, percent cancellable, year three								1.00%	66.00%
Advances, percent cancellable, year four									1.00%
Borrowing, number of monthly installments \| installment								5	5
Settlement agreement , recognized in equity								€ 1,427
Loan term (Year)									4 years
Conversion of loans, number of shares issued (in shares) \| shares							737,664
Total par value of shares converted from debt recognized in subscribed capital							€ 44
Percentage of face value												0.52%
Number of cars reserved \| $											2,000

Note 6 - Disclosures to the Statement of Income and Loss - Deferred Tax Assets and Liabilities (Details) - EUR (€) € in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Statement Line Items [Line Items]
Non-recognition of deferred tax assets	€ (1,262)	€ (691)	€ (199)
Recognition of deferred tax assets	€ 1,138	€ 761	€ 757

Note 7 - Balance Sheet Disclosures - Property, Plant and Equipment (Details) - EUR (€) € in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Statement Line Items [Line Items]
Reclassifications	€ (221)
Deductions	0	€ 348
Accumulated depreciation Jan. 1	0	83
Accumulated depreciation Dec. 31	€ 269	€ 0

Note 7 - Balance Sheet Disclosures - Advance Payments received from customers (Details) - EUR (€) € in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Note 7 - Balance Sheet Disclosures - Advance Payments received from customers (Details)
Additions	€ 5,198	€ 30,565
Repayment	(912)	(4,117)
Net interest	€ 1,498	€ 1,360

Note 8 - Disclosure of Financial Instruments and Risk Management (Tables)

12 Months Ended

Dec. 31, 2021

Note 8 - Disclosure of Financial Instruments and Risk Management

Disclosure of reconciliation of changes in fair value measurement, liabilities [text block]


	Dec. 31, 2021	Dec. 31, 2020
	kEUR	kEUR
Balance at beginning of year	6,859	—
New transactions	—	6,800
Amount presented in other comprehensive income (OCI)	(16)	21
Amount presented in profit or loss (interest and other expenses)	2,818	38
Payment for fractional shares	—	—
Conversion to equity	(9,661)	—
Transfer from OCI to accumulated deficit		—
Other comprehensive income	(5)	—
Accumulated deficit	5	—
Balance at end of year	—	6,859

Disclosure of gains (losses) on financial instruments [text block]


	2021	2020	2019
	kEUR	kEUR	kEUR
Net loss for financial assets at amortized cost	162	49	1
Net loss for financial liabilities at amortized cost	319	560	287
Net loss for financial liabilities at fair value through profit or loss	2,802	59	—

Note 7 - Balance Sheet Disclosures

12 Months Ended

Dec. 31, 2021

Notes To Financial Statements [Abstract]

Disclosure of balance sheet explanatory [text block]

7.Balance sheet disclosures

7.1Intangible assets


	Website	Software	Total
	kEUR	kEUR	kEUR
Historical cost
Balance as of Jan. 1, 2021	43	—	43
Additions	2	222	224
Balance as of Dec. 31, 2021	45	222	267
Accumulated amortization
Balance as of Jan. 1, 2021	27	—	27
Amortization	11	23	34
Balance as of Dec. 31, 2021	38	23	61
Carrying Amount as of Jan. 1, 2021	16	—	16
Carrying Amount as of Dec. 31, 2021	7	199	206


	Website	Software	Total
	kEUR	kEUR	kEUR
Historical cost
Balance as of Jan. 1, 2020	43	—	43
Additions	—	—	—
Balance as of Dec. 31, 2020	43	—	43
Accumulated amortization
Balance as of Jan. 1, 2020	16	—	16
Amortization	11	—	11
Balance as of Dec. 31, 2020	27	—	27
Carrying Amount as of Jan. 1, 2020	27	—	27
Carrying Amount as of Dec. 31, 2020	16	—	16

The amortization expenses for the acquired intangible assets amounting to kEUR 34 (previous year: kEUR 11) are included in research and development (kEUR 22, previous year: kEUR -), selling and distribution costs (kEUR 4, previous year: kEUR 11) and general and administrative expenses (kEUR 8, previous year: kEUR -).

7.2Property, plant and equipment


		Advance
		payments for
		technical
	Equipment /	equipment
	Hardware	and machinery	Total
	kEUR	kEUR	kEUR
Acquisition or manufacturing costs Jan. 1, 2021	281	1,965	2,246
Additions	546	926	1,472
Reclassifications	221	(221)	—
Deductions	—	—	—
Impairment	—	(1,965)	(1,965)
Acquisition or manufacturing costs Dec. 31, 2021	1,048	705	1,753
Accumulated depreciation Jan. 1, 2021	144	—	144
Depreciation	125	—	125
Accumulated depreciation Dec. 31, 2021	269	—	269
Carrying Amount Jan. 1, 2021	137	1,965	2,102
Carrying Amount Dec. 31, 2021	779	705	1,484


		Advance
		payments to
		technical
	Equipment /	equipment
	Hardware	and machinery	Total
	kEUR	kEUR	kEUR
Acquisition or manufacturing costs Jan. 1, 2020	239	2,313	2,552
Additions	42	—	42
Deductions	—	348	348
Impairment	—	—	—
Acquisition or manufacturing costs Dec. 31, 2020	281	1,965	2,246
Accumulated depreciation Jan. 1, 2020	83	—	83
Depreciation	61	—	61
Accumulated depreciation Dec. 31, 2020	144	—	144
Carrying Amount Jan. 1, 2020	156	2,313	2,469
Carrying Amount Dec. 31, 2020	137	1,965	2,102

The depreciation expenses for property, plant and equipment amounting to kEUR 125 (2020: kEUR 61; 2019: kEUR 50) are included in research and development (kEUR 70, 2020: kEUR 28; 2019: kEUR 19), selling and distribution costs (kEUR 27, 2020: kEUR 15; 2019: kEUR 18) and general and administrative expenses (kEUR 28, 2020: kEUR 18; 2019: kEUR 13).

Additions to equipment and hardware in the amount of kEUR 254 as well as to advance payments in the amount of kEUR 634 refer to the equipment for the production of solar panels, which are currently located at the productional partner’s facilities but legally owned and economically controlled by Sono Group. The remaining additions to equipment and hardware refer mainly to office equipment and are associated with an increase of employees’ number.

In the reporting period, Sono Group recognized an impairment of the advances paid in the amount of kEUR 1,965. The impairment loss of kEUR 1,965 included in the general and administrative expense relates to advance payments on assets intended for the tooling of batteries that had been recognized in 2020. Management has determined that, due to an unforeseen change in the specifications of the battery, resulting from a change in supplier, the assets that the advance payments referred to were no longer needed in the Group’s development of prototypes. As the Group does not expect to be able to reclaim the payments made under the contract with the supplier of the tools, the advance payments’ fair value (determined as the market value of reclaimable payments at level 1 of the fair value hierarchy) and recoverable amount are EUR 0. It cannot be ruled out that the supplier of the tool will still assert additional claims from this, but Sono Group considers a successful claim unlikely.

7.3Right-of-use assets

Sono Motors leases buildings and warehouses at its headquarters in Munich and three electrical cars including batteries. At the end of the reporting period, the remaining lease terms for the buildings were 6 to 10 years and for the cars 2 to 3 years.

The below table presents details on the lease agreements of Sono Motors:


	Buildings	Cars	Total
	kEUR	kEUR	kEUR
Right-of-use assets on January 1, 2021	1,906	31	1,937
Additions to right-of-use assets	1,496	—	1,496
Depreciation of right-of-use assets	405	10	415
Right-of-use assets on December 31, 2021	2,997	21	3,018
Interest expense on lease liabilities	52	4	56
Expense relating to short-term leases	—	—	—
Total cash outflow for leases	423	12	435


	Buildings	Cars	Total
	kEUR	kEUR	kEUR
Right-of-use assets on January 1, 2020	2,211	24	2,235
Additions to right-of-use assets	—	15	15
Depreciation of right-of-use assets	305	8	313
Right-of-use assets on December 31, 2020	1,906	31	1,937
Interest expense on lease liabilities	35	4	39
Expense relating to short-term leases	—	—	—
Total cash outflow for leases	311	12	323


	Buildings	Cars	Total
	kEUR	kEUR	kEUR
Right-of-use assets on January 1, 2019	—	—	—
Additions to right-of-use assets	2,372	25	2,397
Depreciation of right-of-use assets	161	1	163
Right-of-use assets on December 31, 2019	2,211	24	2,235
Interest expense on lease liabilities	22	1	23
Expense relating to short-term leases	84	—	84
Total cash outflow for leases	271	5	276

The depreciation expenses for right-of-use assets amounting to kEUR 415 (2020: kEUR 313, 2019: kEUR 163) are included in research and development (kEUR 192, (2020: kEUR 144, 2019: kEUR 61) selling and distribution costs (kEUR 45, 2020r: kEUR 77, 2019: kEUR 56) and general and administrative expenses (kEUR 178, 2020: kEUR 92, 2019: kEUR 46). Interest expenses for lease agreements are presented as part of interest and other expenses.

At the end of the reporting period, Sono Group has lease commitments for short-term leases of kEUR 4 (previous year: kEUR -). At the end of both the reporting period and the prior fiscal year, there were no obligations from sale and lease back transactions or leasing of low-value assets. In the reporting period, expenses relating to variable lease payments not included in the measurement of lease liabilities amounted to kEUR 16.

The below table presents the maturity profiles of future lease payments:


kEUR	< 1 year	1 to 5 years	>5 years
Buildings	488	1,988	810
Cars	15	12	—
Total December 31, 2021	503	2,000	810


kEUR	< 1 year	1 to 5 years	>5 years
Buildings	311	1,302	421
Cars	12	24	—
Total December 31, 2020	323	1,326	421

The Group has entered several leasing agreements for buildings that offer an extension option. In all of these cases, Management has determined that the Group is reasonably certain to exercise the extension option. Therefore, the extension options were included in determining the carrying amounts of the lease liabilities and right-of-use assets for these buildings.

Sono Group does not act as a lessor or sublessor in any lease agreements.

7.4Other noncurrent financial assets

Other noncurrent financial assets as of December 31, 2021 (kEUR 91; previous year: kEUR 41) consist solely of security deposits. For details on expected credit losses, please refer to note 8.1.2 Credit risk.

7.5Other current financial assets

The below table displays information on financial instruments included in other current financial assets:


	Dec. 31, 2021	Dec. 31, 2020
	kEUR	kEUR
PayPal reserve	6,000	4,655
Receivables from crowdfunding and deposits	169	179
Debtors creditors	26	539
Current trade receivables	20	—
Current receivables (affiliated companies)	11	11
Other	7	20
Total	6,233	5,404

The PayPal reserve in 2021 relates to the reclassification of the specific reserve imposed by PayPal due to the crowdfunding campaign from cash to other current financial assets. In February 2022, the reserve amounting to kEUR 5,900 was released and transferred to the current bank account of Sono Group. Sono Group expects a repayment of the remaining kEUR 100 within 12 months after the balance sheet date. Therefore, the PayPal reserve is classified as current.

7.6Other current non-financial assets

Other current non-financial assets as of December 31, 2021 (kEUR 3,236; previous year: kEUR 579) mainly consist of receivables for VAT and other taxes (kEUR 2,069, previous year: kEUR 257) and prepaid expenses mainly for software (kEUR 669, previous year: kEUR 256).

7.7Cash and cash equivalents

Cash and cash equivalents include the following amounts:


	Dec. 31, 2021	Dec. 31, 2020
	kEUR	kEUR
Bank balances	132,947	43,266
Allowance for expected credit losses	(8)	(2)
Total	132,939	43,264

For details on expected credit losses, please refer to note 8.1.2 Credit risk.

7.8Equity

Total equity of Sono Group comprises subscribed capital, capital reserves, other reserves and accumulated deficit. The subscribed capital amounts to kEUR 8,735 (previous year: kEUR 6,468) and represents 73,577,641 (previous year: 35,803,197) fully paid-in member shares with a par value of EUR 0.06 (ordinary shares, previous year: EUR 0.06) and EUR 1.50 (high voting shares, previous year: EUR 1.50). Capital reserves include any amounts paid in by the owners that exceed the member shares’ par value. Other reserves include mainly effects from equity-settled stock-option. Accumulated deficit consists of losses from prior periods.

In the reporting year, the following events with regard to equity took place:

During the first half of fiscal year 2021, an amount of 68,136 new ordinary shares have been issued to two new investors.

At the general meeting on November 8, 2021, the shareholders of Sono Group agreed to a resolution to issue bonus shares according to which all shareholders of Sono Group received an additional amount of 0.71 ordinary shares with a par value of EUR 0.06 for each share they held at the time, regardless of their voting rights, financed by deducting the nominal amount from capital reserves (in total: 25,468,644 ordinary shares). The stock options from the "Conversion Stock Option Program 2020" were increased in the same proportion. In line with this resolution, the issue of bonus shares was implemented immediately prior to the execution of the Underwriting Agreement related to the IPO between Sono Group and Berenberg Capital Markets LLC and Craig-Hallum Capital Group LLC as underwriters.

Moreover, the shareholders agreed to extend the authorization of Sono Motors’ Management Board to issue shares in the Company’s capital (irrespective of the class concerned) and/or to grant rights to subscribe for those shares up to the authorized share capital as included in the Company’s articles of association from time to time and to limit and/or exclude pre-emption rights in relation thereto for a period of another five years after the execution of the underwriting agreement. The authorized share capital amounts to kEUR 25,200,000 (320,000,000 ordinary shares with a par value of EUR 0.06 and 4,000,000 high-voting shares with a par value of EUR 1.50). The shareholders also agreed to extend the resolution for the Company to acquire fully paid-up shares (irrespective of the class concerned) and/or depository receipts for those shares for another 18 months after the execution of the underwriting agreement. The underwriting agreement was executed on November 16, 2021.

In the IPO on November 17, 2021, Sono Group offered 10,000,000 ordinary shares with a par value of EUR 0.06 at a price of USD 15.00 each. The underwriters had an additional greenshoe option to 1,500,000 ordinary shares with a par value of EUR 0.06 at a price of USD 13.95 each. All offered shares were sold and the underwriters exercised their greenshoe option. In total, Sono Group raised kUSD 160,425 (kEUR 142,334) through the IPO, after underwriting discounts and commissions. In accordance with IAS 32, further transaction costs of the IPO were recognized directly in equity as a deduction from capital reserves. The total amount of IPO-related transactions costs deducted from capital reserves is kEUR 2,825. The recognition of transaction costs included an amount of kEUR 135 that was directly attributable to the planned IPO and therefore had been deferred in a separate line item in fiscal year 2020.

Upon the IPO, the mandatory convertible notes issued in 2020 (carrying amount: kEUR 9,661) were fully converted into equity. The investors of the mandatory convertible notes received a total of 737,664 ordinary shares with a par value of EUR 0.06 per share. For further details on the mandatory convertible notes, see note 7.10.1 Financial liabilities overview.

The settlement payment conditional to one of the owners of Sono N.V. was due upon completion of the IPO. The corresponding liability was debited to other reserves (please refer to note 7.10.1 Financial liabilities overview).

Regarding changes in equity due to share-based compensation see note 9.3 Remuneration based on shares (share-based payment).

In the previous year, the following events with regard to equity took place:

At the general meeting on November 25, 2020, the owners agreed to a capital increase against contribution in cash in the nominal amount and part of the loan claims (settlement agreement, see note 7.10.2 Other noncurrent financial liabilities) as contribution in kind at the level of Sono N.V.

For the reorganization of the structure of Sono Motors and Sono N.V. we refer to note 1 General information. In the course of the reorganization, a split of the shares (30,588,000, par value ordinary shares of EUR 0.06) and a conversion of high voting shares (3,000,000, par value high voting shares of EUR 1.50) has taken place, including an increase in share capital of kEUR 1,835 and kEUR 4,500 as well as an offsetting effect in the capital reserve (kEUR -1,835 and kEUR -4,500).

The capital increase resulting from the settlement agreement and the issuance of new shares (480,000 and 1,735,197 new shares, respectively) as well as the modification of the original liability amounting to kEUR 1,427 and kEUR 38,200 on December 10, 2020 (closing date of issuance of new shares) resulted in an increase in subscribed capital of kEUR 133 and a corresponding increase in capital reserves of kEUR 37,302, net of tax after deducting transaction costs of kEUR 2,192. Management of Sono N.V. has determined that transaction costs of kEUR 135, which were directly attributable to the planned IPO in 2021, were to be deferred in a separate line item and not deducted from equity at the time. The deferral was derecognized at time of the IPO in November 2021. For the settlement agreement please see note 7.10.2 Other noncurrent financial liabilities.

For the increase in the other reserves (kEUR 32,160) due to the new equity-settled employee participation program (Conversion Stock Option Program or CSOP), please see note 4.11 Share-based payment and 9.3 Remuneration based on shares (share-based payment).

Under Dutch law, Sono Group’s authorized shared capital is the maximum capital that can be issued without amending the articles of association. As of December 31, 2020, the authorized shared capital amounts to kEUR 25,200 representing 320,000 common shares and 4,000,000 high voting shares. The high voting shares carry the same economic rights entitlements as the common shares and only carry different voting rights.

7.9

Advance payments received from customers


	Dec. 31, 2021	Dec. 31, 2020
	kEUR	kEUR
Advance payments received from customers	44,756	38,972
	44,756	38,972

Depending on the general terms and conditions, in some cases, a cancellation by the customer is possible in less than twelve months. Customers may provide their advance payments in several installments, the latest of which determines the applicable cancellation policy. As of December 31, 2021, for customers who made their latest installment on or before November 25, 2020, cancellation is possible at any time. For customers who made their latest installment later than November 25, 2020, but before November 3, 2021, cancellation is possible on July 1, 2023, or later. For customers who made their latest installment on or after November 3, 2021, cancellation is possible on January 1, 2024, or later. Deviating from these conditions, in November 2020, Sono Group approached all German-speaking customers that had made their latest installment during the crowdfunding campaign from December 1, 2019, until and including January 20, 2020, and asked them to accept a change in the terms and conditions to waive their cancellation right until December 31, 2022. In effect, those customers who accepted the change may cancel their advance payment on January 1, 2023, or later.

As of December 31, 2021, currently 28% are cancelable, 58% will be cancelable from January 1, 2023, 13% will be cancelable from July 1, 2023, and 1% will be cancelable from January 1, 2024. The percentages calculated are based on the nominal values of the advance payments excluding IFRS adjustments (interest effect).

As of December 31, 2020, 11% were cancelable at the time, 1% was cancelable from January 1, 2021, 21% was cancelable from January 1, 2022, 66% was cancelable from January 1, 2023, and 1% was cancelable from July 1, 2023.

Sono Group expects to begin recognizing revenue from the sale of the car in the second half of 2023 after expected start of production.

The table below shows the changes in the advance payments received from customers:


	Balance as of				Balance as of
	Jan. 1, 2021	Additions	Repayment	Net interest	Dec. 31, 2021
	KEUR	kEUR	kEUR	kEUR	kEUR
Advance payments received from customers	38,972	5,198	(912)	1,498	44,756
	38,972	5,198	(912)	1,498	44,756


	Balance as of				Balance as of
	Jan. 1, 2020	Additions	Repayment	Net interest	Dec. 31, 2020
	KEUR	kEUR	kEUR	kEUR	kEUR
Advance payments received from customers	11,164	30,565	(4,117)	1,360	38,972
	11,164	30,565	(4,117)	1,360	38,972

7.10Financial liabilities

7.10.1Financial liabilities overview

The below table shows the changes in loans and participation rights:


				Subordinated	Mandatory
	Loan	Loan	Loan	loans	convertible	Participation
Nominal amounts	1	2	3*	(crowd-funding)	Notes	rights	Total
	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Jan. 1, 2020**	—	295	2,590	1,967	—	1,383	6,235
Addition	1,225	—	—	2,795	6,800	—	10,820
Accrued interest	46	12	277	101	—	—	435
Repayment	—	(107)	(1,219)	(1,731)	—	—	(3,058)
Conversion to equity	—	—	(1,648)	—	—	—	(1,648)
Dec. 31, 2020	1,271	200	—	3,131	6,800	1,383	12,784
Addition	—	—	—	—	—	—	—
Accrued interest	50	—	—	174	—	52	276
Repayment	(36)	(200)	—	(805)	—	(1,435)	(2,475)
Conversion to equity	—	—	—	—	(6,800)	—	(6,800)
Dec. 31, 2021	1,285	—	—	2,500	—	—	3,785

*	Shareholder transaction in 2020

**	including nominal interest accrued in previous periods if applicable


				Subordinated	Mandatory
	Loan	Loan	Loan	loans	convertible	Participation
Carrying amounts	1	2	3*	(crowd-funding)	Notes	rights	Total
	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR	kEUR
Jan. 1, 2020	—	295	2,583	2,026	—	1,346	6,250
Initial recognition	1,225	—	—	2,714	6,800	—	10,739
Subsequent measurement	46	12	284	53	59	28	482
Derecognition	—	(107)	(1,219)	(1,731)	—	—	(3,058)
Conversion to equity	—	—	(1,648)	—	—	—	(1,648)
Dec. 31, 2020	1,271	200	—	3,062	6,859	1,374	12,766
Initial recognition	—	—	—	—	—	—	—
Subsequent measurement	14	—	—	58	2,802	62	2,936
Derecognition	—	(200)	—	(655)	—	(1,436)	(2,291)
Conversion to equity	—	—	—	—	(9,661)	—	(9,661)
Dec. 31, 2021	1,285	—	—	2,465	—	—	3,750

*	Shareholder transaction in 2020

Loan 1

Loan 1 consists of nine individual loans with an aggregate nominal value of kEUR 1,225, and interest rate of 4% p.a. and a maturity in December 2023. For six of these loans, Sono Group agreed with the lender to accrue interest until the end of the term of the liability without compounding instead of paying out interest each year.

Loan 2

Loan 2 included two loans with a nominal value of kEUR 185 and kEUR 100, respectively, and an annual interest rate of 4% p.a. each. These loans were repayable including interest at maturity in December 2020. The loan with the nominal amount of kEUR 185 had not been repaid as of December 31, 2020, but was paid back on January 5, 2021.

Loan 3 (including settlement agreement)

Loan 3 included a loan with a contractual two-year term with an interest rate of 12% p.a. and a total nominal value of kEUR 2,500. Following a settlement agreement in November 2020, part of the loan was paid back to the capital providers, while the remaining amount was converted into ordinary shares of Sono N.V. for an additional cash payment of kEUR 29. In addition, Sono N.V. agreed to pay one of the capital providers a total amount of kEUR 250 in five equal monthly installments starting in December 2020 and one lump sum payment of kEUR 250 after a successful IPO of Sono N.V. This modification of the original liability resulted in derecognition of the unpaid liability and a recognition of a new liability for the five installments. The effect of the modification was recorded in equity as it resulted from the relationship with a shareholder. The total amount recognized in equity due to the settlement agreement was kEUR 1,427. The IPO in November 2021 triggered the second settlement payment. As of the reporting date, the payment has not been made. The outstanding amount (kEUR 250) is presented in trade and other payables as the outstanding amount for the first payment (kEUR 200) in the previous year (see note 7.11 Trade and other payables).

Subordinated loans (crowdfunding)

The crowdfunding loans consisted of several crowdfunding loans with interest rates of 6% p.a. and different terms, varying between less than one year and up to 4 years. The issuing period ended in December 2020.

Mandatory convertible notes

In December 2020, Sono Group issued mandatory convertible notes with a nominal value of kEUR 6,800. According to the contract, conversion was mandatory upon the occurrence of certain events, including, an IPO of Sono Group. Upon the successful IPO in November 2021, these notes (carrying amount: kEUR 9,661) were fully converted into equity (for details on the IPO, please refer to note 1 General information and note 7.8 Equity). The investors of the mandatory convertible notes received a total of 737,664 ordinary shares with a par value of EUR 0.06 per share. The par value of the shares (kEUR 44) was recognized in subscribed capital, while the remainder (kEUR 9,617) was recognized in capital reserves. Accordingly, the financial liability relating to the notes was derecognized.

Participation rights

Between October 2018 and November 2019, Sono Motors issued participation rights with a total face value of kEUR 1,383 that bore a fixed interest rate of 3.5% p.a., plus a one-time bonus payment at maturity of 0.52% p.a. of the face value for each 1,000 cars reserved by potential customers between October 18, 2018 and December 31, 2019. More than 2,000 reservations were made during that period; as of December 31, 2020, the carrying amount of the liability includes the one-time bonus payment. The participation rights including the bonus payment were repaid in full in the reporting period.

7.10.2Other noncurrent financial liabilities

The below table displays details on items included in other noncurrent financial liabilities:


	Dec. 31, 2021	Dec. 31, 2020
	kEUR	kEUR
Loans and participation rights	3,718	3,665
Lease liabilities	2,635	1,669
	6,353	5,335

For further details regarding the conditions of the other noncurrent financial liabilities, we refer to note 7.10.1 Financial liabilities overview.

7.10.3Current financial liabilities

The below table displays details on items included in current financial liabilities:


	Dec. 31, 2021	Dec. 31, 2020
	kEUR	kEUR
Current other financial liabilities
Loans and participation rights	31	2,240
Mandatory convertible notes	—	6,859
Lease liabilities	441	289
	472	9,388

For further details regarding the conditions of the other financial liabilities, we refer to note 7.10.1 Financial liabilities overview.

7.11Trade and other payables

The below table displays details on items included in trade and other payables:


	Dec. 31, 2021	Dec. 31, 2020
	kEUR	kEUR
Trade payables	6,866	2,642
Other payables	715	232
	7,582	2,874

Trade payables refer to purchased goods, assets and services. Other payables mainly refer to outstanding short-term employee benefits (kEUR 383) and second payment resulting from a settlement agreement (kEUR 250). In the previous year, other payables mainly related to the first payment resulting from the settlement agreement (kEUR 200). Please refer to note 7.10.2 Other noncurrent financial liabilities and note 7.8 Equity, respectively.

7.12Current other liabilities

The below table displays details on items included in other current liabilities:


	Dec. 31, 2021	Dec. 31, 2020
	kEUR	kEUR
Accruals and deferrals	2,011	1,463
Employee tax liabilities (wage and church tax)	372	146
Tax liabilities (VAT taxes and interest)	109	80
	2,492	1,689

Accruals and deferrals as of December 31, 2021 contain mainly accrued vacation payments to employees (kEUR 857), accrued expenses for pending invoices (kEUR 751) and accruals of kEUR 144 (previous year: kEUR 65) for statutory levies.

7.13Provisions

The table below presents information on the movements and carrying amounts of provisions over the course of the reporting period.


	Balance as of				Balance as of
	Jan. 1, 2021	Usage	Reversals	Additions	Dec. 31, 2021
	KEUR	kEUR	kEUR	kEUR	kEUR
Other provisions	—	—	—	65	65
Personnel costs	—	—	—	—	—
Financial statements	111	(111)	—	2,137	2,137
	111	(111)	—	2,202	2,202


	Balance as of				Balance as of
	Jan. 1, 2020	Usage	Reversals	Additions	Dec. 31, 2020
	KEUR	kEUR	kEUR	kEUR	kEUR
Other provisions	—	—	—	—	—
Personnel costs	584	(584)	—	—	—
Financial statements	52	(46)	—	105	111
	636	(630)	—	105	111

Provisions for financial statements include audit fees and advisory services for the preparation of financial statements in accordance with Form 20-F.

In the reporting period, Sono Group cancelled a supplier contract related to the delivery of assets intended for the tooling of batteries, for which advance payments had been recognized in 2020. It cannot be ruled out that the supplier of the tool will still assert additional claims from this, but Sono Group considers a successful claim unlikely. For further details, please refer to note 7.2 Property, plant and equipment.

Note 6 - Disclosures to the Statement of Income and Loss - Temporary Differences for which No Deferred Tax Assets Recognized (Details) - EUR (€) € in Thousands	Dec. 31, 2021	Dec. 31, 2020
Statement Line Items [Line Items]
Potential tax benefit at a total tax rate of 32,98 %	€ 1,282	€ 690

Note 6 - Disclosures to the Statement of Income and Loss - Cost of Research and Development (Details) - EUR (€) € in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Statement Line Items [Line Items]
Development cost of prototypes	€ 27,632	€ 8,234	€ 2,102
Personnel expenses	1,137	17,723	0
Software fees and subscriptions	506	91	44
Professional services	352	267	284
Depreciation and amortization	192	144	61
Other	€ 495	€ 54	€ 186

Note 9 - Other Disclosures (Details Textual) € / shares in Units, € in Thousands		12 Months Ended
	Nov. 19, 2021 item	Dec. 31, 2021 EUR (€) item	Dec. 31, 2020 item € / shares	Dec. 31, 2019 € / shares
Statement Line Items [Line Items]
Government grants, payment installment amount \| €		€ 68
Government grants, deferral period (Month)			18 months
Share-based payment arrangements, exit event, percentage of shares or assets sold or transferred		95.00%
Number of additional employees offered share based payment arrangement transfer			5
Number of additional employees, active, share based payment arrangement			1
Number of additional employees, former, share-based payment arrangement			4
Vesting term after exit-event, share options granted (Year)		1 year
Expiration term after exit-event, share options granted (Year)		4 years
Vesting period, share options granted (Month)		36 months
Number of supervisory board members		5
Vesting, number of installments, other equity instruments	4
Vesting period, other equity instruments (Year)	4 years
Diluted earnings (loss) per share, before bonus share adjustment (in EUR per share) \| € / shares			€ (1.66)	€ (0.30)
Debt to equity swap \| €		€ 1,648

Note 6 - Disclosures to the Statement of Income and Loss - Reconciliation of Effective Income Tax (Details) - EUR (€) € in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Note 6 - Disclosures to the Statement of Income and Loss - Reconciliation of Effective Income Tax (Details)
Changes in deferred taxes on timing differences	€ 1,261	€ 690	€ 199
MCN non-tax-deductible expenses	753	0	0
CSOP non-tax-deductible expenses	626	10,606	0
Tax-deductible transaction costs	€ (937)	€ (723)	€ (36)

Note 9 - Other Disclosures

12 Months Ended

Dec. 31, 2021

Notes To Financial Statements [Abstract]

Disclosure of other disclosures [text block]

9Other disclosures

9.1Defined contribution plans (government-run pension plans)

Sono Motors makes payments under defined contributions plans, related to government-run pension plans. In the financial year 2021, the total expense recognized amounted to kEUR 1,047 (2020: kEUR 491; 2019: kEUR 329).

9.2Government grants

In fiscal year 2021, other operating income includes an amount of kEUR 71 (2020: kEUR 68; 2019: kEUR 15) related to a grant that Sono Motors received from the EU to promote the development of open-source hardware as part of the “OPEN_NEXT” project. There are no unfulfilled conditions or other contingencies attached to these grants. Sono Motors did not benefit from any other forms of government assistance.

The “OPEN_NEXT” grant is divided into pre-financing, interim and a final payment. The pre-financing amounts to kEUR 136 and was received by Sono Motors in two installments paid out in 2019 and 2020, each payment amounting to kEUR 68. The grant has the purpose to reimburse Sono Motors for direct personnel costs, direct costs of subcontracting, other direct costs and indirect costs in relation to the development of open-source hardware in the form of company-community collaborations. The payments are deferred and recognized in profit and loss over a period of 18 months each to match them with the costs that they are intended to reimburse. In 2021, one interim grant payment of kEUR 18 was received and recognized in other operating income. The final payment amount depends on the total cost incurred by Sono Motors and will be received in 2023. Due to its inherent uncertainty, it was not recognized in the Group’s consolidated financial statements.

9.3Remuneration based on shares (share-based payment)

9.3.1Staff members and managers

In the first half of 2018, management of Sono Motors has set up two similar employee participation programs for staff members and selected managers. The employee participation programs are based on virtual shares. The virtual share of each employee is determined based on a point system (staff members) respectively a percentage defined in the employment contract (manager). The program provides remuneration in form of the right to participate in Sono Motors’ exit proceeds. The remuneration for managers is subject to the fulfillment of specific vesting conditions. In both programs, which have no time limit regarding the ‘exit-event’, the right to receive a remuneration based on the exit proceeds is achieved if 95 % of the shares of Sono Motors are sold and transferred to a new owner or all material assets of Sono Motors (particularly patents) are sold to a third party. Both employee participation programs are accounted for as cash-settled share-based transactions. However, no expense and liability has been recognized because an ‘exit-event’ and consequently a payment was not probable as of December 31, 2020.

In December 2020, Management has offered all participants of the existing employee participation program as well as five additional staff members (one active and four former staff members) to transfer or join the new employee participation program (Conversion Stock Option Program or CSOP), which is equity-settled. Therefore, all participants were asked to leave the current employee participation program by signing a cancellation agreement and to join the new program. As of December 31, 2020, 88 employees, including all management-level employees, have signed the CSOP. All participants of the employee participants program for managers have been transferred to the CSOP by December 31, 2020. Consequently, the employee participants program for managers was obsolete as of December 31, 2020.

The table below shows the current status of the number of employees as of December 31, 2021:


	Cash-settled	Equity-settled
	program	program
Staff members	1	85
Managers	—	3
	1	88

In November 2021, Sono Group successfully completed an IPO and is now listed on the Nasdaq Stock Market.

No expense and liability have been recognized for the one participant remaining in the cash-settled program because management does not consider an IPO an ‘exit-event’ in accordance with the cash-settled employee participation program and consequently does not consider a payment to the remaining participant probable as of December 31, 2021.

Management has determined that an IPO would constitute an ‘exit-event’ according to the CSOP.

For all staff members as well as one manager in the CSOP, all granted share options are fully vested as of December 31, 2021 (also fully vested as of December 31, 2020). They become exercisable one year after an ‘exit-event’. All unexercised share options expire four years after an ‘exit-event’. The weighted average remaining contractual life for the CSOP as of December 31, 2021 is 3.9 years.

Two managers in the CSOP have a vesting period of 36 months (service condition) for their granted share options, beginning at a contractually set date. If the employment of the managers with Sono Motors GmbH, Munich, Germany, ends during the vesting period, a pro rata exercisability of the share options might be granted, depending on contractually agreed good or bad leaver scenarios. After the vesting period all granted share options become exercisable. Other than that, there are no vesting conditions.

Sono N.V. initially measures the fair value of the received services by reference to the fair value of the equity instruments (share options) granted and the number of share options contractually agreed on with each participant. Sono N.V. recognizes the fair value of the services as expenses and a corresponding increase in equity when the services are received. If Sono N.V. and the participant did not agree on service conditions (86 participants) and the participant is unconditionally entitled to the share options, Sono N.V. presumes, that the services have been received on grant date and recognizes the services received in full, with a corresponding increase in equity. If Sono N.V. and the participant did agree on service conditions (two participants), Sono N.V. accounts for the services as they are rendered by the participant during the vesting period, with a corresponding increase in equity.

The following table illustrates the volume of the program, the weighted average fair value at grant date as well as the total expense of the period and the corresponding increase in equity:


December 31, 2021
Number of options granted		1,805,100
Weighted average fair value at grant date (EUR)		19.26
Expense of the period (kEUR)		1,898
Increase in equity (kEUR)		1,898


December 31, 2020
Number of options granted		1,805,100
Weighted average fair value at grant date (EUR)		19.26
Expense of the period (kEUR)		32,160
Increase in equity (kEUR)		32,160

The following table illustrates the number of, and movements in, share options during the year:


2021
January 1, 2021		1,805,100
Granted		—
Forfeited		—
December 31, 2021		1,805,100


2020
January 1, 2020		—
Granted		1,805,100
Forfeited		—
December 31, 2020		1,805,100

The exercise price of all share options will be EUR 0.06.

The fair value of the share options for the equity-settled share-based transactions is measured using Black-Scholes Model and the following inputs:


Input factor
Weighted average share price (EUR)	22.01
Exercise price (EUR)	0.06
Expected volatility	75	%
Option life (yrs.)	1.29
Expected dividends (EUR)	0.00
Risk-free interest rate	(0.73)	%
Lack of marketability discount	14.39	%

The expected life of the share options is based on current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility was based on an evaluation of historical volatilities of comparable listed peer group companies. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome.

As of December 31, 2020, the full fair value of the options for the participants, who did not agree on service conditions (86 participants) for the new Conversion Stock Option Program, was recognized as a personnel expense as the program for these participants is fully vested. For the participants, who did agree on service conditions (two participants), Sono N.V. recognized the proportionate fair value as a personnel expense as the program for these participants is not yet fully vested.

9.3.2Supervisory Board

In November 2021, Sono Group established a supervisory board. As of December 31, 2021, the supervisory board consists of five members. The members receive share-based payment based on awarded restricted stock units (“RSU”), as part of their remuneration. RSU is the right to receive, in cash, in assets, in the form of plan shares valued at fair market value (“FMV”), or a combination, the FMV of one share on the exercise date. FMV is the closing price of a Sono share on the relevant date on the principal stock exchange where Sono shares have been admitted for trading. The RSU agreements were signed on November 25, 2021, by four members of the supervisory board and on February 22, 2022, by one member of the supervisory board. The RSU are vested in four equal installments on each relevant anniversary of November 19, 2021, with the fourth installment vesting on the earlier of (a) the fourth anniversary of November 21, 2021 (b) the annual general meeting of the Sono N.V. to be held in 2025 (exercise dates). The RSUs expire on the tenth anniversary of November 19, 2021. The measurement date for the four members was November 25, 2021 and for one member December 31, 2021. There are no contractual performance obligations. Vested tranches of RSUs may be exercised at the option of Sono Group in cash or in the form of ordinary shares. The weighted average remaining contractual life as of December 31, 2021 is 9.9 years.

Sono Group considers the RSU a transaction in which the terms of the arrangement provide Sono Group with a choice of settlement. Management determined that Sono Group does not have an obligation to settle in cash and therefore accounts for the transactions with the requirements applying to equity-settled share-based payment transactions.

The following table illustrates the volume of the program, the weighted average fair value at measurement date as well as the total expense of the period and the corresponding increase in equity:


December 31, 2021
Number of options granted		86,411
Weighted average fair value at measurement date (EUR)		14.74
Expense of the period (kEUR)		83
Increase in equity (kEUR)		83

For 2021 Sono N.V. recognized the proportionate fair value as other general and administrative expense.

The following table illustrates the number of, and movements in, share options during the year:


2021
January 1, 2021		—
Granted		86,411
Forfeited		—
December 31, 2021		86,411

The exercise price of all share options will be EUR 0.00.

9.4Earnings per share

Basic earnings per share is calculated by dividing earnings attributable to Sono N.V. shareholders by the weighted average number of ordinary and high voting shares outstanding during the reporting period. The high voting shares entitle the shareholders to additional voting rights, but not to higher dividend rights.There are currently no factors resulting in a dilution of earnings per share. As a result, basic earnings per share equals diluted earnings per share.

Earnings per share


	2021	2020	2019
	EUR	EUR	EUR
From continuing operations attributable to the ordinary equity holders of the company	(1.07)	(0.97)	(0.18)
	(1.07)	(0.97)	(0.18)

The capital increase and the IPO have resulted in an increase in the number of shares in the reporting year. Moreover, the weighted number of shares was adjusted retroactively in accordance with IAS 33.28 to reflect the issue of bonus shares in 2021. The adjusted weighted number of shares increased to 59,836,824 in the reporting year (2020: 57,684,220; 2019: 56,860,720). Due to the adjustment, reported earnings per share for 2020 have increased from EUR -1.66 to EUR -0.97 (2019: from EUR -0.30 to EUR -0.18).

The options granted under IFRS 2 have not been included in the determination of earnings per share. Details relating to these options are set out in note 9.3 Remuneration based on shares (share-based payment).

9.5Related parties

Related parties of Sono Group include the following persons as well as their close family members:

●

C-level Management

●

Supervisory Board members

Further, related parties of Sono Group also include the following entities:

●

Sono Motors Management UG

●

Sono Motors Investment UG

Sono N.V. is not controlled by any other entity, but controls Sono Motors GmbH as of December 31, 2021.

The below table displays the compensation of key management personnel:


	2021	2020	2019
	kEUR	kEUR	kEUR
Short-term employee benefits	1,317	558	589
Share-based payments*	1,898	5,829	—
Total compensation	3,215	6,387	589

*	thereof kEUR 2,577 for key management personnel leaving in 2019

Some of the key management personnel do participate in the employee participation program. For details on this program, please refer to note 4.11 Share-based payment and 9.3 Remuneration based on shares (share-based payment).

The table below displays loans and advance payments received from key management personnel and other related parties:


	2021	2020	2019
	kEUR	kEUR	kEUR
Loans from key management personnel (subordinated crowdfunding loan II)	2	2	—
Loans from other related parties	—	199	191
	2	201	191
Advance payments received from key management personnel*	47	52	—
Total	49	253	191

*	for which 9 Sono points have been granted

For the terms and conditions of the subordinated crowdfunding loan II, we refer to note 7.10.2 Other noncurrent financial liabilities.

The main shareholders of Sono N.V. have significant influence over Sono Motors Investment UG, Munich. Therefore, Sono Motors Investment UG is considered a related party. Sono Motors has received a loan amounting to kEUR 185 from Sono Motors Investment UG in 2019. The loan was due December 31, 2020, interest-paying at arm’s length (4 % p.a.) and unsecured. As of December 31, 2020, the loan had not been repaid as of the balance sheet date. Instead, it was paid back on January 5, 2021.

9.6Reconciliation of changes in liabilities arising from financing activities

The statement of cash flows presents information on the cash flow from operating, financing and investing activities. In fiscal year 2021 and previous years, non-cash financing and investing activities include the acquisition of right-of-use assets (see note 7.3 Right-of-use assets). The table below presents a reconciliation of liabilities arising from financing activities.

Jan. 1,

Cash

Non-cash changes

Dec. 31,

2021

flows

EIR method

Additions

Other

2021

kEUR

Financial liabilities*

Loans and participation rights

12,765

(2,187)

—

(6,859)

3,749

Lease liabilities

1,958

(378)

—

1,496

—

3,076

14,723

(2,565)

1,496

(6,859)

6,825

*	including current and noncurrent financial liabilities

Non-cash changes

Jan. 1,

Cash

EIR

Dec. 31,

2020

flows

method

Additions

Other

2020

kEUR

Financial liabilities*

Loans and participation rights

6,250

8,330

482

(650)

(1,648)

12,765

Lease liabilities

2,228

(282)

—

1,958

8,478

8,049

482

(638)

(1,648)

14,723

*	including current and noncurrent financial liabilities

Non-cash changes

Jan. 1,

Cash

EIR

Dec. 31,

2019

flows

method

Additions

Other

2019

kEUR

Financial liabilities*

Loans and participation rights

2,067

3,710

192

—

281

6,250

Lease liabilities

—

(92)

—

2,320

—

2,228

2,067

3,618

192

2,320

281

8,478

The column “EIR method” includes both interest paid and non-cash interest expenses.

In the reporting year, other non-cash changes include the transfer of the mandatory convertible notes to equity and the fair-value changes of the mandatory convertible notes. In fiscal year 2020, other non-cash changes include a transfer from debt to equity (kEUR -1,648) in connection with a settlement agreement with a capital provider. For further details, we refer to note 7.10.1 Financial liabilities overview.

9.7Subsequent events

9.7.1Production of Sion

Sono Group intends to outsource the Sion’s production to Valmet Automotive in Uusikaupunki, Finland. As of the the issuance date of the consolidated financial statements our arrangement with Valmet Automotive is of a preliminary and basic nature and various aspects of our commercial and legal relationship with Valmet Automotive, as well as details of the production of the Sion, will have to be clarified and stipulated in a finalized principal contractual framework with Valmet Automotive in advance of the production of our vehicles.

The change to Valmet Automotive and the development of new production lines leads to a new estimated date for start of production. Accordingly Sono Motors currently projects that it will deliver its first Sion in the second half of 2023. Sono Motors expects to produce and deliver the first Sion in late 2023. The Valmet Automotive facilities in Uusikaupunki allow for the production of a low four-digit volume in 2023, which is expected to be followed by a steady ramp-up over the coming months.The financial impact on the consolidated financial statements resulting from the change to Valmet Automotive cannot be reliably estimated yet.

9.7.2New employees share-based payment program

Sono Group plans to introduce a new, equity settled ESOP in the second quarter of 2022. The program will be offered to all regular employees except the top management.

The vesting period will go back to 2021. Starting with the second quarter of 2022, management expects the ESOP to have a material impact on the consolidated financial statements of Sono Group. In these consolidated financial statements, no impact of the new ESOP has been considered as the program was not communicated to employees until the second quarter of 2022.The financial impact of the program on the consolidated financial statements cannot be reliably estimated yet.

There may be a new program for the management in the future, but these considerations are at a very early stage.

Approval of these consolidated financial statements

Munich, March 19, 2022

Sono Group N.V.
represented by the Management of Sono Group N.V.


Laurin Hahn	Jona Christians	Torsten Kiedel

Thomas Hausch	Markus Volmer

Note 6 - Disclosures to the Statement of Income and Loss (Details Textual) - EUR (€) € in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Statement Line Items [Line Items]
Professional services received in connection with the IPO was not recognized in general and administrative expenses but deducted from capital reserves	€ 2,690
Professional services in connection with the IPO received in the previous year were accrued as a current non-financial asset in the previous year and deducted from capital reserve in the reporting year	135
Increase (decrease) in personnel expenses	21,613	€ 1,898	€ 32,160
Maximum advance payments from customers	4,000
Interest expense on advance payments from customers	1,497	1,360	€ 415
Current deferred tax assets	314	806
Current deferred tax liabilities	47	73
Tax effect of transaction cost	937	€ 723
Deferred tax assets on transaction costs recognized in equity	€ 18