It should be said in advance that Sono Motors' listing on the Nasdaq alone represents a "risk that is difficult to insure". Therefore, an effective marketing strategy is required to obtain appropriate insurance coverage. We refer interested parties to our "Road to IPO" page, where we also discuss a Nasdaq IPO. Ideally, the two founders will have access to specialized criminal liability insurance, either provided by Sono Motors or taken out privately, as well as (at least) D&O insurance.

In such cases, the preference is always for specialist criminal legal protection insurance, as it is specifically designed for such situations (which are not uncommon), whereas D&O insurance only offers a limited scope of cover to cover similar risks. Unfortunately, despite advice, we still see a low level of awareness of the issue of "unjustified" criminal investigations, particularly among growth companies, so it is not unlikely that the preferred specialist criminal legal protection insurance is not in place. In the less ideal case, the focus shifts to at least one D&O insurance policy in order to obtain insurance cover for costs (e.g. expensive criminal defense) via the criminal law section cover.

Why at least one D&O insurance policy? The special situation caused by the De-SPAC and the listing in the USA plays a role here. In addition to the challenging US capital market risk, a personal D&O or corporate D&O insurance policy without the US capital market risk, but with cover for risks in Germany, could also be available. Based on knowledge of the insurance market, it can be clearly stated that the possibly current D&O insurance with the US capital market risk, which certainly includes the company in Germany and thus the two founders, does not have to offer insurance cover despite possible negotiations on criminal law protection insurance. The background to this is that the (alleged) breaches of duty occurred before De-SPAC in 2021 and so-called De-SPAC D&O insurance policies in the USA are designed as pure "forward cover", which means that past breaches of duty are not covered. Therefore, the focus is shifting to current corporate D&O insurance policies for the "German risk" or the D&O insurance policy that was sent into run-off at the time of the listing, which should ideally be equipped with a longer grace period to step in if necessary. The same applies to any existing personal D&O insurance for the German risk (note: not available for the US capital market risk), which is certainly in run-off due to the departure of the two founders and ideally also has a correspondingly long grace period.

We hope that the two founders come out of this situation in good shape and ideally have access to high-performance special criminal legal protection insurance and - should civil law claims still arise here - also to strong cover via at least one D&O insurance policy.