# Workhorse Group Inc.: Form 10-Q for the period ended Sep 30, 2025

- Company: [Workhorse Group Inc.](/companies/wkhs.md) (CIK 1425287)
- Form: 10-Q
- Filed: 2025-11-10
- Accepted by EDGAR: Nov 10, 2025, 17:15 ET
- Period: 2025-09-30
- Accession: 0001628280-25-051161
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1425287/000162828025051161/wkhs-20250930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1425287/000162828025051161/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-07-01 to 2025-09-30 | $2.4m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2025-01-01 to 2025-09-30 | $8.7m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-07-01 to 2025-09-30 | $10.1m | us-gaap:CostOfRevenue |
| Cost of revenue | 9 months, 2025-01-01 to 2025-09-30 | $28.3m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2025-07-01 to 2025-09-30 | −$7.7m | us-gaap:GrossProfit |
| Gross profit | 9 months, 2025-01-01 to 2025-09-30 | −$19.6m | us-gaap:GrossProfit |
| Research and development | 3 months, 2025-07-01 to 2025-09-30 | $1.1m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 9 months, 2025-01-01 to 2025-09-30 | $3.9m | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2025-07-01 to 2025-09-30 | $7.8m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months, 2025-01-01 to 2025-09-30 | $20.4m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-07-01 to 2025-09-30 | −$16.6m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2025-01-01 to 2025-09-30 | −$43.9m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-07-01 to 2025-09-30 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2025-01-01 to 2025-09-30 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-07-01 to 2025-09-30 | −$7.8m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2025-01-01 to 2025-09-30 | −$43.3m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-07-01 to 2025-09-30 | −$0.50 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2025-01-01 to 2025-09-30 | −$4.49 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-07-01 to 2025-09-30 | −$0.50 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2025-01-01 to 2025-09-30 | −$4.49 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-07-01 to 2025-09-30 | 15,537,878 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2025-01-01 to 2025-09-30 | 9,632,187 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2025-01-01 to 2025-09-30 | −$25.0m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2025-01-01 to 2025-09-30 | $0 | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2025-09-30 | $12.7m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-09-30 | $73.0m | us-gaap:AssetsCurrent |
| Total assets | at 2025-09-30 | $116.7m | us-gaap:Assets |
| Current liabilities | at 2025-09-30 | $60.4m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-09-30 | $84.7m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-09-30 | $32.1m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 41,926 characters.

### Overview

We are an American technology company with a vision to pioneer the transition to zero-emission commercial trucks. Our primary focus is to provide robust, sustainable, and cost-effective solutions to the commercial transportation sector. We design and manufacture all-electric trucks, including the technology that optimizes the way these trucks operate. We are focused on our core competency of bringing our electric delivery truck platforms to serve the last mile delivery market.

We continue to seek opportunities to grow the business organically, and by expanding relationships with existing and new customers. We believe we are well positioned to take advantage of long-term opportunities and continue our efforts to bring product innovations to market.

### Recent Developments

#### Merger Agreement with Motiv Power Systems, Inc.

On August 15, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among Workhorse, Omaha Intermediate 2, Inc., a Delaware corporation and wholly-owned subsidiary of Workhorse, Omaha Intermediate, Inc., a Delaware corporation and wholly-owned subsidiary of Intermediate Parent (“Intermediate Parent”), Omaha Merger Subsidiary, Inc., a Delaware corporation and wholly-owned subsidiary of Intermediate (“Merger Subsidiary”), and Motiv Power Systems, Inc., a Delaware of corporation (“Motiv”), pursuant to which, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Subsidiary will merge with and into Motiv (the “Merger”). Upon consummation of the Merger, Merger Sub will cease to exist and Motiv will become a direct, wholly-owned subsidiary of Intermediate and an indirect, wholly-owned subsidiary of Workhorse.

Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, Motiv’s investors will receive a number of shares of Workhorse’s Common Stock, based on a ratio calculated in accordance with the Merger Agreement (the “Merger Consideration”). Upon closing of the Merger (the “Closing”), all of the issued and outstanding shares of Motiv’s common stock and preferred stock will be cancelled, and Workhorse will be the ultimate indirect parent of 100% of Motiv. In addition, all of the financial indebtedness of Motiv will be cancelled with the holders of such indebtedness receiving Workhorse Common Stock as Merger Consideration.

Upon the Closing and issuance of the Merger Consideration, on a pro forma basis and based upon the number of shares of Workhorse Common Stock expected to be issued in the Merger, pre-Merger Motiv investors will own approximately 62.5%, Workhorse stockholders as of immediately prior to Closing will own approximately 26.5%, and the 2024 Note Holder (as defined below) will own Rights (as defined below) to receive Workhorse Common Stock representing approximately 11% of Workhorse, in all cases, on a fully-diluted basis prior to giving effect to (i) the Equity Financing (as defined below), and (ii) the Convertible Financing (as defined below). Under certain circumstances further described in the Merger Agreement, the ownership percentages may be adjusted.

#### Merger Closing Financing

The Merger Agreement includes a condition to closing that entities affiliated with Motiv’s largest investor (the “Motiv Investor”) provide Workhorse with up to $20 million in debt financing (the “Closing Debt Financing”) at the Closing. Under the Closing Debt Financing, approximately $10 million is to be made available after the Closing for general corporate purposes pursuant to a revolving credit facility, and $10 million is to be made available after the Closing to fund vehicle manufacturing upon the receipt of confirmed purchase orders pursuant to an ABL facility. The terms of the Closing Debt Financing have not been finalized, but the parties expect that it will contain customary terms, conditions, including borrowing conditions, and covenants for similar transactions. The Closing Debt Financing will be guaranteed by Workhorse’s subsidiaries and secured by substantially all non-real estate assets of Workhorse and its subsidiaries. In addition, Workhorse and Motiv have agreed to use their commercially reasonable best efforts to effect an equity financing for Workhorse on terms mutually acceptable to the parties (the “Equity Financing”).

#### Sale Leaseback of Union City, IN Facility

On August 15, 2025, in connection with the sale and leaseback transaction (the “Sale Leaseback”), a subsidiary of Workhorse, Workhorse Motor Works Inc. entered into a Purchase and Sale Agreement with an affiliate of the Motiv Investor (the “Property Purchaser”) for the sale of its Union City, Indiana manufacturing facility and campus (the “Property”), excluding any equipment and any fixtures solely used in the production of vehicles, to the Property Purchaser for a purchase price, before fees and expenses, of $20 million. The sale resulted in a gain of $13.8 million, recorded as a Gain on sale of assets in the Condensed Consolidated Statements of Operations. Simultaneously with the sale of the Property, the Company entered into a 20-year leaseback arrangement classified as an operating lease under ASC 842. Upon commencement of the lease, the Company recognized a right-of-use asset and corresponding lease liability of $16.8 million. Workhorse plans to use the proceeds for the Repayment (as defined below), to pay transaction expenses, and for general corporate purposes.

#### Convertible Financing

On August 15, 2025, Workhorse issued to an affiliate of the Motiv Investor (the “Convertible Note Holder”) a Subordinated Secured Convertible Note (the “Motive Convertible Note”) with an aggregate original principal amount of $5.0 million (the “Convertible Financing”). The Motive Convertible Note was issued without original issue discount, and Workhorse received $5.0 million in proceeds, prior to fees and expenses, which Workhorse plans to use for the Repayment and other general corporate purposes. The Motive Convertible Note bears interest at a rate of 8.0% per annum, subject to adjustment as set forth in the Motive Convertible Note, compounded quarterly and increasing the principal outstanding under the Motive Convertible Note. The Motive Convertible Note is a secured obligation of Workhorse, ranking junior to the 2024 Notes (as defined below) and senior to all other indebtedness and, subject to certain limitations, is unconditionally guaranteed by each of Workhorse’s subsidiaries, pursuant to the terms of a certain Subsidiary Guarantee and secured by substantially all of the assets of Workhorse and its subsidiaries pursuant to a certain Security Agreement.

Workhorse’s obligations under the Motive Convertible Note mature on the earliest of (i) the date a termination fee is due to Motiv under the Merger Agreement, (ii) the date that is three months following the termination of the Merger Agreement pursuant to certain provisions of the Merger Agreement, and (iii) the date that is 24 months after the date of issuance. Following the Closing of the Merger, the Motive Convertible Note will be automatically convertible into a number shares of Workhorse stock equal to the principal amount then outstanding divided by 90% of the price per share paid by investors in the Equity Financing.

As of September 30, 2025, the estimated fair value of the Motive Convertible Note was $5.1 million, and the aggregate principal amount outstanding was $5.0 million.

#### Waiver, Repayment and Exchange Agreement

On August 15, 2025, Workhorse entered into a Waiver, Repayment and Exchange Agreement (the “Repayment Agreement”) by and among Workhorse and the investors party thereto (collectively, the “2024 Note Holder”).

Upon entry into the Repayment Agreement, Workhorse deposited approximately $9.9 million (the “Cash Collateral”) into the previously disclosed Lockbox Account (the “Lockbox”), with such Cash Collateral to be released to the 2024 Note Holder in connection with the Closing. The Cash Collateral will bear interest at a rate equal to 5.0% per annum. The amount of Cash Collateral released to the 2024 Note Holder in connection with the Closing will be reduced by the aggregate principal amount of 2024 Notes converted before the Closing and increased by the amount of interest accrued on the Cash Collateral before the Closing. In connection with the Closing, Workhorse will redeem all of its then outstanding obligations under the 2024 Notes, which as of September 30, 2025 is approximately $24.1 million, at 100% of the face amount, plus accrued interest (the “Repayment”). Upon making such Repayment, Workhorse shall have no outstanding obligations under the 2024 Notes.

In addition, Workhorse will issue the 2024 Note Holder rights (the “Rights”) to acquire shares of Workhorse Common Stock in exchange (the “Warrant Exchange”) for the cancellation of all of the Warrants issued to the 2024 Note Holder. The Warrant Exchange would be for a number of Rights exercisable for shares of Workhorse Common Stock equal to 30% of fully diluted shares of Workhorse Common Stock then outstanding immediately prior to the Closing. The Exchange will occur on the Closing Date, after which there will no longer be any outstanding 2024 Warrants or 2024 Notes. The Rights are exercisable at the discretion of the holder at any time to the extent the number of shares of Workhorse Common Stock held by the holder does not exceed 9.99% of the then outstanding shares of Workhorse Common Stock.

In addition, the Repayment Agreement amended certain provisions of the Securities Purchase Agreement, by and among Workhorse and the 2024 Note Holder (the “2024 Securities Purchase Agreement”). The 2024 Note Holder also waived its right to effect and agreed not to request any Additional Closing (as defined in the 2024 Securities Purchase Agreement), effective as of the date of Closing or the abandonment of the Merger. The 2024 Note Holder also consented to the issuance of the Motive

Convertible Note, including the Security Agreement and the Subsidiary Guarantee, the Sale Leaseback, and the Merger and related transactions.

### Going Concern; Financing

As discussed more fully under Note 1, Summary of Business and Significant Accounting Principles; Liquidity, Capital Resources, and Going Concern, above, and Liquidity and Capital Resources; Going Concern, in the notes to our unaudited Condensed Consolidated Financial Statements included with this Quarterly Report on Form 10-Q, our ability to continue as a going concern is contingent upon the outcome of the Recent Transactions, as well as the successful execution of management’s intended plan over the next twelve months to improve the Company’s liquidity and working capital requirements.

On March 15, 2024, we entered into a securities purchase agreement (the “2024 Securities Purchase Agreement”) with an institutional investor (the “Investor”) under which we agreed to issue and sell, in one or more registered public offerings by the Company directly to the Investor in multiple tranches over a period beginning on March 15, 2024, (i) senior secured convertible notes for up to an aggregate principal amount of $139.0 million (the “2024 Notes”) that are convertible into shares of the Company’s common stock, par value of $0.001 per share (the “Common Stock”) and (ii) warrants (the “ 2024 Warrants”) to purchase shares of Common Stock.

Pursuant to the 2024 Securities Purchase Agreement, during the three and nine months ended September 30, 2025, the Investor released approximately $7.0 million and $15.8 million from the lockbox account, respectively, and we had received net proceeds of approximately $6.8 million and $15.2 million, respectively, in connection with the Tenth Additional 2024 Note.

On February 12, 2025, we issued a 2024 Note in aggregate principal amount of $35.0 million (the “Tenth Additional 2024 Note”) is governed by a lockbox letter agreement entered into between the Company and the Investor (the “Lockbox Letter”). Pursuant to the Lockbox Letter, the net proceeds of $30.6 million, after a 12.5% original issue discount and related fees and expenses, were deposited into a lockbox account under the control of the collateral agent under the 2024 Securities Purchase Agreement. Funds may be released from the lockbox account from time to time (i) in an amount corresponding to the principal amount converted, if the Investor converts any portion of the Tenth Additional 2024 Note; (ii) in the amount of $2.6 million each calendar month, if we satisfy the conditions of a Market Release Event (as defined in the Lockbox Letter), including minimum Common Stock price and trading volume conditions; or (iii) otherwise, with the consent of the Investor. As of November 7, 2025, the 2024 Note Holder had released approximately $15.8 million from the lockbox account, and we had received net proceeds of approximately $15.2 million. Although we expect that we will receive additional funds held in the lockbox account during the term of the Tenth Additional 2024 Note, it is possible that the foregoing events will not occur with respect to some or all of the principal amount of the Tenth Additional 2024 Note and that, accordingly, we will not be able to draw any or all of the remaining funds in the lockbox account.

Although the 2024 Securities Purchase Agreement contemplates the issuance of up to $61.5 million of additional 2024 Notes, the terms of our existing financing arrangements impose substantial restrictions on our ability to obtain additional financing. Accordingly, our ability to obtain liquidity through public sales of securities, including pursuant to our ATM Agreement and the 2024 Securities Purchase Agreement, is substantially limited.

Because of the foregoing, our ability to obtain additional proceeds from financing is extremely limited under current conditions, and if we are unable to obtain such proceeds, we may need to further adjust our operations and seek protection by filing a voluntary petition for relief under the Bankruptcy Code. If this were to occur, the value available to our various stakeholders, including our creditors and stockholders, is uncertain and trading prices for our securities may bear little or no relationship to the actual recovery, if any, by holders of our securities in bankruptcy proceedings, if any.

These conditions raise substantial doubt regarding our ability to continue as a going concern for a period of at least one year from the date of issuance of the accompanying Condensed Consolidated Financial Statements. On August 15, 2025, the Company entered into the Recent Transactions, which includes repayment of the 2024 Notes upon closing of the Merger. For more information, see “Recent Developments” above.

### Liquidity Improvement Measures

As previously disclosed, a key part of management’s plan to improve liquidity and meet working capital needs involves reducing operating costs to lower cash usage and ease pressure on available liquidity. Many of the cost-saving measures implemented in 2024 have continued to yield benefits through the nine months ended September 30, 2025.

In addition, we significantly reduced other operating costs during the first nine months of 2025 compared to the prior year period including, but not limited to, reductions in third-party consulting arrangements, lower research and development activities and associated internal and external costs related to new vehicle program development, consolidation of activities within back-office functions to take advantage of associated personnel attrition and other cost control actions.

As disclosed previously, our executive officers agreed to defer approximately 20% of their cash compensation from the first quarter of 2024 through the third quarter of 2024. The deferred compensation remained outstanding until the Company determined it had sufficient liquidity to make payment. In July 2025, the Company paid the deferred compensation of $0.4 million, which was recorded in Accrued liabilities and other current liabilities in the Condensed Consolidated Balance Sheets, to the participating executive officers.

We also substantially decreased the procurement of raw materials for future commercial vehicle production, which has notably affected the near-term production and availability of our W56 vehicle platform. We have made substantial progress on our outstanding accounts payable but continue to be overdue on payments to certain suppliers. Certain purchased components for our trucks have supplier long-lead times of up to 24 weeks. While we are focused on the sale of existing inventory on hand, in the event of an increase in market demand for our W56 vehicle, we may not have sufficient cash resources to fund working capital requirements without support from our customer and supplier base, or the availability of additional third-party financing arrangements. We continue to work with certain of our suppliers to extend or restructure the payment terms of its outstanding accounts payable as well as terms and conditions related to the purchase of materials necessary for future production.

Management plans to continue to seek additional opportunities to reduce costs and, in particular, cash expenditures, in a manner intended to minimize their adverse impact on our core operations. Management intends to continue to maintain significantly reduced capital expenditures and only allocate capital for manufacturing equipment and tooling, as needed for future production to support firm orders. There can be no assurance that the measures described above, or any other cost-saving measures we may implement in the future will be sufficient to address our immediate or longer-term liquidity and working capital needs. Moreover, it is possible that such measures will have an adverse effect on our operations.

On August 15, 2025, the Company entered into the Recent Transactions. For more information, see “Recent Developments” above.

### Trucks in Production

We continue to focus on product quality, manufacturing capacity and operational planning, and engineering and design to enable increased deliveries and deployments of our products and future revenue growth. During the first nine months of 2025, we continued executing our strategic product roadmap for our electric truck offerings, including the production of the W56 and the development of the W56 208-inch wheelbase truck program in both strip chassis and step van variants. We continued to electrify the fleet of trucks being used in our Stables by Workhorse initiative, which operates FedEx Ground delivery routes in the greater Cincinnati, OH area. The electrification of the fleet provides us with firsthand data on the benefits and challenges of independent fleet operators experience while executing last-mile delivery operations. The initiative also provides valuable insights into how our customers can plan for and manage the transition to EV operations, including how to develop adequate charging infrastructure, training and maintenance services. In addition to our ongoing production ramp in 2025, we intend to continue to generate demand and brand awareness by improving our trucks’ performance and functionality, and by developing new truck programs, including new W56 variants. We expect to continue to benefit from ongoing electrification of the commercial truck market and in particular “last mile delivery” sector.

### Recent Trends and Market Conditions

We continue to monitor macroeconomic conditions to remain flexible and to optimize and evolve our business as appropriate, in this uncertain environment and we will endeavor to project demand and infrastructure requirements globally and deploy our production, workforce and other resources accordingly.

*Market Demand*. We continue to experience slower-than-anticipated industry wide electric truck adoption rates and lack of government subsidies and incentives available to our dealers as well as slower than expected roll-out of additional power to electric grids and the resulting effect on roll-outs of electric truck charging infrastructure, nationwide. Delayed governmental approvals in certain states and slower than expected proliferation of charging stations across the country have also adversely impacted demand. We expect these delays and the current and developing regulatory landscape in the United States to continue to slow adoption in 2026. The dynamic regulatory landscape is a significant consideration for our operations and strategic planning and remains uncertain. Proposed changes to California’s Hybrid and Zero-Emission Truck and Bus Voucher Incentive Program (“HVIP”) could negatively impact demand, if implemented. The removal of the Federal 45W tax-rebate for commercial vehicles may also impact a small percentage of customers. Weighing against these real and potential additional headwinds are the introduction of new incentive programs in some states as well as increased incentives in New York’s, New York Truck Voucher Incentive Program (“NYTVIP”).

*Commodities*. Commodity prices remain volatile, and we expect continued cost increases for key materials used in electric truck production, including lithium, cobalt, nickel, steel, and aluminum. Global demand shifts in supply and demand have caused uneven price trends across commodities, but overall we anticipate higher material costs. In addition, tariff measures under the current Presidential Administration could have raised the cost of imported automotive parts and raw materials. Although these tariffs are evolving, we are actively monitoring developments and evaluating potential impacts on our supply chain, production costs, and pricing strategies.

*Supply Chain.* We continue to develop relationships with suppliers of key parts, components and raw materials to be used in the manufacture of our products such as batteries, electronics, and truck chassis that are sourced from suppliers across the world. As we continue to execute on our new truck programs, we will continue to identify supplier relationships and truck program synergies which may allow us to take advantage of pricing efficiencies from economies of scale. Where available, we will utilize multiple supply sources for key parts, and we will work to qualify multiple supply sources to achieve pricing efficiencies and minimize potential production risks related to supply chain. As previously disclosed, we are currently working with certain of our vendors to extend or restructure the payment terms of past due accounts payable balances. We are also currently in litigation with one of our battery suppliers, Coulomb Solutions Inc. For more information concerning this matter, see Note 15, *Commitments and Contingencies* to the Condensed Consolidated Financial Statements included in this Form 10-Q.

*Inflation.* Inflation continues to impact our operations, resulting from both supply and demand imbalances as economies continue to face constraints as well as the impact on the availability and cost of energy and other commodities as a result of the ongoing conflicts in Ukraine and Israel. We are seeing a near-term impact on our business due to inflationary pressure. In an effort to dampen inflationary pressures, central bank interest rates continue to be higher, which would likely raise the cost of any financing the Company may undertake in the future.

*Geopolitical.* Our operations and results may be impacted due to uncertainty of the political environment and the current Presidential Administration. The Administration’s policies have affected support for the adoption of electric trucks, as well as the availability of government subsidies to fund the adoption of electric trucks and has implemented additional tariffs on imports that affect us and our industry. In addition, recent U.S. Supreme Court decisions that purport to limit the authority of federal executive agencies, including the EPA, may affect our industry in ways we cannot yet predict.

The following section provides a narrative discussion about our financial condition and results of operations. The narrative should be read in conjunction with our Condensed Consolidated Financial Statements and related Notes thereto included in Item 1 of this Form 10-Q and in conjunction with our 2024 Form 10-K.

### Results of Operations

The Company operates as a single reporting segment under ASC 280, Segment Reporting, (“ASC 280”) consistent with how

management evaluates and prioritizes investment and resource allocation decisions and assesses operating performance.

Our Condensed Consolidated Statements of Operations is as follows:

|  | Three Months Ended September 30, 2025 2025 | 2024 | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Sales, net of returns and allowances | $2,384,998 | $2,509,717 | $8,695,389 | $4,691,451 |
| Cost of sales | 10,092,624 | 6,642,549 | 28,308,743 | 21,386,676 |
| Gross loss | (7,707,626) | (4,132,832) | (19,613,354) | (16,695,225) |
| Operating expenses |  |  |  |  |
| Selling, general and administrative | $7,770,633 | $7,722,014 | $20,399,242 | $33,883,844 |
| Research and development | 1,077,631 | 2,313,423 | 3,852,998 | 7,834,113 |
| Total operating expenses | 8,848,264 | 10,035,437 | 24,252,240 | 41,717,957 |
| Loss from operations | (16,555,890) | (14,168,269) | (43,865,594) | (58,413,182) |
| Interest expense, net | (167,909) | (3,003,460) | (6,002,383) | (6,196,858) |
| Change in fair value of convertible notes | (2,867,041) | (5,314,353) | (7,781,029) | (8,912,278) |
| Change in fair value of warrants | (6,838,103) | (2,649,477) | (4,205,035) | (7,089,027) |
| Gain on sale of assets | 13,805,791 | — | 13,805,791 | — |
| Other income | 4,795,250 | — | 4,795,250 | — |
| Loss before provision for income taxes | (7,827,902) | (25,135,559) | (43,253,000) | (80,611,345) |
| Provision for income taxes | — | — | — | — |
| Net loss | $(7,827,902) | $(25,135,559) | $(43,253,000) | $(80,611,345) |

### Sales, net of returns and allowances

Sales, net of returns and allowances for the three months ended September 30, 2025 and 2024 were $2.4 million and $2.5 million, respectively. The decrease in sales of $0.1 million was primarily due to lower sales of approximately $2.3 million related to the sale of fewer trucks in 2025 compared to the same period in 2024, offset by an increase of $2.2 million related to the recognition of seven vehicles from deferred revenue. Sales, net of returns and allowances for the nine months ended September 30, 2025, and 2024 were $8.7 million and $4.7 million, respectively. The increase in sales of $4.0 million was primarily due to the increased delivery of W56 trucks in the current period, partially offset by the Aero divestiture and W4 CC truck sales in the prior period.

### Cost of sales

Cost of sales for the three months ended September 30, 2025 and 2024 were $10.1 million and $6.6 million, respectively. The increase in cost of sales of $3.5 million was primarily a result of an increase in inventory excess and obsolescence reserve of $3.3 million.

Cost of sales for the nine months ended September 30, 2025 and 2024 were $28.3 million and $21.4 million, respectively. The increase in cost of sales of $6.9 million was primarily due to an increase in sales volume as well as a $1.7 million increase in warranty reserve expenses and a $3.3 million increase in inventory excess and obsolescence reserve, which was offset by a $1.8 million decrease in direct and indirect labor costs.

### Selling, general and administrative expenses

Selling, general and administrative expenses (“SG&A”) expenses for the three months ended September 30, 2025 and 2024 were $7.8 and $7.7 million, respectively. The increase in SG&A of $0.1 million was primarily driven by a $3.6 million increase in consulting and legal expenses due to the proposed Merger offset by a $2.9 million decrease in employee compensation and related expenses, decrease of $0.2 in marketing and trade show related expenses, and a decrease of $0.3 in IT-related expenses.

SG&A expenses for the nine months ended September 30, 2025 and 2024 were $20.4 million and $33.9 million, respectively. The decrease in SG&A of $13.5 million was primarily driven by a $10.2 million decrease in employee compensation and related expenses due to lower headcount, a decrease of $1.3 million in insurance expenses, a decrease in marketing expenses of $0.6 million, and a decrease in IT-related expenses of $1.2 million.

### Research and development expenses

Research and development (“R&D”) expenses for the three months ended September 30, 2025 and 2024 were $1.1 million and $2.3 million, respectively. The decrease in R&D expenses of $1.2 million was primarily driven by a $0.3 million decrease in employee compensation and related expenses due to lower headcount, a $0.5 million decrease in prototype part expenses and $0.3 million decrease in consulting and professional services expenses.

Research and development expenses for the nine months ended September 30, 2025 and 2024 were $3.9 million and $7.8 million, respectively. The decrease in R&D expenses of $3.9 million was primarily driven by the decrease in employee compensation and related expenses due to lower headcount and cost saving measures and the successful completion of the W56 initial design and production of the W56 and the W56 208-inch wheelbase truck program.

### Interest expense, net

Interest expense, net for the three months ending September 30, 2025 and 2024 was $0.2 million and $3.0 million, respectively. The difference was primarily driven by higher financing fees related to the 2024 Notes recognized in the prior year period compared to the current period.

Interest expense, net for the nine months ended September 30, 2025 and 2024 was $6.0 million and $6.2 million, respectively. The difference was primarily driven by higher financing fees related to the 2024 Notes recognized in the prior year period compared to current period.

### Change in fair value adjustment on notes

As September 30, 2025, the estimated fair value of the 2024 Notes totaled $27.1 million and the estimated fair value of the Motive Convertible Note was $5.1 million.

During the three and nine months ended September 30, 2025, the Investor converted $19.0 million and $38.3 million fair value of principal into Common Stock, respectively, and we recorded a $1.4 million fair value net loss and $8.5 million fair value net gain on conversion in the Condensed Consolidated Statements of Operations, respectively. During the three months ended September 30, 2025 and 2024, we recorded a $2.9 million fair value net loss and a $5.3 million fair value net loss, respectively, in the Condensed Consolidated Statements of Operations related to the 2024 Notes. For the nine months ended September 30, 2025 and 2024, we recorded a $7.8 million fair value net loss and a $8.9 million fair value net loss, respectively, in the Condensed Consolidated Statements of Operations related to the 2024 Notes.

### Change in fair value adjustment on warrants

As September 30, 2025, the estimated fair value of the 2024 Warrants totaled $10.0 million.

During the three months ended September 30, 2025 and 2024, we recognized a net fair value loss of $6.8 million and a net fair value loss of $2.6 million, respectively, in the Condensed Consolidated Statements of Operations related to the 2024 Warrants. During the nine months ended September 30, 2025 and 2024, we recognized a net fair value loss of $4.2 million and a net fair value loss of $7.1 million, respectively, in the Condensed Consolidated Statements of Operations related to the 2024 Warrants.

### Gain on sale of assets

During the three and nine months ended September 30, 2025, we recognized a gain on sale of assets of $13.8 million primarily related to the Sale Leaseback of our Union City, IN Facility.

### Other income

During the three and nine months ended September 30, 2025, we recognized a gain of $4.8 million related to Deferred revenue upon termination of the Tropos Assembly Services Agreement.

### Provision for income taxes

The provision for income taxes during the three and nine months ended September 30, 2025 and 2024 was zero. The Company continues to maintain a full valuation allowance against its deferred tax assets, as management has concluded that it is not more likely than not that these assets will be realized in the foreseeable future. In addition, no current federal or state income tax liability has been recorded in the accompanying Condensed Consolidated Financial Statements due to the Company’s loss position for the respective periods.

### Liquidity and Capital Resources; Going Concern

We have financed our operations primarily through sales of equity securities and issuance of debt. We have utilized these funds for R&D to fund designing, building and delivering trucks to customers and for working capital purposes.

We had sales net of returns and allowances of $8.7 million, incurred a net loss of $43.3 million and used $25.0 million of cash in operating activities during the nine months ended September 30, 2025. As of September 30, 2025, we had $12.7 million of cash and cash equivalents and $25.5 million in restricted cash.

As a result of our recurring losses from operations, accumulated deficit, projected capital needs, and delays in bringing our trucks to market and lower than expected market demand, management determined that substantial doubt exists regarding our ability to continue as a going concern within one year after the issuance date of the accompanying Condensed Consolidated Financial Statements. Our ability to continue as a going concern is contingent upon the outcome of the Recent Transactions, as well as the successful execution of management’s intended plan over the next twelve months to improve the Company’s liquidity and working capital, which includes, but is not limited to:

- Generating revenue by increasing sales of our trucks and other services.
- Reducing expenses and limiting non-contracted capital expenditures.
- Raising capital to fund operations through the issuance of debt or equity securities or other financing arrangements.

It is essential that we have access to capital as we bring our existing line of trucks to market, scale up production and sales of such trucks and continue to develop additional variations of our existing trucks and our next generation of trucks. There is no assurance that we will be successful in implementing management’s plans to generate liquidity to fund these activities or other aspects of our short and long-term strategy, that our projections of our future capital needs will prove accurate or that any additional funding would be available or sufficient to continue operations in future periods.

Our revenues from operations are unlikely to be sufficient to meet our liquidity requirements for the twelve months following the date of the issuance of our Condensed Consolidated Financial Statements, and, accordingly, our ability to continue as a going concern depends on our ability to obtain and receive proceeds from third-party financing. We currently expect that our primary source of third-party financing will be the proceeds of the Tenth Additional 2024 Note, which we issued under our 2024 Securities Purchase Agreement, and the Sale Leaseback and the Motive Convertible Note. As discussed more fully above, as of September 30, 2025, approximately $17.0 million of such proceeds remain in a lockbox account and will be available to us only upon satisfaction or waiver of the conditions described above. Accordingly, there can be no assurance that any or all of such proceeds will be available to us on a timely basis or ever.

On February 12, 2025, we issued the Tenth Additional 2024 Note in the aggregate principal amount of $35.0 million. The Tenth Additional 2024 Note is governed by the terms of the Lockbox Letter. Pursuant to the Lockbox Letter, net proceeds of $ 30.6 million after a 12.5% original issue discount and related fees and expenses, were deposited into a lockbox account under the control of the collateral agent under the 2024 Securities Purchase Agreement. Funds may be released from the lockbox from time to time (i) in an amount corresponding to the principal amount converted, if the Investor converts any portion of the Tenth Additional 2024 Note; (ii) in the amount of $2.6 million each calendar month, if we satisfy the conditions of a Market Release Event (as defined in the Lockbox Letter), including minimum Common Stock price and trading volume conditions; or (iii) otherwise, with the consent of the Investor. As of November 7, 2025, the Investor had released approximately $15.8 million from the lockbox account, and we had received net proceeds of approximately $15.2 million. Although we expect that we will receive additional funds held in the lockbox account during the term of the Tenth Additional 2024 Note, it is possible that the foregoing events will not occur with respect to some or all of the principal amount of the Tenth Additional 2024 Note and that, accordingly, we will not be able to draw any or all of the remaining funds in the lockbox account. Furthermore, there is no guarantee that we will receive additional proceeds in excess of the Tenth Additional 2024 Note under the 2024 Securities Purchase Agreement.

Although the 2024 Securities Purchase Agreement contemplates the issuance of up to $61.5 million of additional 2024 Notes, the terms of our existing financing arrangements impose substantial restrictions on our ability to obtain additional financing. Accordingly, our ability to obtain liquidity through public sales of securities, including pursuant to our ATM Agreement and the 2024 Securities Purchase Agreement, is substantially limited.

Because of the foregoing, our ability to obtain additional proceeds from financing is extremely limited under current conditions, and if we are unable to obtain such proceeds, we may need to further adjust our operations and seek protection by filing a voluntary petition for relief under the Bankruptcy Code. If this were to occur, the value available to our various stakeholders, including our creditors and stockholders, is uncertain and trading prices for our securities may bear little or no relationship to the actual recovery, if any, by holders of our securities in bankruptcy proceedings, if any.

These conditions raise substantial doubt regarding our ability to continue as a going concern for a period of at least one year from the date of issuance of these accompanying Condensed Consolidated Financial Statements.

On August 15, 2025, the Company entered into the Recent Transactions. For more information, see “Recent Developments” above.

#### Summary of Cash Flows

|  | Nine Months Ended September 30, 2025 | 2024 |
| --- | ---: | ---: |
| Net cash used in operating activities | (25,014,462) | (40,115,793) |
| Net cash used in investing activities | 19,469,855 | (4,027,565) |
| Net cash provided by financing activities | 39,101,412 | 11,542,249 |

#### Cash Flows from Operating Activities

Our cash flows from operating activities are affected by our cash investments to support the business in R&D, manufacturing, and SG&A. Our operating cash flows are also affected by our working capital needs to support fluctuations in accounts receivable, inventory, accounts payable and other current assets and liabilities.

During the nine months ended September 30, 2025 and 2024, net cash used in operating activities was $25.0 million and $40.1 million, respectively. The decrease in net cash used in operations was primarily attributable to a decrease in spend related to inventory and cost saving measures as we slowed our production due to lower than anticipated sales. The decrease included a $12.9 million decrease in employee compensation and related expenses, excluding non-cash stock-based compensation, resulting from our reduction in force actions.

#### Cash Flows from Investing Activities

Cash provided by investing activities was $19.5 for the nine months ended September 30, 2025, as compared to cash used in investing activities was $4.0 million for the nine months ended September 30, 2024. The increase was primarily driven by the proceeds from the Sale Leaseback of our the Union City, IN manufacturing facility in the current period.

#### Cash Flows from Financing Activities

Net cash provided by financing activities during the nine months ended September 30, 2025 was $39.1 million, which was primarily attributable to the issuances of Notes and Warrants under our 2024 Securities Purchase Agreement, Motive Convertible Note, and Common Stock. Net cash provided by financing activities during the nine months ended September 30, 2024 was $11.5 million, which was primarily attributable to the issuance of 2024 Notes and 2024 Warrants under our 2024 Securities Purchase Agreement and Common Stock under the ATM Agreement offset by the payment of our 2026 Notes.

### Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

### Critical Accounting Estimates

A discussion of our critical accounting estimates is contained in the 2024 Form 10-K, under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

### Recent Accounting Pronouncements

A description of recently issued and adopted accounting pronouncements is contained in Note 14, *Recent Accounting Pronouncements*, of the Condensed Consolidated Financial Statements.

## Market risk

As filed, 365 characters.

For a discussion of our quantitative and qualitative disclosures about market risk, see “Quantitative and Qualitative Disclosures About Market Risks” included in the Form 10-K, under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” There have been no material changes to the information provided in the Form 10-K.

## Controls and procedures

As filed, 6,622 characters.

#### Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Exchange Act is recorded, processed, summarized and reported within the specified time periods and accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q was made under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer.

Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of September 30, 2025, our disclosure controls and procedures were not effective as of such date due to material weaknesses in internal control over financial reporting, as described below.

#### Material Weaknesses in Internal Control over Financial Reporting

There are inherent limitations on the effectiveness of any system of internal controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective internal controls and procedures can only provide reasonable assurance of achieving their control objectives.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

As disclosed in our 2024 Form 10-K, management identified material weaknesses in our internal controls over financial reporting. During the audit process related to the year ended December 31, 2023, management identified a material weakness in the design of the Company’s internal controls related to our review of third-party valuation deliverables regarding our convertible debt and warrant liability. Additionally, during the third quarter of 2024, management identified a material weakness related to our failure to timely issue finalized quarterly reports for two consecutive quarters due to the turnover of key accounting positions within the Company’s finance organization and the ability of Company accounting personnel who had recently assumed new and additional responsibilities, with the assistance of external accounting consultants, to identify, evaluate and address technical accounting and disclosure issues that affect our Consolidated Financial Statements on a timely basis. As a result of the Company’s previously disclosed efforts to reduce costs and preserve liquidity, the Company was not able to attract, develop and retain sufficient resources to implement internal control responsibilities, resulting in the lack of a sufficient complement of personnel with an appropriate degree of knowledge and experience. Management has determined that these material weaknesses are related to employee turnover and insufficient internal resources in technical accounting and financial reporting impacting our internal control over financial reporting in the third quarter of 2024 and did not affect previously reported periods.

Based on the results of its evaluation and the material weaknesses described above, management concluded that the Company’s internal control over financial reporting was not effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with GAAP as of September 30, 2025.

#### Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

#### Remediation of Material Weaknesses

Due to the control weaknesses outlined above, management has implemented additional measures to review the key inputs and assumptions used by third-party valuation subject matter specialists. These enhancements aim to address deficiencies in the fair value calculation of the convertible note and warrant liability. We are also in the process of designing and implementing a robust plan intended to address the personnel-related material weakness identified in 2024. These remediation measures will be focused on ensuring that we have a sufficient number of accounting personnel, including the use of third-party resources, and that such personnel have appropriate training and experience with our disclosure and financial reporting process.

The remediation plans are actively underway, and management will continue to assess its effectiveness. Until the identified material weaknesses are fully remediated and operating effectively for a sustained period, management will continue to assess and enhance internal controls. We are committed to ensuring that these deficiencies are fully addressed and will provide updates on our progress in future filings.

While management has taken steps to remediate these control weaknesses, the material weaknesses are still unresolved. Consequently, our internal control over financial reporting was not effective as of September 30, 2025.

Unless and until these material weaknesses are remediated, or if new material weaknesses arise in the future, material misstatements could occur and go undetected in our interim or annual Consolidated Financial Statements, and we may be required to restate our financial statements. In addition, we may experience delays in satisfying our reporting obligations or to comply with Securities and Exchange Commission rules and regulations, which could result in, among other things, regulatory or enforcement actions, securities litigation, limitations on our ability to access capital markets, debt rating agency downgrades or rating withdrawals, or loss in confidence of our investors, any one of which could adversely affect the valuation of our Common Stock and our business prospects. We can give no assurance that the measures we have taken and plan to take in the future will remediate the material weaknesses identified or that any additional material weaknesses will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting.

## Risk factors

As filed, 361 characters.

For a detailed discussion of risk factors affecting us, see “Part I – Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 and “Part II – Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025. There have been no material changes in the current period regarding our risk factors.

Filed Nov 10, 2025.
Source: SEC EDGAR, the filing index for accession 0001628280-25-051161. Last ingested by Listed: Nov 2, 2026, 16:40 ET. No prices; not investment advice.