PART I FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited financial statements for June 30, 2025, show increased revenue, continued net losses, and negative working capital, with total assets at **$99.3 million** and liabilities at **$76.9 million**, addressing a 'going concern' via merger and financing [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets reached **$99.3 million** due to increased restricted cash, while total liabilities surged to **$76.9 million** from convertible notes, leading to a decrease in stockholders' equity to **$22.3 million** Condensed Consolidated Balance Sheet Highlights (Unaudited) | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $2,190,820 | $4,119,938 | | Restricted cash | $22,528,341 | $525,000 | | Inventory, net | $32,757,831 | $41,839,020 | | Total current assets | $63,688,513 | $53,431,820 | | Total Assets | $99,254,112 | $93,840,770 | | **Liabilities & Equity** | | | | Accounts payable | $10,823,073 | $11,509,150 | | Convertible notes at fair value | $39,520,020 | $10,491,792 | | Total current liabilities | $73,482,778 | $45,235,937 | | Total Liabilities | $76,907,373 | $49,552,845 | | Total stockholders' equity | $22,346,739 | $44,287,925 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 sales significantly increased to **$5.7 million** year-over-year, yet the company reported a **$7.4 million** gross loss, with net loss narrowing to **$14.8 million** due to lower operating expenses Condensed Consolidated Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Sales, net | $5,669,469 | $842,440 | $6,310,391 | $2,181,735 | | Gross loss | ($7,381,887) | ($6,458,908) | ($11,905,728) | ($12,562,391) | | Loss from operations | ($14,472,933) | ($20,518,240) | ($27,309,704) | ($44,244,912) | | Net loss | ($14,780,964) | ($26,319,999) | ($35,425,098) | ($55,475,786) | | Net loss per share (Basic and Diluted) | ($1.67) | ($17.45) | ($5.34) | ($40.81) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities significantly reduced to **$14.0 million**, while financing activities provided **$34.1 million**, resulting in **$24.7 million** in total cash and equivalents Cash Flow Summary (Unaudited) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($14,027,313) | ($30,063,456) | | Net cash used in investing activities | $0 | ($3,759,353) | | Net cash provided by (used in) financing activities | $34,101,536 | $3,285,505 | | **Change in cash, cash equivalents and restricted cash** | **$20,074,223** | **($30,537,304)** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies and critical events, highlighting a liquidity crisis and 'going concern' due to recurring losses and negative working capital, addressed by a planned merger with Motiv Power Systems, a sale-leaseback, and new financing - Substantial doubt exists regarding the company's ability to continue as a going concern due to recurring losses, an accumulated deficit of **$888.8 million**, and negative working capital of **$9.8 million** as of June 30, 2025[29](index=29&type=chunk)[30](index=30&type=chunk)[36](index=36&type=chunk) - On August 15, 2025, the company entered into a merger agreement with Motiv Power Systems, Inc., which is a key part of its plan to address liquidity issues[44](index=44&type=chunk)[153](index=153&type=chunk) - In connection with the merger, the company arranged a **$20 million** sale-leaseback of its Union City, IN facility and a **$5 million** convertible note financing[49](index=49&type=chunk)[50](index=50&type=chunk)[158](index=158&type=chunk) - The company is involved in litigation with supplier Coulomb Solutions Inc. (CSI) over alleged unpaid invoices exceeding **$4 million**, for which it has accrued **$1.0 million**[152](index=152&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's focus on zero-emission trucks, detailing the August 15, 2025, merger with Motiv Power Systems and related financing as critical to addressing its 'going concern' status, alongside increased Q2 sales and reduced operating expenses [Recent Developments and Going Concern](index=35&type=section&id=Recent%20Developments%20and%20Going%20Concern) This section details the August 15, 2025, merger with Motiv Power Systems, a **$20 million** sale-leaseback, and **$5 million** convertible note financing, all crucial for addressing severe liquidity issues and the 'going concern' warning - On August 15, 2025, the company entered into a merger agreement with Motiv Power Systems, where pre-merger Motiv investors will own approximately **62.5%** of the combined entity[169](index=169&type=chunk)[171](index=171&type=chunk) - To improve liquidity, the company is executing a **$20 million** sale-leaseback of its Indiana manufacturing facility and has secured **$5 million** in new convertible financing[174](index=174&type=chunk)[175](index=175&type=chunk) - Management reiterates that substantial doubt exists about the company's ability to continue as a going concern and that failure to obtain proceeds from financing may require seeking bankruptcy protection[188](index=188&type=chunk)[187](index=187&type=chunk) [Results of Operations](index=39&type=section&id=Results%20of%20Operations) Q2 2025 sales significantly increased to **$5.7 million** due to W56 truck deliveries, despite a **$7.4 million** gross loss, while SG&A and R&D expenses decreased, contributing to a narrower net loss Comparison of Operating Results (Unaudited) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Sales, net | $5,669,469 | $842,440 | $6,310,391 | $2,181,735 | | Cost of sales | $13,051,356 | $7,301,348 | $18,216,119 | $14,744,126 | | Gross loss | ($7,381,887) | ($6,458,908) | ($11,905,728) | ($12,562,391) | | SG&A | $5,844,698 | $12,066,553 | $12,628,609 | $26,161,831 | | R&D | $1,246,348 | $1,992,779 | $2,775,367 | $5,520,690 | | Net loss | ($14,780,964) | ($26,319,999) | ($35,425,098) | ($55,475,786) | - The **$4.8 million** increase in sales for Q2 2025 was primarily due to the increased delivery of W56 trucks[207](index=207&type=chunk) - SG&A expenses decreased by **$6.3 million** in Q2 2025 compared to Q2 2024, mainly due to lower employee compensation from reduced headcount and other cost-saving measures[210](index=210&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company held **$2.2 million** in cash and **$22.5 million** in restricted cash, with cash used in operations at **$14.0 million** and financing providing **$34.1 million**, reiterating the 'going concern' warning - As of June 30, 2025, the company had **$2.2 million** of cash and cash equivalents and **$22.5 million** in restricted cash[222](index=222&type=chunk) Summary of Cash Flows (Six Months Ended June 30) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($14,027,313) | ($30,063,456) | | Net cash used in investing activities | $0 | ($3,759,353) | | Net cash provided by financing activities | $34,101,536 | $3,285,505 | - The company's ability to continue as a going concern is contingent upon the successful execution of management's plan, including raising capital through the announced merger and related financing[223](index=223&type=chunk)[224](index=224&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes have occurred in the company's quantitative and qualitative disclosures about market risk since the 2024 Form 10-K filing - There have been no material changes to the company's market risk disclosures from the 2024 Form 10-K[238](index=238&type=chunk) [Item 4. Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) As of June 30, 2025, disclosure controls and procedures were deemed ineffective due to material weaknesses in third-party valuation reviews and insufficient accounting personnel, with remediation plans ongoing - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were not effective[240](index=240&type=chunk) - The ineffectiveness is due to material weaknesses related to the review of third-party valuations and a lack of sufficient, experienced accounting personnel[243](index=243&type=chunk) - Remediation plans are in process, but the material weaknesses remain unresolved as of the end of the quarter[246](index=246&type=chunk)[248](index=248&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 15 for details on material legal proceedings, specifically the ongoing litigation with supplier Coulomb Solutions Inc. (CSI) seeking over **$4 million** in damages - The company directs readers to Note 15 for details on material legal proceedings, which describes a lawsuit filed by supplier Coulomb Solutions Inc. (CSI)[251](index=251&type=chunk)[152](index=152&type=chunk) [Item 1A. Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) New material risks are primarily associated with the pending merger with Motiv Power Systems, including non-completion, adverse effects on business relationships, restrictive covenants, and potential litigation - The consummation of the merger with Motiv is subject to numerous conditions, including stockholder and regulatory approvals, which may not be satisfied[253](index=253&type=chunk) - The merger agreement contains provisions that restrict the company from soliciting alternative acquisition proposals and limit its ability to conduct certain business operations before the closing[257](index=257&type=chunk)[258](index=258&type=chunk) - Failure to complete the merger could negatively impact the company's business and stock price and could trigger the payment of a termination fee[255](index=255&type=chunk)[256](index=256&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities occurred during the reporting period - None[261](index=261&type=chunk) [Item 3. Defaults Upon Senior Securities](index=48&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - None[262](index=262&type=chunk) [Item 4. Mine Safety Disclosures](index=48&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[263](index=263&type=chunk) [Item 5. Other Information](index=48&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements during Q2 2025 - No directors or officers adopted or terminated any Rule 10b5-1 trading arrangements during the three months ended June 30, 2025[264](index=264&type=chunk) [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL data files - The report includes required CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1, 32.2) and Inline XBRL filings[266](index=266&type=chunk)

Core Viewpoint - Workhorse Group Inc. reported significant growth in sales and strategic developments, including a merger with Motiv Electric Trucks, aimed at enhancing its position in the zero-emission commercial vehicle market [2][5]. Financial Performance - Sales for Q2 2025 reached $5.7 million, a substantial increase from $0.8 million in Q2 2024, driven by higher shipments of W56 trucks [4]. - Cost of sales for Q2 2025 was $13.1 million, up from $7.3 million in the previous year, primarily due to increased sales volume and inventory reserves [6]. - Selling, general, and administrative expenses decreased to $5.8 million from $12.1 million year-over-year, reflecting cost-cutting measures [7]. - Research and development expenses fell to $1.2 million from $2.0 million, indicating a focus on efficiency [8]. - The net loss for Q2 2025 was $14.8 million, compared to a loss of $26.3 million in Q2 2024, showing improvement in financial performance [29]. Strategic Developments - Workhorse secured 36 purchase orders for W56 step vans during the quarter and shipped 32 units, indicating strong demand [5]. - The merger with Motiv Electric Trucks is expected to create a leading North American medium-duty electric truck OEM, enhancing operational efficiencies and product offerings [5]. - The combined company will leverage joint engineering and manufacturing capabilities to optimize costs and improve total cost of ownership for customers [5]. Operational Highlights - The W56 platform demonstrated reliability with over 97% uptime in real-world operations, accumulating over 212,000 miles across diverse conditions [5]. - Workhorse is expanding the application options for the W56, including the integration of the Utilimaster Aeromaster walk-in van body [5]. Cash Management - The company reduced operating expenses by $7.0 million year-over-year and secured interim funding of approximately $25 million related to the merger with Motiv [14][13]. - As of June 30, 2025, Workhorse had $2.2 million in cash and cash equivalents, alongside $22.5 million in restricted cash [12].

Core Viewpoint - The merger between Workhorse Group Inc. and Motiv Electric Trucks aims to create a leading North American medium-duty electric truck OEM, enhancing value through a broader portfolio of high-performing commercial EVs at lower unit costs [1][3][4] Company Overview - Workhorse Group Inc. focuses on zero-emission commercial vehicles and operates its manufacturing in Union City, Indiana [16] - Motiv Electric Trucks specializes in medium-duty, zero-emission electric trucks and buses, producing a variety of vehicles that meet stringent emissions standards [18][19] Merger Details - The merger is an all-stock transaction valuing the combined company at approximately $105 million, with Motiv's controlling investor becoming the majority owner [2][7] - Workhorse has completed a $20 million sale leaseback of its Union City plant and a $5 million convertible note financing in connection with the merger [1][8] Market Position - The combined company will operate in the $23 billion medium-duty truck segment, offering a full range of Class 4-6 trucks [3] - The merger is expected to enhance operational efficiencies and lower total cost of ownership (TCO) for customers [3][5] Financial Implications - The merger is anticipated to strengthen the financial profile of the combined company through improved operational scale and a simplified capital structure [4][6] - The companies expect to achieve at least $20 million in cost synergies by the end of 2026 through reductions in R&D, G&A, and facility costs [9] Leadership Structure - Following the merger, Scott Griffith, CEO of Motiv, will lead the combined company, while Rick Dauch, CEO of Workhorse, will serve as an advisor [4][5] Strategic Benefits - The merger is positioned to create a scalable manufacturing platform and a diverse product portfolio, enhancing the ability to serve a blue-chip customer base [3][9] - The combined company aims to leverage existing relationships with major medium-duty fleets to drive large-scale adoption of electric trucks [9]

[Management Commentary and Strategic Highlights](index=1&type=section&id=Management%20Commentary%20and%20Strategic%20Highlights) Workhorse achieved record Q2 2025 truck shipments, announced a merger with Motiv Electric Trucks, and secured interim funding to bolster operations - Shipped a record **32 trucks** in Q2, driven by W56 step van performance[3](index=3&type=chunk) - Entered a definitive merger agreement with Motiv Electric Trucks to create a leading North American medium-duty electric truck OEM[3](index=3&type=chunk)[6](index=6&type=chunk) - Secured **36 new purchase orders** for W56 step vans during the quarter[6](index=6&type=chunk) - Reduced operating expenses by **$7.0 million** year-over-year through cost conservation[5](index=5&type=chunk) - Secured approximately **$25 million** in interim funding via sale-leaseback and convertible note financing to pay down debt[5](index=5&type=chunk)[16](index=16&type=chunk) - The W56 platform accumulated over **212,000 miles** in customer operations, demonstrating **97% uptime**[6](index=6&type=chunk) [Second Quarter 2025 Financial Performance](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Performance) Workhorse reported increased net sales to **$5.7 million** in Q2 2025, alongside a **$7.4 million** gross loss, while reducing operating expenses and narrowing its net loss Q2 2025 vs Q2 2024 Financial Results | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Sales, net | $5.7 million | $0.8 million | | Cost of Sales | $13.1 million | $7.3 million | | Gross Loss | ($7.4 million) | ($6.5 million) | | SG&A Expenses | $5.8 million | $12.1 million | | R&D Expenses | $1.2 million | $2.0 million | | Loss from Operations | ($14.5 million) | ($20.5 million) | | Net Loss | ($14.8 million) | ($26.3 million) | - The **$4.8 million** increase in sales was primarily driven by higher W56 shipments[7](index=7&type=chunk) - Cost of sales increased by **$5.8 million**, mainly due to higher sales volume and a **$1.8 million** increase in inventory reserves[8](index=8&type=chunk) - SG&A expenses decreased by **$6.3 million**, primarily due to a **$3.1 million** reduction in employee compensation and a **$1.1 million** decrease in legal and professional expenses[9](index=9&type=chunk) [Financial Position and Liquidity](index=3&type=section&id=Financial%20Position%20and%20Liquidity) As of June 30, 2025, Workhorse held **$2.2 million** in cash and **$22.5 million** in restricted cash, bolstering liquidity through a **$20 million** sale-leaseback and **$5 million** convertible note financing Key Balance Sheet Items (as of June 30, 2025) | Item | Amount | | :--- | :--- | | Cash and cash equivalents | $2.2 million | | Restricted cash | $22.5 million | | Inventory, net | $32.8 million | | Accounts payable | $10.8 million | - Completed a **$20 million** sale-leaseback for the Union City, Indiana manufacturing facility[16](index=16&type=chunk)[17](index=17&type=chunk) - Secured an additional **$5 million** through a secured convertible note financing[16](index=16&type=chunk)[17](index=17&type=chunk) [Financial Statements](index=7&type=section&id=Financial%20Statements) This section presents the condensed consolidated balance sheets and statements of operations, detailing the company's financial position and performance [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to **$99.3 million**, while total liabilities rose to **$76.9 million**, leading to a decrease in stockholders' equity to **$22.3 million** Balance Sheet Comparison | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $63.7 million | $53.4 million | | Total Assets | $99.3 million | $93.8 million | | Total Current Liabilities | $73.5 million | $45.2 million | | Total Liabilities | $76.9 million | $49.6 million | | Total Stockholders' Equity | $22.3 million | $44.3 million | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Workhorse reported a Q2 2025 net loss of **$14.8 million** or **($1.67)** per share, a significant improvement from the prior year, driven by reduced operating expenses Statement of Operations (Three Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Sales, net | $5.7 million | $0.8 million | | Gross loss | ($7.4 million) | ($6.5 million) | | Loss from operations | ($14.5 million) | ($20.5 million) | | Net loss | ($14.8 million) | ($26.3 million) | | Net loss per share (Basic & Diluted) | ($1.67) | ($17.45) | Statement of Operations (Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Sales, net | $6.3 million | $2.2 million | | Gross loss | ($11.9 million) | ($12.6 million) | | Loss from operations | ($27.3 million) | ($44.2 million) | | Net loss | ($35.4 million) | ($55.5 million) | | Net loss per share (Basic & Diluted) | ($5.34) | ($40.81) | [Supplementary Information](index=3&type=section&id=Supplementary%20Information) This section provides details on the upcoming conference call and important disclaimers regarding forward-looking statements and associated risks [Conference Call Information](index=3&type=section&id=Conference%20Call%20Information) A joint conference call with Motiv management is scheduled for Tuesday, August 19th, at 10:00 a.m. Eastern Time to discuss financial results and the merger agreement - A joint conference call with Motiv management is scheduled for **Tuesday, August 19th, at 10:00 a.m. Eastern Time** to discuss financial results and the merger[18](index=18&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section provides a legal disclaimer regarding forward-looking statements, highlighting risks associated with the proposed Motiv merger, future plans, and anticipated results - The press release contains forward-looking statements related to the proposed merger with Motiv, future business strategies, and anticipated financial results[22](index=22&type=chunk) - Identified risks include successful integration with Motiv, obtaining approvals, supply chain disruptions, and funding ongoing operations[23](index=23&type=chunk)[24](index=24&type=chunk)

Core Viewpoint - Workhorse Group Inc. has entered into a new exclusivity agreement with a privately held U.S.-based manufacturer of electric commercial vehicles, indicating progress in a potential merger transaction aimed at enhancing its position in the zero-emission commercial vehicle market [1][2]. Group 1: Exclusivity Agreements - The company previously entered into a Prior Exclusivity Agreement on July 14, 2025, which restricted it from engaging with third parties regarding alternative transactions for a period of 14 days [3]. - The restrictions from the Prior Exclusivity Agreement expired on July 28, 2025, and a New Exclusivity Agreement was established on August 4, 2025, reinstating similar restrictions for an additional seven days [4]. Group 2: Potential Transaction - The potential transaction involves merging the manufacturer into a newly created subsidiary of Workhorse in exchange for newly issued shares of the company's common stock [2]. - If definitive agreements are reached regarding the potential transaction, the company plans to file a proxy statement with the Securities and Exchange Commission (SEC) [5].

Group 1 - The article provides a buy rating for Dycom Industries (NYSE: DY), highlighting its strong positioning as a beneficiary of the ongoing digital infrastructure investment supercycle [1] - The core fiber-to-the-home rollout for Dycom Industries remains robust, indicating a solid demand for its services [1] - The author emphasizes a diverse investment background, utilizing various investment strategies such as fundamental, technical, and momentum investing to enhance the investment process [1] Group 2 - There is no disclosure of any stock, option, or similar derivative position in any of the companies mentioned, nor any plans to initiate such positions in the near future [2] - The article expresses the author's personal opinions and is not compensated beyond the platform used for publication [2] - Seeking Alpha clarifies that past performance does not guarantee future results and that the views expressed may not reflect the opinions of the platform as a whole [3]

Core Viewpoint - Workhorse Group Inc. is in discussions for a potential merger with a privately held U.S.-based manufacturer of electric commercial vehicles, which may significantly alter the ownership structure of the company [1][2]. Company Overview - Workhorse Group Inc. focuses on the transition to zero-emission commercial vehicles and is exploring a merger with a manufacturer in the same sector [1][2]. Potential Transaction Details - The merger would involve the manufacturer being merged into a newly created subsidiary of Workhorse in exchange for newly issued shares of common stock, likely resulting in the manufacturer’s investors holding a substantial majority of the outstanding shares post-transaction [2][3]. - The exact number of shares to be issued has not been determined yet [2]. Refinancing Plans - The potential transaction includes plans for refinancing approximately $33 million in outstanding senior secured convertible notes, with a new convertible note and a $20 million sale leaseback of the company's manufacturing facility in Indiana [3][4]. - The refinancing aims to fully repay the existing notes without incurring a redemption premium and to cancel related warrants [3][4]. Conditions and Timeline - The completion of the refinancing and the merger is intended to occur simultaneously, with the company planning to repay half of its obligations under the notes as a condition for executing a definitive agreement [4]. - The company has entered into an Exclusivity Agreement with the manufacturer, preventing negotiations with third parties for 14 days [5]. Regulatory and Approval Process - The consummation of the potential transaction is subject to various conditions, including stockholder approval and compliance with Nasdaq listing procedures [5][6]. - If definitive agreements are reached, the company will file a proxy statement with the SEC, and stockholders will be advised to read it carefully [6][7].

Financial Data and Key Metrics Changes - Sales net of returns and allowances for Q1 2025 were $600,000, a decrease from $1,300,000 in Q1 2024, primarily due to the Arrow divestiture and decreased W4CC and W56 truck sales [27] - Cost of sales for Q1 2025 was $5,200,000, down from $7,400,000 in the prior year, driven by lower sales volume and reduced labor costs [28] - Selling, general and administrative expenses decreased to $6,800,000 from $14,100,000 in the prior year, primarily due to lower headcount and related expenses [28] - Research and development expenses were $1,500,000, down from $3,500,000 in the prior year, mainly due to decreased employee compensation [29] - Interest expense net for Q1 2025 was $5,300,000, compared to $1,300,000 in the prior year, driven by higher outstanding convertible note balances [29] - As of March 31, 2025, the company had $2,600,000 in cash and cash equivalents and $27,900,000 in restricted cash [30] Business Line Data and Key Metrics Changes - Year to date, the company booked purchase orders for 27 W56 Step Vans, with deliveries expected in the next 60 to 120 days [6] - The company delivered FedEx's 2024 order of fully equipped W56 Step Vans, which are expected to be deployed at three terminals by the end of Q2 [8] - The company began delivering the extended wheelbase W56 Step Van to a national fleet, providing a larger electric alternative without range or payload compromise [9] - The company expanded its dealer and service networks, adding new partners to enhance market coverage and service reliability [11] Market Data and Key Metrics Changes - The commercial EV market is experiencing a shift in customer demand, with increasing interest in the company's vehicles and growing momentum through vehicle orders and deployments [5] - The company is the only North American OEM producing complete electric step vans in-house, providing a competitive advantage in quality and lead times [14][15] - The company has seen competitors struggling with production and quality concerns, highlighting its position as a reliable provider of electric trucks [23][24] Company Strategy and Development Direction - The company is focused on building dependable electric trucks and earning customer confidence through rigorous execution and partnerships [4][5] - The company aims to expand its product portfolio to meet the demands of last-mile delivery, with plans to introduce more range options and configurations [16][17] - The company is maintaining financial discipline and cash preservation while navigating market challenges and seeking larger fleet orders [12][13] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of disciplined execution and real-world impact, focusing on building and shipping key customer orders [34] - The company is ramping production in line with demand and assessing new battery suppliers to strengthen its supply chain [34] - Management acknowledged ongoing market challenges but expressed confidence in the company's ability to scale for long-term growth [26] Other Important Information - The company completed a reverse stock split in March 2025 to regain NASDAQ compliance, which is crucial for accessing capital [13] - The company received CMBSS certification for the import and sale of vehicles into Canada, broadening its international footprint [12] Q&A Session Summary Question: What is the company's outlook for future orders? - Management indicated that they anticipate receiving the 2025 RFQ from FedEx in Q2 and are actively engaging with multiple logistics providers for demos and orders [9][33] Question: How is the company managing its financial runway? - The company has successfully reduced monthly operating cash to below $3,000,000 and is focused on further cost reductions and increasing cash reserves [31][32]

Financial Data and Key Metrics Changes - Sales net of returns and allowances for Q1 2025 were $600,000, down from $1,300,000 in Q1 2024, primarily due to the Arrow divestiture and decreased W4CC and W56 truck sales [28] - Cost of sales decreased to $5,200,000 from $7,400,000 in the prior year, driven by lower sales volume and reduced labor costs [29] - Selling, general and administrative expenses were $6,800,000, down from $14,100,000, mainly due to a decrease in employee compensation and related expenses [29] - Research and development expenses decreased to $1,500,000 from $3,500,000, primarily due to lower headcount [30] - Interest expense net increased to $5,300,000 from $1,300,000, driven by higher outstanding convertible note balances [30] Business Line Data and Key Metrics Changes - Year to date, the company booked purchase orders for 27 W56 Step Vans, with deliveries expected in the next 60 to 120 days [6] - The company delivered FedEx's 2024 order of fully equipped W56 Step Vans, increasing the total number of FedEx terminals with W56 vehicles to 12 [9] - The company began delivering the extended wheelbase 208 inches W56 Step Van to a national fleet, showcasing a larger electric alternative [10] Market Data and Key Metrics Changes - The company added two new dealers in key states preparing to adopt CARB emission standards, expanding its market coverage [12] - The company received CMBSS certification for the import and sale of W56 and W750 vehicles into Canada, broadening its international footprint [13] Company Strategy and Development Direction - The company focuses on building dependable electric trucks and earning customer confidence through rigorous execution and partnerships [5] - The company aims to expand the W56 lineup to provide more range options and cargo capacity for fleet operators [17] - The company is integrating advanced telematics into its vehicles to support better operating decisions and efficiency gains [19] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of maintaining financial discipline and reducing operating expenses by $9,300,000 year over year [14] - The company is focused on building and shipping key customer orders while maintaining a lean operating environment [35] - Management expressed confidence in the company's ability to scale for long-term growth despite ongoing market challenges [27] Other Important Information - The company completed a reverse stock split in March 2025 to regain NASDAQ compliance, which is crucial for long-term plans and access to capital [14] - The company is actively pursuing additional funding to support its operations and growth [35] Q&A Session Summary - No specific annual revenue guidance was provided due to uncertainty in the EV landscape, but the company aims to ship more trucks in Q2 than in all of last year [33] - Management emphasized the importance of building trust with fleet customers through demonstrations and securing purchase orders [35]

[PART I FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) Overview of the company's financial performance and position, highlighting recurring losses and going concern issues [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) Presents the company's unaudited Q1 2025 financial statements, revealing decreased sales, a net loss, and significant going concern doubts [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Details the company's financial position as of March 31, 2025, showing increased assets and liabilities, and negative working capital Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $2,645 | $4,120 | | Restricted cash | $27,947 | $525 | | Inventory, net | $41,309 | $41,839 | | Total current assets | $77,544 | $53,432 | | Total Assets | $115,484 | $93,841 | | **Liabilities & Equity** | | | | Accounts payable | $11,092 | $11,509 | | Convertible notes at fair value | $45,244 | $10,492 | | Total current liabilities | $80,388 | $45,236 | | Total Liabilities | $84,092 | $49,553 | | Total stockholders' equity | $31,392 | $44,288 | - The company had negative working capital of **$2.8 million** as of March 31, 2025[25](index=25&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Reports the company's operational results for Q1 2025, indicating reduced sales, a gross loss, and a net loss Q1 2025 vs Q1 2024 Statement of Operations (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Sales, net | $641 | $1,339 | | Cost of sales | $5,165 | $7,443 | | Gross loss | $(4,524) | $(6,103) | | Selling, general and administrative | $6,784 | $14,095 | | Research and development | $1,529 | $3,528 | | Loss from operations | $(12,837) | $(23,727) | | Net loss | $(20,644) | $(29,156) | | Net loss per share (Basic and Diluted) | $(4.68) | $(24.09) | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Outlines changes in stockholders' equity for Q1 2025, primarily driven by the net loss and capital raised from convertible notes - The company's accumulated deficit grew from **$853.4 million** to **$874.0 million** during the first quarter of 2025[17](index=17&type=chunk) - Common stock issued under convertible notes added **$7.0 million** to stockholders' equity during the quarter[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash movements for Q1 2025, showing cash used in operations and significant cash generated from financing activities Q1 2025 vs Q1 2024 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(8,154) | $(17,964) | | Net cash used in investing activities | $(18) | $(3,026) | | Net cash provided by (used in) financing activities | $34,118 | $(8,128) | | **Change in cash, cash equivalents and restricted cash** | **$25,946** | **$(29,117)** | - Proceeds from convertible notes were the primary source of financing, providing **$33.7 million** in cash during Q1 2025[20](index=20&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides critical disclosures, including the company's going concern status, financing dependencies, and legal proceedings - Management has concluded that **substantial doubt exists** regarding the company's ability to continue as a going concern for at least one year from the issuance date of the financial statements[26](index=26&type=chunk)[33](index=33&type=chunk) - The company's ability to continue operations is **contingent on obtaining proceeds** from third-party financing, primarily the 2024 Securities Purchase Agreement, which has conditions for fund release[27](index=27&type=chunk)[37](index=37&type=chunk) - The company is in a legal dispute with supplier Coulomb Solutions Inc. (CSI) over alleged unpaid invoices **exceeding $4 million**. Workhorse has accrued **$1.0 million** in connection with this dispute[127](index=127&type=chunk) - Subsequent to the quarter end, the company received consent for the release of an **additional $5.5 million** from its lockbox account in two tranches (**$3.0M in April**, **$2.5M in May**)[131](index=131&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Discusses the company's financial condition and operational results, emphasizing going concern risks, cost-saving measures, and market challenges - The company's ability to obtain additional financing is '**extremely limited under current conditions**,' and if unsuccessful, it may need to **seek bankruptcy protection**[141](index=141&type=chunk)[179](index=179&type=chunk) - Cost-saving measures implemented include a **20% reduction** in workforce (excluding direct labor), furloughing employees, reducing capital expenditures, and raising capital through the 2024 Securities Purchase Agreement[149](index=149&type=chunk) Q1 2025 vs Q1 2024 Results of Operations Summary (in millions) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Sales, net | $0.6 | $1.3 | $(0.7) | | Cost of sales | $5.2 | $7.4 | $(2.2) | | SG&A expenses | $6.8 | $14.1 | $(7.3) | | R&D expenses | $1.5 | $3.5 | $(2.0) | | Net loss | $(20.6) | $(29.2) | $8.6 | - Market demand in Q1 2025 was negatively impacted by slower-than-anticipated EV adoption, lack of government subsidies, and delays in charging infrastructure roll-out[152](index=152&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Confirms no material changes to market risk disclosures from the prior annual report - There have been **no material changes** to the market risk disclosures previously reported in the 2024 Form 10-K[188](index=188&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Concludes that disclosure controls and procedures were ineffective due to material weaknesses in internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures were **not effective** as of March 31, 2025[190](index=190&type=chunk) - Material weaknesses identified include deficiencies in reviewing third-party valuations and a lack of sufficient, experienced accounting personnel due to turnover and cost-cutting measures[193](index=193&type=chunk) - The company is implementing remediation plans, but the material weaknesses **remain unresolved** as of the reporting date[196](index=196&type=chunk)[198](index=198&type=chunk) [PART II OTHER INFORMATION](index=39&type=section&id=PART%20II%20OTHER%20INFORMATION) Contains supplementary information not covered in the financial statements, including legal proceedings and risk factors [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) Refers to the financial statement notes for details on material legal disputes, specifically the CSI litigation - For details on legal proceedings, the report directs readers to Note 15 in the financial statements, which discusses the CSI litigation[201](index=201&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) States that no material changes to the company's previously disclosed risk factors occurred during the period - There have been **no material changes** in the company's risk factors during the current period[202](index=202&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Reports no unregistered sales of equity securities during the reporting period - **None**[203](index=203&type=chunk) [Defaults Upon Senior Securities](index=39&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Indicates that the company experienced no defaults on senior securities - **None**[204](index=204&type=chunk) [Mine Safety Disclosures](index=39&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Confirms that this disclosure item is not applicable to the company's operations - **Not applicable**[205](index=205&type=chunk) [Other Information](index=39&type=section&id=Item%205.%20Other%20Information) Notes that no directors or officers adopted or terminated Rule 10b5-1 trading plans in Q1 2025 - No directors or officers adopted or terminated any Rule 10b5-1 trading plans or similar arrangements in Q1 2025[206](index=206&type=chunk) [Exhibits](index=40&type=section&id=Item%206.%20Exhibits) Lists all documents filed as exhibits with the Form 10-Q, including financing agreements and certifications