Workhorse(US:WKHS)2022-08-08 16:00Financial Performance - For the three months ended June 30, 2022, net sales were $12,555, a significant decrease from $1,202,876 in the same period of 2021, primarily due to a decrease in automotive vehicle sales volume [105]. - Gross loss for the three months ended June 30, 2022, was $(3,007,649), compared to $(13,593,254) in the same period of 2021 [104]. - The company recognized a net loss of $(21,160,272) for the three months ended June 30, 2022, compared to a net loss of $(43,619,087) in the same period of 2021 [104]. Cost and Expenses - Cost of sales for the three months ended June 30, 2022, was $3.0 million, down from $14.8 million in 2021, attributed to a $6.7 million decrease in inventory write-downs and a reduction in sales volume [106]. - Selling, general and administrative expenses increased to $13.0 million for the three months ended June 30, 2022, from $7.0 million in 2021, driven by a $4.8 million increase in employee compensation [108]. - Research and development expenses rose to $5.0 million for the three months ended June 30, 2022, compared to $2.1 million in 2021, primarily due to increased headcount and related expenses [110]. Cash and Liquidity - As of June 30, 2022, the company had approximately $140.1 million in cash and cash equivalents, down from $201.6 million as of December 31, 2021, reflecting a decrease of $61.6 million [118]. - Net cash used in operating activities for the six months ended June 30, 2022, was $55.5 million, a decrease from $81.3 million in the same period of 2021 [130]. - The decrease in cash used in operations was primarily due to reduced spending related to the initial production of the C-Series vehicle platform [130]. - The company maintains an investment in a bank money market fund to ensure liquidity and capital preservation [125]. Future Commitments and Agreements - The company entered into a multi-year vehicle purchase and supply agreement with GreenPower Motor Company Inc. to purchase 1,500 base vehicles, with deliveries beginning in July 2022 [98]. - The company expects capital expenditures for facility upgrades in Indiana, Ohio, and Michigan to be between $15.0 million and $25.0 million in 2022 [122]. - Total minimum future lease payments amount to $13.4 million as of June 30, 2022 [124]. Financing and Funding - The company has established an At-The-Market Sales Agreement allowing for the sale of up to $175.0 million in common stock, with $0.2 million raised during the three months ended June 30, 2022 [119]. - As of June 30, 2022, the company has no convertible notes outstanding after exchanging $27.5 million in aggregate principal of the 2024 Notes for common stock [123]. - Net cash used in financing activities during the six months ended June 30, 2022, was $0.5 million, primarily for payments on financing leases and tax payments related to share options [132]. - Future funding requirements will depend on various factors, including technology acquisition, growth management, and patent enforcement costs [126]. - The company continues to monitor credit and financial market conditions to assess the need for changes in its investment strategy [127]. - The company does not have any off-balance sheet arrangements that could materially affect its financial condition or results of operations [134]. Cash Flows - Cash flows from investing activities were $5.7 million for the six months ended June 30, 2022, compared to $3.3 million for the same period in 2021, indicating increased capital expenditures [131].