Workhorse Group Inc.
For the period ended Jun 30, 2025. Filed Aug 15, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 15, 2025
WKHS$3.09-1.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0001425287-25-000058
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-15.
0001425287-25-000064
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 83 previous paragraphs and 97 current paragraphs.
44 unchanged; 26 reworded; 25 added; 9 removed; 4 previous and 2 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (25)
Current report
Recent Developments
Current report
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.
Current report
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.
Current report
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.
Current report
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”).
Current report
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. Workhorse plans to use the proceeds for the Repayment (as defined below), to pay transaction expenses, and for general corporate purposes.
Current report
On August 15, 2025, Workhorse issued to an affiliate of the Motiv Investor (the “Convertible Note Holder”) a Subordinated Secured Convertible Note (the “Convertible Note”) with an aggregate original principal amount of $5 million (the “Convertible Financing”). The Convertible Note was issued without original issue discount, and Workhorse will receive $5 million in proceeds, prior to fees and expenses, which Workhorse plans to use for the Repayment and other general corporate purposes. The Convertible Note bears interest at a rate of 8% per annum, subject to adjustment as set forth in the Convertible Note, compounded quarterly and increasing the principal outstanding under the Convertible Note. The 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.
Current report
Workhorse’s obligations under the 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 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.
Current report
On August 15, 2025, Workhorse entered into Waiver, Repayment and Exchange Agreements (each, a “Repayment Agreement” and collectively, the “Repayment Agreements”) by and among Workhorse and the investors party thereto (collectively, the “2024 Note Holder”).
Current report
Upon entry into the Repayment Agreements, Workhorse will deposit 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% 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 the date hereof is approximately $30.9 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.
Current report
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.
Current report
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 Convertible Note, including the Security Agreement and the Subsidiary Guarantee, the Sale Leaseback, and the Merger and related transactions.
Current report
Pursuant to the 2024 Securities Purchase Agreement, during the three and six months ended June 30, 2025, the Investor released approximately $5.8 million and $9.1 million from the lockbox account, respectively, and we had received net proceeds of approximately $5.4 million and $8.4 million, respectively, in connection with the Tenth Additional 2024 Note.
Current report
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 six months ended June 30, 2025.
Current report
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.
Current report
On August 15, 2025, the Company entered into the Recent Transactions. For more information, see “Recent Developments” above.
Current report
Cost of sales for the six months ended June 30, 2025 and 2024 were $18.2 million and $14.7 million, respectively. The increase in Cost of sales of $3.5 million was primarily due to an increase in sales volume as well as a $1.3 million increase in warranty reserve expenses which was offset by a $1.6 million decrease in direct and indirect labor costs and a $1.3 million reversal of infrastructure expenses previously accrued.
Current report
SG&A expenses during the six months ended June 30, 2025 and 2024 were $12.6 million and $26.2 million, respectively. The decrease in SG&A of $13.6 million was primarily driven by a $7.2 million decrease in employee compensation and related expenses due to lower headcount, a decrease of $1.8 million in consulting related expenses, a decrease in legal and professional expenses of $1.9 million, a decrease of $1.1 million in insurance expenses, a decrease in IT-related expenses of $0.9 million, and a $0.3 million decrease in depreciation and amortization expense due to the Aero divestiture.
Current report
Research and development (“R&D”) expenses during the six months ended June 30, 2025, and 2024 were $2.8 million and $5.5 million, respectively. The decrease in R&D expenses of $2.7 million was primarily driven by the successful completion of the W56 initial design and production of the W56 and the W56 208-inch wheelbase truck program.
Current report
Interest expense, net
Current report
Interest expense, net for the six months ended June 30, 2025 was $5.8 million compared to $3.2 million for the six months ended June 30, 2024. The difference was primarily driven by higher financing fees related to the 2024 Notes recognized in the current period compared to prior year.
Current report
Provision for income taxes
Current report
Provision for income taxes during the three and six months ended June 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.
Current report
•Sale leaseback transaction of our Union City, IN production facility
Current report
On August 15, 2025, the Company entered into the Recent Transactions. For more information, see “Recent Developments” above.
Removed paragraphs (9)
Previous report
Pursuant to the 2024 Securities Purchase Agreement, during the three months ended March 31, 2025, the Company issued and sold to the Investor (i) 2024 Notes in the original principal amount of $38.5 million and (ii) 2024 Warrants to purchase up to
Previous report
4.4 million shares of Common Stock pursuant to the 2024 Securities Purchase Agreement (following adjustment in connection with the Company’s 1-for-20 and 1-for-12.5 Reverse Splits).
Previous report
Another key element of management’s strategy to improve our liquidity and meet our working capital needs is the reduction of operating costs. This effort is intended, among other objectives, to ease the demands on our available liquidity. Accordingly, the below cost-saving measures implemented during 2024 have continued to deliver benefits through the quarter ended March 31, 2025.
Previous report
•Completed a reduction in force (the “RIF”) pursuant to which we terminated approximately 20% of our total workforce, excluding direct labor. We have not incurred and do not expect to incur additional material costs in connection with the RIF.
Previous report
We have reinstated certain furloughed employees to fulfill truck production requirements for the W56. However, there is still no assurance that all furloughed employees, including key personnel, will be available and willing to return to work or that we will be able to replace the employees who departed voluntarily.
Previous report
Interest income (expense), net
Previous report
Benefit for income taxes
Previous report
Benefit for income taxes during the three months ended March 31, 2025, and 2024 was zero as all income tax benefits are reserved.
Previous report
Although the 2024 Securities Purchase Agreement contemplates the issuance of up to $62.0 million of additional 2024 Notes, we can issue such 2024 Notes only to the extent we can offer and sell them pursuant to a Registration Statement on Form S-3. Because the public float of our Common Stock is currently less than $75 million, SEC rules limit the amount of securities we can offer and sell on Form S-3, including the 2024 Notes, Common Stock and all other securities, to one-third of our public float in any twelve month period. Accordingly, our ability to obtain liquidity though public sales of securities, including pursuant to our ATM Agreement and the 2024 Securities Purchase Agreement, is substantially limited.
Reworded paragraphs (26)
Previous wording
As described in our Current Report on Form 8-K filed with the SEC 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 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 May 14, 2025, the Investor had released approximately $7.1 million from the lockbox account, and we had received net proceeds of approximately $6.0 million. Additionally, on May 14, 2025, the investor notified the Company that it consented to the release of an additional $2.5 million from the lockbox account. Subject to the satisfaction of certain conditions in the Lockbox Letter, the Company expects to receive such funds, less fees and expenses, on or about May 19, 2025. 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.
Current wording
As described in our Current Report on Form 8-K filed with the SEC 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 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 August 12, 2025, the Investor had released approximately $15.1 million from the lockbox account, and we had received net proceeds of approximately $12.7 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.
Previous wording
Although the 2024 Securities Purchase Agreement contemplates the issuance of up to $62.0 million of additional 2024 Notes, we can issue such 2024 Notes only to the extent we can offer and sell them pursuant to a Registration Statement on Form S-3. Because the public float of our Common Stock is currently less than $75 million, SEC rules limit the amount of securities we can offer and sell on Form S-3, including the 2024 Notes, Common Stock and all other securities, to one-third of our public float in any twelve month period. Accordingly, our ability to obtain liquidity though public sales of securities, including pursuant to our ATM Agreement (as defined below) and the 2024 Securities Purchase Agreement, is substantially limited. In addition, the terms of our existing financing arrangements impose substantial restrictions on our ability to obtain additional financing.
Current wording
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 (as
Previous wording
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.
Current wording
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. For more information, see “Recent Developments” above.
Previous wording
In addition to the RIF and furlough actions, we have significantly reduced other operating costs during the first quarter of 2025 compared to the same period a year ago 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.
Current wording
In addition, we significantly reduced other operating costs during the first six 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.
Previous wording
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. Additionally, we are overdue on payments to certain suppliers for outstanding accounts payable. Certain purchased components for our vehicles 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 are currently working 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.
Current wording
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. Additionally, we are overdue on payments to certain suppliers for outstanding accounts payable. 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 are currently working 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.
Previous wording
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 also plans to significantly reduce 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.
Current wording
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.
Previous wording
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 three 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.
Current wording
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 six 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.
Previous wording
Market Demand. Our sales during the first three months of 2025 were lower than the prior year period due to 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. However, we expect adoption rates to accelerate in 2025, driven by more stringent state and federal emissions requirements and continued government subsidies and incentives that will continue to reduce cost barriers for EV ownership, including the approval for our W56 platform for the California’s Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project ("HVIP") program through California Air Resource Board ("CARB"), providing buyers with an $85,000 base voucher per W56 truck purchased. The accelerated adoption rates are related to the enforcement of California’s Advanced Clean Fleets Regulation (“ACF Regulation”), which is contingent upon the Environmental Protection Agency (“EPA”) granting a waiver or determining that a waiver is not necessary. Under the Clean Air Act, California holds the unique authority to request a waiver of preemption, which typically restricts states from setting their own emissions standards for new motor trucks. The EPA’s role involves a thorough review of comments and an assessment to determine if the criteria for granting a waiver are satisfied. This regulatory landscape is a significant consideration for our operations and strategic planning.
Current wording
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 will 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").
Previous wording
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, proposed tariffs measures under the new Presidential Administration could raise 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.
Current wording
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 new 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.
Previous wording
Geopolitical: Our operations and results may be impacted due to uncertainty of the political environment and the new Presidential Administration. The new Presidential Administration could affect the support for the adoption of electric trucks, as well as the availability of government subsidies to fund the adoption of electric trucks and may implement 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.
Current wording
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.
Previous wording
Sales, net of returns and allowances for the three months ended March 31, 2025, and 2024 were $0.6 million and $1.3 million, respectively. The decrease in sales of $0.7 million was primarily due to the Aero divestiture and lower W4 CC and W56 truck sales in the current period.
Current wording
Sales, net of returns and allowances for the three months ended June 30, 2025, and 2024 were $5.7 million and $0.8 million, respectively. Sales, net of returns and allowances for the six months ended June 30, 2025, and 2024 were $6.3 million and $2.2 million, respectively. For the three and six months ended June 30, 2025, the increase in sales of $4.8 million and $4.1 million, respectively, was primarily due to the increased delivery of W56 trucks in the current period, partially offset by the Aero divestiture and higher W4 CC truck sales in the prior period.
Previous wording
Cost of sales for the three months ended March 31, 2025, and 2024 were $5.2 million and $7.4 million, respectively. The decrease in Cost of sales of $2.3 million was primarily a result of lower sales volume, which was partially offset by lower inventory reserves of $0.5 million and lower direct and indirect labor costs of $1.6 million primarily due to lower headcount as a result of employee furloughs.
Current wording
Cost of sales for the three months ended June 30, 2025, and 2024 were $13.1 million and $7.3 million, respectively. The increase in Cost of sales of $5.8 million was primarily a result of higher sales volume and increase in inventory excess and obsolescence reserve of $1.8 million, which was partially offset by lower other production expenses of $1.2 million and lower direct and indirect labor costs of $0.2 million primarily due to lower headcount.
Previous wording
Selling, general and administrative expenses ("SG&A") expenses for the three months ended March 31, 2025, and 2024 were decreased $6.8 and $14.1 million, respectively. The decrease in SG&A of $7.3 million was primarily driven by a $4.4 million decrease in employee compensation and related expenses primarily due to lower headcount, a decrease of $1.0 million in consulting related expenses, a decrease in legal and professional expenses of $0.7 million, a decrease of $0.4 million in marketing expenses, a decrease in IT-related expenses of $0.5 and lower corporate insurance of $0.5 million, partially offset by an increases in rent expenses and depreciation and amortization expense.
Current wording
Selling, general and administrative expenses (“SG&A”) expenses for the three months ended June 30, 2025, and 2024 were $5.8 and $12.1 million, respectively. The decrease in SG&A of $6.3 million was primarily driven by a $3.1 million decrease in employee compensation and related expenses primarily due to lower headcount, a decrease of $0.8 million in consulting related expenses, a decrease in legal and professional expenses of $1.1 million, a decrease of $0.5 million in insurance expenses, a decrease in IT-related expenses of $0.4 million, lower corporate insurance of $0.5 million, and a $0.2 million decrease in depreciation and amortization expense due to the Aero divestiture.
Previous wording
Research and development (“R&D”) expenses during the three months ended March 31, 2025, and 2024 were $1.5 million and $3.5 million, respectively. The decrease in R&D expenses of $2.0 million was primarily driven by a $1.3 million decrease in employee compensation and related expenses due to lower headcount and a $0.4 million decrease in consulting expenses.
Current wording
Research and development (“R&D”) expenses during the three months ended June 30, 2025, and 2024 were $1.2 million and $2.0 million, respectively. The decrease in R&D expenses of $0.7 million was primarily driven by a $0.1 million decrease in employee compensation and related expenses due to lower headcount, a $0.3 million decrease in prototype part expenses and $0.3 million decrease in rent expenses and depreciation and amortization expense.
Previous wording
For the three months ending March 31, 2024, Interest income (expense), net was $5.3 million, compared to $1.2 million for the three months ended March 31, 2024. The difference was primarily driven by recognition of interest expense related to higher balances of the 2024 Notes in the current period compared to the prior year.
Current wording
For the three months ending June 30, 2025, Interest expense, net was $0.6 million, compared to $2.0 million for the three months ended June 30, 2024. 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.
Previous wording
As March 31, 2025, the estimated fair value of the 2024 Notes totaled $45.2 million.
Current wording
As June 30, 2025, the estimated fair value of the 2024 Notes totaled $39.5 million.
Previous wording
During the three months ended March 31, 2025, the Investor converted $5.9 million of principal into Common Stock and we recorded a net $1.6 million fair value net gain in the Condensed Consolidated Statements of Operations. We recorded a net $3.3 million gain and a net $0.5 million fair value net loss, respectively, in the Condensed Consolidated Statements of Operations related to the 2024 Notes.
Current wording
During the three and six months ended June 30, 2025, the Investor converted $13.5 million and $19.4 million fair value of principal into Common Stock, respectively, and we recorded a $5.4 million and $7.0 million fair value net gain on conversion in the Condensed Consolidated Statements of Operations, respectively. During the three months ended June 30, 2025 and 2024, we recorded a $1.6 million fair value net loss and a $3.1 million fair value net loss, respectively, in the Condensed Consolidated Statements of Operations related to the 2024 Notes. For the six months ended June 30, 2025 and 2024, we recorded a $4.9 million fair value net loss and a $3.6 million fair value net loss, respectively, in the Condensed Consolidated Statements of Operations related to the 2024 Notes.
Previous wording
As March 31, 2025, the estimated fair value of the 2024 Warrants totaled $5.1 million.
Current wording
As June 30, 2025, the estimated fair value of the 2024 Warrants totaled $3.1 million.
Previous wording
During the three months ended March 31, 2025, and 2024, we recognized a net fair value gain of $0.7 million and a net fair value loss of $3.8 million, respectively, in the Condensed Consolidated Statements of Operations related to the 2024 Warrants.
Current wording
During the three months ended June 30, 2025, and 2024, we recognized a net fair value gain of $1.9 million and a net fair value loss of $0.6 million, respectively, in the Condensed Consolidated Statements of Operations related to the 2024 Warrants. During the six months ended June 30, 2025, and 2024, we recognized a net fair value gain of $2.6 million and a net fair value loss of $4.4 million, respectively, in the Condensed Consolidated Statements of Operations related to the 2024 Warrants.
Previous wording
We had sales of $0.6 million, incurred a net loss of $20.6 million and used $8.2 million of cash in operating activities during the three months ended March 31, 2025. As of March 31, 2025, we had $2.6 million of cash and cash equivalents and $27.9 million in restricted cash.
Current wording
We had sales net of returns and allowances of $6.3 million, incurred a net loss of $35.4 million and used $14.0 million of cash in operating activities during the six months ended June 30, 2025. As of June 30, 2025, we had $2.2 million of cash and cash equivalents and $22.5 million in restricted cash.
Previous wording
•Reduced expenses and limited non-contracted capital expenditures.
Current wording
•Reducing expenses and limiting non-contracted capital expenditures.
Previous wording
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. As discussed more fully above, as of March 21, 2025, approximately $27.4 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.
Current wording
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, the Sale Leaseback, and the Convertible Note. As discussed more fully above, as of June 30, 2025, approximately $21.9 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.
Previous wording
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 May 14, 2025, the Investor had released approximately $7.1 million from the lockbox account, and we had received net proceeds of approximately $6.0 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.
Current wording
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 August 12, 2025, the Investor had released approximately $15.1 million from the lockbox account, and we had received net proceeds of approximately $12.7 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.
Previous wording
During the three months ended March 31, 2025 and 2024, net cash used in operating activities was $8.2 million and $18.0 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 slower than anticipated sales. The decrease is also attributable to a $7.3 million decline in employee compensation and related expenses, excluding non-cash stock-based compensation, resulting from our reduction in force actions.
Current wording
During the six months ended June 30, 2025 and 2024, net cash used in operating activities was $14.0 million and $30.1 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 slower than anticipated sales. The decrease included a $7.3 million decline in employee compensation and related expenses, excluding non-cash stock-based compensation, resulting from our reduction in force actions.
Previous wording
Cash used in investing activities related primarily to capital expenditures to upgrade our production and research and development facilities, were $17,866 for the three months ended March 31, 2025, and $3.0 million for the three months ended March 31, 2024. The decrease is primarily driven by a decline in spending in tooling and equipment related to our truck programs at our Union City, IN manufacturing facility.
Current wording
Cash used in investing activities related primarily to capital expenditures to upgrade our production and research and development facilities, were $0 for the six months ended June 30, 2025, and $3.8 million for the six months ended June 30, 2024. The decrease is primarily driven by a decline in spending in tooling and equipment related to our truck programs at our Union City, IN manufacturing facility.
Previous wording
Net cash provided by financing activities during the three months ended March 31, 2025, was $34.1 million, which was primarily attributable to the issuances of Notes and Warrants under our 2024 Securities Purchase Agreement and of Common Stock under our ATM Agreement.
Current wording
Net cash provided by financing activities during the six months ended June 30, 2025, was $34.1 million, which was primarily attributable to the issuances of Notes and Warrants under our 2024 Securities Purchase Agreement and of Common Stock under our ATM Agreement. Net cash provided by financing activities during the six months ended June 30, 2024 was $3.3 million, which was primarily attributable to the issuance of Common Stock under our ATM Program offset by the payment of our 2024 Notes.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
defined below) and the 2024 Securities Purchase Agreement, is substantially limited.
Current report — wording carried from elsewhere
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 (as defined below) and the 2024 Securities Purchase Agreement, is substantially limited.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
•Furloughed employees at our Union City, IN manufacturing facility without pay.
Previous report — wording carried elsewhere
•Raised capital to fund operations through our 2024 Securities Purchase Agreement.
Previous report — wording carried elsewhere
Management plans to continue to seek additional opportunities to reduce costs and cash expenditures in a manner intended to minimize their adverse impact on our core operations. There can be no assurance that the measures described above, or any other cost-cutting 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.
Previous report — wording carried elsewhere
In addition, the terms of our existing financing arrangements impose substantial restrictions on our ability to obtain additional financing.