Workhorse Group Inc.
For the period ended Mar 31, 2026. Filed May 14, 2026.
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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.
Mar 31, 2026 · Filed May 14, 2026
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 2025-09-30; filed 2025-11-10.
0001628280-25-051161
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-14.
0001628280-26-035109
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 105 previous paragraphs and 110 current paragraphs.
28 unchanged; 27 reworded; 52 added; 49 removed; 1 previous and 3 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 (52)
Current report
Workhorse Group Inc. (“Workhorse,” or the “Company”) is a North American manufacturer of medium-duty electric trucks and buses. Our primary focus is to provide sustainable and cost-effective solutions to the commercial transportation sector. We design and manufacture all-electric vehicles, including the technology that optimizes the way that these vehicles operate. The Company’s best-in-class vehicles are designed for last-mile delivery, medium-duty operations, and a growing range of specialized applications.
Current report
We believe our all-electric commercial vehicles offer fleet operators significant benefits, which include:
Current report
•Lower total cost-of-ownership as compared to conventional gas/diesel vehicles;
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•Improved profitability through lower maintenance costs and reduced fuel expenses; and
Current report
•Decreased vehicle emissions and reduced carbon footprint.
Current report
Recent Events
Current report
Reverse Merger and Related Transactions
Current report
Motiv is a leading manufacturer of medium duty, zero-emission electric trucks and buses. Motiv produces a range of vehicles, including step vans, shuttle buses, box trucks and work trucks, all of which eliminate tailpipe CO2 emissions and particulate matter, while offering drivers and passengers a comfortable, healthier and safer ride. The Merger is intended to broaden our product portfolio and strengthen our financial position by combining complementary products, fleet dealerships and dealer networks, as well as creating operational scale and cost synergies, including as a result of the transactions described below.
Current report
The Merger was accounted for as a reverse merger, with Motiv being treated as the acquirer for accounting purposes. References to “Workhorse,” the “Company,” “we,” “us,” or “our,” when used in this Quarterly Report on Form 10-Q (this "Report") incorporate the operations of Motiv unless otherwise indicated or the context requires otherwise. See Note 2, Merger and Related Transactions, in the notes to the accompanying Condensed Consolidated Financial Statements.
Current report
Pre-Merger Motiv Indebtedness
Current report
Prior to the Closing Date of the Merger, Motive GM Holdings II LLC (“MGMH”), a Delaware limited liability company, was Motiv’s controlling stockholder and largest creditor, with all financial indebtedness of Motiv beneficially owned by MGMH or one of its affiliates. In connection with the closing of the Merger, MGMH received 6,629,800 shares of Workhorse Common Stock (the “Merger Consideration”) in partial satisfaction of the financial indebtedness of Motiv beneficially owned by MGMH or one of its affiliates, with any remaining indebtedness cancelled for no consideration, which resulted in MGMH owning 68.3% of the then issued and outstanding of our Common Stock.
Current report
Pre-Merger Workhorse Indebtedness
Current report
On December 15, 2025, in accordance with the terms of the Repayment Agreement and upon consummation of the Merger, Workhorse issued to the 2024 Note Holder rights (the “Rights”) to acquire 1,193,364 shares of Common Stock in exchange for the cancellation of the 2024 Warrants (the “Exchange”). Upon completing the redemption of the 2024 Notes (the "Repayment") and the Exchange, Workhorse had no outstanding obligations under the 2024 Notes, all of the 2024 Notes and 2024 Warrants were cancelled, and all collateral, including cash collateral, securing the 2024 Notes was released. Following the Repayment and the Exchange effective December 15, 2025, Workhorse and the 2024 Note Holder terminated the Securities Purchase Agreement to which they were parties, pursuant to which the 2024 Notes were issued and which allowed for further issuances of notes and previously served as a source of third-party financing to Workhorse (the “Securities Purchase Agreement”).
Current report
The Convertible Financing
Current report
On December 15, 2025, the parties to the Convertible Note entered into an Amended and Restated Convertible Note (the “A&R Note”) to make the obligations under the Convertible Note, as amended, unsecured obligations of Workhorse and each guarantor party thereto. As a result, the Convertible Note Security Agreement entered into when the Convertible Note was issued was terminated on the Closing Date. The Convertible Note Subsidiary Guaranty entered into when the Convertible Note was issued was amended and restated (the “A&R Convertible Note Subsidiary Guaranty”) to incorporate the termination of the Convertible Note Security Agreement.
Current report
The Sale-Leaseback Transaction
Current report
On April 25, 2026, the Company and an affiliate of MGMH entered into an agreement whereby Lessor agreed to a deferral of the Company’s monthly rental payments pursuant to the lease for the Company’s manufacturing facility in Union City, Indiana for five months beginning May 2026, with the entire deferred amount due and payable in a single lump-sum payment on or before September 30, 2026.
Current report
Post-Merger Financing
Current report
On December 15, 2025, Workhorse entered into a (i) Credit Agreement (Customer Orders) (the “Customer Order Credit Agreement”) and (ii) Credit Agreement (Cash Flow) (the “Cash Flow Credit Agreement” and together with the Customer Order Credit Agreement, the “Credit Agreements” and such transactions, collectively, the “Closing Debt Financing”), each by and among Workhorse, as borrower, certain subsidiaries of Workhorse, as guarantors, and MGMH as lender.
Current report
The Customer Order Credit Agreement provided Workhorse with up to $40.0 million to fund vehicle manufacturing in connection with Qualified Purchase Orders (as defined in the Customer Order Credit Agreement). Under the Customer Order Credit Agreement, a Qualified Purchase Order includes purchase orders entered into between Workhorse and/or one or more of its subsidiaries and a customer made on terms approved by MGMH or substantially similar to terms previously approved by MGMH pursuant to a master purchase agreement or other standard terms and conditions approved by MGMH. The amount of funds advanced by MGMH upon the receipt of an acceptable purchase order will be determined by MGMH but will not exceed 70% of the purchase price for the ordered vehicles without MGMH’s consent. The Cash Flow Credit Agreement provided
Current report
Workhorse with a line of credit with borrowing capacity of up to $10.0 million to fund its working capital requirements, including costs related to the Merger, and general corporate purposes.
Current report
Workhorse’s outstanding obligations under each Credit Agreement bear interest at a reference rate equal to the term Secured Overnight Financing Rate for a three-month tenor (“SOFR”) plus an applicable margin of 5.00%. If SOFR is unavailable pursuant to the terms of the Credit Agreements, the reference rate will be the prime rate of interest per annum last quoted by The Wall Street Journal, and the applicable margin will be 2.50% per annum. Workhorse’s obligations under the Credit Agreements mature on December 15, 2028. MGMH’s obligation to advance additional funds under the Cash Flow Credit Agreement will terminate and thereafter be at the discretion of MGMH upon the consummation by Workhorse of a PIPE transaction (as defined in the Credit Agreements) to the extent such PIPE occurs prior to the maturity date of the Cash Flow Credit Agreement. Both Credit Agreements contain customary representations and warranties, affirmative and negative covenants, and events of default, and provide for customary acceleration and remedy rights for MGMH upon the occurrence of an event of default by Workhorse.
Current report
In April 2026, we amended the Credit Agreements to increase the borrowing capacity under the Cash Flow Credit Agreement from $10.0 million to $20.0 million, and reduce the borrowing capacity under the Customer Order Credit Agreement from $40.0 million to $30.0 million.
Current report
In order to manage liquidity and operating capital, the Company entered into certain of the transactions described above, including the Convertible Financing and the Sale-Leaseback transaction, pursuant to which the Company received gross proceeds of $25.0 million. As of March 31, 2026, there was $5.0 million in principal outstanding under the A&R Note. Additionally, the Company has access to the Customer Order Credit Agreement and the Cash Flow Credit Agreement. See discussion above in Post-Merger Financing for further information on the borrowing capacity of the Credit Agreements. As of March 31, 2026, the Company had $5.0 million in outstanding borrowings and remaining availability of $35.0 million under the Customer Order Credit Agreement. As of March 31, 2026, the Company had $10.0 million in outstanding borrowings and no remaining availability under the Cash Flow Credit Agreement.
Current report
On April 1, 2026, we borrowed $7.25 million under the Customer Order Credit Agreement, and following the effectiveness of the amendment to increase the borrowing capacity, we borrowed an additional $10.0 million under the Cash Flow Credit Agreement. As of the filing date, we had $12.25 million in outstanding borrowings and remaining availability of $17.75 million under the Customer Order Credit Agreement, and we had $20.0 million in outstanding borrowings and no remaining availability under the Cash Flow Credit Agreement.
Current report
Subject to certain conditions, the Credit Agreements permit the Company to raise funds through an equity or equity-linked financing; however, the consummation of such a transaction is not probable as of the issuance date of the accompanying Condensed Consolidated Financial Statements.
Current report
The Company is actively working to evaluate financing alternatives; however, as noted above, as of the issuance date of the accompanying Condensed Consolidated Financial Statements, it is not probable that a potential equity or equity-linked financing transaction will be consummated.
Current report
Cost-saving Measures
Current report
A vital component of management’s intended plan to improve our liquidity and working capital requirements was completion of the Merger. Consummation of the Merger resulted in settlement of all of Workhorse’s obligations under the 2024 Notes, with all of the 2024 Notes and 2024 Warrants being cancelled, and all collateral, including the cash collateral, securing the 2024 Notes being released. Additionally, all indebtedness of Motiv was partially satisfied in exchange for the Merger Consideration with the balance cancelled for no consideration. Additionally, as a result of the Merger, we believe that we have the potential to (i) benefit from our and Motiv’s complementary customer bases, which include a substantial number of leading national medium duty fleets; (ii) benefit from our complementary sales and marketing strategies, which include extensive dealer relationships and an established methodology for direct sales to fleets and other customers; and (iii) achieve substantial cost synergies, including savings from reducing contract manufacturers for Motiv products by manufacturing them in the Workhorse production facility, including the transition away from contract manufacturers and shifting of production of all vehicles into the Workhorse production facility during 2026. Additionally, the combined company now has an extensive and attractive portfolio of products, including a full range of Category 4-6 trucks and buses that the Company believes will be attractive to customers.
Current report
Market Demand
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Commodities
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Supply Chain
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Inflation
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Geopolitical
Current report
Sales, net of returns and allowances for the three months ended March 31, 2026 and 2025 were $4.3 million and $1.1 million, respectively. The increase in sales of $3.2 million was driven by delivering 16 more vehicles in the first quarter of 2026 as compared to the prior year, including delivering 15 Workhorse W56 vehicles in the current year.
Current report
Cost of sales for the three months ended March 31, 2026 and 2025 were $11.8 million and $2.2 million, respectively. The increase in cost of sales of $9.6 million was primarily a result of higher sales volume as well as the higher fixed cost base of the combined manufacturing footprint, including the costs for the Workhorse manufacturing facility as well as contract manufacturing under the legacy Motiv operational structure during the quarter. Additionally, we incurred $1.5 million in higher warranty costs in the first quarter of 2026, which was primarily attributable to costs related to a retrofit campaign that is underway for certain Motiv trucks sold in Canada. Costs incurred during the quarter were higher than our original estimates, and we increased our reserves required to complete the retrofit campaign.
Current report
Selling, general and administrative expenses (“SG&A”) expenses for the three months ended March 31, 2026 and 2025 were $9.5 million and $4.3 million, respectively. The increase in SG&A of $5.2 million was primarily driven by the Merger, with costs in the first quarter of 2026 reflecting the costs of the combined company, while the costs in the prior year period only reflected the costs of Motiv’s historical operations. The main drivers of the higher costs include legal, consulting, accounting and investor relations fees, as well as higher IT costs and increased cost for D&O insurance, primarily related to being a publicly traded company in the current year, while the prior year reflected the operations of a privately held company. We also incurred higher rent costs for redundant facilities as we work to complete the Merger integration and close redundant facilities. These costs were partly offset by synergies resulting from the Merger, including the elimination of redundant headcount and other operating costs.
Current report
Research and development (“R&D”) expenses during the three months ended March 31, 2026 and 2025 were $4.1 million and $3.7 million, respectively. The increase in R&D expenses of $0.4 million was primarily driven by higher employee compensation and related expenses as we invest in R&D on key projects, including our initiative to lower the total bill of material cost of our vehicles to be in line with internal combustion engine (“ICE”) vehicles.
Current report
For the three months ending March 31, 2026 and 2025, Interest expense, net was $0.4 million and $3.6 million, respectively. The difference was primarily driven by lower outstanding debt at lower interest rates in the first quarter of 2026 as compared to the prior year. All debt outstanding as of March 31, 2025 was restructured as part of the Merger, resulting in lower debt levels at lower interest rates.
Current report
In connection with the Merger, we assumed the A&R Note that is remeasured to fair value at each reporting period. As of March 31, 2026, the estimated fair value of the A&R Note was $5.4 million. We recorded a fair value loss of $0.1 million for the three months ended March 31, 2026.
Showing the first 40 of 52 passages. Open the source sections for the rest.
Removed paragraphs (49)
Previous report
We are an American technology company with a vision to pioneer the transition to zero-emission commercial trucks. Our primary focus is to provide robust, sustainable, and cost-effective solutions to the commercial transportation sector. We design and manufacture all-electric trucks, including the technology that optimizes the way these trucks operate. We are focused on our core competency of bringing our electric delivery truck platforms to serve the last mile delivery market.
Previous report
Recent Developments
Previous 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.
Previous 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.
Previous 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.
Previous report
Merger Closing Financing
Previous 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”).
Previous report
Sale Leaseback of Union City, IN Facility
Previous report
As of September 30, 2025, the estimated fair value of the Motive Convertible Note was $5.1 million, and the aggregate principal amount outstanding was $5.0 million.
Previous report
Upon entry into the Repayment Agreement, Workhorse deposited approximately $9.9 million (the “Cash Collateral”) into the previously disclosed Lockbox Account (the “Lockbox”), with such Cash Collateral to be released to the 2024 Note Holder in connection with the Closing. The Cash Collateral will bear interest at a rate equal to 5.0% per annum. The amount of Cash Collateral released to the 2024 Note Holder in connection with the Closing will be reduced by the aggregate principal amount of 2024 Notes converted before the Closing and increased by the amount of interest accrued on the Cash Collateral before the Closing. In connection with the Closing, Workhorse will redeem all of its then outstanding obligations under the 2024 Notes, which as of September 30, 2025 is approximately $24.1 million, at 100% of the face amount, plus accrued interest (the “Repayment”). Upon making such Repayment, Workhorse shall have no outstanding obligations under the 2024 Notes.
Previous 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.
Previous 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 Motive
Previous report
Convertible Note, including the Security Agreement and the Subsidiary Guarantee, the Sale Leaseback, and the Merger and related transactions.
Previous report
On March 15, 2024, we entered into a securities purchase agreement (the “2024 Securities Purchase Agreement”) with an institutional investor (the “Investor”) under which we agreed to issue and sell, in one or more registered public offerings by the Company directly to the Investor in multiple tranches over a period beginning on March 15, 2024, (i) senior secured convertible notes for up to an aggregate principal amount of $139.0 million (the “2024 Notes”) that are convertible into shares of the Company’s common stock, par value of $0.001 per share (the “Common Stock”) and (ii) warrants (the “ 2024 Warrants”) to purchase shares of Common Stock.
Previous report
Pursuant to the 2024 Securities Purchase Agreement, during the three and nine months ended September 30, 2025, the Investor released approximately $7.0 million and $15.8 million from the lockbox account, respectively, and we had received net proceeds of approximately $6.8 million and $15.2 million, respectively, in connection with the Tenth Additional 2024 Note.
Previous report
On February 12, 2025, we issued a 2024 Note in aggregate principal amount of $35.0 million (the “Tenth Additional 2024 Note”) is governed by a lockbox letter agreement entered into between the Company and the Investor (the “Lockbox Letter”). Pursuant to the Lockbox Letter, the net proceeds of $30.6 million, after a 12.5% original issue discount and related fees and expenses, were deposited into a lockbox account under the control of the collateral agent under the 2024 Securities Purchase Agreement. Funds may be released from the lockbox account from time to time (i) in an amount corresponding to the principal amount converted, if the Investor converts any portion of the Tenth Additional 2024 Note; (ii) in the amount of $2.6 million each calendar month, if we satisfy the conditions of a Market Release Event (as defined in the Lockbox Letter), including minimum Common Stock price and trading volume conditions; or (iii) otherwise, with the consent of the Investor. As of November 7, 2025, the 2024 Note Holder had released approximately $15.8 million from the lockbox account, and we had received net proceeds of approximately $15.2 million. Although we expect that we will receive additional funds held in the lockbox account during the term of the Tenth Additional 2024 Note, it is possible that the foregoing events will not occur with respect to some or all of the principal amount of the Tenth Additional 2024 Note and that, accordingly, we will not be able to draw any or all of the remaining funds in the lockbox account.
Previous report
Although the 2024 Securities Purchase Agreement contemplates the issuance of up to $61.5 million of additional 2024 Notes, the terms of our existing financing arrangements impose substantial restrictions on our ability to obtain additional financing. Accordingly, our ability to obtain liquidity through public sales of securities, including pursuant to our ATM Agreement and the 2024 Securities Purchase Agreement, is substantially limited.
Previous report
These conditions raise substantial doubt regarding our ability to continue as a going concern for a period of at least one year from the date of issuance of the accompanying Condensed Consolidated Financial Statements. On August 15, 2025, the Company entered into the Recent Transactions, which includes repayment of the 2024 Notes upon closing of the Merger. For more information, see “Recent Developments” above.
Previous report
Liquidity Improvement Measures
Previous 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 nine months ended September 30, 2025.
Previous report
In addition, we significantly reduced other operating costs during the first nine months of 2025 compared to the prior year period including, but not limited to, reductions in third-party consulting arrangements, lower research and development activities and associated internal and external costs related to new vehicle program development, consolidation of activities within back-office functions to take advantage of associated personnel attrition and other cost control actions.
Previous 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.
Previous report
We also substantially decreased the procurement of raw materials for future commercial vehicle production, which has notably affected the near-term production and availability of our W56 vehicle platform. We have made substantial progress on our outstanding accounts payable but continue to be overdue on payments to certain suppliers. Certain purchased components for our trucks have supplier long-lead times of up to 24 weeks. While we are focused on the sale of existing inventory on hand, in the event of an increase in market demand for our W56 vehicle, we may not have sufficient cash resources to fund working capital requirements without support from our customer and supplier base, or the availability of additional third-party financing arrangements. We continue to work with certain of our suppliers to extend or restructure the payment terms of its outstanding accounts payable as well as terms and conditions related to the purchase of materials necessary for future production.
Previous report
On August 15, 2025, the Company entered into the Recent Transactions. For more information, see “Recent Developments” above.
Previous report
Sales, net of returns and allowances for the three months ended September 30, 2025 and 2024 were $2.4 million and $2.5 million, respectively. The decrease in sales of $0.1 million was primarily due to lower sales of approximately $2.3 million related to the sale of fewer trucks in 2025 compared to the same period in 2024, offset by an increase of $2.2 million related to the recognition of seven vehicles from deferred revenue. Sales, net of returns and allowances for the nine months ended September 30, 2025, and 2024 were $8.7 million and $4.7 million, respectively. The increase in sales of $4.0 million was primarily due to the increased delivery of W56 trucks in the current period, partially offset by the Aero divestiture and W4 CC truck sales in the prior period.
Previous report
Cost of sales for the three months ended September 30, 2025 and 2024 were $10.1 million and $6.6 million, respectively. The increase in cost of sales of $3.5 million was primarily a result of an increase in inventory excess and obsolescence reserve of $3.3 million.
Previous report
Cost of sales for the nine months ended September 30, 2025 and 2024 were $28.3 million and $21.4 million, respectively. The increase in cost of sales of $6.9 million was primarily due to an increase in sales volume as well as a $1.7 million increase in warranty reserve expenses and a $3.3 million increase in inventory excess and obsolescence reserve, which was offset by a $1.8 million decrease in direct and indirect labor costs.
Previous report
Selling, general and administrative expenses (“SG&A”) expenses for the three months ended September 30, 2025 and 2024 were $7.8 and $7.7 million, respectively. The increase in SG&A of $0.1 million was primarily driven by a $3.6 million increase in consulting and legal expenses due to the proposed Merger offset by a $2.9 million decrease in employee compensation and related expenses, decrease of $0.2 in marketing and trade show related expenses, and a decrease of $0.3 in IT-related expenses.
Previous report
SG&A expenses for the nine months ended September 30, 2025 and 2024 were $20.4 million and $33.9 million, respectively. The decrease in SG&A of $13.5 million was primarily driven by a $10.2 million decrease in employee compensation and related expenses due to lower headcount, a decrease of $1.3 million in insurance expenses, a decrease in marketing expenses of $0.6 million, and a decrease in IT-related expenses of $1.2 million.
Previous report
Research and development (“R&D”) expenses for the three months ended September 30, 2025 and 2024 were $1.1 million and $2.3 million, respectively. The decrease in R&D expenses of $1.2 million was primarily driven by a $0.3 million decrease in employee compensation and related expenses due to lower headcount, a $0.5 million decrease in prototype part expenses and $0.3 million decrease in consulting and professional services expenses.
Previous report
Research and development expenses for the nine months ended September 30, 2025 and 2024 were $3.9 million and $7.8 million, respectively. The decrease in R&D expenses of $3.9 million was primarily driven by the decrease in employee compensation and related expenses due to lower headcount and cost saving measures and the successful completion of the W56 initial design and production of the W56 and the W56 208-inch wheelbase truck program.
Previous report
Interest expense, net for the three months ending September 30, 2025 and 2024 was $0.2 million and $3.0 million, respectively. The difference was primarily driven by higher financing fees related to the 2024 Notes recognized in the prior year period compared to the current period.
Previous report
Interest expense, net for the nine months ended September 30, 2025 and 2024 was $6.0 million and $6.2 million, respectively. The difference was primarily driven by higher financing fees related to the 2024 Notes recognized in the prior year period compared to current period.
Previous report
As September 30, 2025, the estimated fair value of the 2024 Notes totaled $27.1 million and the estimated fair value of the Motive Convertible Note was $5.1 million.
Previous report
During the three and nine months ended September 30, 2025, the Investor converted $19.0 million and $38.3 million fair value of principal into Common Stock, respectively, and we recorded a $1.4 million fair value net loss and $8.5 million fair value net gain on conversion in the Condensed Consolidated Statements of Operations, respectively. During the three months ended September 30, 2025 and 2024, we recorded a $2.9 million fair value net loss and a $5.3 million fair value net loss, respectively, in the Condensed Consolidated Statements of Operations related to the 2024 Notes. For the nine months ended September 30, 2025 and 2024, we recorded a $7.8 million fair value net loss and a $8.9 million fair value net loss, respectively, in the Condensed Consolidated Statements of Operations related to the 2024 Notes.
Previous report
As September 30, 2025, the estimated fair value of the 2024 Warrants totaled $10.0 million.
Previous report
During the three months ended September 30, 2025 and 2024, we recognized a net fair value loss of $6.8 million and a net fair value loss of $2.6 million, respectively, in the Condensed Consolidated Statements of Operations related to the 2024 Warrants. During the nine months ended September 30, 2025 and 2024, we recognized a net fair value loss of $4.2 million and a net fair value loss of $7.1 million, respectively, in the Condensed Consolidated Statements of Operations related to the 2024 Warrants.
Previous report
Gain on sale of assets
Previous report
During the three and nine months ended September 30, 2025, we recognized a gain on sale of assets of $13.8 million primarily related to the Sale Leaseback of our Union City, IN Facility.
Showing the first 40 of 49 passages. Open the source sections for the rest.
Reworded paragraphs (27)
Previous wording
We continue to seek opportunities to grow the business organically, and by expanding relationships with existing and new customers. We believe we are well positioned to take advantage of long-term opportunities and continue our efforts to bring product innovations to market.
Current wording
customers and dealers. We believe we are well positioned to take advantage of long-term opportunities and continue our efforts to bring product innovations to market.
Previous wording
Merger Agreement with Motiv Power Systems, Inc.
Current wording
On December 15, 2025 (the “Closing Date”), we completed our merger with Motiv Power Systems, Inc. (“Motiv”), pursuant to which Motiv became our indirect, wholly owned subsidiary (the “Merger”).
Previous wording
Waiver, Repayment and Exchange Agreement
Current wording
The Waiver, Repayment and Exchange Agreement
Previous wording
On August 15, 2025, Workhorse entered into a Waiver, Repayment and Exchange Agreement (the “Repayment Agreement”) by and among Workhorse and the investors party thereto (collectively, the “2024 Note Holder”).
Current wording
On August 15, 2025, in connection with the contemplated Merger, Workhorse entered into a Waiver, Repayment and Exchange Agreement (the “Repayment Agreement”) by and among Workhorse and the investors party thereto (collectively, the “2024 Note Holder”) to (i) redeem all of Workhorse’s outstanding obligations under the notes issued to the 2024 Note Holder (the “2024 Notes”) and (ii) cancel the warrants issued to the 2024 Note Holder (the “2024 Warrants”) on the Closing Date.
Previous wording
On August 15, 2025, Workhorse issued to an affiliate of the Motiv Investor (the “Convertible Note Holder”) a Subordinated Secured Convertible Note (the “Motive Convertible Note”) with an aggregate original principal amount of $5.0 million (the “Convertible Financing”). The Motive Convertible Note was issued without original issue discount, and Workhorse received $5.0 million in proceeds, prior to fees and expenses, which Workhorse plans to use for the Repayment and other general corporate purposes. The Motive Convertible Note bears interest at a rate of 8.0% per annum, subject to adjustment as set forth in the Motive Convertible Note, compounded quarterly and increasing the principal outstanding under the Motive Convertible Note. The Motive Convertible Note is a secured obligation of Workhorse, ranking junior to the 2024 Notes (as defined below) and senior to all other indebtedness and, subject to certain limitations, is unconditionally guaranteed by each of Workhorse’s subsidiaries, pursuant to the terms of a certain Subsidiary Guarantee and secured by substantially all of the assets of Workhorse and its subsidiaries pursuant to a certain Security Agreement.
Current wording
On August 15, 2025, Workhorse issued to MGMH a Subordinated Secured Convertible Note (the “Convertible Note”) with an aggregate original principal amount of $5.0 million (the “Convertible Financing”). The Convertible Note was issued without original issue discount, and Workhorse received $5.0 million in proceeds, which was used for general corporate purposes. The Convertible Note bears interest at a rate of 8.0% 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 was originally a secured obligation of Workhorse, ranking senior to all other indebtedness and, subject to certain limitations, is unconditionally guaranteed by each of Workhorse’s subsidiaries and secured by substantially all of the assets of Workhorse and its subsidiaries.
Previous wording
Workhorse’s obligations under the Motive Convertible Note mature on the earliest of (i) the date a termination fee is due to Motiv under the Merger Agreement, (ii) the date that is three months following the termination of the Merger Agreement pursuant to certain provisions of the Merger Agreement, and (iii) the date that is 24 months after the date of issuance. Following the Closing of the Merger, the Motive Convertible Note will be automatically convertible into a number shares of Workhorse stock equal to the principal amount then outstanding divided by 90% of the price per share paid by investors in the Equity Financing.
Current wording
Workhorse’s obligations under the Convertible Note mature 24 months after the date of issuance. The Convertible Note is automatically convertible into a number of shares of Workhorse Common Stock equal to the principal amount then outstanding divided by 90% of the price per share paid by investors in a bona fide transaction or series of transactions with the principal purpose of raising capital, pursuant to which the Company issues and sells common stock or preferred stock that occurs after the Closing Date of the Merger.
Previous wording
On August 15, 2025, in connection with the sale and leaseback transaction (the “Sale Leaseback”), a subsidiary of Workhorse, Workhorse Motor Works Inc. entered into a Purchase and Sale Agreement with an affiliate of the Motiv Investor (the “Property Purchaser”) for the sale of its Union City, Indiana manufacturing facility and campus (the “Property”), excluding any equipment and any fixtures solely used in the production of vehicles, to the Property Purchaser for a purchase price, before fees and expenses, of $20 million. The sale resulted in a gain of $13.8 million, recorded as a Gain on sale of assets in the Condensed Consolidated Statements of Operations. Simultaneously with the sale of the Property, the Company entered into a 20-year leaseback arrangement classified as an operating lease under ASC 842. Upon commencement of the lease, the Company recognized a right-of-use asset and corresponding lease liability of $16.8 million. Workhorse plans to use the proceeds for the Repayment (as defined below), to pay transaction expenses, and for general corporate purposes.
Current wording
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 MGMH (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 $20.0 million. Workhorse used the proceeds to redeem a portion of the 2024 Notes pursuant to the Repayment Agreement, to pay Merger transaction expenses, and for general corporate purposes.
Previous wording
As discussed more fully under Note 1, Summary of Business and Significant Accounting Principles; Liquidity, Capital Resources, and Going Concern, above, and Liquidity and Capital Resources; Going Concern, in the notes to our unaudited Condensed Consolidated Financial Statements included with this Quarterly Report on Form 10-Q, our ability to continue as a going concern is contingent upon the outcome of the Recent Transactions, as well as the successful execution of management’s intended plan over the next twelve months to improve the Company’s liquidity and working capital requirements.
Current wording
As discussed more fully under Note 1, Summary of Business and Significant Accounting Principles; Liquidity, Capital Resources, and Going Concern, above, and Liquidity and Capital Resources; Going Concern, in the notes to our Unaudited Condensed Consolidated Financial Statements included with this Report, our ability to continue as a going concern is contingent upon successful execution of management’s intended plan over the next twelve months to improve the Company’s liquidity and working capital requirements.
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 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.
Current wording
Management plans to continue to work to achieve expected synergies from the Merger. 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 nine months of 2025, we continued executing our strategic product roadmap for our electric truck offerings, including the production of the W56 and the development of the W56 208-inch wheelbase truck program in both strip chassis and step van variants. We continued to electrify the fleet of trucks being used in our Stables by Workhorse initiative, which operates FedEx Ground delivery routes in the greater Cincinnati, OH area. The electrification of the fleet provides us with firsthand data on the benefits and challenges of independent fleet operators experience while executing last-mile delivery operations. The initiative also provides valuable insights into how our customers can plan for and manage the transition to EV operations, including how to develop adequate charging infrastructure, training and maintenance services. In addition to our ongoing production ramp in 2025, we intend to continue to generate demand and brand awareness by improving our trucks’ performance and functionality, and by developing new truck programs, including new W56 variants. We expect to continue to benefit from ongoing electrification of the commercial truck market and in particular “last mile delivery” sector.
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. We have plans to continue to reduce the total cost of and enhance the design and performance of our current product lineup, as well as design new vehicles as the market evolves. We intend to develop a proprietary Class 5/6 cab chassis and expect that this product will be able to be used for dry box, refrigeration, stake bed, utility and shuttle purposes. 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 2026, 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
We continue to monitor macroeconomic conditions to remain flexible and to optimize and evolve our business as appropriate, in this uncertain environment and we will endeavor to project demand and infrastructure requirements globally and deploy our production, workforce and other resources accordingly.
Current wording
We continue to monitor macroeconomic conditions to remain flexible and to optimize and evolve our business as appropriate, in this tumultuous environment and we will endeavor to project demand and infrastructure requirements globally and deploy our production, workforce and other resources accordingly.
Previous 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 may also impact a small percentage of customers. Weighing against these real and potential additional headwinds are the introduction of new incentive programs in some states as well as increased incentives in New York’s, New York Truck Voucher Incentive Program (“NYTVIP”).
Current wording
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 rollouts of electric truck charging infrastructure, nationwide. Delayed governmental approvals in certain states and slower than expected proliferation of charging stations across the country have also adversely impacted demand. We expect these delays and the current and developing regulatory landscape in the United States to continue to slow adoption in 2026. The dynamic regulatory landscape is a significant consideration for our operations and strategic planning and remains uncertain. Proposed changes to California’s Hybrid and Zero-Emission Truck and Bus Voucher Incentive Program (“HVIP”) could negatively impact demand, if implemented. The removal of the Federal 45W tax-rebate for commercial vehicles may also impact a small percentage of customers. Weighing against these real and potential additional headwinds are the introduction of new incentive programs in some states as well as increased incentives in New York’s, New York Truck Voucher Incentive Program (“NYTVIP”) and Washington State’s Zero-Emission Incentive Program (“WAZIP”).
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, tariff measures under the current Presidential Administration could have raised the cost of imported automotive parts and raw materials. Although these tariffs are evolving, we are actively monitoring developments and evaluating potential impacts on our supply chain, production costs, and pricing strategies.
Current wording
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 shifts in supply and demand have caused uneven price trends across commodities, but overall, we anticipate higher material costs. In addition, tariff measures and trade policy under the presidential administration have raised the cost of imported automotive parts and raw materials. The current U.S. trade policy, including tariffs, is dynamic, and we are actively monitoring developments and evaluating potential impacts on our supply chain, production costs, and pricing strategies, in addition to the impacts that the war in Iran is having on commodity prices as a result of rising energy costs and supply and supply chain disruptions.
Previous wording
Supply Chain. We continue to develop relationships with suppliers of key parts, components and raw materials to be used in the manufacture of our products such as batteries, electronics, and truck chassis that are sourced from suppliers across the world. As we continue to execute on our new truck programs, we will continue to identify supplier relationships and truck program synergies which may allow us to take advantage of pricing efficiencies from economies of scale. Where available, we will utilize multiple supply sources for key parts, and we will work to qualify multiple supply sources to achieve pricing efficiencies and minimize potential production risks related to supply chain. As previously disclosed, we are currently working with certain of our vendors to extend or restructure the payment terms of past due accounts payable balances. We are also currently in litigation with one of our battery suppliers, Coulomb Solutions Inc. For more information concerning this matter, see Note 15, Commitments and Contingenciesto the Condensed Consolidated Financial Statements included in this Form 10-Q.
Current wording
We continue to develop relationships with suppliers of key parts, components and raw materials to be used in the manufacture of our products such as batteries, electronics, and truck chassis that are sourced from suppliers across the world. As we continue to execute on our new truck programs, we will continue to identify supplier relationships and truck program synergies which may allow us to take advantage of pricing efficiencies from economies of scale. Where available, we will utilize multiple supply sources for key parts, and we will work to qualify multiple supply sources to achieve pricing efficiencies and minimize potential production risks related to supply chain. As previously disclosed, we are currently working with certain of our vendors to extend or restructure the payment terms of past due accounts payable balances. We were in litigation with one of our battery suppliers, Coulomb Solutions Inc., but entered into a settlement agreement in April 2026. For more information concerning this matter, see Note 15, Commitments and Contingencies, and Note 16, Subsequent Events, in the notes to the accompanying Condensed Consolidated Financial Statements.
Previous wording
Inflation. Inflation continues to impact our operations, resulting from both supply and demand imbalances as economies continue to face constraints as well as the impact on the availability and cost of energy and other commodities as a result of the ongoing conflicts in Ukraine and Israel. We are seeing a near-term impact on our business due to inflationary pressure. In an effort to dampen inflationary pressures, central bank interest rates continue to be higher, which would likely raise the cost of any financing the Company may undertake in the future.
Current wording
Inflation continues to impact our operations, resulting from both supply and demand imbalances as economies continue to face constraints as well as the impact on the availability and cost of energy and other commodities as a result of the ongoing war in Ukraine, the war in Iran, and other tensions in the Middle East. While inflation had moderated in 2025, to the extent inflation or interest rates rise, we would experience an impact on our business, resulting in higher input costs and increasing the cost of any financing the Company may undertake in the future.
Previous 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.
Current wording
Our operations and results may be impacted due to uncertainty of the political environment and the current presidential administration. The administration’s policies have negatively 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
The following section provides a narrative discussion about our financial condition and results of operations. The narrative should be read in conjunction with our Condensed Consolidated Financial Statements and related Notes thereto included in Item 1 of this Form 10-Q and in conjunction with our 2024 Form 10-K.
Current wording
The following section provides a narrative discussion about our financial condition and results of operations. The narrative should be read in conjunction with our Condensed Consolidated Financial Statements and related Notes thereto included in Item 1 of this Report and in conjunction with our 2025 Form 10-K.
Previous wording
Change in fair value adjustment on notes
Current wording
Change in fair value of convertible note
Previous wording
We have financed our operations primarily through sales of equity securities and issuance of debt. We have utilized these funds for R&D to fund designing, building and delivering trucks to customers and for working capital purposes.
Current wording
We have financed our operations primarily through sales of equity securities and issuances of debt. We have utilized this capital for R&D to fund designing, building and delivering trucks to customers and for working capital purposes.
Previous wording
We had sales net of returns and allowances of $8.7 million, incurred a net loss of $43.3 million and used $25.0 million of cash in operating activities during the nine months ended September 30, 2025. As of September 30, 2025, we had $12.7 million of cash and cash equivalents and $25.5 million in restricted cash.
Current wording
We had sales of $4.3 million, incurred a net loss of $19.9 million and used $16.5 million of cash in operating activities during the three months ended March 31, 2026. As of March 31, 2026, we had $0.6 million of cash and cash equivalents and $0.7 million in restricted cash.
Previous wording
As a result of our recurring losses from operations, accumulated deficit, projected capital needs, and delays in bringing our trucks to market and lower than expected market demand, management determined that substantial doubt exists regarding our ability to continue as a going concern within one year after the issuance date of the accompanying Condensed Consolidated Financial Statements. Our ability to continue as a going concern is contingent upon the outcome of the Recent Transactions, as well as the successful execution of management’s intended plan over the next twelve months to improve the Company’s liquidity and working capital, which includes, but is not limited to:
Current wording
As a result of our recurring losses from operations, accumulated deficit, projected capital needs, delays in bringing our vehicles to market and lower than expected market demand, management determined that substantial doubt exists regarding our ability to continue as a going concern within one year after the issuance date of the accompanying Condensed Consolidated Financial Statements. Our ability to continue as a going concern is contingent upon successful execution of management’s intended plan over the next twelve months to improve our liquidity and working capital, which includes, but is not limited to:
Previous wording
•Generating revenue by increasing sales of our trucks and other services.
Current wording
•Generating revenue by increasing sales of our vehicles and other services;
Previous wording
•Reducing expenses and limiting non-contracted capital expenditures.
Current wording
•Reducing redundant expenses and limiting non-strategic capital expenditures;
Previous wording
It is essential that we have access to capital as we bring our existing line of trucks to market, scale up production and sales of such trucks and continue to develop additional variations of our existing trucks and our next generation of trucks. There is no assurance that we will be successful in implementing management’s plans to generate liquidity to fund these activities or other aspects of our short and long-term strategy, that our projections of our future capital needs will prove accurate or that any additional funding would be available or sufficient to continue operations in future periods.
Current wording
It is essential that we have access to capital as we bring our existing line of vehicles to market, scale up production and sales of such vehicles and continue to develop additional variations of our existing vehicles and our next generation of vehicles. There is no assurance that we will be successful in implementing management’s plans to generate liquidity to fund these activities or other aspects of our short and long-term strategy, that our projections of our future capital needs will prove accurate or that any additional funding would be available or sufficient to continue operations in future periods.
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, and the Sale Leaseback and the Motive Convertible Note. As discussed more fully above, as of September 30, 2025, approximately $17.0 million of such proceeds remain in a lockbox account and will be available to us only upon satisfaction or waiver of the conditions described above. Accordingly, there can be no assurance that any or all of such proceeds will be available to us on a timely basis or ever.
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 external financing. We currently expect that our primary source of financing will be the Credit Agreements and a potential equity or equity-linked financing.
Previous wording
Because of the foregoing, our ability to obtain additional proceeds from financing is extremely limited under current conditions, and if we are unable to obtain such proceeds, we may need to further adjust our operations and seek protection by filing a voluntary petition for relief under the Bankruptcy Code. If this were to occur, the value available to our various stakeholders, including our creditors and stockholders, is uncertain and trading prices for our securities may bear little or no relationship to the actual recovery, if any, by holders of our securities in bankruptcy proceedings, if any.
Current wording
Because of the foregoing, our ability to obtain additional proceeds from financing is extremely limited under current conditions, and if we are unable to obtain such proceeds, we may need to further adjust our operations and seek protection by filing a voluntary petition for relief under the Bankruptcy Code. If this were to occur, the value available to our various stakeholders, including our creditors and stockholders, is uncertain and trading prices for our securities may bear little or no relationship to the actual recovery, if any, by holders of our securities in bankruptcy proceedings, if any. These conditions raise substantial doubt regarding our ability to continue as a going concern for a period of at least one year from the date of issuance of these accompanying Condensed Consolidated Financial Statements.
Previous wording
During the nine months ended September 30, 2025 and 2024, net cash used in operating activities was $25.0 million and $40.1 million, respectively. The decrease in net cash used in operations was primarily attributable to a decrease in spend related to inventory and cost saving measures as we slowed our production due to lower than anticipated sales. The decrease included a $12.9 million decrease in employee compensation and related expenses, excluding non-cash stock-based compensation, resulting from our reduction in force actions.
Current wording
During the three months ended March 31, 2026 and 2025, net cash used in operating activities was $16.5 million and $12.5 million, respectively. The increase in net cash used in operations was primarily attributable to higher net losses in the first quarter of 2026 as compared to the prior year.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
We continue to seek opportunities to grow our business organically, and by expanding relationships with existing and new
Current report — wording carried from elsewhere
Workhorse’s obligations under the Credit Agreements are senior secured obligations of Workhorse, ranking senior to all other indebtedness and, subject to certain limitations, are unconditionally guaranteed by each of Workhorse’s subsidiaries, pursuant to the terms of the Credit Agreements and secured by substantially all of the assets of Workhorse and its subsidiaries pursuant to a certain Security Agreement (the “Security Agreement”). Payments under the Cash Flow Credit Agreement are effectively subordinated to payments under the Customer Order Credit Agreement pursuant to the waterfall in the Security Agreement.
Current report — wording carried from elsewhere
Change in fair value of stock rights
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Change in fair value adjustment on warrants