Xos, Inc.

Previous wording

On August 8, 2025, the Company and Aljomaih amended the Convertible Note primarily (i) to provide for payment of Interest Shares with respect to all interest accrued through the initial maturity date, and (ii) to change the scheduled repayment of principal from all at once on August 11, 2025, to spread over ten quarterly installments beginning November 11, 2025 and ending February 11, 2028. See Part II, Item 5 — Other Information of this Report. Management plans to continue to seek opportunities to reduce costs and, in particular, cash expenditures, in a manner intended to minimize their adverse impact on our core operations. However, 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.

Current wording

On August 8, 2025, the Company and Aljomaih amended the Convertible Note primarily (i) to provide for payment of Interest Shares with respect to all interest accrued through the initial maturity date, and (ii) to change the scheduled repayment of principal from all at once on August 11, 2025, to spread over ten quarterly installments beginning November 11, 2025 and ending February 11, 2028. See Note 9— Convertible Notes of this Report. Management plans to continue to seek opportunities to reduce costs and, in particular, cash expenditures, in a manner intended to minimize their adverse impact on our core operations. However, 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.

Previous wording

During the three months ended June 30, 2025, we delivered 128 vehicles, 3 Hubs and 4 powertrains. During the three months ended June 30, 2024, we delivered 78 vehicles, 4 Hubs and 8 powertrains. During the three months ended June 30, 2025, we generated $17.1 million in revenue (or 93% of revenue) in vehicle sales, $0.9 million (or 5% of revenue) in powertrain and Hub sales, $0.2 million (or 1% of revenue) in other product revenue, and $0.2 million (or 1% of revenue) in ancillary revenue. During the three months ended June 30, 2024, we generated $13.1 million in revenue (or 85% of revenue) from vehicle sales, $1.4 million (or 9% of revenue) in powertrain and Hub sales, $0.6 million (or 4% of revenue) in other product revenue, and $0.3 million (or 2% of revenue) from ancillary revenue.

Current wording

During the three months ended September 30, 2025, we delivered 98 vehicles (including leases) and 32 powertrains & Hubs. During the three months ended September 30, 2024, we delivered 78 vehicles and 16 powertrains & Hubs. During the three months ended September 30, 2025, we generated $13.7 million in revenue (or 83% of revenue) in vehicle sales, $2.6 million (or 16% of revenue) in powertrain & Hub sales, $0.1 million (or 1% of revenue) in other product revenue, and $0.1 million (or 0% of revenue) in ancillary revenue. During the three months ended September 30, 2024, we generated $12.1 million in revenue (or 77% of revenue) from vehicle sales, $2.8 million (or 18% of revenue) in powertrain & Hub sales, $0.1 million (or 1% of revenue) in other product revenue, and $0.7 million (or 4% of revenue) from ancillary revenue.

Previous wording

During the six months ended June 30, 2025, we delivered 150 vehicles, 8 Hubs and 6 powertrains. During the six months ended June 30, 2024, we delivered 138 vehicles, 4 Hubs and 10 powertrains. During the six months ended June 30, 2025, we generated $20.7 million in revenue (or 85% of revenue) in vehicle sales, $2.5 million (or 10% of revenue) in powertrain and Hub sales, $0.6 million (or 3% of revenue) in other product revenue, and $0.5 million (or 2% of revenue) in ancillary revenue. During the six months ended June 30, 2024, we generated $24.7 million in revenue (or 86% of revenue) from vehicle sales, $1.8 million (or 6% of revenue) in powertrain and Hub sales, $1.3 million (or 4% of revenue) in other product revenue, and $0.9 million (or 3% of revenue) from ancillary revenue.

Current wording

13% of revenue) in powertrain & Hub sales, $0.7 million (or 2% of revenue) in other product revenue, and $0.5 million (or 1% of revenue) in ancillary revenue. During the nine months ended September 30, 2024, we generated $36.9 million in revenue (or 83% of revenue) from vehicle sales, $4.7 million (or 10% of revenue) in powertrain & Hub sales, $1.4 million (or 3% of revenue) in other product revenue, and $1.6 million (or 4% of revenue) from ancillary revenue.

Previous wording

Currently, we conduct business through one operating segment. We are an early-stage growth company with minimal commercial operations and our activities to date have been conducted primarily within North America. For more information about our basis of operations, refer to Note 1 - Description of Business in the accompanying unaudited notes to condensed consolidated financial statements for more information.

Current wording

Currently, we conduct business through one operating segment. We are an early-stage growth company with minimal commercial operations and our activities to date have been conducted primarily within North America. For more information about our basis of operations, refer to Note 1 - Description of Business in the accompanying unaudited notes to condensed consolidated financial statements.

Previous wording

Cost of goods sold includes materials and other direct costs related to production of our vehicles, including components and parts, batteries, direct labor costs and manufacturing overhead, among others. Cost of goods sold also includes material and other direct costs related to the production and assembly of powertrains and battery packs as well as materials and other costs incurred related to charging infrastructure installation. Materials include inventory purchased from suppliers, as well as assembly components that are assembled by company personnel, including allocation of stock-based compensation expense. Direct labor costs relate to the wages of those individuals responsible for the assembly of vehicles, powertrain units, Hubs and batteries delivered to customers. Cost of goods sold also includes depreciation expense on property and equipment related to cost of goods sold activities, calculated over the estimated useful life of the property and equipment on a straight-line basis. Upon property and equipment retirement or disposal, the cost of the asset disposed, and the related accumulated depreciation from the accounts and any gain or loss is reflected in the unaudited condensed consolidated statements of operations and comprehensive loss, allocated to cost of goods sold.

Current wording

Cost of goods sold includes materials and other direct costs related to production of our vehicles, including components and parts, batteries, direct labor costs and manufacturing overhead, among others. Cost of goods sold also includes material and other direct costs related to the production and assembly of powertrains and battery packs as well as materials and other costs incurred related to charging infrastructure installation. Materials include inventory purchased from suppliers, as well as assembly components that are assembled by company personnel, including allocation of stock-based compensation expense. Direct labor costs relate to the wages of those individuals responsible for the assembly of vehicles, powertrain units, Hubs and batteries delivered to customers. Cost of goods sold also includes depreciation expense on property and equipment related to cost of goods sold activities, calculated over the estimated useful life of the property and equipment on a straight-line basis. Upon property and equipment retirement or disposal, the cost of the asset disposed, and the related accumulated depreciation from the accounts and any gain or loss is reflected in the unaudited condensed consolidated statements of operations and comprehensive income (loss), allocated to cost of goods sold.

Previous wording

General and administrative (“G&A”) expense consists of personnel-related expenses, outside professional services, including legal, audit and accounting services, as well as expenses for facilities, non-sales related travel, and general office supplies and expenses. Personnel-related expenses consist of salaries, benefits, allocations of stock-based compensation, and associated payroll taxes. Overhead items including rent, insurance, utilities, and other items are included in G&A expense. G&A expense also includes depreciation expense on property and equipment related to G&A activities, calculated over the estimated useful life of the property and equipment on a straight-line basis. Upon property and equipment retirement or disposal, the cost of the asset disposed, and the related accumulated depreciation from the accounts and any gain or loss is reflected in the unaudited condensed consolidated statements of operations and comprehensive loss, allocated to G&A.

Current wording

General and administrative (“G&A”) expense consists of personnel-related expenses, outside professional services, including legal, audit and accounting services, as well as expenses for facilities, non-sales related travel, and general office supplies and expenses. Personnel-related expenses consist of salaries, benefits, allocations of stock-based compensation, and associated payroll taxes. Overhead items including rent, insurance, utilities, and other items are included in G&A expense. G&A expense also includes depreciation expense on property and equipment related to G&A activities, calculated over the estimated useful life of the property and equipment on a straight-line basis. Upon property and equipment retirement or disposal, the cost of the asset disposed, and the related accumulated depreciation from the accounts and any gain or loss is reflected in the unaudited condensed consolidated statements of operations and comprehensive income (loss), allocated to G&A.

Previous wording

Other expense, net primarily includes interest expense for our equipment leases and interest expense related to our financing obligations, including the amortization for debt discount and issuance costs, partially offset by income from the sublease of our Los Angeles, California, office space.

Current wording

Other (expense) income, net primarily includes interest expense for our equipment leases and interest expense related to our financing obligations, including the amortization for debt discount and issuance costs, offset by gains from the termination of equipment leases and income from the sublease of our Los Angeles, California, office space.

Previous wording

Comparison of the Three and Six Months Ended June 30, 2025 and 2024

Current wording

Comparison of the Three and Nine Months Ended September 30, 2025 and 2024

Previous wording

Our total revenues increased by $2.9 million, or 18%, from $15.5 million in the three months ended June 30, 2024 to $18.4 million in the three months ended June 30, 2025, primarily driven by an increase in unit sales offset by a decrease in average selling price resulting from product mix. During the three months ended June 30, 2025, we sold 128 vehicles, 3 Hubs and 4 powertrains, compared to 78 vehicles, 4 Hubs and 8 powertrains during the three months ended June 30, 2024.

Current wording

Our total revenues increased by $0.7 million, or 4%, from $15.8 million in the three months ended September 30, 2024 to $16.5 million in the three months ended September 30, 2025, primarily driven by an increase in unit sales offset by a decrease in average selling price resulting from product mix. During the three months ended September 30, 2025, we sold 98 vehicles and 32 powertrains & Hubs, compared to 78 vehicles and 16 powertrains & Hubs during the three months ended September 30, 2024.

Previous wording

Our total revenues decreased by $4.4 million, or 15%, from $28.7 million in the six months ended June 30, 2024 to $24.3 million in the six months ended June 30, 2025, primarily driven by product mix, resulting in a decrease in average selling price. During the six months ended June 30, 2025, we sold 150 vehicles, 8 Hubs and 6 powertrains, compared to 138 vehicles, 4 Hubs, and 10 powertrains during the six months ended June 30, 2024.

Current wording

Our total revenues decreased by $3.7 million, or 8%, from $44.5 million in the nine months ended September 30, 2024 to $40.8 million in the nine months ended September 30, 2025, primarily driven by product mix, resulting in a decrease in average selling price. During the nine months ended September 30, 2025, we sold 248 vehicles and 46 powertrains & Hubs, compared to 216 vehicles and 30 powertrains & Hubs during the nine months ended September 30, 2024.

Previous wording

Revenue for thesix months ended June 30, 2025 and 2024 consisted of the following (dollars in thousands):

Current wording

Revenue for thenine months ended September 30, 2025 and 2024 consisted of the following (dollars in thousands):

Previous wording

We may encounter additional pressure on our loss from operations in the second half of 2025, due to changes in our expected product mix and increased expected costs due to tariffs on parts and commodities we use in the manufacture of our products.

Current wording

We may encounter additional pressure on our loss from operations in the fourth quarter of 2025, due to changes in our expected product mix and increased expected costs due to tariffs on parts and commodities we use in the manufacture of our products.

Previous wording

Cost of goods sold increased by $3.3 million, or 24%, from $13.5 million in the three months ended June 30, 2024 to $16.8 million in the three months ended June 30, 2025. The increase in cost of goods sold is directly attributable to the increase in our product revenue and associated increases of (i) $3.6 million in direct materials (ii) $0.4 million for warranty reserve and (iii) $0.2 million in direct labor, manufacturing overhead, and freight. These increases were offset by decreases of (i) $0.7 million related to reductions in inventory reserves and associated write-downs to net realizable value and (ii) $0.2 million less in unfavorable physical inventory count and other adjustments.

Current wording

Cost of goods sold increased by $1.1 million, or 8%, from $12.9 million in the three months ended September 30, 2024 to $14.0 million in the three months ended September 30, 2025. The increase in cost of goods sold is directly attributable to the increase in our product revenue and associated increases of (i) $1.0 million in identifiable tariff charges, (ii) $0.3 million in dealer return reserve, (iii) $0.3 million in direct materials, and (iv) $0.1 million for warranty reserve. These increases were offset by decreases of (i) $0.2 million related to reductions in inventory reserves, and (ii) $0.4 million less in unfavorable physical inventory count and other adjustments.

Previous wording

Cost of goods sold decreased by $2.4 million, or 10%, from $23.9 million in the six months ended June 30, 2024 to $21.4 million in the six months ended June 30, 2025. The decrease in cost of goods sold is attributable to a change in product mix resulting in decreases of (i) $1.6 million in direct materials, (ii) $0.7 million related to reductions in inventory reserves and associated write-downs to net realizable value, (iii) $0.5 million in direct labor, manufacturing overhead, and freight, and (iv) $0.4 million for dealer return reserves. These decreases were offset by increases of (i) $0.5 million for warranty reserve and (ii) $0.3 million in unfavorable physical inventory count and other adjustments .

Current wording

Cost of goods sold decreased by $1.4 million, or 4%, from $36.8 million in the nine months ended September 30, 2024 to $35.4 million in the nine months ended September 30, 2025. The decrease in cost of goods sold is attributable to a change in product mix resulting in decreases of (i) $1.9 million in direct materials, (ii) $0.8 million in direct labor, manufacturing overhead, and freight, (iii) $0.1 million related to reductions in inventory reserves, and (iv) $0.1 million for dealer return reserves. These decreases were offset by increases of (i) $1.0 million in identifiable tariff charges and (ii) $0.5 million for warranty reserve.

Previous wording

The changes in direct labor encompasses employee labor costs. The changes in direct labor, manufacturing overhead and direct material costs are driven by changes in units sold. A significant portion of the overhead costs incurred include freight, indirect salaries, facility rent, utilities, and depreciation of production equipment, which are primarily fixed in nature and allocated based on production levels. Accordingly, these costs increase correspondingly with an increase in production volume and units sold.

Current wording

The changes in direct labor encompasses employee labor costs. The changes in direct labor, manufacturing overhead and direct material costs are driven by changes in units sold. A significant portion of the overhead costs incurred include freight, tariff charges, indirect salaries, facility rent, utilities, and depreciation of production equipment, which are primarily fixed in nature and allocated based on production levels. Accordingly, these costs increase correspondingly with an increase in production volume and units sold.

Previous wording

General and administrative expenses decreased by $3.3 million, or 36%, from $9.2 million in the three months ended June 30, 2024 to $5.9 million in the three months ended June 30, 2025, attributable to decreases of (i) $1.6 million in headcount and personnel costs for legal, finance, accounting, information technology and general and administrative functions, including stock-based compensation expense, (ii) $0.3 million in depreciation expense, (iii) $0.8 million in other operating expenses including travel, recruiting, and computer software costs, (iv) $0.4 million in professional fees, (v) $0.1 million in insurance expense and (vi) $0.1 million in facility costs.

Current wording

General and administrative expenses decreased by $2.4 million, or 27%, from $8.9 million in the three months ended September 30, 2024 to $6.5 million in the three months ended September 30, 2025, attributable to decreases of (i) $1.4 million in headcount and personnel costs for legal, finance, accounting, information technology and general and administrative functions, including stock-based compensation expense, (ii) $0.4 million in professional fees, (iii) $0.2 million in depreciation expense due to the allocation of less overhead costs, (iv) $0.2 million in facility costs, and (v) $0.2 million in other operating expenses including insurance and computer software costs.

Previous wording

General and administrative expenses decreased by $4.3 million, or 24%, from $18.1 million in the six months ended June 30, 2024 to $13.8 million in the six months ended June 30, 2025, attributable to decreases of (i) $3.8 million in headcount and personnel costs for legal, finance, accounting, information technology and general and administrative functions, (ii) $1.1 million in other operating expenses including travel, recruiting, and computer software costs, (iii) $0.7 million in depreciation expense due to the allocation of less overhead costs, (iv) $0.4 million in stock-based compensation expense due to decreased headcount, (v) $0.4 million in professional fees and (vi) $0.1 million in insurance expense. These decreases were offset by increases of (i) $1.9 million in financed equipment lease expense with no such comparable expense for the six months ended June 30, 2024 and (ii) $0.3 million in facility costs.

Current wording

General and administrative expenses decreased by $6.7 million, or 25%, from $27.0 million in the nine months ended September 30, 2024 to $20.3 million in the nine months ended September 30, 2025, attributable to decreases of (i) $5.6 million in headcount and personnel costs for legal, finance, accounting, information technology and general and administrative functions, including stock-based compensation expense, (ii) $1.3 million in other operating expenses including travel, recruiting, and computer software costs, (iii) $0.9 million in depreciation expense due to the allocation of less overhead costs, (iv) $0.8 million in professional fees and (v) $0.2 million in insurance expense. These decreases were offset by increases of (i) $1.9 million in financed equipment lease expense with no such comparable expense for the nine months ended September 30, 2024 and (ii) $0.2 million in facility costs.

Previous wording

Research and development expenses decreased by $0.9 million, or 30%, from $3.0 million in the three months ended June 30, 2024 to $2.1 million in the three months ended June 30, 2025. The change was primarily due to decreases of (i) $0.9 million in allocation of personnel costs, including stock-based compensation expense, driven by lower headcount in engineering.

Current wording

Research and development expenses decreased by $0.5 million, or 20%, from $2.6 million in the three months ended September 30, 2024 to $2.1 million in the three months ended September 30, 2025. The change was primarily due to decreases of (i) $0.6 million in allocation of personnel costs, including stock-based compensation expense, driven by lower headcount in engineering. This increase was offset by an increase of (i) $0.1 million in materials purchases.

Previous wording

Research and development expenses decreased by $2.1 million, or 34%, from $6.1 million in the six months ended June 30, 2024 to $4.0 million in the six months ended June 30, 2025. The change was primarily due to decreases of (i) $1.5 million in allocation of personnel costs, including stock-based compensation expense, driven by lower headcount in engineering, (ii) $0.4 million in other research and development costs, including consulting and software and (iii) $0.2 million in equipment and material purchases due to fewer research and development projects in development year over year.

Current wording

Research and development expenses decreased by $2.6 million, or 30%, from $8.7 million in the nine months ended September 30, 2024 to $6.1 million in the nine months ended September 30, 2025. The change was primarily due to decreases of (i) $2.1 million in allocation of personnel costs, including stock-based compensation expense, driven by lower headcount in engineering, (ii) $0.5 million in other research and development costs, including consulting and software, as well as equipment and material purchases due to fewer research and development projects in development year over year.

Previous wording

Sales and marketing expense decreased by $0.5 million, or 42%, from $1.2 million in the three months ended June 30, 2024 to $0.7 million in the three months ended June 30, 2025. The change was primarily due to decreases of (i) $0.4 million in allocation of personnel costs, including stock-based compensation expense, driven by lower headcount and (ii) $0.1 million in other sales and marketing expenses such as customer accommodation payments and sales events.

Current wording

Sales and marketing expense decreased by $1.0 million, or 29%, from $3.3 million in the nine months ended September 30, 2024 to $2.3 million in the nine months ended September 30, 2025. The change was primarily due to decreases of (i) $0.9 million in allocation of personnel costs, including stock-based compensation expense, driven by lower headcount and (ii) $0.1 million in other sales and marketing expenses such as customer accommodation payments and sales events.

Previous wording

Other expense, net increased by $1.9 million, from income of $1.5 million in the three months ended June 30, 2024 to an expense of $0.4 million in the three months ended June 30, 2025. The change was attributable to $2.1 million in other income from the duty drawback receivable during the three months ended June 30, 2024 with no such comparable income for the three months ended June 30, 2025. This was offset by an increase of $0.2 million in other income primarily due to sublease income.

Current wording

Other (expense) income, net decreased by $0.5 million, from an expense of $0.7 million in the three months ended September 30, 2024 to $0.2 million in the three months ended September 30, 2025. The change was attributable to (i) $0.3 million more in other income primarily due to sublease income, (ii) $0.1 million less in interest expense, and (iii) $0.1 million less in impairment expense.

Previous wording

Other expense, net increased by $2.3 million, from income of $1.0 million in the six months ended June 30, 2024 to an expense of $1.3 million in the six months ended June 30, 2025. The change was attributable to (i) $2.1 million in other income from duty drawback receivable for the six months ended June 30, 2024 with no such comparable income for the three months ended June 30, 2025 and (ii) increases of $0.4 in impairment on assets held for sale. This was offset by an increase of $0.2 million in other income primarily due to sublease income.

Current wording

Other (expense) income, net increased by $1.8 million, from income of $0.3 million in the nine months ended September 30, 2024 to $1.5 million in expense in the nine months ended September 30, 2025. The change was attributable to decreases of (i) $2.1 million in other income from duty drawback receivable for the nine months ended September 30, 2024 with no such comparable income for the nine months ended September 30, 2025 and (ii) increases of $0.3 million in impairment on assets held for sale. These decreases were offset by increases of (i) $0.5 million in other income primarily due to sublease income and (ii) $0.1 million less in interest expense.

Previous wording

The loss on the change in fair value of derivative instruments increased by $20,000, or 50%, from $40,000 in the six months ended June 30, 2024 to $60,000 in the six months ended June 30, 2025. The change in fair value in both periods is primarily attributable to the change in our stock price and the resulting valuation at the respective reporting period.

Current wording

The loss on the change in fair value of derivative instruments decreased by $68,000, or 64%, from $107,000 in the three months ended September 30, 2024 to $39,000 in the three months ended September 30, 2025. The change in fair value in both periods is primarily attributable to the change in our stock price and the resulting valuation at the respective reporting period.

Previous wording

The loss on the change in fair value of derivative instruments increased by $0.1 million, or 105%, from a gain of $0.1 million in the three months ended June 30, 2024 to a loss of $6,000 in the three months ended June 30, 2025. The change in fair value in both periods is primarily attributable to the change in our stock price and the resulting valuation at the respective reporting period.

Current wording

The loss on the change in fair value of derivative instruments decreased by $48,000, or 33%, from $147,000 in the nine months ended September 30, 2024 to $99,000 in the nine months ended September 30, 2025. The change in fair value in both periods is primarily attributable to the change in our stock price and the resulting valuation at the respective reporting period.

Previous wording

The gain on the change in fair value of contingent earn-out shares liability decreased by $33,000 from $33,000 in the six months ended June 30, 2024 to $0 in the six months ended June 30, 2025. The change in fair value in both periods is primarily attributable to the change in our stock price and the resulting valuation at the respective reporting period.

Current wording

The gain on the change in fair value of contingent earn-out shares liability decreased by $33,000 from $33,000 in the nine months ended September 30, 2024 to $0 in the nine months ended September 30, 2025. The change in fair value in both periods is primarily attributable to the change in our stock price and the resulting valuation at the respective reporting period.

Previous wording

The Company recorded income tax provision of $13,000 and $4,000 during the three months ended June 30, 2025 and 2024, respectively.

Current wording

The Company recorded income tax provision of $23,000 and $13,000 during the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

As of June 30, 2025, our principal sources of liquidity were our cash and cash equivalents of$8.8 million and an accumulated deficit of approximately $221.1 million. Our short-term uses of cash are for working capital and to pay the principal of our indebtedness. During the three months ended June 30, 2025, we incurred a net loss of approximately $7.5 million and had net cash used in operating activities of $0.1 million.

Current wording

As of September 30, 2025, our principal sources of liquidity were our cash and cash equivalents of $14.1 million with an accumulated deficit of approximately $219.0 million. Our short-term uses of cash are for working capital and to pay the principal of our indebtedness. During the nine months ended September 30, 2025, we incurred a net loss of approximately $15.6 million and had net cash provided by operating activities of $3.0 million.

Previous wording

Under ASC Subtopic 205-40, Presentation of Financial Statements—Going Concern (“ASC 205-40”), we have the responsibility to evaluate whether conditions and/or events raise substantial doubt about our ability to meet our future financial obligations as they become due within one year of the financial statements included elsewhere in this Report. The result of our ASC 205-40 analysis, due to uncertainties discussed below, is that there is substantial doubt about our ability to continue as a going concern through the next 12 months from the date of the unaudited condensed consolidated financial statements in this Report.

Current wording

Under ASC Subtopic 205-40, Presentation of Financial Statements—Going Concern (“ASC 205-40”), we have the responsibility to evaluate whether conditions and/or events raise substantial doubt about our ability to meet our future financial obligations as they become due within one year of the unaudited condensed consolidated financial statements included elsewhere in this Report. The result of our ASC 205-40 analysis, due to uncertainties discussed below, is that there is substantial doubt about our ability to continue as a going concern through the next 12 months from the date of the unaudited condensed consolidated financial statements in this Report.

Previous wording

As an early-stage growth company, we have incurred net losses and cash outflows since our inception. We will continue to incur net losses and cash outflows in accordance with our operating plan as we continue to scale our operations to meet anticipated demand and seek to establish our product and service offerings. As a result, our ability to access capital is critical and until we can generate sufficient revenue to cover our operating expenses, working capital and capital expenditures, we will need to raise additional capital in order to fund and scale our operations. These conditions and events raise substantial doubt about our ability to continue as a going concern. Our unaudited condensed consolidated financial information does not include any adjustment that may result from the outcome of this uncertainty.

Current wording

As an early-stage growth company, we have mainly incurred net losses and cash outflows since our inception. We may continue to incur net losses and cash outflows in accordance with our operating plan as we continue to scale our operations to meet anticipated demand and seek to establish our product and service offerings. As a result, our ability to access capital is critical and until we can generate sufficient revenue to cover our operating expenses, working capital and capital expenditures, we will need to raise additional capital in order to fund and scale our operations. These conditions and events raise substantial doubt about our ability to continue as a going concern. Our unaudited condensed consolidated financial information does not include any adjustment that may result from the outcome of this uncertainty.

Previous wording

In response to these conditions, we are currently evaluating different strategies to obtain the required funding for future operations. We have plans to secure and intend to employ various strategies to raise additional capital, which may include the SEPA (as defined below) as well as other capital raising strategies such as debt financing (which may include asset-based lending and/or receivable financing), other non-dilutive financing and/or equity financing. However, our access to the SEPA is not available as of the date of this Report and will not be available unless and until a post-effective amendment to the Registration Statement on Form S-1 filed on July 27, 2023, is filed and declared effective and other applicable conditions are met. Moreover, unless extended by mutual agreement of the parties, the SEPA is scheduled to expire on February 11, 2026. Our ability to access other capital when needed is not assured and, if capital is not available to us when, and in the amounts needed, we could be required to delay, scale back or abandon some or all of our development programs and other operations, which could materially harm our business, prospects, financial condition and operating results.

Current wording

In response to these conditions, we are currently evaluating different strategies to obtain the required funding for future operations. We have plans to secure and intend to employ various strategies to raise additional capital, which may include the ATM Offering (as defined below) and/or the SEPA (as defined below) as well as other capital raising strategies such as debt financing (which may include asset-based lending and/or receivable financing), other non-dilutive financing and/or equity financing. However, we are limited in how much money we can raise under the ATM Offering, and our access to the SEPA is not available as of the date of this Report and will not be available unless and until a post-effective amendment to the Registration Statement on Form S-1 filed on July 27, 2023, is filed and declared effective and other applicable conditions are met. Moreover, unless extended by mutual agreement of the parties, the SEPA is scheduled to expire on February 11, 2026. Our ability to access other capital when needed is not assured and, if capital is not available to us when, and in the amounts needed, we could be required to delay, scale back or abandon some or all of our development programs and other operations, which could materially harm our business, prospects, financial condition and operating results.

Previous wording

The following table provides a summary of cash flow data for the six months ended June 30, 2025 and 2024(in thousands):

Current wording

The following table provides a summary of cash flow data for the nine months ended September 30, 2025 and 2024(in thousands):

Previous wording

Netcash used in opera ting activities was$0.1 million for the six months ended June 30, 2025, primarily consisting of a cash-basis net lossof$13.1 million from normal operations of the Company (after non-cash adjustments of$4.6 million), partially offset by favorable net working capital changes of $13.0 million, primarily driven by lower accounts receivable due to collections, inventories due to improved inventory turns and other liabilities, partially offset by lower accounts payable and higher prepaid expenses and other current assets.

Current wording

Netcash provided by opera ting activities was$3.0 million for the nine months ended September 30, 2025, primarily consisting of a cash-basis net lossof$15.3 million from normal operations of the Company (after non-cash adjustments of$0.2 million), partially offset by favorable net working capital changes of $18.3 million, primarily driven by lower accounts receivable due to collections, inventories due to improved inventory turns and other liabilities, partially offset by lower accounts payable.

Previous wording

Net cash used in operating activities was $40.6 million for the six months ended June 30, 2024, primarily consisting of a cash-basis net loss of$13.6 million from normal operations of the Company (after non-cash adjustments of$7.0 million), further driven by unfavorable net working capital changes of $26.9 million, primarily driven by higher accounts receivable and inventory.

Current wording

Net cash used in operating activities was $52.1 million for the nine months ended September 30, 2024, primarily consisting of a cash-basis net loss of$19.6 million from normal operations of the Company (after non-cash adjustments of$11.6 million), further driven by unfavorable net working capital changes of $32.5 million, primarily driven by higher accounts receivable and inventory.

Previous wording

Net cash provided by investing activities was$0 for the six months ended June 30, 2025.

Current wording

Net cash provided by investing activities was$43,000 for the nine months ended September 30, 2025.

Previous wording

Net cash provided by investing activities was $51.2 million for the six months ended June 30, 2024, due to net cash acquired in connection with the acquisition of ElectraMeccanica, partially offset by property and equipment purchases of $0.2 million.

Current wording

Net cash provided by investing activities was $51.2 million for the nine months ended September 30, 2024, due to $51.4 million net cash acquired in connection with the acquisition of ElectraMeccanica and net proceeds from sale of assets held for sale of $0.1 million, partially offset by property and equipment purchases of $0.3 million.

Previous wording

Net cash used in financing activitieswas $2.1 million for the six months ended June 30, 2025, which primarily related to (i)net short-term insurance financing note activity of $0.2 million, (ii) equipment lease principal paymentsof $1.2 million and (iii) taxes paid relating to net-settlement of stock-based awards of $0.7 million.

Current wording

Net cash provided by financing activitieswas $0.1 million for the nine months ended September 30, 2025, which primarily related to (i) $2.4 million of proceeds from issuance of common stock under anat-the-market offering by the Company and(ii)net short-term insurance financing note activity of $0.4 million. This was partially offset by (i) equipment lease principal paymentsof $1.9 million and (ii) taxes paid relating to net-settlement of stock-based awards of $0.8 million.

Previous wording

Net cash used in financing activities was $1.6 million for the six months ended June 30, 2024, primarily related to (i) equipment lease principal payments of $1.2 million and (ii) taxes paid relating to net-settlement of stock-based awards of $0.8 million. This was partially offset by proceeds from net short-term insurance financing note activity of $0.3 million.

Current wording

Net cash used in financing activities was $1.5 million for the nine months ended September 30, 2024, primarily related to (i) equipment lease principal payments of $1.7 million and (ii) taxes paid relating to net-settlement of stock-based awards of $0.9 million. This was partially offset by proceeds from net short-term insurance financing note activity of $1.1 million.

Previous wording

We did not have any material contractual obligations or other commitments as of June 30, 2025, other than as disclosed in the 2024 Form 10-K, and in Note 14 - Commitments and Contingencies.

Current wording

As a result of the Mesa Lease Termination, future lease commitments have been reduced, as further discussed in Note 2 - Summary of Significant Accounting Policies. We did not have any additional material contractual obligations or other commitments as of September 30, 2025, other than as disclosed in the 2024 Form 10-K, and in Note 14 - Commitments and Contingencies.