LiveWire Group, Inc.

11. Related Party Transactions

In connection with the Business Combination, the Company entered into a number of agreements with H-D to govern and provide a framework for the relationship between the parties going forward pursuant to which the Company and/or H-D have continuing obligations to each other. All transactions with H-D subsequent to the Business Combination are considered related party transactions. Agreements that the Company entered into in connection with the separation from H-D that resulted in related party transactions include the Transition Services Agreement (effective through December 31, 2024), the master services agreement effective through December 31, 2024, the new Master Services Agreement (dated December 23, 2024, effective January 1, 2025), Contract Manufacturing Agreement, Joint Development Agreement, and Tax Matters Agreement. Refer to Note 16, Related Party Transactions, of the consolidated financial statements in the Company’s 2024 Form 10-K for additional details on the agreements entered into with H-Das part of, or subsequent to, the separation from H-D.

Related Party Sales and Purchases in the Ordinary Course of Business

Transactions Associated with Service Agreements with H-D

Cost of goods sold -For the three and six months ended June 30, 2025, there are $485 thousand and $1,644 thousand, respectively, and for the three and six months ended June 30, 2024, there are $4,363 thousand and $9,539 thousand, respectively, of Cost of goods sold with H-D on the consolidated statements of operations and comprehensive loss. Of the Costs of goods sold with H-D, for the three and six months ended June 30, 2025, $471 thousand and $1,621 thousand, respectively, and for the three and six months ended June 30, 2024, $4,179 thousand and $9,441 thousand, respectively, are related to purchases, primarily motorcycles, under the terms of the Contract Manufacturing Agreement. These purchases of electric motorcycles from H-D are sold to the Company’s customers resulting in Cost of goods sold.

Selling, administrative and engineering - During the three and six months ended June 30, 2025 there are $1,331 thousand and $2,735 thousand, respectively, and for the three and six months ended June 30, 2024, there were $2,539 thousand and $5,487 thousand, respectively, in expenses associated with services rendered in conjunction with the various service agreements with H-D, which are presented within Selling, administrative and engineering on the consolidated statements of operations and comprehensive loss.

Accounts payable to related party -As of June 30, 2025 and December 31, 2024, there is $12,617 thousand and $9,762 thousand, respectively, due to H-D and presented as Accounts payable to related party on the consolidated balance sheets. Of the amount outstanding to H-D, as of June 30, 2025 and December 31, 2024, $2,998 thousand and $2,914 thousand, respectively, is associated with inventory purchased under the Contract Manufacturing Agreement and $2,178 thousand and $692 thousand, respectively, is associated with services under the various service agreements with H-D and $6,156 thousand in both periods is associated with the obligation to reimburse H-D for excess inventory components held by H-D that the Company expects to be obligated to reimburse H-D under the terms of the Contract Manufacturing Agreement. This amount represents the Company’s best estimate of the liability as of each of the balance sheet dates and is subject to adjustment based on final negotiations with H-D regarding amounts owed under the terms of the Contract Manufacturing Agreement.

Sales of electric motorcycles and related products to independent dealers in the U.S. and Canada are primarily financed through HDFS. Therefore, the Company’s accounts receivable related to these sales are recorded in Accounts receivable from related party on the consolidated balance sheets. Amounts financed through HDFS, not yet remitted to the Company by HDFS, are generally settled within 30 days. As of December 31, 2024, there was $356 thousand due from HDFS and other related receivables due from H-D, which is presented as Accounts receivable from related party on the consolidated balance sheet. As of June 30, 2025, the Company owes HDFS $1,277 thousand for amounts remitted to dealers on behalf of the Company related to a marketing initiative, returns and incentive payments. This amount is included in Accounts payable to related party on the consolidated balance sheet.

Convertible Delayed Draw Term Loan Agreement

On February 14, 2024, the Company entered into a Convertible Delayed Draw Term Loan Agreement (the “Convertible Term Loan”) with H-D providing for term loans from H-D to the Company in one or more advances up to an aggregate principal amount of $100 million. The outstanding principal under the Convertible Term Loan bears interest at a floating rate per annum, as calculated by H-D as of the date of each advance and as of each June 1 and December 1 thereafter, equal to the sum of (i) the forward-looking term rate based on SOFR (i.e., the secured overnight financing rate published by the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate)) for a 6-month interest period, plus (ii)4.00%. The Company may elect to pay up to 100% of the amount of any interest due by increasing the outstanding principal amount of the applicable advance. The Convertible Term Loan does not include affirmative covenants impacting the operations of the Company. The Convertible Term Loan includes negative covenants restricting the ability of the Company to incur indebtedness, create liens, sell assets, make investments, make fundamental changes, make dividends or other restricted payments and enter into affiliate transactions. The Convertible Term Loan has a maturity date of the earlier of (i)24 months from the date of the first draw on the loan or (ii) October 31, 2026. In the event that the Convertible Term Loan cannot be settled in cash by the Company at maturity, unless otherwise agreed between the Company and H-D, the Convertible Term Loan will be converted to equity of Company at a conversion price per share of common stock of the Company equal to 90% of the volume weighted average price per share of Common Stock for the 30 trading days immediately preceding the conversion date. As of June 30, 2025, there were no amounts outstanding under the Convertible Term Loan and the Company remained in compliance with all of the existing covenants.

Other Transactions

During the three and six months ended June 30, 2025, the Company recorded $19 thousand and $31 thousand, respectively, in related party sales between the Company and H-D with $14 thousand and $23 thousand, respectively, in Cost of goods sold. During the three and six months ended June 30, 2024, the Company recorded $20 thousand and $40 thousand, respectively, in related party sales between the Company and H-D with $13 thousand and $28 thousand, respectively, in Cost of goods sold. All sales were for the STACYC segment which sells electric balance bikes and electric bikes to H-D. As of June 30, 2025 and December 31, 2024, there was $7 thousand and $43 thousand due from H-D, respectively, which is presented as Accounts receivable from related party on the consolidated balance sheet.

In conjunction with the relocation of LiveWire Labs from California, announced in 2024, the Company moved its equipment from LiveWire Labs to an H-D location in Milwaukee, Wisconsin in September 2024. During the fourth quarter of 2024, the Company began occupying a portion of the space in the H-D location, including operating certain of its equipment, and using a portion for office space. The Company and H-D finalized negotiations and executed a lease agreement related to this space on January 30, 2025. The Company recorded an ROU asset and ROU liability of $488 thousand and $456 thousand, respectively, in the first quarter of 2025, which were reduced for a $500 thousand lease incentive to be provided from H-D for tenant improvements. The initial term of the agreement is 60 months with a renewal option for another 60 months. As of the current date, the Company does not believe it is reasonably certain of exercising the renewal option and, therefore, the lease term is 60 months.

On September 26, 2022, the Company entered into a lease agreement with H-D to sublease a Product Development Center. This lease was terminated effective February 28, 2025. On August 28, 2023, the Company amended a lease agreement with H-D for office space to extend the term of the lease to a 12-month period, which expired on September 26, 2024 and was renewed on a month-to-month basis and terminated effective January 31, 2025. On September 4, 2024, the Company entered into a lease agreement with H-D to sublease office space in California, which expires on October 31, 2027. These are classified as operating leases.

As of June 30, 2025, the right of use assets included within Lease assets, short-term lease liabilities included within Current portion of lease liabilities, and long-term lease liabilities included within Long-term portion of lease liabilities in the consolidated balance sheets were $466 thousand, zero, and $408 thousand, respectively. As of December 31, 2024, the right of use assets included within Lease assets, short-term lease liabilities included within Current portion of lease liabilities, and long-term lease liabilities included within Long-term portion of lease liabilities in the consolidated balance sheets were $82 thousand, $43 thousand, and $40 thousand, respectively. In addition, the Company incurred $54 thousand and $153 thousand in rent expense during the three and six months ended June 30, 2025, respectively, and the Company recorded $44 thousand and $88 thousand, during the three and six months ended June 30, 2024, respectively, which is included within Selling, administrative and engineering expense on the consolidated statements of operations and comprehensive loss.