8-K: Workhorse Group Changes Auditor Post-Merger

Workhorse Group Inc. announced a change in its independent registered public accounting firm to Carr, Riggs & Ingram, L.L.C. following its merger with Motiv Power Systems, Inc., while also disclosing unremediated material weaknesses and a going concern doubt from its previous auditor.

Summary

• Workhorse Group Inc. completed a merger with Motiv Power Systems, Inc. on December 15, 2025, with Motiv becoming a wholly-owned subsidiary and the accounting acquirer.
• The company's Audit Committee dismissed Berkowitz Pollack Brant Advisors + CPAs, LLP (BPB) and appointed Carr, Riggs & Ingram, L.L.C. (CRI) as the new independent registered public accounting firm, effective January 21, 2026.
• BPB's audit report for the fiscal year ended December 31, 2024, included an explanatory paragraph indicating substantial doubt about Workhorse's ability to continue as a going concern.
• Material weaknesses in internal control over financial reporting were identified for fiscal years ended December 31, 2024 and 2025, and the subsequent interim period, which remain unremediated.
• These weaknesses relate to the review of third-party valuation deliverables for convertible debt and warrant liability, and the failure to timely issue finalized quarterly reports due to accounting personnel turnover and inability to address technical accounting issues.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the explicit 'going concern' doubt from the former auditor and the disclosure of unremediated material weaknesses in internal controls, which indicate significant financial and operational challenges. While a new auditor is appointed, the underlying issues persist.

Positives

• The company has appointed a new independent registered public accounting firm, Carr, Riggs & Ingram, L.L.C., which may signal a fresh start for financial reporting oversight.
• The material weaknesses identified did not result in any material misstatements to the condensed interim consolidated financial statements.

Negatives

• The previous auditor, Berkowitz Pollack Brant Advisors + CPAs, LLP, included an explanatory paragraph in its audit report for the fiscal year ended December 31, 2024, indicating substantial doubt about the company's ability to continue as a going concern.
• Material weaknesses in internal control over financial reporting remain unremediated, specifically concerning the review of third-party valuation deliverables for convertible debt and warrant liability.
• The company failed to timely issue finalized quarterly reports for two consecutive quarters due to turnover of key accounting positions and the inability of accounting personnel to identify, evaluate, and address technical accounting and disclosure issues on a timely basis.

Risks

• Substantial doubt about the company's ability to continue as a going concern, as noted by the former independent auditor for the fiscal year ended December 31, 2024.
• Unremediated material weaknesses in internal control over financial reporting, which could lead to future financial reporting errors or delays.
• Challenges in financial reporting due to turnover of key accounting positions and difficulties in addressing complex technical accounting and disclosure issues.
• Integration risks associated with the reverse acquisition of Motiv Power Systems, Inc., as Motiv's historical financial statements become the company's consolidated financial statements.

Future Outlook

The filing does not provide specific forward-looking statements or guidance regarding future financial performance or operational targets, focusing instead on past events related to the merger and auditor change.

Management Comments

• The Company has requested that BPB furnish it with a letter addressed to the SEC stating whether or not it agrees with the above statements.

Industry Context

The merger with Motiv Power Systems, Inc. positions Workhorse Group Inc. to potentially expand its presence in the electric commercial vehicle market, aligning with broader industry trends towards electrification of fleets. However, the disclosed financial reporting challenges and going concern doubt could impact investor confidence and operational stability within a competitive and capital-intensive sector.

Corporate Governance

Stakeholder Impact

• Shareholders: May face increased uncertainty due to the going concern doubt and unremediated material weaknesses, potentially impacting share price and investment confidence.
• Employees: Turnover in key accounting positions suggests internal challenges, which could affect morale and operational efficiency.
• Creditors: The going concern doubt could raise concerns about the company's ability to meet its financial obligations.
• Customers/Suppliers: While not directly impacted by the auditor change, underlying financial instability could indirectly affect long-term relationships or operational continuity.

Next Steps

• The new independent registered public accounting firm, Carr, Riggs & Ingram, L.L.C., will assume auditing responsibilities for the company.
• The company needs to address and remediate the identified material weaknesses in internal control over financial reporting.
• The company will need to demonstrate its ability to continue as a going concern.

Key Dates

Recommendation

The filing reveals critical red flags for investors, including a 'substantial doubt as to the Company's ability to continue as a going concern' from its former auditor and 'unremediated material weaknesses' in internal financial controls. These issues, coupled with past failures to timely issue quarterly reports due to accounting personnel turnover, indicate severe operational and financial instability. While a new auditor has been appointed, the fundamental problems persist and present significant risks to the company's viability and financial integrity. A seasoned investor would view these disclosures as highly detrimental to the company's short-term and long-term prospects, warranting a strong sell recommendation.

Keywords

Workhorse Group, Motiv Power Systems, Merger, Auditor Change, SEC Filing, 8-K, Going Concern, Material Weaknesses, Internal Control, Financial Reporting, WKHS, Electric Vehicles, Commercial Vehicles