8-K: Workhorse Q3 2025 Results & Motiv Merger Update

Workhorse Group reported its third-quarter 2025 financial results, highlighting a net loss of $7.8 million and progress towards its proposed merger with Motiv Electric Trucks.

Summary

• Net sales for the third quarter ended September 30, 2025, were $2.4 million, a decrease from $2.5 million in the same period of 2024, primarily due to fewer truck sales.
• The company reported a net loss of $(7.8) million for Q3 2025, a significant improvement compared to a net loss of $(25.1) million in Q3 2024.
• Workhorse completed the sale of 15 trucks (Class 4 and 5 versions) during the third quarter.
• Operating expenses decreased by $1.2 million year-over-year in Q3 2025 and by $17.5 million for the nine-month period compared to 2024.
• The proposed merger with Motiv Electric Trucks, announced on August 15, 2025, is a key strategic focus, aiming to create a leading North American medium-duty electric truck OEM, with closing expected in Q4 2025.
• Workhorse secured approximately $25 million in funding from Motiv's controlling investor, including a $20 million sale leaseback transaction and a $5 million secured convertible note financing.
• Upon the merger's closing, all remaining indebtedness and obligations to Workhorse's existing senior secured lender, including warrants, will be repaid and/or cancelled.
• The company recognized a gain on sale of assets of $13.8 million, primarily related to the sale and leaseback of its Union City, IN Facility.
• A gain of $4.8 million was recognized related to deferred revenue upon termination of the Tropos Assembly Services Agreement.
• Cash and cash equivalents stood at $12.7 million, and restricted cash at $25.5 million, as of September 30, 2025.

Sentiment

Score: 4

Explanation: While the net loss improved significantly, this was largely due to one-time gains from asset sales and deferred revenue. Core operational metrics like sales, cost of sales, and gross loss deteriorated. The proposed merger with Motiv and associated financing provide a strategic path forward and improved liquidity, but the execution risks are substantial, and the company's standalone operational performance remains weak.

Positives

• Net loss significantly improved to $(7.8) million in Q3 2025 from $(25.1) million in Q3 2024.
• Operating expenses decreased by $1.2 million year-over-year in Q3 2025 and by $17.5 million year-to-date, demonstrating effective cost control.
• Successful sale of 15 trucks (Class 4 and 5) during the quarter.
• Advanced product roadmap for the W56 platform, including the integration of the Utilimaster Aeromaster body, enhancing product flexibility and market appeal.
• W56 vehicles demonstrated 97% uptime in daily last-mile operations within customer and partner fleets.
• Secured approximately $25 million in funding from Motiv's controlling investor, improving immediate liquidity.
• Anticipated repayment and cancellation of existing senior secured lender debt and warrants upon merger closing, simplifying the capital structure.
• Commitment for up to $20 million in additional debt financing from Motiv's investor affiliates at merger closing, providing future liquidity.
• Recognized a $13.8 million gain on the sale and leaseback of the Union City Facility.
• Recognized a $4.8 million gain from deferred revenue upon termination of the Tropos Assembly Services Agreement.

Negatives

• Net sales decreased to $2.4 million in Q3 2025 from $2.5 million in Q3 2024, primarily due to fewer truck sales.
• Cost of sales increased to $10.1 million in Q3 2025 from $6.6 million in Q3 2024, mainly driven by a $3.3 million increase in inventory excess and obsolescence reserve.
• Gross loss widened to $(7.7) million in Q3 2025 from $(4.1) million in Q3 2024.
• Loss from operations increased to $(16.6) million in Q3 2025 from $(14.2) million in Q3 2024.
• Selling, general and administrative (SG&A) expenses slightly increased by $0.1 million in Q3 2025, primarily due to a $3.6 million increase in consulting and legal expenses related to the proposed Motiv merger.
• Recorded a $1.4 million fair value net loss on conversion of $19.0 million in principal from the existing senior secured lender into Common Stock.
• Recognized a net fair value loss of $6.8 million related to the 2024 Warrants in Q3 2025.

Risks

• The parties' ability to successfully integrate their businesses and technologies, which may result in the combined company not operating as effectively and efficiently as expected.
• The risk that the expected benefits and synergies of the proposed transaction may not be fully achieved in a timely manner, or at all.
• The risk associated with Workhorse's ability to obtain the approval of its shareholders required to consummate the proposed transaction and the timing of the closing of the proposed transaction, including the risk that the conditions to the transaction are not satisfied on a timely basis or at all or the failure of the transaction to close for any other reason or to close on the anticipated terms.
• The risk that any regulatory approval, consent or authorization that may be required for the proposed transaction is not obtained or is obtained subject to conditions that are not anticipated.
• The occurrence of any event, change or other circumstance that could give rise to the termination of the proposed transaction.
• Unanticipated difficulties, liabilities or expenditures relating to the transaction.
• The effect of the announcement, pendency or completion of the proposed transaction on the parties' business relationships and business operations generally.
• The effect of the announcement or pendency of the proposed transaction on Workhorse's common stock prices and uncertainty as to the long-term value of the combined company's common stock.
• Risks that the proposed transaction disrupts current plans and operations of the parties and their respective management teams and potential difficulties in hiring or retaining employees as a result of the proposed transaction.
• Ability to develop and manufacture the product portfolio, including the W4 CC, W750, and W56 and other programs.
• Ability to attract and retain customers for existing and new products.
• Ongoing and anticipated changes in the U.S. political environment, including those resulting from the new Presidential Administration, control of Congress, and changes to regulatory agencies.
• The implementation of changes to the existing tariff regime by the new Presidential Administration and measures taken in response to such tariffs by foreign governments.
• Risks associated with obtaining orders and executing upon such orders.
• The unavailability, reduction, elimination or adverse application of government subsidies and incentives or any challenge to or failure by the federal government, states or other governmental entities to adopt or enforce regulations such as the California Air Resource Board's Advanced Clean Fleet regulation.
• Changes in attitude toward environmental, social, and governance matters among regulators, investors, and parties with which the company does business.
• Supply chain disruptions, including constraints on steel, semiconductors and other material inputs and resulting cost increases impacting the company, its customers, its suppliers or the industry.
• Ability to capitalize on opportunities to deliver products to meet customer requirements.
• Limited operations and need to expand and enhance elements of the production process to fulfill product orders.
• General inability to raise additional capital to fund operations and business plan.
• Ability to receive sufficient proceeds from current and any future financing arrangements to meet immediate liquidity needs and the potential costs, dilution and restrictions resulting from any such financing.
• Ability to maintain compliance with the listing requirements of the Nasdaq and the impact of any steps taken, including reverse splits of common stock, on operations, stock price and future access to funds.
• Ability to protect intellectual property.
• Market acceptance of products.
• Ability to obtain sufficient liquidity from operations and financing activities to continue as a going concern and, ability to control expenses.
• The effectiveness of cost control measures and impact such measures could have on operations, including the effects of furloughing employees.
• Potential competition, including without limitation shifts in technology.
• Volatility in and deterioration of national and international capital markets and economic conditions.
• Global and local business conditions; acts of war (including without limitation the conflicts in Ukraine and the Middle East) and/or terrorism.
• The prices being charged by competitors.
• Inability to retain key members of the management team.
• Inability to satisfy customer warranty claims.
• The outcome of any regulatory or legal proceedings, including with Coulomb Solutions Inc.
• Ability to realize the benefits of the sale and leaseback transaction of the Union City Facility.

Future Outlook

Workhorse is focused on completing its proposed merger with Motiv Electric Trucks in the fourth quarter of 2025, which is expected to create a leading North American medium-duty electric truck OEM. This transaction is anticipated to provide a simplified capital structure and near-term liquidity, enabling the combined company to capitalize on the long-term industry trend towards electrification. The company expects to generate additional purchase orders and revenue from customers while strengthening its financial position.

Management Comments

• "We continue to make important progress on our product roadmap at Workhorse." Rick Dauch, CEO
• "This exciting new offering will enable us to deliver the performance and reliability of our step van in the traditional form factor that fleet operators already know and trust." Rick Dauch, CEO, on the Utilimaster Aeromaster body for the W56.
• "We are focused on completing our proposed transaction with Motiv to create a leading North American medium-duty electric truck OEM." Rick Dauch, CEO
• "We are confident that this transaction will provide our shareholders with the opportunity to participate in the potential upside of the combined company, with a significant ownership stake." Rick Dauch, CEO
• "Our proposed transaction with Motiv will provide Workhorse with a simplified capital structure and the near-term liquidity to support our operations through the proposed transaction close." Bob Ginnan, CFO
• "We continue to take additional steps to extend our financial runway and efficiently manage our cash flow by reducing operating costs and improving working capital needs." Bob Ginnan, CFO
• "We are confident in our ability to generate additional purchase orders and revenue from our customers while strengthening our financial position, and we look forward to completing the proposed transaction with Motiv." Bob Ginnan, CFO

Industry Context

The announcement positions Workhorse to potentially become a leading player in the North American medium-duty electric truck OEM market through its proposed merger with Motiv. This strategic move aligns with the broader industry trend towards electrification of commercial vehicle fleets, driven by increasing demand for zero-emission solutions, environmental regulations, and corporate sustainability goals. The company's focus on last-mile delivery and specialized applications, coupled with product enhancements like the Utilimaster Aeromaster body for the W56, indicates an effort to meet diverse fleet operator needs in a competitive and evolving electric vehicle market.

Stakeholder Impact

• Shareholders: Opportunity to participate in the potential upside of the combined company; urged to vote on the merger; potential dilution from convertible notes and warrants; uncertainty regarding long-term stock value.
• Employees: Potential difficulties in hiring or retaining employees as a result of the proposed transaction; effects of furloughing employees mentioned as a risk.
• Customers: Continued product development (W56 Aeromaster body) and demonstration of reliability (97% uptime) aim to enhance customer offerings; potential for increased product availability post-merger.
• Creditors: Existing senior secured lender debt and warrants to be repaid/cancelled upon merger closing; new debt financing from Motiv's investor affiliates.

Next Steps

• Shareholders are urged to vote for the merger and other proposals at the Company's Annual Meeting on November 12, 2025.
• Completion of the proposed merger with Motiv Electric Trucks, which is expected in the fourth quarter of 2025.
• Finalization of the terms for the up to $20 million debt financing from Motiv's investor affiliates.
• Continue discussions to build additional order interest through its expansive dealer network.
• Workhorse management will hold a conference call on November 11, 2025, to discuss these results and answer related questions.

Key Dates

Recommendation

While Workhorse's Q3 2025 operational results show continued weakness with declining sales and widening gross losses, the proposed merger with Motiv Electric Trucks represents a significant strategic pivot. The associated financing and simplified capital structure offer a potential lifeline and a path to becoming a more competitive medium-duty EV OEM. However, substantial integration risks, the need for shareholder approval, and the company's historical operational challenges warrant a cautious approach. Investors should hold to see the successful completion of the merger and the initial performance of the combined entity before making further investment decisions. The improved net loss is largely due to one-time gains, not core operational strength.

Keywords

Workhorse Group, WKHS, Motiv Electric Trucks, EV, Electric Vehicles, Commercial Vehicles, Medium-Duty Trucks, Q3 2025 Earnings, Merger Agreement, Financial Results, Zero-Emission, Last-Mile Delivery, W56, Utilimaster Aeromaster, Shareholder Meeting, Corporate Governance, Liquidity, Cost Reduction, Supply Chain, Nasdaq Listing, SEC Filing