DEFA14A: Workhorse to Merge with Motiv Power Systems

Workhorse Group Inc. announced an agreement to merge with Motiv Power Systems, aiming to strengthen its financial position and expand its electric truck product lineup.

Summary

• Workhorse Group Inc. has entered into an Agreement and Plan of Merger with Motiv Power Systems, Inc., dated August 15, 2025.
• The merger is intended to strengthen Workhorse's financial position, expand its product lineup, and create a leading medium-duty EV truck manufacturer in North America.
• Workhorse CEO Rick Dauch communicated the strategic and financial benefits of this combination to shareholders.
• A conference call is scheduled for August 19, 2025, at 10:00 a.m. ET to discuss the transaction.
• Workhorse will file a Proxy Statement on Schedule 14A with the SEC regarding the proposed transaction.

Sentiment

Score: 7

Explanation: The announcement of a strategic merger is generally positive, aiming to strengthen the company and expand its market presence. However, the extensive list of forward-looking risks associated with integration, market acceptance, and financial stability tempers the overall positive sentiment, indicating significant execution challenges remain.

Positives

• Expected to strengthen Workhorse's financial position.
• Anticipated expansion of Workhorse's product lineup.
• Aims to create one of the leading medium-duty EV truck manufacturers in North America.
• Potential for significant strategic and financial benefits from the combination.

Risks

• Ability to successfully integrate businesses and technologies, potentially leading to less effective and efficient operations.
• Risk that expected benefits and synergies may not be fully achieved in a timely manner or at all.
• Workhorse's ability to obtain shareholder approval for the transaction.
• Uncertainty regarding the timing of the closing, including conditions not being satisfied or failure to close.
• Regulatory approvals, consents, or authorizations may not be obtained or may be subject to unanticipated conditions.
• Occurrence of any event, change, or circumstance that could terminate the proposed transaction.
• Unanticipated difficulties, liabilities, or expenditures related to the transaction.
• Effect of the announcement, pendency, or completion of the transaction on business relationships and operations.
• Effect of the announcement or pendency on Workhorse's common stock prices and uncertainty of the combined company's long-term stock value.
• Disruption to current plans and operations, and potential difficulties in hiring or retaining employees due to the transaction.
• Ability to develop and manufacture product portfolio, including W4 CC, W750, and W56.
• Ability to attract and retain customers for existing and new products.
• Ongoing and anticipated changes in the U.S. political environment, including tariffs and regulatory agencies.
• Risks associated with obtaining and executing product orders.
• Unavailability, reduction, elimination, or adverse application of government subsidies and incentives.
• Changes in attitudes toward environmental, social, and governance (ESG) matters.
• Supply chain disruptions, including constraints on steel, semiconductors, and other material inputs, leading to cost increases.
• Limited operations and the need to expand and enhance production processes to fulfill orders.
• General inability to raise additional capital to fund operations and business plan.
• Ability to receive sufficient proceeds from current and future financing arrangements to meet immediate liquidity needs.
• Ability to maintain compliance with Nasdaq listing requirements, including impacts of reverse stock splits.
• Ability to protect intellectual property.
• Market acceptance of products.
• Ability to obtain sufficient liquidity from operations and financing to continue as a going concern.
• Ability to control expenses and the impact of cost control measures, including employee furloughs.
• Potential competition, including shifts in technology.
• Volatility and deterioration of national and international capital markets and economic conditions.
• Global and local business conditions, acts of war (Ukraine, Middle East) and/or terrorism.
• Prices charged by competitors.
• Inability to retain key members of the management team.
• Inability to satisfy customer warranty claims.
• Outcome of any regulatory or legal proceedings, specifically mentioning Coulomb Solutions Inc.
• Ability to realize the benefits of the sale and leaseback transaction of the Union City Facility.

Future Outlook

The proposed merger is expected to strengthen Workhorse's financial position, expand its product lineup, and establish it as a leading medium-duty EV truck manufacturer in North America. The combined company anticipates achieving significant strategic and financial benefits and synergies.

Management Comments

• "Last Friday, our CEO Rick Dauch posted a letter to shareholders outlining the significant strategic and financial benefits of our announced agreement to combine with Motiv Electric Trucks."
• "This combination is designed to strengthen our financial position, expand our product lineup, and create one of the leading medium-duty EV truck manufacturers in North America."

Industry Context

The merger positions Workhorse to become a leading player in the medium-duty electric vehicle (EV) truck manufacturing sector in North America, aligning with the broader industry trend towards electrification of commercial fleets and increased demand for sustainable transportation solutions. This move could enhance its competitive standing against other EV truck manufacturers and traditional OEMs transitioning to electric.

Legal Proceedings

• The outcome of any regulatory or legal proceedings, including with Coulomb Solutions Inc., is identified as a risk factor.

Stakeholder Impact

• Shareholders: Will be asked to vote on the proposed transaction, potential impact on stock price and long-term value of combined company.
• Employees: Potential for disruption to current plans and operations, and difficulties in hiring or retaining employees as a result of the transaction.
• Customers: Expected expansion of product lineup (medium-duty EV trucks).
• Partners: Impact on business relationships and operations generally.
• Regulatory Authorities: Requires regulatory approvals, consents, or authorizations.

Next Steps

• Workhorse intends to file a Proxy Statement on Schedule 14A with the SEC.
• A Definitive Proxy Statement will be mailed to Workhorse shareholders.
• Workhorse will host a conference call on August 19, 2025, at 10:00 a.m. ET to discuss the transaction.
• Shareholders are invited to submit questions in advance to shareholder@workhorse.com.

Key Dates

Recommendation

The announcement of a strategic merger with Motiv Power Systems is a significant development for Workhorse, aiming to strengthen its market position in medium-duty EV trucks. While the stated benefits are positive, the filing also outlines a comprehensive list of substantial risks, including integration challenges, shareholder approval, regulatory hurdles, and broader market and operational uncertainties. Given the forward-looking nature of the benefits and the numerous execution risks, a 'hold' recommendation is appropriate. Investors should await further details in the Proxy Statement and monitor progress on integration and financial performance before making further investment decisions.

Keywords

Workhorse Group, Motiv Power Systems, Merger, Acquisition, EV Trucks, Electric Vehicles, Medium-Duty Trucks, Commercial Vehicles, SEC Filing, Corporate Governance, Strategic Alliance, WKHS