DEFA14A: Workhorse to Merge with Motiv Power Systems

Workhorse Group Inc. announced an agreement to merge with Motiv Power Systems, Inc., aiming to strengthen its position in the EV transition.

Summary

• Workhorse Group Inc. has entered into an Agreement and Plan of Merger with Motiv Power Systems, Inc., dated August 15, 2025.
• The merger involves Workhorse, Motiv, and several intermediate and merger subsidiary entities.
• The Company views the transaction as a key step for its people, customers, partners, communities, and shareholders.
• Workhorse's team and manufacturing facilities in Union City are expected to play a crucial role in the combined company's success.
• The company anticipates completing the transaction, capturing future opportunities, and succeeding in the electric vehicle (EV) transition.

Sentiment

Score: 8

Explanation: The filing announces a significant strategic merger, presented with a positive and forward-looking tone regarding future opportunities and stakeholder benefits, despite comprehensive disclosure of standard merger and operational risks.

Positives

• The merger is expected to create a stronger combined entity, enhancing Workhorse's position in the EV market.
• Workhorse's Union City manufacturing facilities and team are identified as key assets for the combined company's success.
• The transaction is anticipated to generate opportunities and contribute to winning the EV transition.
• The company expresses excitement about the transaction's benefits for all stakeholders, including employees, customers, partners, communities, and shareholders.

Negatives

• No explicit negatives were presented in the primary communication of the filing; however, the 'risks' section outlines potential challenges and uncertainties associated with the merger and ongoing operations.

Risks

• Inability of parties to successfully integrate businesses and technologies, potentially leading to less effective and efficient operations.
• Failure to fully achieve expected benefits and synergies from the proposed transaction in a timely manner or at all.
• Workhorse's inability to obtain shareholder approval required to consummate the proposed transaction.
• Delays in the timing of the closing of the proposed transaction, including conditions not being satisfied or failure to close for other reasons.
• Regulatory approvals, consents, or authorizations not being obtained or being subject to unanticipated conditions.
• Occurrence of any event, change, or circumstance that could lead to the termination of the proposed transaction.
• Unanticipated difficulties, liabilities, or expenditures related to the transaction.
• Negative effects of the announcement, pendency, or completion of the proposed transaction on business relationships and operations.
• Impact on Workhorse's common stock prices and uncertainty regarding the long-term value of the combined company's common stock.
• Disruption of current plans and operations, and potential difficulties in hiring or retaining employees due to the transaction.
• Challenges in developing and manufacturing the product portfolio, including W4 CC, W750, and W56 programs.
• Difficulties in attracting and retaining customers for existing and new products.
• Ongoing and anticipated changes in the U.S. political environment, including tariffs and regulatory shifts.
• Unavailability, reduction, elimination, or adverse application of government subsidies and incentives.
• 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 product orders.
• General inability to raise additional capital to fund operations and business plans.
• Inability to receive sufficient proceeds from current and future financing arrangements to meet immediate liquidity needs.
• Failure to maintain compliance with Nasdaq listing requirements, including impacts from reverse stock splits.
• Inability to protect intellectual property and achieve market acceptance of products.
• Inability to obtain sufficient liquidity from operations and financing activities to continue as a going concern.
• Ineffectiveness of cost control measures, including the effects of furloughing employees.
• Potential competition and shifts in technology.
• Volatility and deterioration of national and international capital markets and economic conditions, including global conflicts.
• Inability to retain key members of the management team.
• Inability to satisfy customer warranty claims.
• Adverse outcome of any regulatory or legal proceedings, specifically mentioning Coulomb Solutions Inc.
• Inability to realize the benefits of the sale and leaseback transaction of the Union City Facility.

Future Outlook

The company looks forward to completing the merger transaction, successfully integrating the businesses, capturing new opportunities, and playing a leading role in the electric vehicle transition. It anticipates achieving synergies and positive financial and operating results from the combined entity.

Management Comments

• We will continue to staff based on production needs and are proud to continue as a local employer.
• We are excited about what this transaction means for our people, our customers, partners, communities, and shareholders.
• Workhorse's team and manufacturing facilities in Union City will play a key role in the combined company's success.
• We look forward to completing the transaction, capturing the opportunities ahead, and winning the EV transition.

Industry Context

This merger positions Workhorse to potentially strengthen its competitive standing within the rapidly evolving electric vehicle (EV) commercial vehicle market. By combining with Motiv Power Systems, Workhorse aims to enhance its product portfolio and operational capabilities to better capitalize on the global shift towards electrification in transportation.

Comparison to Industry Standards

• No specific comparable companies, projects, or results were detailed in the filing to assess the results in the context of global benchmarks.

Legal Proceedings

• The filing mentions the 'outcome of any regulatory or legal proceedings, including with Coulomb Solutions Inc.' as a risk factor that could materially affect actual results.

Stakeholder Impact

• **Shareholders**: Expected to benefit from the transaction, but face risks related to stock price volatility and uncertainty of the combined company's long-term value.
• **Employees**: The company intends to continue staffing based on production needs, with Workhorse's team playing a key role in the combined entity.
• **Customers**: Anticipated to benefit from the transaction, likely through an enhanced product portfolio and service capabilities.
• **Partners**: Expected to benefit from the transaction, suggesting strengthened collaborations.
• **Communities**: The company expresses pride in continuing as a local employer and sees benefits for communities.

Next Steps

• Workhorse intends to file a Proxy Statement on Schedule 14A with the SEC.
• Shareholders of Workhorse will need to approve the proposed transaction.
• The company will seek any required regulatory approvals, consents, or authorizations.
• Completion of the transaction and subsequent integration of the businesses.

Key Dates

Recommendation

The announcement of a merger is a significant strategic development that could reshape Workhorse's future. While presented positively, the filing is a preliminary communication, and critical details regarding valuation, synergy realization, and integration challenges are yet to be fully disclosed in the upcoming Proxy Statement. Investors should hold their position pending a thorough review of the definitive proxy materials, which will provide more comprehensive financial and operational insights into the combined entity, and assess the execution risks associated with the integration.

Keywords

Workhorse, Motiv Power Systems, Merger, Electric Vehicles, EV Transition, Commercial Vehicles, SEC Filing, Corporate Governance, Shareholder Approval