DEFA14A: Workhorse Urges Merger Approval to Avoid Liquidity Crisis

Workhorse Group Inc. is urging shareholders to vote for its all-stock merger with Motiv Power Systems, Inc. to create a leading medium-duty electric truck OEM and avoid severe liquidity issues.

Summary

• Workhorse Group Inc. is soliciting shareholder votes for its merger with Motiv Power Systems, Inc.
• The merger is an all-stock transaction aimed at creating a leading North American medium-duty electric truck OEM.
• Shareholders must approve all nine proposals at the Annual Meeting on November 12, 2025, for the transaction to close.
• Failure to approve the merger would result in Workhorse continuing as an independent company, likely facing liquidity issues and potential restructuring where shareholder equity would recover very little or no value.
• A reverse stock split is likely necessary for the combined company to meet Nasdaq's initial listing standards due to a minimum price threshold.
• The record date for voting eligibility was September 18, 2025.

Sentiment

Score: 4

Explanation: The filing presents a critical, binary situation. While advocating for a positive outcome (merger), it explicitly warns of severe negative consequences (liquidity issues, near-total loss of shareholder value) if the merger fails, indicating significant underlying distress for the standalone company.

Positives

• Opportunity for Workhorse shareholders to participate in the potential upside of a leader in the medium-duty EV commercial vehicle market.
• Significant ownership stake in the combined company for Workhorse shareholders.
• Access to financial resources that the transaction would provide.
• The Workhorse Board of Directors believes the future with Motiv is the best option for the Company and shareholder investment.

Negatives

• If the merger fails, Workhorse will likely continue to face liquidity issues as an independent company.
• Potential need for restructuring if the merger fails, where shareholders' equity would likely recover very little or no value.
• Loss of opportunity for Workhorse shareholders to participate in the potential upside of the combined company if the merger fails.

Risks

• Delay in or failure to consummate the Merger or other described transactions.
• Possibility that parties may terminate certain transactions or change terms.
• Inability to consummate transactions or achieve expected synergies and/or efficiencies.
• Potential regulatory delays.
• Industry and market reaction to the announcement.
• Effect of the announcement on the parties' ability to operate businesses, retain and hire key personnel, and maintain favorable business relationships.
• Integration of businesses may be more difficult, time-consuming, or costly than expected.
• Operating costs and business disruptions may be greater than expected.
• Inability to obtain regulatory and other approvals, including from Nasdaq.
• Risk that security prices may be volatile due to a variety of factors.
• Changes in laws, regulations, technologies, the global supply chain, and macro-economic and social environments affecting the business.
• Inability to maintain compliance with Nasdaq rules and otherwise maintain listing of securities on Nasdaq.
• Inability to successfully integrate businesses and technologies, which may result in the combined company not operating as effectively and efficiently as expected.
• Expected benefits and synergies of the proposed transaction may not be fully achieved in a timely manner, or at all.
• Conditions to the transaction may not be 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.
• 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.
• 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.
• Effect of the announcement, pendency, or completion of the proposed transaction on the parties' business relationships and business operations generally.
• 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.
• Disruption of 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 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.
• 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.
• 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 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.
• 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.
• Prices being charged by competitors.
• Inability to retain key members of management team.
• Inability to satisfy customer warranty claims.
• 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

The proposed merger with Motiv Power Systems is expected to create a leading North American medium-duty electric truck OEM, offering Workhorse shareholders the opportunity to participate in the potential upside and long-term growth of the combined company. Without the merger, Workhorse anticipates continued liquidity issues and a potential restructuring, likely resulting in very little or no value for shareholders.

Management Comments

• Our combination with Motiv will provide Workhorse shareholders the opportunity to participate in the potential upside of a leader in the medium-duty EV commercial vehicle market, with a significant ownership stake in the combined company.
• The only way for our shareholders to participate in this potential upside and benefit from long-term growth and value creation is by getting out today and voting FOR the Workhorse Motiv transaction, as well as the other proposals up for a vote at the Annual Meeting.
• If Workhorse shareholders do not vote for the merger proposals, the transaction will not close, and Workhorse will have to continue as an independent company. We will not get access to the financial resources the transaction would provide, and Workhorse shareholders would not have the opportunity to participate in the potential upside of the combined company.
• If Workhorse continues as an independent company, we will likely continue to face liquidity issues and may need to pursue a restructuring, in which shareholders equity would likely recover very little or no value.
• We believe our future with Motiv is the best option for our Company and your investment.

Industry Context

The proposed all-stock merger aims to create a leading North American OEM in the rapidly evolving medium-duty electric truck market. This strategic move positions the combined entity to capitalize on the growing demand for commercial EV solutions, consolidating market presence and potentially enhancing competitive advantage against other players in the electric vehicle sector.

Comparison to Industry Standards

• The filing states the merger will create a 'leading North American medium-duty electric truck OEM' but does not provide specific comparable companies, projects, or results to benchmark against industry standards.

Corporate Governance

Legal Proceedings

• Outcome of any regulatory or legal proceedings, including with Coulomb Solutions Inc.

Stakeholder Impact

• Shareholders: Opportunity for potential upside and significant ownership in a combined entity if the merger is approved; risk of very little or no value recovery if the merger fails due to liquidity issues and restructuring.
• Employees: Implied stability and growth opportunities within a larger, more financially secure combined company.
• Customers/Partners: Potential benefits from a leading North American medium-duty EV commercial vehicle OEM with enhanced capabilities and financial resources.

Next Steps

• Shareholders to vote on all nine proposals at the Annual Meeting on November 12, 2025.
• Completion of the all-stock merger transaction with Motiv Power Systems, Inc., contingent on shareholder approval.
• Implementation of a reverse stock split to meet Nasdaq listing standards.

Key Dates

Recommendation

The filing presents a critical, binary outcome for Workhorse Group Inc. If the proposed all-stock merger with Motiv Power Systems, Inc. is approved by shareholders, the company anticipates significant upside potential as a leader in the medium-duty EV commercial vehicle market. However, the filing explicitly warns that if the merger fails, Workhorse will likely continue to face severe liquidity issues and may need to pursue a restructuring, which would result in shareholders' equity recovering 'very little or no value.' This creates a high-stakes situation where the stock's future value is heavily contingent on the merger's approval. A 'hold' recommendation reflects this uncertainty, acknowledging the substantial upside if the merger proceeds as planned, while also highlighting the severe downside risk if it does not.

Keywords

Workhorse Group, Motiv Power Systems, Merger, EV Commercial Vehicle, Electric Truck OEM, Shareholder Vote, Nasdaq Listing, Reverse Stock Split, Liquidity Issues, Restructuring, SEC Filing, DEFA14A, Corporate Governance, Risk Factors, WKHS