DEFA14A: Workhorse Urges Shareholder Vote FOR Motiv Merger

Workhorse Group Inc. is recommending shareholders vote FOR its proposed all-stock merger with Motiv Electric Trucks, highlighting strategic and financial benefits.

Summary

• Workhorse Group Inc. (Nasdaq: WKHS) recommends shareholders vote FOR the previously announced all-stock merger transaction with Motiv Electric Trucks (Motiv).
• Definitive proxy materials were filed with the U.S. Securities and Exchange Commission on October 8, 2025, in connection with the 2025 Annual General Meeting of Shareholders (Annual Meeting) scheduled for November 12, 2025.
• Shareholders of record as of the close of business on September 18, 2025, are entitled to vote at the Annual Meeting.
• Motiv will merge with a newly created subsidiary of Workhorse in exchange for newly issued shares of Workhorse common stock.
• Following the transaction, Motiv investors will initially own approximately 62.5% of the combined company, while Workhorse shareholders will maintain an approximate 26.5% ownership stake, subject to certain potential adjustments and future dilution.
• Workhorse's existing senior secured lender will have shares and rights to receive common stock representing approximately 11% following the merger, further reducing Workhorse shareholders' ownership on a fully-diluted basis to approximately 26%.
• Workhorse has already completed two transactions with entities affiliated with Motiv's controlling investor, providing $25 million to support near-term operations and pay down debt.
• At closing, the combined company is expected to obtain access to up to $20 million in new financing provided by entities affiliated with Motiv's controlling investor.
• The combined company is expected to raise additional financing after the transaction closes to fund its go-forward strategic execution.
• The transaction is expected to close in the fourth quarter of 2025, contingent on Workhorse shareholder approval and other customary closing conditions, including the debt financing commitment.

Sentiment

Score: 7

Explanation: The sentiment is positive due to the strategic merger aimed at achieving scale, cost synergies, and a stronger financial position, along with immediate and planned future financing. However, the significant dilution for existing shareholders and the ongoing need for additional capital raises temper the enthusiasm slightly, indicating a degree of execution risk.

Positives

• The transaction provides Workhorse shareholders the opportunity to participate in the upside of a leader in the medium-duty EV commercial vehicle market.
• The combined entity will create a platform for scalable growth by integrating Motiv's diverse product portfolio and top fleet relationships with Workhorse's proven vehicles, manufacturing capabilities, and national dealer network.
• Enhanced scale is expected to reduce unit costs and enable more effective competition with pure-play electric and legacy OEMs on a total cost of ownership basis.
• Access to complementary blue-chip customer bases, having collectively served 10 of the largest medium-duty fleets in North America, will increase customer contact and confidence.
• A strong financial foundation is anticipated, with a simplified capital structure, access to new financing of up to $20 million at close, and the ability to raise additional capital post-transaction.
• Compelling synergy opportunities exist, with the potential to achieve at least $20 million of cost synergies by the end of 2026 through R&D, G&A, and facility cost reductions.
• Workhorse received $25 million in near-term liquidity from Motiv's controlling investor affiliates prior to closing, supporting operations and debt reduction.

Negatives

• Workhorse shareholders will experience significant dilution, maintaining only an approximate 26.5% ownership stake (or 26% on a fully-diluted basis) in the combined company.
• The company has faced a 'challenging period for the industry' and required near-term liquidity, indicating past operational difficulties.
• The expectation to raise additional financing post-transaction close suggests ongoing capital requirements and potential for further shareholder dilution.

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, including at least $20 million in cost synergies, may not be fully achieved in a timely manner, or at all.
• Workhorse's ability to obtain the approval of its shareholders required to consummate the proposed transaction.
• 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.
• The ability to develop and manufacture the product portfolio, including the W4 CC, W750, and W56 and other programs.
• The 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.
• The 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.
• The 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.
• The ability to maintain compliance with the listing requirements of Nasdaq and the impact of any steps taken, including reverse splits of common stock, on operations, stock price, and future access to funds.
• The ability to protect intellectual property.
• Market acceptance of products.
• The ability to obtain sufficient liquidity from operations and financing activities to continue as a going concern and 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.
• The inability to retain key members of the management team.
• The inability to satisfy customer warranty claims.
• The outcome of any regulatory or legal proceedings, including with Coulomb Solutions Inc.
• The ability to realize the benefits of the sale and leaseback transaction of the Union City Facility.

Future Outlook

The combined Workhorse and Motiv entity anticipates scalable growth, reduced unit costs, expanded customer access, and a strong financial foundation to fuel growth and margin expansion. They expect to achieve at least $20 million in cost synergies by the end of 2026 and plan to raise additional financing post-merger to fund strategic execution. The transaction is expected to close in the fourth quarter of 2025.

Management Comments

• "We believe Motiv is the right partner to support the advancement of our combined product roadmap and capture new growth opportunities in the over $23 billion medium-duty trucking market for the benefit of our shareholders." Rick Dauch, CEO.
• "Through the advancements of our product roadmap and actions to extend our financial runway, Workhorse has been resilient in a challenging period for the industry." Rick Dauch, CEO.
• "Combining with Motiv is an important next step in our journey. Together, we will create a broader product offering, strengthen our financial position and create long-term shareholder value." Rick Dauch, CEO.

Industry Context

This merger reflects a broader trend in the electric vehicle industry towards consolidation and strategic partnerships, particularly in the commercial vehicle segment, as companies seek to achieve scale, reduce costs, and expand market reach to compete with both established legacy OEMs and emerging pure-play EV manufacturers. The focus on the medium-duty EV commercial vehicle market aligns with increasing demand for zero-emission last-mile delivery and specialized applications, driven by environmental regulations and corporate sustainability goals.

Comparison to Industry Standards

• The combined entity aims to more effectively compete with 'the industry's pure-play electric and legacy OEMs on a total cost of ownership basis,' indicating a strategic positioning against competitors like Rivian (in pure-play EV commercial) or Ford and General Motors (legacy OEMs with growing EV commercial offerings).
• The combined company will have served '10 of the largest medium-duty fleets in North America,' suggesting a strong market penetration and customer base comparable to leading suppliers in the commercial vehicle sector.
• The target of at least $20 million in cost synergies by the end of 2026 sets a specific internal benchmark for post-merger integration efficiency, which will be assessed against industry best practices for M&A value creation.

Legal Proceedings

• The outcome of any regulatory or legal proceedings, including with Coulomb Solutions Inc., is listed as a potential risk factor for the company.

Related Party Transactions

• Workhorse completed two transactions with entities affiliated with Motiv's controlling investor, providing $25 million in liquidity.
• The combined company is expected to obtain up to $20 million in new financing from entities affiliated with Motiv's controlling investor at closing.

Stakeholder Impact

• Shareholders: Existing Workhorse shareholders will experience significant dilution, maintaining approximately 26.5% ownership (or 26% fully diluted) in the combined entity. However, they gain exposure to a larger, more diversified EV commercial vehicle leader with potential for long-term value creation and synergy benefits.
• Employees: Potential for R&D, G&A, and facility cost reductions could imply workforce adjustments, but also opportunities within a larger, more competitive entity.
• Customers: Expected broader product offering, enhanced scale, and increased customer contact through combined enterprise relationships, channels, and dealer networks.
• Creditors: Debt paydown with $25 million from Motiv-affiliated entities and a simplified capital structure are positive for creditors.

Next Steps

• Workhorse shareholders are encouraged to vote FOR the merger proposals at the Annual General Meeting on November 12, 2025.
• The transaction is expected to close in the fourth quarter of 2025, subject to shareholder approval and customary closing conditions.
• The combined company is expected to obtain up to $20 million in new financing from Motiv's controlling investor affiliates at closing.
• The combined company plans to raise additional financing post-transaction close to fund its strategic execution.
• The combined company aims to achieve at least $20 million in cost synergies by the end of 2026.

Key Dates

Recommendation

While the merger with Motiv offers strategic benefits such as enhanced scale, cost synergies, and a stronger financial foundation, the significant dilution for existing Workhorse shareholders (to approximately 26.5% ownership) and the ongoing need for additional capital raises introduce considerable uncertainty. The immediate $25 million liquidity and planned $20 million financing at close provide near-term stability, but the long-term value creation hinges on successful integration and realization of synergies, making a 'hold' recommendation appropriate until further operational clarity emerges post-merger.

Keywords

Electric Vehicles, Commercial Vehicles, EV Trucks, Merger, Acquisition, Motiv Power Systems, Workhorse Group, Zero-Emission Vehicles, Last-Mile Delivery, Medium-Duty Trucks, SEC Filing