Earnings call transcript: Workhorse Q2 2025 reveals significant EPS miss

- Achieving profitability amid significant EPS and revenue misses.

• Scaling operations to meet demand and revenue projections.

• Managing the significant debt burden, with a debt-to-equity ratio of 1.99.

• Competition in the medium-duty electric truck market.

• Integration challenges post-merger with Motive.

• Addressing liquidity concerns with short-term obligations exceeding liquid assets.

Access the complete Pro Research Report and detailed financial analysis through InvestingPro, offering comprehensive insights into Workhorse’s challenges and opportunities.

Key Takeaways

• Workhorse reported a significant EPS and revenue miss in Q2 2025.
• Stock price dropped by 7.41% following the earnings announcement.
• The company shipped 32 trucks in Q2 2025, a substantial increase from the previous year.
• Operating expenses were reduced by $7 million year-over-year.
• The merger with Motive is expected to close in Q4 2025.

Company Performance

Workhorse Group’s overall performance in Q2 2025 showed some operational improvements despite financial shortfalls. The company increased its truck shipments to 32, up from just 1 in the same period last year, and reduced operating expenses by $7 million. However, the financial results did not meet expectations, reflecting challenges in scaling operations to meet revenue targets.

Financial Highlights

• Revenue: $5.67 million, up from $800,000 year-over-year.
• Earnings per share: -$1.67, compared to -$0.05 forecasted.
• Net loss improved from $55.5 million to $35.4 million.
• Cash and cash equivalents stood at $2.2 million.

Earnings vs. Forecast

Workhorse’s actual EPS of -$1.67 was far below the forecast of -$0.05, representing a 3,240% negative surprise. Revenue also fell short, with actual earnings of $5.67 million compared to an expected $27.8 million. This significant miss indicates challenges in achieving projected sales and controlling costs.

Market Reaction

- Achieving profitability amid significant EPS and revenue misses.

• Scaling operations to meet demand and revenue projections.

• Managing the significant debt burden, with a debt-to-equity ratio of 1.99.

• Competition in the medium-duty electric truck market.

• Integration challenges post-merger with Motive.

• Addressing liquidity concerns with short-term obligations exceeding liquid assets.

Access the complete Pro Research Report and detailed financial analysis through InvestingPro, offering comprehensive insights into Workhorse’s challenges and opportunities.

Outlook & Guidance

Looking forward, Workhorse is focusing on its merger with Motive, expected to close in Q4 2025, which should provide $20 million in debt financing. The company aims to reduce vehicle costs and improve battery technology as part of its strategic initiatives. Despite the current financial challenges, Workhorse is targeting expansion with large fleet customers and exploring additional capital for 2026.

Executive Commentary

Rick Dauk, CEO, stated, "Together, we expect to have more scale and the ability to operate more effectively and efficiently." Scott Griffith, CEO, emphasized the need for competitiveness, saying, "Long term, the successful OEM EV company is going to have to be competitive against internal combustion engines on an apples-to-apples basis."

Risks and Challenges

• Achieving profitability amid significant EPS and revenue misses.
• Scaling operations to meet demand and revenue projections.
• Securing additional capital for strategic initiatives in 2026.
• Competition in the medium-duty electric truck market.
• Integration challenges post-merger with Motive.

Q&A

During the earnings call, analysts inquired about New Jersey voucher programs, product portfolio integration, and the company’s financing strategy. Workhorse addressed these concerns, highlighting its approach to customer adoption and large-scale deployment strategies.

Full transcript - Workhorse Group Inc (WKHS) Q2 2025:

Kevin, Conference Operator: Greetings and welcome to the Workhorse Group and Motive Joint Conference Call. At this time, all participants are in a listen only mode. As a reminder, this conference is being recorded. It’s now my pleasure to turn the call over to your host, Stan March from Workhorse. Please go ahead, Stan.

Stan March, Investor Relations, Workhorse Group: Thank you, Kevin. Good morning, welcome to this joint Workhorse Motive conference call. Before we begin, I’d like to note that we posted our financial results for the quarter ended 06/30/2025 by a press release as well as filed its associated 10 Q with the SEC last Friday, August 15. We also released the news of Workhorse Emotive entering into a definitive agreement via the press release and SEC Form eight ks likewise on the fifteenth. You can find all documents as well as the presentation that will form the basis of today’s conversation in the Investor Relations section of our website.

We’ll track along with that presentation during this call. On Slide two, you can find our legal legend. As some of the comments that will be made today are forward looking and are subject to certain provisions and subject to risks and uncertainties as well. Given that we’ll also be filing a proxy in the near future, other notices are likewise described in this legend. On Slide three, you can see the call participants today.

Driving the call are Rick Dauk, our CEO Bob Ganan, our CFO and Scott Griffith, CEO of Motive. And on Slide four, you’ll find our agenda for today’s call. Following my opening remarks, I’ll hand it over to Rick, who’ll give you an update on our Q2 performance as well as a business update. Bob will then walk us through our Q2 financial results. Rick will then provide an initial merger overview.

And following that following those comments, Scott will discuss the rationale and drivers to create a leading North American medium duty electric truck OEM. Rick will then close the conversation by reviewing the near term priorities for the companies before we open the call up to questions. And with that brief introduction, I’ll turn the call over to Rick.

Rick Dauk, CEO, Workhorse Group: Thanks, Stan, and thanks everyone for joining us on the call this morning. We are excited to dive deeper into our recently announced strategic combination with Motive as well as discuss our strong second quarter earnings results. I’m pleased to have Scott Griffith, the CEO of Motive here with us today, who will help unpack some details about the strategic transaction and share more about what this holds for the future of both Workhorse and Motive. First, we’ll start with Workhorse’s second quarter twenty twenty results. Let’s look at slide five.

In the second quarter, we secured 36 purchase orders for our W56 Step Bands, shipping a record 32 trucks in the quarter. These record results are testament to the hard work and dedication of the Workhorse team and were driven by the proven operating performance of our W56 line of vehicles and overwhelmingly positive customer feedback on these vehicles from the field. We believe the growing demand we see for our W56 further demonstrates the critical role Workhorse plays in the emerging transition to EV technology in the commercial vehicle space and last mile delivery space, as well as the market’s recognition of the quality, value, dependability and durability of our vehicles. The capability and reputation of our vehicles is being validated every day in the field and will continue to accelerate as more of our vehicles hit the road. There are currently more than 60 W56 vehicles operating customer and partner fleets across the country along diverse real world routes.

Additionally, we continue to advance our product plans to broaden the W56 application options. This work included the completion of final durability testing on the 140 kilowatt design with a range of 100 miles, which is slated to go into production in early twenty twenty six. It also included development and integration efforts to install the Utilimaster Aeromaster walk in van body on the W56 chassis, now available for order. This familiar time tested body design adds flexibility to the all electric W56 chassis platform, delivering its proven performance in the traditional step van form and configurations that many fleet operators know and trust. We continue to operate efficiently, extending the company’s financial runway enabling us to reach our strategic transaction with Motive last week.

This is reflected in the decrease in operating expenses by $7,000,000 year over year while shipping a record number of vehicles in the quarter. Our near term liquidity was further bolstered by the interim funding from Motiv’s controlling investor totaling approximately $25,000,000 through the sale leaseback and a secured convertible note financing transaction that we closed on last week. This funding will be partially utilized to pay down debt owed to Workhorse’s existing senior secured lender and to finance operations to the close of the transaction. With that, I’d like to turn it over to Bob to provide additional color on our financial performance for the second quarter.

Bob Ganan, CFO, Workhorse Group: Thanks, Rick. In the second quarter, WorkFirst saw significant year over year improvement across almost every operating metric. Let me start by comparing some straightforward numbers. Truck shipments. In the 2024, we shipped one truck compared to this year’s second quarter when we shipped 32, an increase of 31 trucks.

In fact, the 2025, we have shipped 35 trucks, which is more trucks than we did in all of 2024, which was 29. This shipment unit difference was driven almost exclusively by customer demand for the W56 Step Van. Turning to slide six. Sales net of returns and allowances for the 2025 were $5,700,000 compared to $800,000 in the same period a year ago. The $4,800,000 increase was due to higher W56 shipments in the current period, partially offset by the loss of revenue due to the Arrow divestiture and higher W4CC sales in the prior year.

Cost of sales for the 2025 was $13,100,000 an increase of 5,800,000.0 compared to $7,300,000 in the prior year. The cost of sales increase was primarily driven by unit cost increase from higher sales volume and an increase in inventory excess and obsolescence reserves of 1,800,000 which was partially offset by lower production expenses of $1,200,000 and lower direct and indirect labor costs of $200,000 primarily due to lower headcount. Selling, general and administrative expenses in the 2025 were 5,800,000 a decrease of $6,300,000 compared to $12,100,000 in the prior year. The decrease in SG and A expense was primarily driven by a $3,100,000 decrease in employee compensation related expenses, primarily due to lower equity compensation and lower headcount. A decrease in legal and professional expenses of $1,100,000 a decrease in IT related expense of $400,000 lower corporate insurance of $500,000 and a $200,000 decrease in depreciation and amortization expense due to the Arrow divestiture.

Research and development expenses during the 2025 were $1,200,000 a decrease of $700,000 compared to $2,000,000 in the prior year. The decrease in R and D expense was primarily driven by 100,000 decrease in employee compensation related expenses due to lower headcount, a $300,000 decrease in prototype part expenses and a $300,000 decrease in rent expenses as well as depreciation and amortization expense. Looking at the same key parameters for revenue and operating costs for the 2024 and 2025. Sales, net of returns and allowances for the 2025 and 2024 were $6,300,000 and $2,200,000 respectively. For the six months ended 06/30/2025, the increase in sales of $4,100,000 was primarily due to the increased delivery of W56 trucks.

Cost of sales for the 2025 and 2024 were $18,200,000 and $14,700,000 respectively. The increase of cost of sales of $3,500,000 was driven due to the increase in sales volume as well as a $1,300,000 increase in warranty reserve expenses, which was offset by $1,600,000 decrease in direct and indirect labor costs and a $1,300,000 reversal of infrastructure expenses previously accrued. SG and A expenses during the first six months of 2025 and 2024 were $12,600,000 and $26,200,000 respectively. The decrease in SG and A of $13,600,000 was primarily driven by a $7,200,000 decrease in employee compensation and related expenses due to lower headcount and equity compensation, a decrease of $1,800,000 in consulting related expenses, a decrease in legal and professional expenses of $1,900,000 a decrease of $1,100,000 in insurance expense, a decrease in IT related expenses of 900,000 and a $300,000 decrease in depreciation and amortization expense due to the Arrow divestiture. Research and development expense during the first six months of 2025 and 2024 were $2,800,000 and $5,500,000 respectively.

The decrease in R and D expense of $2,700,000 was primarily driven by successful completion of the W56 initial design and production of the W56 and the W56 two zero eight inches wheel based truck program in the prior year. So to summarize, year over year revenue and operating costs for the six month period, revenues up $4,100,000 operating expenses were down $16,300,000 Turning back to Q2, interest expense net for the 2025 was $600,000 compared to $2,000,000 in the prior year. The decrease was primarily driven by higher financing fees related to the 2024 notes in the prior year. As of 06/30/2025, the estimated fair value of the 2024 notes totaled $39,500,000 During the three months ended 06/30/2025, the institutional investor converted $13,500,000 of principal into common stock. And the company recorded a $5,400,000 fair value net gain on conversion in the consolidated statements of operations.

During the three months ended June 2024, we recorded a $1,600,000 fair value net loss and a 3,100,000 fair value net loss respectively in the consolidated financial statements. As of 06/30/2025, the estimated fair value of outstanding warrants totaled $3,100,000 During the three months for the second quarter, the company recorded $1,900,000 fair value gain and a $600,000 fair value loss respectively relating to outstanding warrants. Overall, net loss for the six months ended 06/30/2025 has improved from $55,500,000 in 2024 to $35,400,000 in 2025. If you factor out the interest and fair value adjustments, the net loss from operations improved from $44,200,000 to $27,300,000 Turning to our balance sheet on slide seven. As of 06/30/2025, the company had $2,200,000 of cash and cash equivalents and $22,500,000 in restricted cash, accounts receivable of $2,400,000 other receivables of $100,000 inventory net of reserves of $32,800,000 and accounts payable of $10,800,000 In connection with proposed transaction with Motive, Workhorse completed two transactions with entities affiliated with Motive’s controlling investor, including a $20,000,000 sale leaseback for Workhorse’s Union City Indiana manufacturing facility as well as a superior convertible note financing for $5,000,000 each of which were consummated at the time of the execution of the merger agreement.

With that, I’d like to turn it back over to Rick to discuss the Motive transaction, how we arrived here and how the combined company will be well positioned to build on our progress.

Rick Dauk, CEO, Workhorse Group: Thanks, Bob. As Bob mentioned, on Slide eight, I’m going to touch on our transaction with Motive and then turn it over to Scott for his perspective on the future prospects of our combined companies. Let me start by taking a moment to reflect back on our journey and highlight how far we’ve come since I first joined this commercial startup company about four years ago. At the time, Workhorse’s path forward was far from clear. Our Union City plant and equipment were old and outdated.

Our newly designed Class four five step van was failing both on the test track and in the field. Since then, we have rebuilt the company from the ground up and into a streamlined process driven organization with market segment leading products with a reputation for reliability, durability and significantly lower TCO cost than comparable ICE vehicles. We accomplished this by advancing our technology roadmap, iterating designs based on direct customer feedback from the field and continuing to invest to expand our product portfolio. As a result, our W56 Step Van has become the flagship of our portfolio with consistent positive customer feedback, while offering two wheel based options, two EV powertrain options and now three body configurations. We partnered with proven and technically capable commercial vehicle component suppliers who continue to support our efforts here at Workhorse.

At the same time, we built a strong dealer network across the country and built strong relationship with operators of the largest medium duty fleets who now know and view the Workhorse brand to be associated with the high quality, reliability and integrity, a far cry from 2021. We also invested heavily into our Union City manufacturing facility, turning it into the jewel of the commercial electric vehicle manufacturing segment here in The United States. That said, while we remain optimistic about the long term transition to commercial EV vehicles, it’s true that factors largely outside of our control, like a shifting political landscape and changing government regulations and incentives have led to delayed fleet customer adoption rates. Gaining momentum on the revenue side of the equation has taken far longer than expected or forecasted by any OEM, automotive or Wall Street industry analysts. In light of these market conditions and with the support of our financial stakeholders, our Board of Directors and management team evaluated numerous strategic opportunities to best position Workhorse for both the near and long term future of the company and our stakeholders.

Our transaction with Motive was a result of the strategic guidance from our Board. By combining with Motive, we are creating a broader commercial truck product portfolio, strengthening our near and long term financial positions and providing Workhorse shareholders the opportunity to participate in the upside of a leader in the medium duty EV commercial vehicle market. The transaction itself has a few pieces, so I want to use this opportunity to break it down. Starting with our transaction that merges Motive and Workhorse. Under the terms of the transaction, at closing, Motive will emerge with a newly created subsidiary of Workhorse in exchange for newly issued shares of Workhorse common stock.

We have also taken steps to provide near term liquidity to Workhorse and simplify our capital structure. First, we have completed two transactions with entities affiliated with Motus Controlling Investor. A sale leaseback for Workhorse’s Union City, Indiana manufacturing facility for $20,000,000 as well as a $5,000,000 convertible note secured note financing. These transactions are expected to provide near term liquidity to support Workhorse’s operations through closing. They also provide us with the capital pay down debt owed to Workhorse’s existing senior secured lender.

In connection with signing, we entered into an agreement with our senior lender to permit the sale leaseback and convertible note and to provide additional structure around our repayment of obligations. As a result of the agreement, at closing of the merger, all remaining indebtedness owed to such lender, including all warrants currently held by the lender, will be repaid and or cancelled. In addition, the lender will receive rights to acquire shares of Workhorse common stock. At the close of the transaction, on a fully diluted basis, Motives Control Investor initially will own approx 62.5% of the combined company. Workhorse’s existing senior secured lender will have rights to receive common stock that represent approximately 11%.

And Workhorse shareholders will own approximately 26.5% of the company. All these ownership stakes are subject to certain potential adjustments and additional future dilution. Looking ahead, we intend to seek additional new financing to fuel go forward plans. As part of the merger agreement and as a condition of closing, at the completion of the transaction, the combined company is expected to obtain access to up to $20,000,000 in debt financing provided by entities affiliated with Motive’s controlling investor. This includes approximately $10,000,000 expected to be available in a revolving credit facility and an additional $10,000,000 expected to be available to fund manufacturing costs associated with confirmed purchase orders of the combined company in an ABL facility.

In addition, the combined company will seek to raise additional funding financing to fund its go forward strategic execution plans in 2026 and beyond. The transaction is expected to close in the 2025, subject to Workhorse shareholder approval and other customary closing conditions, the debt financing commitment. Turning now to why we believe our shareholders will be poised to benefit from the upside potential of the combined company. From a strategic perspective, we believe that Motive is the right partner for Workhorse. Together, we are a compelling and complementary fit.

The combination of Motive’s diverse product portfolio and top fleet relationships with Workhorse’s proven vehicles, manufacturing capabilities and national dealer network creates a strong combined company. Together, we expect to have more scale and the ability to operate more effectively and efficiently. We believe this will enable us to compete more effectively with our industry’s pure play electric and legacy OEMs and capitalize on new opportunities to serve more customers with a more competitive advanced electric product portfolio offering. Moreover, we are establishing a strong financial foundation from which we can advance our combined product roadmap. In addition to the cost synergy we expect to capture, we believe the actions we are taking to strengthen the combined company’s financial position will create opportunities for margin expansion and provide greater flexibility to pursue future growth initiatives.

With a simplified capital structure, we also believe that the combined company will be better positioned to raise additional capital post close. Taken together with these actions, we believe we will be well positioned to drive sustainable growth and create long term shareholder value. With that, I’ll turn things over to Scott to share the motive perspective on how the combined company will create shareholder value.

Scott Griffith, CEO, Motive: Thanks, Rick. It’s great to be here with you at the Workhorse headquarters in Cincinnati to discuss the compelling combination of our two leading OEMs in the medium duty space. I want to take a step back and provide more detailed view of Motive for those of you that may be less familiar with our company. We’re a leading manufacturer of medium duty zero emission trucks and buses. For more than fifteen years, we’ve partnered with our customers to help them along in their electrification journey, building long term trusted relationships along the way.

I personally served as CEO of Motive for more than a year and I’m thrilled to become CEO of the combined company at close. I spent much of my career at the intersection of transportation, technology and sustainability. Prior to joining Motive, I was CEO of Ford’s autonomous vehicles and mobility businesses. For more than a decade, I was CEO at Zipcar, the world’s largest car sharing network from seed stage to a public offering and ultimately through its sale to Avis Budget Group. Between my time at Zipcar and my leadership role at Ford Motor, I served as Executive in Residence at General Catalyst, a leading multibillion dollar venture and growth stage investment firm.

In addition to my work at Motive, I’m also on the Board of NASDAQ listed EVgo, a leading EV charging infrastructure company. I have great admiration for the talented Workhorse team, the vehicles and the manufacturing infrastructure your company has built. Now turning back to our slides. As you can see from slide nine, together we believe we’ll be positioned for success as a leading North American medium duty electric truck OEM. The transaction joins Motiv’s diverse product portfolio and top fleet relationships with Workhorse’s proven vehicles, manufacturing capabilities and national dealer network.

This slide covers the highlights of the transaction as well as the combined company’s impressive track record of delivering nearly 1,000 total vehicles and the over 17,000,000 real world miles driven by our vehicles. The combination of motive and workforce creates a leading medium duty electric truck OEM. We’ve developed eight supporting reasons we believe this provides a platform for future success and future shareholder value creation. One, product sorry, broad product portfolio targeting an attractive market. Two, strong complementary customer base.

Three, compelling total cost of ownership to accelerate adoption four, a proven direct sales and dealer network five, scalable and expandable U. S. Manufacturing six, significant synergies seven, stronger financial position and simplified capital structure and finally eight, strong executive leadership. I won’t take the time today to go through all details on all eight of these key points, but I will focus on points one, two, four and seven in the next few slides. In the coming weeks, we’ll provide deeper detail on all eight points.

Turning to slide 10, you’ll see that following the close, we’ll have a full range of Class four through six trucks to serve customers. Our leading portfolio will comprise the most advanced and road tested products and together we’ll chart a product roadmap designed to deliver what our customers want in the future. This includes joint development of a Class five, six cab chassis and importantly, we’ll play in the $23,000,000,000 medium duty electric medium duty truck segment that we believe is poised for continued electrification in the coming years. Both companies believe the next phase of large scale adoption of medium duty electric trucks in North America will be driven by national scale commercial fleets with tested and piloted multi depot EV truck operations similar to the types of large customers we already support including Purolator, FedEx, Cintas, Aramark and others. Turning then to slide 11, we have a strong and complementary customer base and together we’ve served 10 of the largest medium duty fleets in North America positioning the combined company to expand adoption through these existing relationships with the most likely early scalers.

We believe there is ample room for cross selling and increasing new and existing customer contact and confidence as we bring the two organizations together. Moving to slide 12, together the companies will have significant commercial capabilities as we bring together Motiv’s consultative and direct selling methodology and processes for growing from pilots to large multi order relationships with Workhorse’s robust dealer network. Workhorse has 19 dealer locations and is able to sell across all 50 states. Together, we’ll be able to increase customer contact and confidence through a much stronger go to market strategy. We’ll combine Motive’s strong experienced sales team with Workhorse’s national dealer network to foster what I call a new team sell approach with the dealer groups that will allow their sales professionals to participate in the sales process and help them sell more trucks.

Turning to Slide 13. Rick touched earlier on the new liquidity this transaction provides to Workhorse to support the company through close, along with debt financing at close and a significant synergy opportunity, which we project to be at least 20,000,000 by the 2026, the company will have a stronger financial position and simplified capital structure from which to execute its goals. This will support our ability to drive lower unit costs, while optimizing total cost of ownership for our customers. Widespread adoption of medium duty electric trucks, we believe will come from achieving cost parity versus internal combustion and diesel trucks and offering compelling long term value and this will be a primary focus of the combined company. In summary, we’re really excited about this combination.

Following the close of the merger, as one company, we’ll have more vehicles delivered and more miles on the road than any other medium duty truck OEM. We’ll combine that with world class engineering talent, a best in class supply chain and a fantastic manufacturing facility in Union City, Indiana.

Bob Ganan, CFO, Workhorse Group: All of this will

Scott Griffith, CEO, Motive: be commercially powered by top notch sales leaders and dealers and a proven executive team. We can’t wait to get everything we’ve just told you underway, so we can deliver a best in class product to our customers and and deliver new shareholder value for our investors. With that, Rick, I’ll turn it back to you to close this out.

Rick Dauk, CEO, Workhorse Group: Thanks, Scott. Over the next several months, we will continue to work towards completing our transaction with Motive, which we expect to occur in the 2025. As we do that, our focus remains on expanding our product portfolio, including by ensuring reliable fleet operations and customer satisfaction in the field, as well as finalizing plans for the W56140kW production launch in 2026. We will work with the Motive team on a plan to integrate our product roadmaps and R and D technology, allowing us to hit the ground running once the transaction is completed. We will also continue to strengthen our financial position by fulfilling fleet purchase orders, expanding dealer led sales and continuing to convert finished goods inventory into cash.

Together the teams will also begin the planning process for our go to market strategy and how we will best optimize operations at deal close. I hope you share excitement for the future of our combined company and see the significant opportunities ahead to win in the commercial EV transition world. Thanks for joining today’s call. And I’ll hand it back over to the operator, Kevin. Thanks.

Kevin, Conference Operator: Thank you. We’ll now be conducting a question and answer session. Our first question is coming from Craig Irwin from ROTH Capital Partners. Your line is now live.

Craig Irwin, Analyst, ROTH Capital Partners: Good morning and thanks for taking my questions. So this question is really a question for Scott, right? There’s different strengths on the Workhorse side and on the Motive side. But one area where motive is kind of invested over the last number of years is the market opportunity in New Jersey. You guys have been working with Hudson County Motors for several years now.

And those guys in Secaucus are in a pretty interesting place now that the New Jersey zip is the most attractive funding opportunity in the country. Can you maybe talk a little bit about your history working with Hudson County and the New Jersey ZIP, so that the investors interested in Workhorse can understand that. And maybe I need to be corrected about Workhorse’s history with New Jersey. But can you maybe give us a scope or approximate number of vouchers you’ve helped clients procure? And if you have any in hand?

And if there’s anything on the Workhorse side or that could maybe be used for the Workhorse side to facilitate the growth over the next couple of years?

Scott Griffith, CEO, Motive: Greg, thanks for your question. It’s really good point. We have a fantastic relationship with Hudson County Motors. I think that’s going to expand. In fact, I think it’s a good example of how we can develop relationships in other states frankly.

You probably know there’s a voucher program that is on is continuing and there’s a new voucher program that’s being developed in adjacent states including New York. So we think that’s going to be extensible into new locations. A lot of those relationships are going into people mover and box trucks both. So we anticipate that opportunity will continue through Hudson County and relationships that look a lot like that. So thanks for your question.

I think it’s extensible to the future. And it really develops this consultative sale approach that I mentioned during my comments, Craig, where we really help sell with the customer and the dealer together. And then the dealer kind of gets this delivery done and help serve the customer in the market. So I think that joint effort that we’re doing with the Hudson County is exactly the kind of model we’re moving to where we bring our direct sales approach in with the dealer network that Workhorse has developed. And using that as an example across the country the way we see the future.

Thanks again for your question.

Craig Irwin, Analyst, ROTH Capital Partners: Excellent, excellent. Then my second question, guess, is for the team, right? Most important thing for Workhorse has been growth, revenue growth and the market has not necessarily been cooperative, right? We’ve had some very promising programs from the federal government as well as from different state governments, which have had some of them had false starts, some have provided a lot more support than anticipated. Can you maybe flush out for us what the combined company looks like as far as being able to access these different programs?

Is this going to be something that’s maybe a more effective target for you guys with the combined entity? And what are your thoughts around growth and continued deliveries growth into 2026?

Rick Dauk, CEO, Workhorse Group: Great questions. Obviously, there’s been a lot of changes in both the federal level and some of the state levels and some of the government incentive programs and tax incentives. As recently last week, Carve has now republished their new incentive programs for California, restoring the class five six type of incentives, $85,000 for, trucks and up to a 165,000 for small business owners. We think that’s gonna be positive for us. We’ve worked closely with other EV manufacturers to help lobby car to get that done, and we see a big adoption rate going on in California.

So a lot of the large fleets, almost both companies as as Scott said have covered over 10 of the major fleets in North America. We’ve successfully passed all of our demonstrations there. One of the issues we had as a startup company is we had a balance sheet that’s a little bit risky. We’ve already heard from two or three of the largest fleets, both Scott and myself individually and from one of our dealers, they like this deal because it gives us a stronger balance sheet with a strong financial backer in in Moto’s primary investor. It gives us gives them more of a green light to go try some.

I’ve talked to one of the largest fleets. They have over 300 charging stations installed out in California that don’t have electric vehicles right now because they couldn’t find others with electric vehicles that last more than ninety to a hundred and twenty days. Our trucks are proven in the field. But it was minus 20 degrees over Christmas during the holiday season or a 118 degrees out in Arizona the last two weeks, our trucks have performed flawlessly. We’ve had zero service call.

I’ll give it back to Scott, get have to give his opinion about it.

Scott Griffith, CEO, Motive: Yeah. Craig, I love the question. Maybe just a couple other aspects that I’d add on. One of the reasons we have this financing that we structured that comes in a closing is under the condition that we get some of these orders you’re just asking about, we’re going to have the working capital support for parts and production to get those into the system right away. That’s been an issue in the industry in the past.

People wait for orders before they can order parts. It takes an awful long time to then develop the inventory and build the truck and get it out through a bodybuilder to the customer. We’re trying to circumvent that timeframe and really bring it to a much shorter, much more assured delivery date And we think that will help our ability to deliver against these new orders now. I’d say the second thing, look, we love these voucher programs. We love working with The States.

At the end of the day, long term, the successful OEM EV company, truck company is going to have to be competitive against internal combustion engines and diesel engines on an apples to apples basis, no vouchers, no cost support, no other support. And at the end of the day, that’s what this transaction can do. We think it gives us the scale, it puts us on a product development roadmap to do that. And we’ve already got more trucks and more miles than anybody else. So we’re kind of coming down that TCO development curve together after we close this deal.

So I think near term, we’ve got more financial support Rick mentioned. We’ve got this new debt structure that we’re going to put in place to help support orders through those voucher programs. And then long term, our vision is to be the low cost provider and have the lowest TCO in the industry, and we’re gonna work very hard to get that.

Rick Dauk, CEO, Workhorse Group: Scott, just just to reiterate a couple of things here. You know, I served on a public company board for over eleven years. And in the commercial step band space, it’s been a double duopoly for a long time between chassis supply and body upfit. Right? I’ll give you an example.

We shipped some of our trucks to one of the fleets last September. They arrived in the field in July. That’s how long the upfit process took. We’re still the only OEM in North America that can build our own strip chassis from scratch and put a cabin box on it. It doesn’t take much capital investment to go into the upfit part of the business as well.

That will be up to Scott and the new leadership team as they go forward. We think we can offer these large fleets rather than have trucks sit waiting to be up to for nine to twelve months, we can have it go from order to delivery in less than six months. That’s a big strategic and operational advantage for this combined company.

Craig Irwin, Analyst, ROTH Capital Partners: Great. Well, I like that. I like this deal. Congratulations for pulling it all together.

Rick Dauk, CEO, Workhorse Group: Thanks. We appreciate your support all the years. We’ll see you in the field.

Scott Griffith, CEO, Motive: Yeah. Thanks, Craig. Appreciate it.

Greg Lewis, Analyst, BTIG: Thank you.

Kevin, Conference Operator: You. Next question is coming from Greg Lewis from BTIG. Your line is now live.

Greg Lewis, Analyst, BTIG: Yes. Hey, thank you and good morning and thanks for taking my question and congrats on getting this deal to the finish line. Scott, I did have a question for you. I mean, clearly, the bus business for the Class A school bus business has been really a small part of Motive business. Like as you think about the opportunity bringing that into the under the work merging with Workhorse, just giving to Rick’s comments about the ability to kind of really build vehicles, use their chassis, Like do we how are you thinking about that?

Is this a potential opportunity to really ramp that part of the market, which I think everybody is waiting for step vans to get better, but this the school bus market does seem like a pretty it seems like it’s here and now and doing pretty pretty well.

Scott Griffith, CEO, Motive: Yeah. Greg, I appreciate the question. And and I I agree with, I think, the direction you’re you’re kinda going. It’s school buses and it’s also shuttles. It’s both.

They’re really the same platform. They kind of have slightly different conditions when you build them. But the underlying platform, the bodies are roughly the same. That market has continued to develop. There’s also some financial support for that.

And frankly, a lot of community support for it because you’re putting kids on buses that are much cleaner. And you’re putting shuttles on airport and other really tight operations in a much cleaner setting. So I think there’s financial support for it. There’s and these don’t run high miles. They tend to run fairly low miles.

So they kind of hit the exact duty cycle that the battery technology, the electric vehicle technology can hit right now. So it’s really a nice sweet spot for us. And we think on a cost basis, TCO basis, we’re highly competitive against the ICE counterparts in that space. So I agree with you. I think we’re going to bring that together.

We’ll do more of that as we can together. And but we already see lots of opportunity. And I’d say adjacent to that is the municipal space, box trucks in particular, small work trucks. Again, driven by some of the same underlying demand, these are highly dense urban populations where municipalities, school districts, airports want to have lower carbon impact. So they’re really looking at using electric vehicles to help do that.

It’s a very visible way for them to deliver on the promise to do that. So we think that segment’s exciting. It’s going to continue to be in our opinion robust for the next few years. And as the rest of the commercial duty commercial electric truck market develops that will continue to be a big slice of the pie that we’re going to go after.

Greg Lewis, Analyst, BTIG: Super helpful. Thank you very much.

Kevin, Conference Operator: Thank you. I’d like to turn the floor back over to management for any further comments or questions.

Stan March, Investor Relations, Workhorse Group: Yes. Thank you very much, Kevin. In addition to the questions that we just heard, Workhorse solicited questions from shareholders, and we received many of them into the email box. And for this part of the program, what I’d like to do is summarize the ones that were similar and ask the management team members present to respond to the various questions that came directly from shareholders. I actually will take the first one.

In the first question, we were asked, what are the terms of the sale and leaseback agreement? What are the terms of the convertible note? And what are the terms in the merger agreement for closing? And what I can say there is every one of those documents that you need to get the information out of is filed in the eight ks that was filed with the SEC on Friday. You can find every one of those terms, conditions to close and whatnot the sale leaseback dynamics all in there.

So it’s available. Of course, we’ll be filing a proxy as well. We’ll have more further details, but you can find the specific information you’re looking for right there in that eight ks. Glad we can point that out to you. So the questions range a wide variety of topics.

Let me start with the first one. One investor asked, why is a reverse split on the table in connection with the approval of this transaction? And I’m going to ask Bob Ghanan that question. Bob, why is that?

Bob Ganan, CFO, Workhorse Group: So the reason is because the transaction involves a potential change in control of Workhorse, Workhorse will be treated as a new applicant for NASDAQ listing and must meet its initial listing standards. Those standards include minimum price thresholds between $2 and $4 depending on other factors. And as a result, we may need to effect reverse stock split in order to meet these standards.

Stan March, Investor Relations, Workhorse Group: Okay. Thanks, Bob. Got one more for you, Bob. Can you provide the details on the math for the stated $105,000,000 valuation that was in the press release last week? Yes.

Bob Ganan, CFO, Workhorse Group: The go forward entity is being created as a combination of the following contributions. Dollars 50,000,000 from the Motive side of the business contribution, dollars 30,000,000 for the workforce business contribution and $25,000,000 which is a combination of the value sale leaseback transaction and the convertible note on an as converted basis. That totals $105,000,000

Stan March, Investor Relations, Workhorse Group: Okay. Thank you, Bob. Scott, I have one for you. Can you provide more details on Motive’s financials or pro form a financials for the combined company given that the Workhorse shareholders will own approximately 26.5 of the combined entity?

Scott Griffith, CEO, Motive: Yes. What I can say is that we’ll provide quite a bit more detail in our in the proxy. I think the timing of that is weeks away now. We expect to file. What I can say is the transaction really strengths the company’s financial position expected to create opportunities for our margin expansion, doing that together reducing BOM, using volume on the production side and then enabling greater flexibility to pursue future growth initiatives.

So I think we’re in a good position now. You’ll see more details in the proxy and then the go forward, which we’ll talk about in a subsequent presentation to really go after future growth initiatives at a lower cost structure.

Stan March, Investor Relations, Workhorse Group: Thank you, Scott. A number of folks were a number of shareholders were asking questions about product portfolio. So let me ask both Scott, you and Rick, how do you plan to address the overlap in the combined portfolios, specifically in the Class four through six where both companies have existing products?

Scott Griffith, CEO, Motive: Rick, why don’t I take that first? I think we both noted that as a combined company and it was on one of the slides, we’ll have a full range of Class four through six trucks to serve our customers. We think these are the most advanced road tested products out there. That’s going to mean a lot to the especially the larger fleet customer, the experienced fleet customer operator that we’re going to target. We’ll be developing a Class five and six cab chassis together.

We bring a pretty decent head start on that into the mix. And then we’ll be continuing to work on a longer term cycle plan product roadmap, if you will, that really targets that. And back to a question that was asked, we’ll be continuing to focus on the bus and shuttle business, something Workhorse has not really played in the past. We think that’s a that’s an extensible growth opportunity as well. So full stack of products from class four through six, lots of different body configurations that we can support from that in a cost structure that I think is gonna be much more attractive going forward.

Rick Dauk, CEO, Workhorse Group: Yeah. Let me jump in, Scott. We’re working with the Motive team on integration planning against across all functional parts of the company, including our product portfolio and our r and d road map. There’s many details to be determined. At a high level, workforce imports a class four cab chassis from China.

Motive uses a US made cab chassis. So you can factor in tariffs, etcetera. We’ll see how that plays out. On the class five six cab chassis standpoint, Motive uses one from an OEM here in North America, where Workhorse is designed from scratch and built in house. So Scott and I are gonna work on that.

We’ll get the best products at the best cost going forward. Critical for us, we use different battery suppliers today. We’ll have to map out our battery supply situation going forward. And we’re gonna map out our supply chains to make sure where there’s overlap and where there’s not overlap. We can kinda see what we can do going forward.

So a lot of work to do. Good news, we both have well qualified set of engineers, both in mechanical, electrical, and software. And we’ll put those guys to work pretty quickly.

Stan March, Investor Relations, Workhorse Group: I think a question for the combined CEOs again if you don’t mind. Is the financing in connection with the transaction enough operations or will you need to raise more capital in the future?

Rick Dauk, CEO, Workhorse Group: Great question. I’ll go first. So we believe that the proceeds from the sale leaseback and the convertible note, coupled with the potential for additional capital from our existing secured lender will be sufficient to support Workforce’s ongoing operations through the transaction close and provide sufficient capital pay down all the outstanding debt owed to our existing senior secured convertible note holder at closing.

Scott Griffith, CEO, Motive: Right. And then I’ll just add to that Rick. If you note in the merger agreement and it’s been mentioned a few times on the call, I think there’s a condition to close that our controlling investor at Motive will provide up to $20,000,000 in debt financing and that’s split between some working capital support on an asset backed lending structure and then just normal operating support against the company’s operating cash flow needs. So I think we’ve got both of those pieces in place as we hit. And as we get new orders, we can kind of get those orders into the system quickly using that structure.

And then also following the completion of the transaction, we’ll look to raise additional capital to fund the company’s go forward strategic execution. We’ll be talking more about that in the company months as we get closer to the close. And then lastly, I’d say with a stronger financial position, we’ll be better positioned to pursue future growth initiatives as a combined company. That product roadmap that Rick and I just talked about expanding our sales activity is something that we’ll want to invest in. And so that’s those are exciting new growth avenues for us as we get this uniform product portfolio put together.

Stan March, Investor Relations, Workhorse Group: Thank you very much, Scott and Rick. We got a question that we certainly want to answer, very specific. Bob, I think I’ll ask you, did Workhorse retain any patents when it had the transaction for the Aero division? Can the company still use any

Bob Ganan, CFO, Workhorse Group: of that intellectual property? To stay in all the drone related patents were included with the divestiture of the Aero division.

Stan March, Investor Relations, Workhorse Group: Okay. I think back to the CEOs, does Workhorse or Motive have any near term contracts or regulatory approvals or partnerships or other announcements in the near term that will increase shareholder confidence in the combined company? Or maybe said a different way, are there any potential customers that you’d expect will submit purchase orders only if this transaction is completed?

Rick Dauk, CEO, Workhorse Group: Great, Stan. We’ve had conversations with the customers that started since the announcement and we’ve received initially strong feedback. I can tell you that I haven’t been on calls since Friday with our largest dealer. He’s excited to meet Scott and understand the product portfolio motive and see how he can help us. We’re also working with him on a big opportunity for a large order for a fleet.

Second, we’ve talked to one or two of the big fleets at my level and Scott’s talked to a couple of them as well. With the stronger balance sheet, with the capability of the manufacturing, and the the capital they have approved in their future spending, it looks like we can go out and secure some additional orders. We’re not gonna come any further until we actually receive those new orders. How’s that? It’s on on us right now.

Scott and I are gonna work together to go out and secure additional orders that we hope to close before the deal is finalized.

Scott Griffith, CEO, Motive: Yeah. Rick, I think I would just add. I I have also personally talked to some of our customers, James Griffin, our CROs, talked to our customer base. We’ve we’ve had universal great support from for the idea behind this. I think the compelling eight points that we went through earlier about the support for why this transaction makes sense strategically and financially, I think our customers are pretty quickly seeing that.

And they see the benefits that will accrue to them over time. So I’m excited about the feedback we’ve had in the past few days since we announced the merger. The other thing I’d say is the timing of this transaction and assuming we close in Q4, it lays in directly to the buying cycle for next year for 2026. Large fleets primarily that we deal with start doing their planning, their budgeting and their fleet sizing between now and into Q4. And so we fit right into that buying cycle, that planning cycle.

So I really like the way this dovetails into that. So we’ll be starting conversations as we start moving toward close with customers about their plans for next year and walking them through how we see the combined portfolio of products fitting into that and how we can support their plans for development of electric vehicle fleet expansion next year. So we’re excited about the timing of this. That part’s a little bit lucky. Sometimes you got to be a little bit lucky.

And I think our timing here is really good.

Rick Dauk, CEO, Workhorse Group: There’s one comment Scott gave me on Monday at a call with one of the fleets that we spent an extensive amount of time last year on a demo for over several months. And our truck passed with flying colors ranges from 50 to 150 mile with payloads up to 5,000. We didn’t miss a beat, but the customer was concerned about our balance sheet and our ability to sustain the company going forward. By putting these two companies together and having a clean balance sheet with the right financial backing that alleviates that issue and hopefully we can turn that now into a real PO.

Stan March, Investor Relations, Workhorse Group: Okay. And I think the last summary question, I think mostly it’s for you Scott. I know you’ve talked about this, but let’s come at it again. What’s the first priority in driving sales in the new organization? How will the new workhorse target the market?

And do you have any particular customers that you want to attract? Or do you feel like you’ve got a

Scott Griffith, CEO, Motive: broad enough group now? Yes. I mean, look, secret to success here is these larger fleets at the starting point. We’ve developed what we think of as a four phase program that starts with a pilot. It then often results in a first order and then a multiyear contract with multiple orders after that.

That cycle can take anywhere from twelve months to a couple of years to get through. So we want to continue those. We’re in those conversations with, as I mentioned earlier, 10 of the largest fleets in North America. All 10 of those are currently commercially operating with one of our companies. We’d like to get to the next 30 or 40 of those and and start that same discussion that we’ve we’ve proven this track record of how we get you started in pilots, how we get you into a single depot operation at some scale, and then we use the multiple depot operations including the infrastructure required and then the maintenance and parts and support and customer service.

So I think that continues to so we’ve got this direct sales approach that we take on our side. We’re going to combine that with the dealer network. And from my perspective, that’s a peanut butter and chocolate combination because it really is a very straightforward. These the big fleets that we speak with, they really want to talk directly with the OEM as they start really understanding this transition. Once they get more comfortable, they get enough trucks on the road, the dealer can start to play a much more important role.

So we see this as a transition from our direct sales model, the workhorse model, which is maybe more focused on the dealer side, put those two together and now we’re we work all the way through those four phases I mentioned from early early adoption in a pilot phase all the way to hundreds and maybe thousands of trucks in the fleet. We can support that whole journey now in our customer roadmap. So we’ll be combining our experienced sales team with the national dealer network to foster this new team sell approach I mentioned earlier with the dealer groups allow their sales professionals to participate in the sales process. It’s pretty difficult for a dealer to make the first sale of an electric truck to fleet that’s never run an electric truck before. It’s a complicated sale.

There’s a lot to answer on the technology. There’s a lot to answer on the economics of these trucks. We like to do that directly and then bring the dealers in as our partner. And and that’s what the combination of these two companies is gonna allow us to do it real scale now.

Rick Dauk, CEO, Workhorse Group: Yeah. Let me comment on that just quick, you know. We have experience with a few fleets out there. It’s almost follow the exact same pattern Scott talked about. You have to have a successful demo or pilot, which is simply one to a few units.

Those demos take thirty to a hundred and eighty days. They’re they’re used in different scenarios, range of the route, payloads, etcetera. If you pass that demo pilot, you get to initial order with these are expensive trucks. They can see an order from maybe five to 20 trucks. The fleets wanna run those trucks now in the field for a year across all the seasons including the peak season.

And if you are successful there, you get good service to the field because sometimes these trucks get banged around, they they have a heavy usage. Then you they they make a big decision about are they making the capital expenditures to actually make the transition to EVs. That starts with the charging systems, and Scott’s position, the board of EVgo helps give him insight to the fleets across the country that are all going ahead and putting in EV charging systems, and also where they’re going in by states. And then then you start seeing the bigger orders from the cap the bigger companies. And there’s a couple who are leaders in the industry both north of the border and here in United States.

We think we’re well positioned with two of the leaders to earn their initial big EV transition design buys. And that’s a big capital expenditure. These companies buy these trucks and they hold on anywhere from ten to fifteen up to twenty years. What we’re seeing on our own stables route is we’re seeing paybacks of less than three to four years depending on the incentive programs going on. So that’s a good business decision.

This is

Scott Griffith, CEO, Motive: not gonna be driven by incentive programs long term as Scott said. We have to drive the cost of vehicles down including battery cost, manufacturing efficiencies. And if we do, we’re confident there’s a great business case for these fleets to go electric. And to sort of close that out, I think this merger puts us in, you know, really a good position to be able to do that as as a real one of the real industry leaders at some with scale and a supply chain that’s really excited about supporting us as we start to scale up.

Rick Dauk, CEO, Workhorse Group: And I can tell you from one of the fleets we deal with, there’s three or four people who’ve been fighting for that business. One company has been taken off the bid list because their trucks don’t don’t last more than ninety to hundred twenty days. Another one hasn’t passed the initial pilot phase, so we’re well positioned. We got to go out and win that business.

Stan March, Investor Relations, Workhorse Group: Okay. That actually is I think we’ve wrapped up in summary fashion the questions that came in from the shareholders. And thank you very much those of you who took the time to respond. We tried to make sure we got all the relevant questions addressed here. Kevin, unless there’s another call on the line, I think we can wrap it up from here.

Kevin, Conference Operator: Sure. Do have any further or closing comments?

Rick Dauk, CEO, Workhorse Group: Well, I appreciate the opportunity to and thanks for your patience with us. Look forward to rolling up our sleeves and working with the Motiv team to put these two companies together by the New Year. And then Scott can have the baton and he can run the next lap here at Workhorse.

Scott Griffith, CEO, Motive: I mean, my only last comment is I imagine both of our teams, number of our team members are listening as Tom Brady says, let’s go.

Stan March, Investor Relations, Workhorse Group: Let’s go. Thank you very much. Signing off.

Kevin, Conference Operator: Thank you. That does conclude today’s teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

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