UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(MARK ONE)
For
the quarter ended
For the transition period from to
Commission
file number:
(Exact Name of Registrant as Specified in Its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
(Issuer’s telephone number)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The
|
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company | |||
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of August 6, 2026, there were Class B Common Stock, $ par value issued and outstanding.
APTERA MOTORS CORP.
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2026
TABLE OF CONTENTS
| i |
PART I - FINANCIAL INFORMATION
Item 1. Interim Financial Statements.
APTERA MOTORS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share data)
| June 30, 2026 | December 31, 2025 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Prepaids and other | ||||||||
| Total current assets | ||||||||
| Deposits and other long-term assets | ||||||||
| Property and equipment, net | ||||||||
| Right of use assets – operating lease, net | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Unearned reservation fees | ||||||||
| Financing arrangements | ||||||||
| Current portion of operating lease liabilities | ||||||||
| Total current liabilities | ||||||||
| Operating lease liabilities, net of current portion | ||||||||
| Other long-term liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 3) | ||||||||
| Stockholders’ Equity: | ||||||||
| Preferred stock, $ par value, authorized; and shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively | ||||||||
| Class A Common Stock, $ par value, shares authorized, and shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively | ||||||||
| Class B Common Stock, $ par value, shares authorized, and shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Subscription receivables | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
See accompanying notes.
| 1 |
APTERA MOTORS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except share and per share data)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Operating Expenses: | ||||||||||||||||
| General, selling, and administrative | ||||||||||||||||
| Research and development | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income | ||||||||||||||||
| Net Loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average loss per share of Class A and Class B common stock basic and diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average shares outstanding of Class A and B common stock - basic and diluted | ||||||||||||||||
See accompanying notes.
| 2 |
APTERA MOTORS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except share and per share data)
(Unaudited)
| Preferred Stock | Class A Common Stock | Class B Common Stock | Additional Paid-In | Subscription | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Receivable | Deficit | Equity | |||||||||||||||||||||||||||||||
| Balance January 1, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||||
| Sale of common stock, net of issuance costs | — | — | ||||||||||||||||||||||||||||||||||||||
| Stock based compensation | — | — | — | |||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| As of March 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||||
| Sale of common stock, net of issuance costs | — | — | ||||||||||||||||||||||||||||||||||||||
| Stock based compensation | — | — | 347 | |||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| As of June 30, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||||
| Balance January 1, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||||
| Issuance of common stock and warrants from sale and exercise, net of issuance costs | — | — | ||||||||||||||||||||||||||||||||||||||
| Share conversions | — | ( | ) | |||||||||||||||||||||||||||||||||||||
| Issuance of stock for vested RSUs | — | — | ||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | |||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| As of March 31, 2026 | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||||||
| Issuance of common stock and warrants from sale and exercise, net of issuance costs | — | — | ( | ) | ||||||||||||||||||||||||||||||||||||
| Share conversions | — | ( | ) | |||||||||||||||||||||||||||||||||||||
| Issuance of stock for vested RSUs | — | — | ||||||||||||||||||||||||||||||||||||||
| Stock-based settlement of litigation (see Note 3) | — | — | — | |||||||||||||||||||||||||||||||||||||
| Issuance of common stock to settle liabilities | — | — | ||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | |||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| As of June 30, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||||||||
See accompanying notes.
| 3 |
APTERA MOTORS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
| Six Months Ended | ||||||||
| June 30, 2026 | June 30, 2025 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Stock-based compensation | ||||||||
| Non-cash legal settlement | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Grant funds receivable | ( | ) | ||||||
| Prepaids and other | ( | ) | ( | ) | ||||
| Deposits and other long-term assets | ||||||||
| Accounts payable | ( | ) | ||||||
| Accrued liabilities and unearned reservation fees | ( | ) | ( | ) | ||||
| Operating lease assets and liability, net | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities | ||||||||
| Net proceeds from sale of common stock, warrants and exercise of warrants | ||||||||
| Payments on financing arrangements | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents, beginning of period | ||||||||
| Cash and cash equivalents, end of period | $ | $ | ||||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
| Non-cash financing activities: | ||||||||
| Increase to right-of-use asset and lease liability from lease extension | $ | |||||||
| Settlement of litigation liability with issuance of equity instruments | $ | $ | ||||||
| Settlement of accrued liabilities with issuance of common stock | $ | $ | ||||||
| Insurance policies and software licenses financed | $ | $ | ||||||
See accompanying notes.
| 4 |
APTERA MOTORS CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1—ORGANIZATION AND BUSINESS
Aptera Motors Corp. (“Aptera,” the “Company,” “we,” “us” or “our” and similar terms refers to Aptera Motors Corp. and its subsidiaries unless the context otherwise requires) was incorporated on March 4, 2019 (“Inception”) in the State of Delaware. The Company is developing a solar electric vehicle focused on efficiency. In September 2023, the Company established the subsidiary company Aptera Motors Italia Srl, based in Modena, Italy.
Risks and Uncertainties
Our business is highly sensitive to domestic and global economic and business conditions as well as local, state, and federal government policy decisions. Several factors beyond our control could cause material fluctuations in our business and financial condition. In addition, we require a significant amount of capital to fund vehicle manufacturing, have a limited operating history and operate with small management and development teams that contain key employees. We also face significant barriers to market entry and competing technologies. At times, we have experienced constraints and volatility in our supply chain that resulted in increased costs to us. Furthermore, we are affected by uncertain regulatory conditions, fluctuations in demand, and inflation in production and shipping costs. These conditions could affect the volatility of our business, our financial condition and our results of operations.
Going Concern and Our Plans
We have incurred losses from operations since inception and have not generated any revenue to date. We expect to incur significant costs associated with vehicle development, testing, and the commencement of production before generating revenue. As of June 30, 2026, our existing cash and cash equivalents were not sufficient to fund our current operations for the next twelve months. These factors, among others, raise substantial doubt about our ability to continue as a going concern. After considering the plans described above, we have concluded that substantial doubt about our ability to continue as a going concern has not been alleviated because our plans are dependent on events and conditions that are not within our control, including our ability to raise additional capital on acceptable terms and in amounts sufficient to fund our operating and capital needs.
The Company is executing a multi-phased financial strategy to address our liquidity needs and fund our path to production. Significant milestones achieved include:
| ● | Nasdaq Direct Listing: On October 16, 2025, our Class B Common Stock commenced trading on the Nasdaq Capital Market under the ticker symbol “SEV,” providing a platform for broader access to public capital markets. | |
| ● | Equity
Line of Credit (“ELOC”): In October 2025, we entered into a share purchase agreement providing a committed $ million
equity line of credit. Through June 30, 2026, we had utilized this facility to raise approximately $ | |
| ● | January
2026 Capital Raise: In January 2026, the Company successfully raised an additional $ | |
| ● | March
2026 Warrant Exercises: During the first quarter of 2026, the Company received aggregate gross cash proceeds of approximately
$ | |
| ● | July
2026 Warrant Inducement Transaction: On July 13, 2026, subsequent to quarter-end, the Company closed a warrant inducement transaction
generating approximately $ |
Our
ability to continue as a going concern is dependent on our ability to obtain sufficient funding by accessing the remaining capacity under
our $ million ELOC and raising additional capital through public or private markets. Following the successful capital raises in early
2026, the Company estimates that an additional $
While the Company believes its access to the public markets and the ELOC provide a viable path to necessary liquidity, there is no guarantee that we will be able to draw down sufficient amounts or secure additional financing on favorable terms. If the Company is unable to obtain adequate financing, it may be required to implement significant cost-cutting measures or significantly curtail our operations. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
| 5 |
NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying condensed consolidated financial statements included herein have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted as permitted by such rules and regulations; however, the Company believes the disclosures are adequate to make the information presented not misleading.
The interim financial information is unaudited, but reflects all normal recurring adjustments that are necessary in the Company’s opinion to fairly present the information set forth herein. The interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2025 included in Form 10-K filed with the SEC on March 30, 2026. Interim results are not necessarily indicative of the results expected for the full year.
The Company operates as a single reportable segment focused on the development of solar electric vehicles. The Co-Chief Executive Officers review consolidated financial information to assess performance and allocate resources. The Co-Chief Executive Officers function collectively as our chief operating decision maker.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires the Company to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of expenses during the reporting periods. We use historical and other pertinent information to determine those estimates. Actual results could materially differ from these estimates.
Reclassification
Certain amounts in the condensed consolidated financial statements have been reclassified to conform to the current period presentation.
Correction of Immaterial Error and Out of Period Adjustments
During the quarter ended June 30, 2026, management identified an error related to the accounting for contingent considerations within its technology licensing agreement (“TLA”) entered into in 2022. Specifically, that the recording of amounts related to those stock-based contingent consideration as expenses and paid-in capital prior to such liabilities being incurred was not appropriate under GAAP.
The error resulted in an overstatement of additional paid-in capital and an overstatement of accumulated deficit in previously issued interim and annual financial statements beginning with the year ended December 31, 2022. The error had no effect on the statement of cash flows previously reported due to its non-cash operating nature and has zero effect on total stockholders’ equity.
The Company evaluated the error qualitatively and quantitatively in accordance with SEC Staff Accounting Bulletin Nos. 99 and 108 and determined it was immaterial to each previously issued reporting period. Because correcting the cumulative amount solely through a catch-up adjustment in the current period would materially affect the comparability of the current period financial statements, management revised prior period comparative financial information for periods ended on or prior to December 31, 2024 and recorded an out-of-period adjustment of $ million in the three months ended June 30, 2026 to reduce stock-based compensation expense and additional paid-in capital for amounts previously recorded in the year ended December 31, 2025 and the three months ended March 31, 2026. The net loss for the three months ended June 30, 2026 includes this adjustment.
| 6 |
The following table presents the impact of the correction on the Company’s consolidated balance sheet as of December 31, 2024:
| (in thousands) | As Previously Reported | Adjustment | As Revised | |||||||||
| Additional paid-in capital | ( | ) | ||||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||||||
The following table presents the impact of the correction on the Company’s consolidated balance sheet as of March 31, 2025:
| (in thousands) | As Previously Reported | Adjustment | As Revised | |||||||||
| Additional paid-in capital | ( | ) | ||||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||||||
The following table presents the impact of the correction on the Company’s consolidated balance sheet as of June 30, 2025:
| (in thousands) | As Previously Reported | Adjustment | As Revised | |||||||||
| Additional paid-in capital | ( | ) | ||||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||||||
The following table presents the impact of the correction on the Company’s consolidated balance sheet as of September 30, 2025:
| (in thousands) | As Previously Reported | Adjustment | As Revised | |||||||||
| Additional paid-in capital | ( | ) | ||||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||||||
The following table presents the impact of the correction on the Company’s consolidated balance sheet as of December 31, 2025:
| (in thousands) | As Previously Reported | Adjustment | As Revised | |||||||||
| Additional paid-in capital | ( | ) | ||||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||||||
The following table presents the impact of the correction on the Company’s consolidated balance sheet as of March 31, 2026:
| (in thousands) | As Previously Reported | Adjustment | As Revised | |||||||||
| Additional paid-in capital | ( | ) | ||||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||||||
Additionally,
during the quarter ended June 30, 2026, management identified an error in the presentation of financed arrangements for certain
prepaid insurance policies and software licenses which were incorrectly presented on a net basis within prepaid assets, resulting in
an understatement of financed arrangements and understatement of prepaids and other assets. Management evaluated the correction and
determined that the effect of the correction was not material on previously reported financial statements and recorded the
correction as of the current period. The out-of-period adjustment related to the balances of the financed arrangements as of
December 31, 2025 was $
Fair Value of Financial Instruments
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants as of the measurement date. Applicable accounting guidance provides an established hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors that market participants would use in valuing the asset or liability. There are three levels of inputs that may be used to measure fair value:
Level 1—Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.
Level 2—Observable inputs other than prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated with observable market data.
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs.
| 7 |
The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
Fair-value estimates discussed herein are based upon certain market assumptions and pertinent information available to the Company as of the balance sheet dates.
The following are the classes of assets and liabilities measured at fair value (amounts in thousands):
| As of June 30, 2026 | ||||||||||||||||
| Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Assets: | ||||||||||||||||
| Money market fund | $ | $ | $ | $ | ||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| As of December 31, 2025 | ||||||||||||||||
| Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Assets: | ||||||||||||||||
| Money market fund | $ | $ | $ | $ | ||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
As of June 30, 2026 and December 31, 2025, the respective carrying value of cash and cash equivalents, receivables, other current assets, accounts payable, unearned reservation fees and financing arrangements approximated their fair values.
Cash and Cash Equivalents
The
Company considers all highly liquid cash instruments purchased with an original maturity of three months or less to be cash
equivalents. As of June 30, 2026 and December 31, 2025, cash and cash equivalents contained $
Property and Equipment
Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the following estimated useful lives:
| Computers, hardware and software | |
| Leasehold improvements | |
| Machinery, tooling, and equipment | |
| Other equipment | |
| Production tooling equipment |
Long-Lived Assets
Long-lived assets, such as property, plant and equipment and operating lease assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for potential impairment, we first compare undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent the carrying amount of the underlying asset exceeds its fair value.
Unearned Reservation Fees
Unearned reservation fee liabilities are recorded based on all funds we expect to collect on each transaction, including merchant processor fees charged. We maintain a separate money market account for all customer reservation fees collected.
| 8 |
Leases
The Company recognizes all operating leases on the condensed consolidated balance sheets at the commencement date. This includes:
| ● | A right-of-use (ROU) asset representing the right to use the leased asset. | |
| ● | A lease liability representing the future lease payments discounted to present value. |
Lease expense is recognized on a straight-line basis over the lease term, reflecting the benefit of using the leased asset. Our assessed lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.
We recognize a ROU asset at the commencement of an operating lease, representing the right to use the leased asset. The ROU asset is initially measured at the present value of the non-cancellable lease payments, including any initial direct payments. The ROU asset is depreciated over the lease term, using the same depreciation method and useful life as the underlying leased asset, or if not readily determinable, using a straight-line method over the lease term.
We recognize a lease liability at the commencement of an operating lease, representing the obligation to make lease payments. The lease liability is initially measured at the present value of the non-cancellable lease payments, less any initial direct payments. The lease liability is subsequently remeasured to reflect the present value of the remaining lease payments using the lessee’s incremental borrowing rate at the initial recognition date or the subsequent remeasurement date, if applicable. Interest expense is recognized on the lease liability using the effective interest method.
Commitments and Contingencies
Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount within a range of loss can be reasonably estimated. When no amount within the range is a better estimate than any other amount, we accrue for the minimum amount within the range. Legal costs incurred in connection with loss contingencies are expensed as incurred.
Contracts
that must be settled in a variable number of the Company’s equity securities based on a fixed dollar amount are classified as liabilities
and remeasured to fair value at each reporting date. When such a contract is settled through the issuance of stock, or when the number
of shares to be issued becomes fixed, the liability is reclassified to additional paid-in capital. No such liabilities existed as of
June 30, 2026. Accrued liabilities related to such contracts were $
During
the three months ended June 30, 2026, the Company settled previously accrued liabilities of $
Revenue Recognition
To date, the Company has not generated any revenue from operations. The Company is currently in the pre-production development, testing and validation stage.
The Company expects to recognize revenue upon the delivery of its product to customers.
The Company’s ability to generate revenue is subject to various risks and uncertainties, including successful product development, market acceptance and regulatory approvals. These factors could materially impact the timing and amount of future revenue recognized by the Company.
Key Considerations for Future Revenue Recognition:
| ● | Performance obligations: The Company will assess its contracts with customers to identify the distinct performance obligations and allocate the transaction price accordingly. | |
| ● | Variable consideration: If applicable, the Company will estimate the amount of variable consideration to which it is entitled based on the probability-weighted approach. | |
| ● | Right of return: If customers have a right to return products, the Company will recognize a refund liability and adjust revenue accordingly. | |
| ● | Principal versus agent: The Company will determine whether it acts as a principal or an agent in its transactions, which will impact the presentation of revenue in the financial statements. |
| 9 |
The Company will continue to evaluate its revenue recognition policies and procedures as its business evolves and will make any necessary disclosures in future financial statements.
Advertising Costs
The
Company expenses advertising and promotional costs as incurred. Advertising costs are included within general, selling, and
administrative expenses in the accompanying consolidated statements of operations. Advertising expenses were $
Income Taxes
The Company provides for income taxes using the asset and liability approach. As of June 30, 2026, the Company continues to maintain a full valuation allowance against its net deferred tax assets, as the Company believes it remains more likely than not that they will not be realized. There have been no material changes to the Company’s liability for uncertain tax positions since December 31, 2025.
The Company measures and recognizes compensation expense for all stock-based awards, including stock options and restricted stock units (“RSUs”), granted to employees, directors, and non-employees based on their estimated grant-date fair value. Equity instruments issued in connection with financing transactions or settlements of liabilities are not classified as stock-based compensation.
| ● | Stock Options: The fair value of stock options is estimated at the date of grant using the Black-Scholes option-pricing model. | |
| ● | Restricted Stock Units: The fair value of RSUs is determined based on the closing market price of the Company’s Class B Common Stock on the date of grant. |
The Company accounts for forfeitures as they occur. Accordingly, compensation expense is recognized only for awards that ultimately vest. Forfeitures are recognized in the period in which they occur, and no estimations or adjustments are made for anticipated forfeitures.
Research and Development
Research and development costs are expensed as incurred and represent costs incurred to further new technologies, product design and technical capabilities.
Concentration of Credit Risk
Financial instruments that potentially subject us to concentration of credit risk are cash, cash equivalents, and restricted cash. We hold cash in domestic financial institutions that are federally insured within statutory limits. At times, deposits exceed federally insured limits.
Concentration of Supply Risk
The Company is dependent on a few suppliers for capital equipment, the majority of which are single-source suppliers, and the inability of these suppliers to deliver necessary equipment and components of its products according to the schedule and at prices, quality levels and volumes acceptable to the Company, or its inability to efficiently manage these components, could have a material adverse effect on the Company’s results of operations and financial condition.
We compute net loss per share of Class A and Class B Common Stock using the two-class method. Basic net loss per share is computed using the weighted-average number of shares outstanding during the period. Diluted net loss per share is computed using the weighted-average number of shares and the effect of potentially dilutive securities outstanding during the period. For periods in which we incur a net loss, the effects of potentially dilutive securities would be antidilutive and would be excluded from diluted calculations. Dilutive securities consist of Preferred Stock, restricted stock units, stock options and warrants issued under the Company’s Equity Incentive Plans.
| 10 |
| June 30, 2026 | June 30, 2025 | |||||||
| Preferred stock | ||||||||
| Restricted stock units | ||||||||
| Stock options | ||||||||
| Warrants | ||||||||
| Stock awarded and not yet issued | ||||||||
| Potentially dilutive securities | ||||||||
For the three and six months ended June 30, 2026 and 2025, we incurred a net loss for which the effects of our potentially dilutive securities would be antidilutive and are therefore excluded from diluted net loss per share calculations.
| Three Months Ended June 30, | ||||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Class A | Class B | Class A | Class B | |||||||||||||
| Numerator: | ||||||||||||||||
| Allocation of losses | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Denominator: | ||||||||||||||||
| Weighted average shares outstanding | ||||||||||||||||
| Basic net loss per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Six Months Ended June 30, | ||||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Class A | Class B | Class A | Class B | |||||||||||||
| Numerator: | ||||||||||||||||
| Allocation of losses | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Denominator: | ||||||||||||||||
| Weighted average shares outstanding | ||||||||||||||||
| Basic net loss per share | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires public business entities to disclose specific natural expense categories within relevant expense captions. The standard is effective for annual reporting periods beginning after December 15, 2026. The Company is currently evaluating the impact of this standard on its financial statement disclosures.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which is intended to improve the guidance in Topic 270 by enhancing the navigability of required interim disclosures and clarifying the applicability of the guidance. The update also introduces a disclosure principle requiring the disclosure of events occurring since the end of the most recent annual reporting period that have a material impact on the entity. For the Company, the standard is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact of this standard on its financial statement disclosures.
In May 2026, the FASB issued ASU No. 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818). The ASU establishes authoritative guidance for the accounting of environmental credits and environmental credit obligations, including recognition, measurement, presentation, and disclosure requirements, in an effort to reduce diversity in practice and increase consistency of application across reporting entities. The ASU is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Adoption of this ASU should be applied on a retrospective basis through a cumulative-effect adjustment to the opening balance of retained earnings (or other appropriate components of equity or net assets on the balance sheet) as of the beginning of the annual reporting period of adoption, without recasting for any financial statement information before the period of adoption. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the provisions of this ASU.
NOTE 3 – COMMITMENTS AND CONTINGENCIES
Litigation and Regulation
Various aspects of our business and service areas are subject to U.S. federal, state, and local regulation, as well as regulation outside the United States. The Company is also subject to legal proceedings which arise in the ordinary course of business.
| 11 |
In August 2024, Zaptera USA, Inc. (“Zaptera”) filed a complaint against Aptera Motors Corp. in the U.S. District Court for the Southern District of California alleging design patent infringement, misappropriation of trade secrets, and declaratory judgment of patent ownership, among other claims.
In
April 2026, the Company entered into a settlement agreement with Zaptera. Pursuant to the terms of the settlement, the Company
agreed to issue shares
of Class B Common Stock and warrants to purchase up to
In January 2025, the Company received a subpoena for documents from the staff of the Securities and Exchange Commission (SEC) related to its securities offerings and the production, design, and manufacture of our vehicles. This subpoena is part of an ongoing SEC investigation. The Company continues to cooperate fully with the investigation and is continuing to produce documents in response to the subpoena and subsequent requests.
The SEC has informed us that the investigation does not mean that it has concluded that anyone has violated the law and that the receipt of the subpoena does not mean that the SEC has a negative opinion of any person, entity, or security. However, the Company can offer no assurances as to the timing, outcome or potential effect, if any, of this ongoing investigation. Responding to the subpoena and related requests continues to require the dedication of management time and attention and has resulted, and may continue to result, in the incurrence of significant expenses, including legal and other professional services fees.
Chery Technology License Agreement
In 2022, the Company entered into a Technology License Agreement (“TLA”) with Chery New Energy Automobile Co. Ltd. (“Chery”). The TLA provides the Company with access to Chery’s established supply chain, which helps streamline procurement and production processes. In addition, it provides the Company with access and option to incorporate certain Chery technologies and parts, such as components of their HVAC (Heating, Ventilation, and Air Conditioning) system, into Aptera’s vehicles. This collaboration aims to accelerate lead-up to production and drive the advancement of solar mobility.
The
TLA, as amended in 2023, grants the Company a non-transferable license to use certain Chery automobile parts technology, know-how, and
data. As consideration, the Company provided a total of $
Purchase Obligations
The Company
regularly enters into purchase obligations with vendors and service providers, which represent expected payments and commitments
during the normal course of our business. These purchase obligations are generally cancellable with or without notice and without
penalty, although certain vendor agreements provide for cancellation fees or penalties. As of June 30, 2026 and December 31, 2025,
we had approximately $
| 12 |
NOTE 4 – PROPERTY AND EQUIPMENT
Property and equipment, net consisted of the following (amounts in thousands):
| June 30, 2026 | December 31, 2025 | |||||||
| Leasehold improvements | $ | $ | ||||||
| Computers, hardware and software | ||||||||
| Machinery, tooling, and equipment | ||||||||
| Construction in progress | ||||||||
| Less: accumulated depreciation and amortization | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | $ | ||||||
During
the three months ended June 30, 2026, the Company placed production tooling and related equipment in service. As a result, $
NOTE 5 – LEASES
Operating Lease
The
Company leases approximately
During
the six months ended June 30, 2026, the Company executed an amendment to extend the lease term for this facility by an additional twelve
months, establishing a new expiration date of March 31, 2028. The amendment established a revised monthly base rent of approximately
$
As
a result of this lease modification, the Company remeasured its lease liability and corresponding right-of-use (ROU) asset based on an
updated incremental borrowing rate of
The following table presents supplemental information related to the Company’s operating lease:
As of June 30, 2026 | As of December 31, 2025 | |||||||
| Supplemental lease information: | ||||||||
| Weighted average remaining lease term (in years) | ||||||||
| Weighted average discount rate | % | % | ||||||
Maturities of operating lease liabilities as of June 30, 2026, are as follows:
The following table summarizes the annual contractual maturities of operating lease liabilities (in thousands):
As of June 30, 2026 | ||||
| 2026 (remaining 6 months) | $ | |||
| 2027 | ||||
| 2028 | ||||
| Total minimum lease payments | ||||
| Imputed interest | ( | ) | ||
| Present value of lease liabilities | $ | |||
The
Company recorded $
| 13 |
NOTE 6 – FINANCING ARRANGEMENTS
From
time to time the Company may enter into financing arrangements with its vendors or third party lenders to pay for certain expenditures
for multiple annual insurance policies and multi-year software licenses. The Company presents such financing arrangements as liabilities
when the right-of-setoff criteria are not met. As of June 30, 2026, the Company had outstanding $
NOTE 7 – STOCKHOLDERS’ EQUITY
Common Stock
The
Company’s authorized capital stock includes Class A Common Stock and Class B Common Stock. The rights of the holders of both classes
are identical, including rights to dividends and distributions upon liquidation, except with respect to voting and conversion.
January 2026 Public Offering
On
January 26, 2026, the Company closed a registered public offering, issuing shares of Class B Common Stock and accompanying
common stock warrants to purchase up to
In
connection with the January 2026 registered public offering, the Company issued to A.G.P./Alliance Global Partners, as placement agent,
warrants to purchase up to
March 2026 Warrant Inducement
On
March 12, 2026, the Company entered into a warrant inducement agreement with certain holders of the warrants previously issued in the
January 2026 public offering. Pursuant to the agreement, the holders exercised Existing Warrants to purchase
Warrant Activity
The following table summarizes the Company’s warrant activity for the six months ended June 30, 2026:
| Warrants | Weighted average exercise price | Weighted Average remaining contractual term | ||||||||||
| Balance at December 31, 2025 | $ | |||||||||||
| Issued | ||||||||||||
| Exercised | ( | ) | ||||||||||
| Expired | - | |||||||||||
| Outstanding at June 30, 2026 | ||||||||||||
Exercisable at June 30, 2026 | ||||||||||||
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Equity Line of Credit (ELOC)
In October 2025, the Company entered into a Share Purchase Agreement with New Circle Principal Investments LLC, providing the Company with the right, but not the obligation, to sell up to $ million of its Class B Common Stock over a 36-month period.
The Company’s ability to access capital under the ELOC is subject to the following primary constraints:
| ● | Exchange Cap: |
| ● | Ownership Cap: |
| ● | Registration Requirement: Accessing the facility requires the Company to maintain an effective resale registration statement covering the shares. |
In
connection with the January 2026 Public Offering, the Company’s utilization of the ELOC became subject to a 45-day lock-up period,
which expired on March 12, 2026. As of June 30, 2026, $
During
the three months ended June 30, 2026, the Company sold
shares of Class B Common Stock under the ELOC facility for aggregate net proceeds of approximately $
Contracts Containing Share-Based Considerations
During
the three months ended June 30, 2026, the Company settled previously accrued liabilities of $
Equity Incentive Plans
The Company maintains the 2025 Omnibus Equity Incentive Plan (the “2025 Plan”), which allows for the grant of various equity-based awards to employees, officers, directors, and consultants. As of June 30, 2026, shares of Class B Common Stock remained available for future issuance under the 2025 Plan. Although the 2021 Stock Option and Incentive Plan was terminated in October 2025, outstanding awards under that plan remain in effect according to their original terms.
In April 2026, stock options awarded in December 2025 were modified to change the terms of vesting. There was no incremental compensation cost as a result of the modifications.
Stock Option Activity
| Options | Weighted average exercise price | Aggregate Intrinsic value | Weighted average grant date fair value | Weighted average remaining contractual Term | ||||||||||||||||
| Balance at December 31, 2025 | $ | $ | ||||||||||||||||||
| Granted | ||||||||||||||||||||
| Forfeited | - | |||||||||||||||||||
| Expired | ( | ) | - | |||||||||||||||||
| Outstanding and expected to vest at June 30, 2026 | ||||||||||||||||||||
| Vested and exercisable at June 30, 2026 | ||||||||||||||||||||
There were options granted during the six months ended June 30, 2026 with a total grant-date fair value of $ million. During the six months ended June 30, 2025, the Company granted options with a total grant-date fair value of $ million. The total fair value of stock options vested during the six months ended June 30, 2026 and 2025 was approximately $ million and $ million, respectively.
| 15 |
The Company utilizes the Black-Scholes option-pricing model to estimate the fair value of stock options on the date of grant. The expected term is estimated using the simplified method, and expected volatility is based on the historical volatility of a peer group of publicly traded companies.
| Six Months Ended | Six Months Ended | |||||||
| June 30, 2026 | June 30, 2025 | |||||||
| Weighted average risk-free interest rate | % | % | ||||||
| Weighted average expected volatility | % | % | ||||||
| Weighted average expected term (in years) | ||||||||
| Expected dividend yield | ||||||||
| Weighted average exercise price | $ | $ | ||||||
| Estimated fair value of stock price | $ | $ | ||||||
Restricted Stock Unit Activity
Number of Shares | Weighted Average Grant Date Fair Value | |||||||
| Nonvested at December 31, 2025 | $ | |||||||
| Granted | ||||||||
| Vested | ( | ) | ||||||
| Forfeited | ||||||||
| Nonvested at June 30, 2026 | ||||||||
| Vested not yet issued at June 30, 2026 | ||||||||
The total fair value of RSUs granted and vested during the six months ended June 30, 2026 was approximately $ million and $ million, respectively. There were RSUs granted or vested during the six months ended June 30, 2025.
Allocation of Stock-based Compensation
| For the three months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| General, selling and administrative | $ | $ | ||||||
| Research and development | ||||||||
| Total stock-based compensation | $ | $ | ||||||
| For the six months ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| General, selling and administrative | $ | $ | ||||||
| Research and development | ||||||||
| Total stock-based compensation | $ | $ | ||||||
As of June 30, 2026, the total unrecognized compensation cost related to outstanding time-based options was $ million, which is expected to be recognized over a weighted-average period of years.
NOTE 9 – SUBSEQUENT EVENTS
The Company evaluated subsequent events from the balance sheet date of June 30, 2026, through August 12, 2026, the date these condensed consolidated financial statements were issued. Material events include:
July 2026 Warrant Inducement Transaction
On
July 10, 2026, the Company entered into an inducement offer letter agreement with an existing holder of the Company’s warrants
(the “July 2026 Inducement Agreement”). Under the terms of the July 2026 Inducement Agreement, the holder agreed to exercise
The Company evaluated the July 2026 New Warrants and determined that they meet the criteria for equity classification consistent with the equity classification analysis applied to warrants issued in the March 2026 warrant inducement transaction. The July 2026 Inducement Agreement was entered into after the balance sheet date and accordingly no amounts have been recognized with respect to the Inducement Agreement in the accompanying condensed consolidated financial statements.
Board Appointment
On August 11, 2026, the Board of Directors appointed Wellington "Duke" Reiter to serve as a director of
the Company. In connection with his appointment, the Company approved compensation consisting of
| 16 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Aptera Motors Corp. References to our “management” or our “management team” refer to our officers and directors. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and our plans and objectives for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect our current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s annual report on Form 10-K for the year ended December 31, 2025 filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
OVERVIEW
Aptera Motors Corp. is a public benefit corporation and development stage company focused on the development and commercialization of solar electric vehicles. In October 2025, the Company completed a direct listing of its Class B Common Stock on The Nasdaq Capital Market.
The Company has not commenced production or generated any revenue from the sale of its products. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which is dependent upon the Company obtaining additional financing and ultimately achieving profitable operations. To that end, in October 2025, we established an equity line of credit (“ELOC”) as a mechanism to incrementally access capital. We successfully utilized this ELOC between mid-November 2025 and June 2026 to raise approximately $4.3 million. Furthermore, during the first quarter of 2026, we successfully raised an aggregate of approximately $17.1 million in gross proceeds, consisting of $9.0 million from a follow-on public offering in January 2026 and an additional $8.1 million from subsequent warrant exercises, including a warrant inducement transaction completed in March 2026. This management’s discussion and analysis discusses the Company’s progress to date, its challenges, and its plans for the future, but should be read in conjunction with the consolidated financial statements and accompanying notes.
Subsequent to quarter-end, on July 13, 2026, the Company closed a warrant inducement transaction that generated approximately $6.0 million in gross cash proceeds and resulted in the issuance of 4,320,000 new warrants at an exercise price of $2.25 per share, subject to a six-month lock-up before becoming exercisable. The additional 4,320,000 warrants issued in the July 2026 inducement transaction, if fully exercised for cash, would generate approximately $9.7 million in additional gross proceeds beginning in approximately January 2027. This transaction, together with the Company’s continued access to the ELOC facility and the currently exercisable warrants described in Note 7, are the key sources of near-term and medium-term liquidity that we are relying upon in our evaluation of the Company’s ability to continue as a going concern.
Aptera was formed as a Delaware corporation on March 4, 2019, and transitioned to a Delaware public benefit corporation in October 2025, for the purpose of engaging in the production of energy-efficient, solar-powered vehicles. We first began accepting $100 reservations for our vehicle in December 2020 and as of June 30, 2026, we had approximately 49,300 reservation holders. We conducted two promotional programs that allowed investors to reserve priority reservations for initial customer vehicles. Under the first program, which ran from January 2023 through January 2024, the initial 2,000 delivery positions were offered through an auction process, resulting in an average investment exceeding $20,000 per position. Under the second program, which was conducted from April to August 2025, an additional 1,000 delivery positions were made available to investors making minimum investments of $5,000. We have not delivered any products to customers and have not recognized any revenue from the sale of vehicles.
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During the past three years, we engaged with strategic partners to supply validated production parts, and we are currently executing our validation vehicle program. While we require substantial capital to commence commercial production, core physical assets—including our proprietary Body in Carbon (BinC) structural tooling and automated transport systems—are physically on-site and undergoing final engineering assessments. Alongside efforts to secure necessary financing, our current operational focus remains on completing this validation and durability testing process to ensure the reliability of our production-intent design. Our marketing team is expected to engage with the public to educate them on our brand proposition, expand our reservation backlog, and optimize our initial production mix. As a result of these activities, the Company expects to continue to experience increased spending on production equipment and tooling.
During the second quarter of 2026, we achieved several key operational and regulatory milestones. In May 2026, we drove the first five validation vehicles off our newly established low-volume validation assembly line at our Carlsbad facility. In June 2026, during real-world validation testing, our solar electric vehicle achieved more than 4 kilowatt-hours of daily solar generation, exceeding our internal solar charging targets. Additionally, on June 18, 2026, we received a Certificate of Conformity from the U.S. Environmental Protection Agency for the 2026 Aptera Launch Edition, one of the two primary federal certifications required before a vehicle can be legally sold in the United States. With the Certificate of Conformity in hand, the remaining federal requirement that must be satisfied before we can begin customer deliveries is compliance with the Federal Motor Vehicle Safety Standards, which we are working to demonstrate using vehicles built on our low-volume validation assembly line.
Our production timeline has evolved and remains heavily dependent on our ability to secure sufficient capital in substantial tranches. This shift to larger funding rounds is necessary to allow us to place large-scale purchase orders and fulfill supplier commitments for our finalized production tooling. Our production plan for our Carlsbad facility is phased. The initial “low-volume” production phase requires an estimated $40 million to $45 million in capital to fund the remaining necessary tooling and validation programs. Following the initiation of low-volume production, a second phase to ramp to high-volume production (a target rate of approximately 20,000 vehicles per year, which we believe is our current facility’s maximum capacity based on consultations with Munro & Associates) would require an estimated additional $140 million to $160 million. Until the necessary funding for a given production phase is secured, we are unable to predict if and when that phase of production will commence, and our previously anticipated timelines are no longer indicative of our current expectations.
Commencing production also depends on key factors beyond funding, including:
| ● | Availability of resources: Production is contingent on the availability of materials, components, manufacturing facilities, and an uninterrupted supply chain. | |
| ● | Addressing technical challenges: We may encounter further technical challenges during our validation programs that require redesign, mechanical modification, or alternative sourcing of components. | |
| ● | Meeting regulatory requirements: We must meet all necessary safety and regulatory requirements to certify our vehicles. |
Historically, we have experienced challenges in raising capital in the amounts needed to fully fund our operations, and we have faced production delays due to financial constraints, supply chain disruptions, technological challenges, and regulatory requirements. While we currently do not anticipate any major supply chain disruptions, changes in global trade policies, including the imposition of new tariffs or changes to existing tariffs, could impact the cost and availability of components and materials, potentially affecting our production timelines and profitability. We have experienced price fluctuations for vehicle components and labor in the past, which have led to increased costs and negatively affected our results of operations.
We are actively working to address these challenges through our direct listing, recent capital raises, and utilization of our ELOC (subject to lock-up periods and facility limitations). We will provide further updates on our progress as we achieve significant milestones. However, we cannot assure you that we will be successful in securing the remaining necessary funding, overcoming technical challenges, or meeting regulatory requirements on a timely basis, or at all.
Operating Expenses
General, Selling and Administrative
General, selling and administrative expenses consist of administrative, compliance, legal, investor relations, financial operations, and information technology services. They include related department salaries, office expenses, meals and entertainment costs, software/applications for operational use, and other general and administrative expenses, including but not limited to technology subscriptions and travel expenses. These expenses account for a significant portion of our operating expenses.
Research and Development
We spend significant resources on engineering, tooling and design capabilities, which are classified as research and development expenses. Research and development expenses consist primarily of personnel costs, materials to build prototype and validation vehicles, specialized out-sourced engineering services, facilities and software licenses.
| 18 |
Results of Operations
Comparison of the results of operations for the three months ended June 30, 2026 and June 30, 2025
General, Selling and Administrative Expenses
| For the three months ended June 30, (in thousands) | ||||||||||||||||
| (in thousands) | 2026 | 2025 | $ Change | % Change | ||||||||||||
| Stock-based compensation | $ | 2,295 | $ | 5,896 | $ | (3,601 | ) | (61 | )% | |||||||
| Corporate and overhead expenses | 1,731 | 2,094 | (363 | ) | (17 | )% | ||||||||||
| Depreciation | 48 | 42 | 6 | 14 | % | |||||||||||
| Selling, general and administrative | $ | 4,074 | $ | 8,032 | $ | (3,958 | ) | (49 | )% | |||||||
The decrease in selling, general and administrative expenses was primarily driven by a $3.6 million net reduction in stock-based compensation, consisting of a $2.4 million decrease in equity-based advisory fees issued to non-employees and a $1.2 million decrease in employee share-based compensation. Sales and marketing expenses declined $0.3 million as marketing activities were reduced following the October 2025 direct listing. Legal expenses declined $0.5 million compared to the 2025 period, which contained higher fees related to the Zaptera intellectual property claim and other non-recurring matters.
These decreases were partially offset by approximately $0.2 million of higher costs associated with operating as a publicly traded company, including directors’ and officers’ liability insurance premiums, investor relations and transfer agent fees.
Historically, we have tightly managed our administrative footprint by utilizing third-party consultants and outsourced professional services. As we transition toward final vehicle validation and commercial production, we expect to shift away from certain outsourced arrangements and bring more administrative and operational resources in-house on a full-time basis. To support this growth while prioritizing the allocation of cash toward production readiness, we have increasingly utilized equity-based remuneration. This includes a transition to settling all Board of Director compensation and executive bonuses in stock, as well as the broader use of long-term restricted stock unit awards. While we expect this strategy to preserve capital liquidity, it will result in elevated non-cash share-based compensation expense in future periods.
Consequently, we anticipate that our baseline selling, general and administrative expenses will increase as we scale. Furthermore, we expect to incur sustained, incremental expenses related to operating as a public company, including elevated legal, accounting, insurance, and investor relations costs. Additionally, in connection with our ongoing efforts to remediate the material weakness in internal control over financial reporting identified at year-end, we expect to incur near-term increases in professional fees and personnel costs as we implement enhancements to our control environment.
Research and Development Expenses
| For the three months ended June 30, (in thousands) | ||||||||||||||||
| (in thousands) | 2026 | 2025 | $ Change | % Change | ||||||||||||
| Engineering, design and development | $ | 5,560 | $ | 1,965 | $ | 3,595 | 183 | % | ||||||||
| Stock-based compensation | 1,405 | 3,814 | (2,409 | ) | (63 | )% | ||||||||||
| Depreciation | 124 | 93 | 31 | 33 | % | |||||||||||
| Research and Development | $ | 7,089 | $ | 5,872 | $ | 1,217 | 21 | % | ||||||||
The increase in research and development expenses was primarily driven by a $3.6 million increase in engineering, design, and development expenses, driven by a $1.1 million increase in cash personnel costs from strategic engineering headcount additions and, more significantly, a $1.8 million increase in outside consulting services engaged to support our vehicle build, testing, and validation program, a $0.3 million increase in parts, materials, and supplies for the validation vehicle build, and approximately $0.3 million of other engineering-related operating cost increases. These increases were partially offset by a $2.4 million decrease in stock-based compensation expense, consisting of a $1.9 million reduction in employee share-based compensation and a $0.4 million favorable out-of-period adjustment related to the correction described in Note 2.
| 19 |
As we continue to advance toward commercial production, our overarching objective is to allocate the maximum amount of available capital directly to vehicle validation, safety testing, and production readiness. To support this objective while protecting our liquidity, we expect to continue utilizing equity-based compensation as a core component of our remuneration strategy for engineering and technical staff. We anticipate that our baseline research and development expenses will remain elevated in the near term as we finalize pre-production milestones. Upon the commencement of commercial production, we expect certain engineering and manufacturing personnel costs to be capitalized into inventory and subsequently recognized as cost of goods sold.
Other Income
Other income was $0.3 million for the three months ended June 30, 2026, compared to $1.8 million for the three months ended June 30, 2025. The change of $1.5 million was primarily due to a decrease in California Energy Commission grant reimbursement income and reduced interest income.
Net Loss
As a result of the foregoing, the Company’s net loss for the three months ended June 30, 2026 was $10.9 million compared to $12.1 million for the three months ended June 30, 2025.
Comparison of the results of operations for the six months ended June 30, 2026 and June 30, 2025
General, Selling and Administrative Expenses
| For the six months ended June 30, (in thousands) | ||||||||||||||||
| (in thousands) | 2026 | 2025 | $ Change | % Change | ||||||||||||
| Stock-based compensation | $ | 3,636 | $ | 11,167 | $ | (7,531 | ) | (67 | )% | |||||||
| Corporate and overhead expenses | 4,768 | 4,730 | 38 | 1 | % | |||||||||||
| Depreciation | 97 | 84 | 13 | 15 | % | |||||||||||
| Selling, general and administrative | $ | 8,501 | $ | 15,981 | $ | (7,480 | ) | (47 | )% | |||||||
The change in selling, general and administrative expenses for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily driven by a $7.5 million net reduction in stock-based compensation, consisting of a $7.3 million decrease in equity-based advisory fees issued to non-employees and a $0.3 million decrease in employee share-based compensation. Sales and marketing expenses also decreased $0.5 million as marketing activities were reduced following the direct listing in October 2025.
These decreases were partially offset by approximately $0.6 million of higher costs associated with operating as a publicly traded company, including directors’ and officers’ liability insurance premiums, investor relations and transfer agent fees.
Research and Development Expenses
| For the six months ended June 30, (in thousands) | ||||||||||||||||
| (in thousands) | 2026 | 2025 | $ Change | % Change | ||||||||||||
| Engineering, design and development | $ | 9,312 | $ | 4,281 | $ | 5,031 | 118 | % | ||||||||
| Stock-based compensation | 3,420 | 4,619 | (1,199 | ) | (26 | )% | ||||||||||
| Depreciation | 262 | 186 | 76 | 41 | % | |||||||||||
| Research and Development | $ | 12,994 | $ | 9,086 | $ | 3,908 | 43 | % | ||||||||
The change in research and development expenses for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily driven by a $5.0 million increase in engineering, design and development expenses, reflecting a $1.8 million increase in cash personnel costs from strategic engineering headcount additions, a $2.1 million increase in outside consulting services engaged to support our vehicle build, testing, and validation program, a $0.5 million increase in parts, materials, and supplies for the validation vehicle build, and approximately $0.6 million of other engineering-related operating cost increases, including recruiting, engineering software, and freight expenses.
These increases were partially offset by a $1.2 million decrease in stock-based compensation expense, consisting of a $0.7 million reduction in employee share-based compensation and a $0.4 million favorable out-of-period adjustment related to the correction described in Note 2. Depreciation expense also increased $0.1 million as additional production tooling and equipment were placed in service during the period.
Other Income
Other income was $0.4 million for the six months ended June 30, 2026, compared to $2.1 million for the six months ended June 30, 2025. The change of $1.7 million was primarily due to lower California Energy Commission grant reimbursement income and reduced interest income.
Net Loss
As a result of the foregoing, the Company’s net loss for the six months ended June 30, 2026 was $21.1 million compared to $22.9 million for the six months ended June 30, 2025.
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Liquidity and Capital Resources
As of June 30, 2026, the Company had $32.4 million in total assets. Our primary source of liquidity at that date was $10.1 million in cash and cash equivalents. We did not have a recognized grant funds receivable balance as of June 30, 2026, as we maintain a full allowance against the remaining $0.7 million balance due to uncertainties regarding the timing of the capital raises required to trigger those reimbursements.
Our current baseline operational cash burn rate, covering essential personnel, ongoing regulatory compliance, and fixed costs, is approximately $2.0 to $2.2 million per month. This baseline burn rate remained elevated during the first half of 2026 due to significant expenses associated with operating as a publicly traded company, costs related to our Class B Common Stock offerings, and legal and other professional fees related to the SEC Investigation and the Zaptera settlement. Such costs are difficult to predict with certainty but are expected to continue to be material in the near term.
Our existing cash and cash equivalents are not sufficient to fund our baseline operations for the next twelve months, nor are they sufficient to advance our vehicle production business plan. These factors continue to raise substantial doubt about our ability to continue as a going concern. After considering the plans described above, we have concluded that substantial doubt about our ability to continue as a going concern has not been alleviated because our plans are dependent on events and conditions that are not within our control, including our ability to raise additional capital on acceptable terms and in amounts sufficient to fund our operating and capital needs.
Our plan to address our liquidity needs and fund operations over the next twelve months relies primarily on accessing capital through the ELOC and potentially through other public market financings.
Subsequent to quarter-end, on July 13, 2026, the Company closed a warrant inducement transaction that generated approximately $6.0 million in gross cash proceeds and resulted in the issuance of 4,320,000 new warrants at an exercise price of $2.25 per share, subject to a six-month lock-up before becoming exercisable. The additional 4.3 million warrants issued in the July 2026 inducement transaction, if fully exercised for cash, would generate approximately $9.7 million in additional gross proceeds beginning in approximately January 2027. This transaction, together with the Company’s continued access to the ELOC facility and the currently exercisable warrants described in Note 7, are the key sources of near-term and medium-term liquidity that we are relying upon in our evaluation of the Company’s ability to continue as a going concern. There can be no assurance that holders of the outstanding warrants will elect to exercise for cash or that the Company will be able to draw down sufficient amounts under the ELOC.
During the six months ended June 30, 2026, net cash used in operating activities was $15.9 million, compared to $7.1 million for the same period in 2025. This increase in operating cash usage was driven not only by the elevated professional fees noted above, but primarily by strategic cash investments in parts, materials, and supplies necessary to advance our vehicle validation and production readiness, as well as a reduction in accounts payable.
To fund these operations and investments, net cash provided by financing activities was $16.7 million during the six months ended June 30, 2026. This was the result of two key financing transactions. On January 26, 2026, we closed a registered public offering, issuing 4,500,000 units (each consisting of one share of Class B Common Stock and one accompanying warrant) for gross proceeds of $9.0 million. Furthermore, we received an additional $8.1 million in aggregate gross proceeds from warrant exercises during the quarter, which included a $6.3 million warrant inducement transaction completed in March 2026. In addition, during the second quarter of 2026, we sold 605,000 shares of Class B Common Stock under our ELOC facility for aggregate net proceeds of approximately $1.3 million. Subsequent to quarter-end, on July 13, 2026, we completed a warrant inducement transaction that generated approximately $6.0 million in gross cash proceeds.
We estimate that we will require an additional $40 million to $45 million to complete vehicle validation and prepare for low-volume production—including increased spending on engineering, validation, testing, production tooling, and the hiring of additional sales, marketing, and administrative personnel. We expect that the associated work would take less than 12 months to complete from the time such capital is fully secured. While the commencement of the final production timeline requires securing this capital in substantial tranches, we are proactively deploying current liquidity to procure critical long-lead components and advance validation milestones to compress this timeline where possible. The ELOC provides a potential mechanism to access capital incrementally, subject to the conditions and limitations previously described. Our ability to effectively utilize the ELOC is highly dependent on the trading volume and market price of our Class B Common Stock.
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As of June 30, 2026, approximately 5.2 million of the Company’s outstanding warrants sold to investors carried exercise prices that, if fully exercised for cash, would have generated approximately $17.5 million in additional gross proceeds. Subsequent to quarter-end, on July 13, 2026, the Company entered into the warrant inducement transaction described above. Following that transaction, the Company had approximately 6.6 million warrants outstanding attributable to equity financings, which if exercised, would generate approximately $17.1 million in additional gross proceeds.
Our awarded $21.9 million grant from the CEC remains a component of our potential future liquidity. Through June 30, 2026, we have received approximately $17.6 million in cash disbursements. We anticipate receiving further portions of the grant only if we are able to secure sufficient financing to make the eligible expenditures and meet the project milestones.
Long-Term Cash Requirements
Beyond our immediate capital needs to commence low-volume production, our long-term business plan requires us to raise substantial additional capital for future growth and operational expansion. Our material cash requirements beyond the next 12 months are expected to include, but are not limited to, the following:
| ● | Scaling to High-Volume Production: We estimate needing $140 million to $160 million to fully equip our current Carlsbad facility and scale our manufacturing process to achieve our high-volume production target of 20,000 vehicles per year. This includes significant investment in additional automation, assembly line equipment, and quality control systems and is in addition to the $40 million to $45 million necessary to fund the remaining tooling and validation programs mentioned above. | |
| ● | Future Manufacturing Capacity: To meet our longer-term production targets that exceed the capacity of our current facility, we expect to require additional manufacturing capacity. This may involve securing or constructing new, larger facilities, which would represent a material future capital expenditure, the cost and timing of which has not yet been determined. | |
| ● | Expansion of Sales and Service Infrastructure: Our anticipated direct-to-consumer model will require significant investment to scale nationally. We expect to need to fund the establishment of regional pre-delivery and service centers, as well as expand our fleet of mobile service vehicles to support our customers and/or form relationships with third party vendors to provide this level of service. | |
| ● | Research and Development: To maintain our competitive advantage, we intend to continue investing in research and development. This includes developing future vehicle models, enhancing our proprietary solar and battery technology, and exploring other applications for our technology. | |
| ● | Working Capital: As we begin and scale production, our need for working capital is expected to increase significantly. The cash required to fund raw materials, work-in-process, and finished goods inventory is expected to increase substantially as our production volume grows. | |
| ● | Public Company Costs: We expect to continue to incur significant legal, accounting, and other expenses as a public company that we did not incur as a private company. |
Our ability to fund these long-term requirements is dependent upon our ability to successfully utilize the ELOC, raise substantial additional capital through future equity or debt financings, and there can be no assurance that the ELOC will provide sufficient capital or that other financing will be available on favorable terms, or at all. Failure to obtain sufficient funding would materially adversely affect our business plan and our ability to continue as a going concern.
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Liabilities
As of June 30, 2026, the Company’s total liabilities were $8.0 million. Major existing liabilities include $1.1 million in accrued liabilities, $4.1 million in unearned reservation fees, and $1.9 million in operating lease liabilities.
Commitment and Contingencies
Leases
As of June 30, 2026, we leased approximately 77,000 square feet of office, manufacturing and assembly space at our principal facility in Carlsbad, California under an operating lease agreement that expires March 31, 2028. For the six months ended June 30, 2026, we recorded $0.5 million of lease expense.
Purchase Orders
We regularly enter into purchase obligations with vendors and service providers, which represent expected payments and commitments during the normal course of our business. These purchase obligations are generally cancellable with or without notice and without penalty, although certain vendor agreements provide for cancellation fees or penalties. As of June 30, 2026, we had approximately $5.5 million in open purchase orders.
Litigation and Regulation
Various aspects of our business and service areas are subject to U.S. federal, state, and local regulation, as well as regulation outside the United States.
As of the date of this Quarterly Report, the Company is responding to a subpoena related to an ongoing SEC Investigation and recently settled a pending lawsuit with Zaptera, as described below.
Zaptera
In August 2024, Zaptera USA, Inc. (“Zaptera”) filed a complaint against Aptera Motors Corp. in the U.S. District Court for the Southern District of California alleging design patent infringement, misappropriation of trade secrets, and declaratory judgment of patent ownership, among other claims.
In April 2026, the Company entered into a settlement agreement with Zaptera. Pursuant to the terms of the settlement, the Company agreed to issue 105,000 shares of Class B Common Stock and warrants to purchase up to 210,000 shares of Class B Common Stock, resulting in a recognized litigation settlement charge of approximately $0.6 million during the three months ended March 31, 2026. On April 9, 2026, all claims related to the action were dismissed with prejudice. In April 2026, the Company agreed to issue the shares and warrants in satisfaction of the settlement.
As of June 30, 2026 and the date of this Quarterly Report, the warrants to purchase up to 210,000 shares of Class B Common Stock have been issued and are reflected in the warrant activity table above. However, the 105,000 shares of Class B Common Stock have not yet been issued, pending Zaptera’s designation of a recipient and the establishment of a brokerage account capable of receiving the shares by the Company’s transfer agent. Accordingly, the 105,000 shares are not reflected in the Company’s issued and outstanding share count as of June 30, 2026.
SEC Investigation
In January 2025, we received a subpoena for documents from the staff of the SEC related to our securities offerings and the production, design, and manufacture of our vehicles (the “SEC Investigation”). This subpoena is part of the ongoing SEC Investigation. We are cooperating fully with the investigation and are producing documents in response to the subpoena.
The SEC has informed us that the investigation does not mean that it has concluded that anyone has violated the law and that the receipt of the subpoena does not mean that the SEC has a negative opinion of any person, entity, or security. However, we cannot provide any assurances as to the outcome of this investigation or its potential effect, if any, on our Company.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this Item.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer (together, the “Certifying Officers”), or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
Our Certifying Officers have concluded that our disclosure controls and procedures were not effective as of June 30, 2026, due to the material weaknesses in internal control over financial reporting described below.
As previously disclosed, in our annual report on Form 10-K for the year ended December 31, 2025, we identified two material weaknesses in our internal control over financial reporting (“ICFR”):
| 1. | Accounting for stock-based compensation – deficiencies in the review, approval, and accounting for stock option modifications, which resulted in a restatement of our 2023 financial statements; and | |
| 2. | Lack of formalized accounting and financial reporting policies and procedures, which contributed to inconsistent policy application and limited segregation of duties. |
We have continued implementing our remediation plans to address these material weaknesses. Actions taken to date include:
| ● | formalizing management and Board-level review and approval controls for all stock-based compensation modifications; | |
| ● | developing and beginning implementation of a comprehensive accounting policies and procedures manual; and | |
| ● | enhancing segregation of duties and management review processes within the finance function. |
While significant progress has been made, management has not yet completed testing of the operating effectiveness of these new and enhanced controls. Accordingly, the material weaknesses have not been fully remediated, and our disclosure controls and procedures remain not effective as of June 30, 2026. We expect remediation efforts to continue through 2026 as we prepare for our first required assessment of ICFR effectiveness under Section 404(a) of the Sarbanes-Oxley Act for the fiscal year ending December 31, 2026.
We do not expect that our disclosure controls and procedures will prevent all errors or all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of such controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no system can provide absolute assurance that all control deficiencies and instances of fraud, if any, have been detected. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control over Financial Reporting
Other than the remediation efforts described above, there were no changes in our internal control over financial reporting during the quarter ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we might become involved in lawsuits, claims, investigations, proceedings, and threats of litigation relating to intellectual property, commercial arrangements and other matters arising in the ordinary course of our business. For information on our litigation matters, see “Litigation and Regulation” under Note 3 of the Notes to Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated by reference herein.
Item 1A. Risk Factors
Factors that could cause our actual results to differ materially from those in this Quarterly Report include the risk factors described in our annual report on Form 10-K for the year ended December 31, 2025. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in our annual report on Form 10-K for the year ended December 31, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Unregistered Sales of Equity Securities
In May 2026, the company issued 56,180 shares of Class B common stock to a vendor as payment for services. These securities were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
During
the three months ended June 30, 2026, no director or officer of the Company
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Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| * | Filed herewith. |
| ** | These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing. |
| # | Management contract or compensatory plan or arrangement. |
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| APTERA MOTORS CORP. | ||
| Date: August 12, 2026 | By: | /s/ Chris Anthony |
| Name: | Chris Anthony | |
| Title: | Co-Chief Executive Officer | |
| (Principal Executive Officer) | ||
| Date: August 12, 2026 | By: | /s/ Tom DaPolito |
| Name: | Tom DaPolito | |
| Title: | Interim Chief Financial Officer | |
| (Principal Financial Officer and Principal Accounting Officer) | ||
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