v3.26.1
MERGER AND RELATED TRANSACTIONS
 6 Months Ended
Jun. 30, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
MERGER AND RELATED TRANSACTIONS MERGER AND RELATED TRANSACTIONS
As described in Note 1, Motiv merged with a wholly owned subsidiary of Workhorse on December 15, 2025. The Merger was accounted for as a business combination in accordance with ASC 805, Business Combinations. While the legal acquirer in the Merger was Workhorse, for financial accounting and reporting purposes under GAAP, Motiv was the accounting acquirer, and the Merger was accounted for as a reverse acquisition for accounting purposes. Motiv was determined to be the accounting acquirer primarily based on the facts that (i) Motiv’s investors own a substantial majority of the voting rights in the combined company; (ii) Motiv designated a majority (five of seven) of the initial members of the board of directors of the combined company; and (iii) Motiv’s senior management hold most key positions in senior management of the combined company. Accordingly, the consolidated assets, liabilities and results of operations of Motiv became the historical consolidated financial statements of the combined company, and Workhorse’s assets, liabilities and results of operations were consolidated with those of Motiv beginning on the acquisition date at the estimated fair value of assets acquired and liabilities assumed. Operations prior to the Merger are presented as those of Motiv in this and future reports.

Prior to the Closing Date of the Merger, Motive GM Holdings II LLC (“MGMH”), a Delaware limited liability company, was Motiv’s controlling stockholder and largest creditor, with all financial indebtedness of Motiv beneficially owned by MGMH or one of its affiliates. In connection with the closing of the Merger, MGMH received 6,629,800 shares of Common Stock (the “Merger Consideration”) in partial satisfaction of the financial indebtedness of Motiv beneficially owned by MGMH or one of its affiliates, with any remaining indebtedness cancelled for no consideration, which resulted in MGMH owning 68.3% of the then issued and outstanding of our Common Stock. All outstanding preferred and common shares of Motiv were cancelled for no consideration. In addition, pursuant to the Merger Agreement, all unexercised and outstanding Workhorse stock options were cancelled for no consideration, and all other awards under Workhorse’s equity incentive plans that were unvested immediately prior to the Merger were accelerated in full, with performance deemed achieved at target level for performance share units.

Repayment and Exchange
On August 15, 2025, in connection with the Merger Agreement, Workhorse entered into a Waiver, Repayment and Exchange Agreement (the “Repayment Agreement”) by and among Workhorse and the investors party thereto (collectively, the “2024 Note Holder”) to (i) redeem all of Workhorse’s outstanding obligations under the notes issued to the 2024 Note Holder (the “2024 Notes”) and (ii) cancel the warrants issued to the 2024 Note Holder (the “2024 Warrants”) on the Closing Date.

In addition, in accordance with the terms of the Repayment Agreement, Workhorse issued to the 2024 Note Holder rights (the “Rights”) to acquire 1,193,364 shares of Common Stock in exchange for the cancellation of the 2024 Warrants (the “Exchange”). Upon completing the repayment and the exchange, Workhorse had no outstanding obligations under the 2024 Notes, all of the 2024 Notes and 2024 Warrants were cancelled, and all collateral, including the Cash Collateral (as defined in the Repayment Agreement), securing the 2024 Notes was released. Following the repayment and the exchange effective December 15, 2025, the parties thereto terminated the Securities Purchase Agreement, by and between Workhorse and the 2024 Note Holder (the “Securities Purchase Agreement”). As of June 30, 2026, all shares of Common Stock have been issued to the 2024 Note Holder, and no shares remain issuable under the Rights.
The Sale-Leaseback Transaction

On August 15, 2025, in connection with the sale and leaseback transaction (the “Sale-Leaseback”), a subsidiary of Workhorse, Workhorse Motor Works Inc., entered into a Purchase and Sale Agreement with an affiliate of MGMH (the “Property Purchaser”) for the sale of its Union City, Indiana manufacturing facility and campus (the “Property”), excluding any equipment and any fixtures solely used in the production of vehicles, to the Property Purchaser for a purchase price, before fees and expenses, of $20.0 million. Workhorse used the proceeds to redeem a portion of the 2024 Notes pursuant to the Repayment Agreement, to pay Merger transaction expenses, and for general corporate purposes.

Closing Debt Financing

On December 15, 2025, Workhorse entered into a (i) Credit Agreement (Customer Orders) (the “Customer Order Credit Agreement”) and (ii) Credit Agreement (Cash Flow) (the “Cash Flow Credit Agreement” and together with the Customer Order Credit Agreement, the “Credit Agreements” and such transactions, collectively, the “Closing Debt Financing”), each by and among Workhorse, as borrower, certain subsidiaries of Workhorse, as guarantors, and MGMH as lender.

The Customer Order Credit Agreement provided Workhorse with up to $40.0 million to fund vehicle manufacturing in connection with Qualified Purchase Orders (as defined in the Customer Order Credit Agreement). The Cash Flow Credit
Agreement provided Workhorse with a line of credit with borrowing capacity of up to $10.0 million to fund its working capital requirements, including costs related to the Merger, and its general corporate purposes.

The Credit Agreements were amended in April 2026 and again in June 2026 to increase the borrowing capacity under the Cash Flow Credit Agreement and defer interest payments on the additional commitments until after September 30, 2026 and to reduce the borrowing capacity under the Customer Order Credit Agreement. Additionally, the June 2026 amendment obligates the Company to issue warrants to purchase equity interests in the Company within 45 days of the execution of the amendment or such later date as the lender agrees, with terms and in number to be mutually agreed, as consideration for the amendments therein. In August 2026, the Company further amended the Credit Agreements, as further described in Note 16, Subsequent
Events.

See Note 8, Debt for additional information regarding the Closing Debt Financing.

Purchase Price Allocation

Under reverse acquisition accounting, the assets and liabilities of Workhorse were recorded at their fair value. For additional details on the fair value measurement of the acquired assets and liabilities assumed, including the valuation techniques used, please refer to Note 11, Fair Value Measurements in the 2025 Form 10-K.
The following table summarizes the fair value of purchase consideration for the Merger and the preliminary allocation of the purchase price to the identifiable assets acquired and liabilities assumed, based on their estimated fair values as of the acquisition date:
(in thousands)Purchase Price Allocation
Cash and cash equivalents$10,430 
Accounts receivable377 
Inventory24,642 
Prepaid expenses and other current assets4,679 
Property and equipment21,578 
Goodwill3,226 
Intangible assets10,200 
Operating leases right-of-use assets21,691 
Other assets416 
Accounts payable(9,758)
Accrued liabilities and other liabilities(13,392)
Stock rights liability(7,112)
Convertible note(5,412)
Operating lease liability(22,051)
Total purchase consideration$39,514 
The allocation of the purchase price is preliminary and subject to adjustment during the measurement period, not to exceed one year from the acquisition date, as we finalize the valuations for tangible and intangible assets. During the six months ended June 30, 2026, the Company recorded measurement period adjustments related to additional information obtained about facts and circumstances that existed as of the acquisition date. These adjustments primarily relate to (i) the recognition of additional accrued legal fees following the finalization of a legal settlement associated with litigation that existed at the acquisition date, (ii) a decrease in the estimated amount of other accrued liabilities that existed at the acquisition date and (iii) adjustment to fixed assets for a vehicle that was put in service prior to the merger date. As a result, the Company increased goodwill by $0.1 million. The Company will continue to evaluate information obtained during the measurement period and may record further adjustments to the preliminary purchase price allocation as additional information becomes available.

The results of Workhorse’s operations have been included in our condensed consolidated financial statements for the three and six months ended June 30, 2026.

The following unaudited pro forma summary presents consolidated information of the Company as if the business combination had occurred on January 1, 2025.
(in thousands)Three Months Ended June 30, 2025Six Months Ended June 30, 2025
Revenue$6,420 $8,206 
Net loss(24,334)(52,128)

The unaudited pro forma financial information includes adjustments for (i) interest expense on new debt (the Convertible Financing and Cash Flow Credit Agreement), (ii) interest expense for historical debt that was forgiven as part of the Merger, (iii) stock-based compensation expense for accelerated vesting of Workhorse stock options, issuance of director grants, and the cancellation of Motiv shares, (iv) acquisition-related costs, and (v) the sale and leaseback transaction, including the gain on sale of assets, depreciation expense of assets prior to sale, and lease expense.

The unaudited pro forma financial information is provided for illustrative purposes only and does not reflect the results of operations that would have occurred had the acquisition taken place on that date.