The following discussion should be read in conjunction with the Condensed Consolidated Financial Statements and notes thereto included under Item 1 in this Quarterly Report on Form 10-Q (this “Report”) and our Consolidated Financial Statements and notes thereto and related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2025. The statements included herein that are not based solely on historical facts are “forward looking statements.” Such forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties. Our actual results could differ materially from those anticipated by us in these forward-looking statements as a result of various factors, including those discussed in this Report and under Part I, Item 1A. "Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the SEC on March 31, 2026. Overview Workhorse Group Inc. (“Workhorse,” or the “Company”) is a North American manufacturer of medium-duty electric trucks and buses. Our current commercial operations are primarily focused on providing sustainable and cost-effective solutions to the commercial transportation sector. We design and manufacture all-electric vehicles, including the technology that optimizes the way that these vehicles operate. The Company’s best-in-class vehicles are designed for last-mile delivery, medium-duty operations, and a growing range of specialized applications. We believe our all-electric commercial vehicles offer fleet operators significant benefits, which include: •Lower total cost-of-ownership as compared to conventional gas/diesel vehicles; •Improved profitability through lower maintenance costs and reduced fuel expenses; and •Decreased vehicle emissions and reduced carbon footprint. We continue to seek opportunities to grow our business organically, and by expanding relationships with existing and new customers and dealers. We believe we are well positioned to take advantage of long-term opportunities and continue our efforts to bring product innovations to market. In July 2026, we announced that we are developing a containerized mobile AI data center product line intended to leverage our existing engineering and manufacturing capabilities. On December 15, 2025 (the “Closing Date”), we completed our merger with Motiv Power Systems, Inc. (“Motiv”), pursuant to which Motiv became our indirect, wholly owned subsidiary (the “Merger”). The Merger was accounted for as a reverse merger, with Motiv being treated as the acquirer for accounting purposes. References to “Workhorse,” the “Company,” “we,” “us,” or “our,” when used in this Report incorporate the operations of Motiv unless otherwise indicated or the context requires otherwise. 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 Workhorse 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. Merger Related Transactions The Waiver, Repayment and Exchange Agreement On August 15, 2025, in connection with the contemplated Merger, 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. On December 15, 2025, in accordance with the terms of the Repayment Agreement and upon consummation of the Merger, 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 redemption of the 2024 Notes (the "Repayment") 21 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 cash collateral, securing the 2024 Notes was released. Following the Repayment and the Exchange effective December 15, 2025, Workhorse and the 2024 Note Holder terminated the Securities Purchase Agreement to which they were parties, pursuant to which the 2024 Notes were issued and which allowed for further issuances of notes and previously served as a source of third-party financing to Workhorse (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 stock Rights liability. The Convertible Financing On August 15, 2025, Workhorse issued to MGMH a Subordinated Secured Convertible Note (the “Convertible Note”) with an aggregate original principal amount of $5.0 million (the “Convertible Financing”). The Convertible Note was issued without original issue discount, and Workhorse received $5.0 million in proceeds, which was used for general corporate purposes. The Convertible Note bears interest at a rate of 8.0% per annum, subject to adjustment as set forth in the Convertible Note, compounded quarterly and increasing the principal outstanding under the Convertible Note. The Convertible Note was originally a secured obligation of Workhorse, ranking senior to all other indebtedness and, subject to certain limitations, is unconditionally guaranteed by each of Workhorse’s subsidiaries and secured by substantially all of the assets of Workhorse and its subsidiaries. Workhorse’s obligations under the Convertible Note mature 24 months after the date of issuance. The Convertible Note is automatically convertible into a number of shares of Workhorse Common Stock equal to the principal amount then outstanding divided by 90% of the price per share paid by investors in a bona fide transaction or series of transactions with the principal purpose of raising capital, pursuant to which the Company issues and sells common stock or preferred stock that occurs after the Closing Date of the Merger. On December 15, 2025, the parties to the Convertible Note entered into an Amended and Restated Convertible Note (the “A&R Note”) to make the obligations under the Convertible Note, as amended, unsecured obligations of Workhorse and each guarantor party thereto. As a result, the Convertible Note Security Agreement entered into when the Convertible Note was issued was terminated on the Closing Date. The Convertible Note Subsidiary Guaranty entered into when the Convertible Note was issued was amended and restated (the “A&R Convertible Note Subsidiary Guaranty”) to incorporate the termination of the Convertible Note Security Agreement. 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. On April 25, 2026, the Company and an affiliate of MGMH entered into an agreement whereby the lessor agreed to a deferral of the Company’s monthly rental payments pursuant to the lease for the Company’s manufacturing facility in Union City, Indiana for five months beginning May 2026, with the entire deferred amount due and payable in a single lump-sum payment on or before September 30, 2026. In August 2026, the parties to the lease entered into an agreement whereby the lessor agreed to a further deferral of the Company’s monthly rental payments, as further described in Note 16, Subsequent Events, to the Condensed Consolidated Financial Statements. Post-Merger 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). Under the Customer Order Credit Agreement, a Qualified Purchase Order includes purchase orders entered into between Workhorse and/or one or more of 22 its subsidiaries and a customer made on terms approved by MGMH or substantially similar to terms previously approved by MGMH pursuant to a master purchase agreement or other standard terms and conditions approved by MGMH. The amount of funds advanced by MGMH upon the receipt of an acceptable purchase order will be determined by MGMH but will not exceed 70% of the purchase price for the ordered vehicles without MGMH’s consent. 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 general corporate purposes. Workhorse’s outstanding obligations under each Credit Agreement bear interest at a reference rate equal to the term Secured Overnight Financing Rate for a three-month tenor (“SOFR”) plus an applicable margin of 5.00%. If SOFR is unavailable pursuant to the terms of the Credit Agreements, the reference rate will be the prime rate of interest per annum last quoted by The Wall Street Journal, and the applicable margin will be 2.50% per annum. Workhorse’s obligations under the Credit Agreements mature on December 15, 2028. MGMH’s obligation to advance additional funds under the Cash Flow Credit Agreement will terminate and thereafter be at the discretion of MGMH upon the consummation by Workhorse of a PIPE transaction (as defined in the Credit Agreements) to the extent such PIPE occurs prior to the maturity date of the Cash Flow Credit Agreement. Both Credit Agreements contain customary representations and warranties, affirmative and negative covenants, and events of default, and provide for customary acceleration and remedy rights for MGMH upon the occurrence of an event of default by Workhorse. Workhorse’s obligations under the Credit Agreements are senior secured obligations of Workhorse, ranking senior to all other indebtedness and, subject to certain limitations, are unconditionally guaranteed by each of Workhorse’s subsidiaries, pursuant to the terms of the Credit Agreements and secured by substantially all of the assets of Workhorse and its subsidiaries pursuant to a certain Security Agreement (the “Security Agreement”). Payments under the Cash Flow Credit Agreement are effectively subordinated to payments under the Customer Order Credit Agreement pursuant to the waterfall in the Security Agreement. In April 2026, Workhorse made the following amendments to the Credit Agreements: (i) amends the Cash Flow Credit Agreement to increase the borrowing capacity from $10.0 million to $20.0 million, (ii) amends the Cash Flow Credit Agreement to defer interest payments on the additional $10.0 million Commitment until the Interest Payment Date (as defined in the Cash Flow Credit Agreement) occurring after September 30, 2026 and (iii) amends the Customer Order Credit Agreement to reduce the borrowing capacity from $40.0 million to $30.0 million. In June 2026, Workhorse made the following amendments to the Credit Agreements: (i) amends the Cash Flow Credit Agreement to increase the borrowing capacity from $20.0 million to $30.0 million, (ii) amends the Cash Flow Credit Agreement to defer interest payments on the additional $10.0 million Commitment until the first Interest Payment Date (as defined in the Cash Flow Credit Agreement) occurring after September 30, 2026, (iii) amends the Customer Order Credit Agreement to reduce the borrowing capacity from $30.0 million to $20.0 million and (iv) 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 to increase the borrowing capacity under the Cash Flow Credit Agreement from $30.0 million to $40.0 million and to defer interest payments on the additional commitments until after January 31, 2027, as further described in Note 16, Subsequent Events, to the Condensed Consolidated Financial Statements. Going Concern; Financing As discussed more fully under Note 1, Summary of Business and Significant Accounting Principles; Liquidity, Capital Resources, and Going Concern, above, and Liquidity and Capital Resources; Going Concern, in the notes to our Unaudited Condensed Consolidated Financial Statements included with this Report, our ability to continue as a going concern is contingent upon successful execution of management’s intended plan over the next twelve months to improve the Company’s liquidity and working capital requirements. In order to manage liquidity and operating capital, the Company entered into certain of the transactions described above, including the Convertible Financing and the Sale-Leaseback transaction, pursuant to which the Company received gross proceeds of $25.0 million. As of June 30, 2026, there was $5.0 million in principal outstanding under the A&R Note. Additionally, the Company has access to the Customer Order Credit Agreement and the Cash Flow Credit Agreement. See discussion above in Post-Merger Financing for further information on the borrowing capacity of the Credit Agreements. As of June 30, 2026, the Company had $18.3 million in outstanding borrowings and remaining availability of $1.7 million under the Customer Order Credit Agreement. As of June 30, 2026, the Company had $30.0 million in outstanding borrowings and no remaining availability under the Cash Flow Credit Agreement. 23 As of the filing date, we had $18.3 million in outstanding borrowings and $1.7 million remaining availability under the Customer Order Credit Agreement, and we had $40.0 million in outstanding borrowings and no remaining availability under the Cash Flow Credit Agreement. Subject to certain conditions, the Credit Agreements permit the Company to raise funds through an equity or equity-linked financing. The Company is actively working to evaluate financing alternatives; however, the consummation of such a transaction is not probable as of the issuance date of the accompanying Condensed Consolidated Financial Statements. Accordingly, our ability to obtain additional proceeds from financing is extremely limited under current conditions, and if we are unable to obtain such proceeds, we may need to further adjust our operations and seek protection by filing a voluntary petition for relief under the Bankruptcy Code. If this were to occur, the value available to our various stakeholders, including our creditors and stockholders, is uncertain and trading prices for our securities may bear little or no relationship to the actual recovery, if any, by holders of our securities in bankruptcy proceedings. These conditions raise substantial doubt regarding our ability to continue as a going concern for a period of at least one year from the date of issuance of these accompanying Condensed Consolidated Financial Statements. Cost-saving Measures A vital component of management’s intended plan to improve our liquidity and working capital requirements was completion of the Merger. Consummation of the Merger resulted in settlement of all of Workhorse’s obligations under the 2024 Notes, with all of the 2024 Notes and 2024 Warrants being cancelled, and all collateral, including the cash collateral, securing the 2024 Notes being released. Additionally, all indebtedness of Motiv was partially satisfied in exchange for the Merger Consideration with the balance cancelled for no consideration. Additionally, as a result of the Merger, we believe that we have the potential to (i) benefit from our and Motiv’s complementary customer bases, which include a substantial number of leading national medium duty fleets; (ii) benefit from our complementary sales and marketing strategies, which include extensive dealer relationships and an established methodology for direct sales to fleets and other customers; and (iii) achieve substantial cost synergies, including savings from reducing contract manufacturers for Motiv products by manufacturing them in the Workhorse production facility, including the transition away from contract manufacturers and shifting of production of all vehicles into the Workhorse production facility during 2026. Additionally, the combined company now has an extensive and attractive portfolio of products, including a full range of Category 4-6 trucks and buses that the Company believes will be attractive to customers. Management plans to continue to work to achieve expected synergies from the Merger. There can be no assurance that the measures described above, or any other cost-saving measures we may implement in the future, will be sufficient to address our immediate or longer-term liquidity and working capital needs. Moreover, it is possible that such measures will have an adverse effect on our operations. Trucks in Production We continue to focus on product quality, manufacturing capacity and operational planning, and engineering and design to enable increased deliveries and deployments of our products and future revenue growth. We have plans to continue to reduce the total cost of and enhance the design and performance of our current product lineup, as well as design new vehicles as the market evolves. We are planning a new, proprietary “modular” chassis design that will be based on the foundational learnings gathered from proven W56 components but with a scalable architecture that supports flexible wheelbase configurations, advanced battery and axle technologies, and next-generation software and power electronics. In addition, we are planning for our first Class 5/6 cab chassis, which will pair the new modular chassis with a lightweight, low-cost cab designed for efficient upfitting, spanning applications across all classes of medium duty trucks. We continued to electrify the fleet of trucks being used in our Stables by Workhorse initiative, which operates FedEx Ground delivery routes in the greater Cincinnati, OH area. The electrification of the fleet provides us with firsthand data on the benefits and challenges of independent fleet operators experience while executing last-mile delivery operations. The initiative also provides valuable insights into how our customers can plan for and manage the transition to EV operations, including how to develop adequate charging infrastructure, training and maintenance services. In addition to our ongoing production ramp in 2026, we intend to continue to generate demand and brand awareness by improving our trucks’ performance and functionality, and by developing new truck programs, including new W56 variants. We expect to continue to benefit from ongoing electrification of the commercial truck market and in particular “last mile delivery” sector. 24 Recent Trends and Market Conditions We continue to monitor macroeconomic conditions to remain flexible and to optimize and evolve our business as appropriate, in this tumultuous environment and we will endeavor to project demand and infrastructure requirements globally and deploy our production, workforce and other resources accordingly. Market Demand We continue to experience slower-than-anticipated industry wide electric truck adoption rates and lack of government subsidies and incentives available to our dealers as well as slower than expected roll-out of additional power to electric grids and the resulting effect on rollouts of electric truck charging infrastructure, nationwide. Delayed governmental approvals in certain states and slower than expected proliferation of charging stations across the country have also adversely impacted demand. We expect these delays and the current and developing regulatory landscape in the United States to continue to slow adoption in 2026. The dynamic regulatory landscape is a significant consideration for our operations and strategic planning and remains uncertain. Proposed changes to California’s Hybrid and Zero-Emission Truck and Bus Voucher Incentive Program (“HVIP”) could negatively impact demand, if implemented. The removal of the Federal 45W tax-rebate for commercial vehicles may also impact a small percentage of customers. Weighing against these real and potential additional headwinds are the introduction of new incentive programs in some states as well as increased incentives in New York’s, New York Truck Voucher Incentive Program (“NYTVIP”) and Washington State’s Zero-Emission Incentive Program (“WAZIP”). Commodities Commodity prices remain volatile, and we expect continued cost increases for key materials used in electric truck production, including lithium, cobalt, nickel, steel, and aluminum. Global shifts in supply and demand have caused uneven price trends across commodities, but overall, we anticipate higher material costs. In addition, tariff measures and trade policy under the presidential administration have raised the cost of imported automotive parts and raw materials. The current U.S. trade policy, including tariffs, is dynamic, and we are actively monitoring developments and evaluating potential impacts on our supply chain, production costs, and pricing strategies, in addition to the impacts that the war in Iran is having on commodity prices as a result of rising energy costs and supply and supply chain disruptions. Supply Chain We continue to develop relationships with suppliers of key parts, components and raw materials to be used in the manufacture of our products such as batteries, electronics, and truck chassis that are sourced from suppliers across the world. As we continue to execute on our new truck programs, we will continue to identify supplier relationships and truck program synergies which may allow us to take advantage of pricing efficiencies from economies of scale. Where available, we will utilize multiple supply sources for key parts, and we will work to qualify multiple supply sources to achieve pricing efficiencies and minimize potential production risks related to supply chain. As previously disclosed, we are currently working with certain of our vendors to extend or restructure the payment terms of past due accounts payable balances. Inflation Inflation continues to impact our operations, resulting from both supply and demand imbalances as economies continue to face constraints as well as the impact on the availability and cost of energy and other commodities as a result of the ongoing war in Ukraine, the war in Iran, and other tensions in the Middle East. While inflation had moderated in 2025, to the extent inflation or interest rates rise, we would experience an impact on our business, resulting in higher input costs and increasing the cost of any financing the Company may undertake in the future. Geopolitical Our operations and results may be impacted due to uncertainty of the political environment and the current presidential administration. The administration’s policies have negatively affected support for the adoption of electric trucks, as well as the availability of government subsidies to fund the adoption of electric trucks and has implemented additional tariffs on imports that affect us and our industry. In addition, recent U.S. Supreme Court decisions that purport to limit the authority of federal executive agencies, including the EPA, may affect our industry in ways we cannot yet predict. 25 Results of Operations The Company operates as a single reporting segment under ASC 280, Segment Reporting, (“ASC 280”) consistent with how management evaluates and prioritizes investment and resource allocation decisions and assesses operating performance. Our Condensed Consolidated Statements of Operations are as follows: Three Months Ended June 30, Change Six Months Ended June 30, Change ($ in thousands) 2026 2025 $ % 2026 2025 $ % Sales, net of returns and allowances $ 3,562 $ 750 $ 2,812 375 % $ 7,891 $ 1,896 $ 5,995 316 % Cost of sales 11,034 2,109 8,925 423 % 22,845 4,334 18,511 427 % Gross loss (7,472) (1,359) (6,113) 450 % (14,954) (2,438) (12,516) 513 % Operating expenses: Selling, general and administrative 7,840 4,469 3,371 75 % 17,385 8,809 8,576 97 % Research and development 4,108 3,197 911 28 % 8,177 6,857 1,320 19 % Total operating expenses 11,948 7,666 4,282 56 % 25,562 15,666 9,896 63 % Loss from operations (19,420) (9,025) (10,395) 115 % (40,516) (18,104) (22,412) 124 % Interest expense, net (800) (3,819) 3,019 (79) % (1,154) (7,395) 6,241 (84) % Change in fair value of convertible note (132) — (132) N/M (277) — (277) N/M Change in fair value of stock rights 182 — 182 N/M 1,885 — 1,885 N/M Other expense (1) (3) 2 (67) % (25) (4) (21) 525 % Loss before benefit for income taxes (20,171) (12,847) (7,324) 57 % (40,087) (25,503) (14,584) 57 % Benefit for income taxes — — — — % 34 — 34 N/M Net loss $ (20,171) $ (12,847) $ (7,324) 57 % $ (40,053) $ (25,503) $ (14,550) 57 % Sales, net of returns and allowances Sales, net of returns and allowances were $3.6 million and $0.8 million for the three months ended June 30, 2026 and 2025, respectively, and $7.9 million and $1.9 million for the six months ended June 30, 2026 and 2025, respectively. For the three and six months ended June 30, 2026, the sales increase was driven by the delivery of 22 and 39 more vehicles, respectively, as compared to the prior year periods. These deliveries included 13 and 28 Workhorse W56 vehicles in the three and six months ended June 30, 2026, respectively. Additionally, in the second quarter of 2026, we sold 12 older model Workhorse vehicles at a discounted amount in order to sell through the inventory. Cost of sales Cost of sales were $11.0 million and $2.1 million for the three months ended June 30, 2026 and 2025, respectively, and $22.8 million and $4.3 million for the six months ended June 30, 2026 and 2025, respectively. The increases in cost of sales of $8.9 million and $18.5 million for the three and six months ended June 30, 2026, respectively, were primarily a result of higher sales volume and the higher fixed cost base of Workhorse's Union City, IN manufacturing facility. Additionally, costs in the first quarter of 2026 included the contract manufacturing costs of the legacy Motiv operational structure. We also incurred $0.9 million and $2.4 million in higher warranty costs in the three and six months ended June 30, 2026, respectively, which was primarily attributable to costs related to an ongoing retrofit campaign for certain Motiv trucks sold in Canada. Costs incurred for the retrofit campaign during the current year exceeded our original estimates, and we increased our reserves required to complete the retrofit campaign. These items were partly offset by margin realized on the sale of 12 older model Workhorse vehicles during the second quarter of 2026 that had been previously written down. 26 Selling, general and administrative expenses Selling, general and administrative (“SG&A”) expenses were $7.8 million and $4.5 million for the three months ended June 30, 2026 and 2025, respectively, and $17.4 million and $8.8 million for the six months ended June 30, 2026 and 2025, respectively. The increases in SG&A of $3.4 million and $8.6 million for three and six months ended June 30, 2026, respectively, were primarily driven by the Merger, as the current year periods reflected the costs of the combined company, whereas the corresponding prior-year periods reflected only the costs of Motiv’s historical operations. The higher costs were primarily attributable to legal, consulting, accounting and investor relations fees, higher IT costs, increased D&O insurance costs associated with the combined company’s public-company status, and rent expense for duplicative facilities pending closure as part of the Merger integration. These increases were partly offset by Merger-related synergies, including reductions in redundant headcount and other operating costs. Research and development expenses Research and development (“R&D”) expenses were $4.1 million and $3.2 million for the three months ended June 30, 2026 and 2025, respectively, and $8.2 million and $6.9 million for the six months ended June 30, 2026 and 2025, respectively. The increases in R&D expenses of $0.9 million and $1.3 million for the three and six months ended June 30, 2026, respectively, were primarily driven by higher employee compensation and related expenses associated with our investment in key R&D projects, including our initiative to reduce the total bill of material cost of our vehicles to levels comparable with internal combustion engine ("ICE") vehicles. Interest expense, net For the three months ended June 30, 2026 and 2025, Interest expense, net was $0.8 million and $3.8 million, respectively. For the six months ended June 30, 2026 and 2025, Interest expense, net was $1.2 million and $7.4 million, respectively. The difference was primarily driven by lower outstanding debt at lower interest rates in the first six months of 2026 as compared to the prior year. All debt that was outstanding as of June 30, 2025 was restructured in connection with the Merger, resulting in lower debt levels at lower interest rates. Change in fair value of convertible note In connection with the Merger, we assumed the A&R Note that is remeasured to fair value at each reporting period. As of June 30, 2026, the estimated fair value of the A&R Note was $5.6 million. We recorded a fair value loss of $0.1 million and $0.3 million for the three and six months ended June 30, 2026, respectively. Change in fair value of stock rights In connection with the Merger, we assumed an outstanding liability for Rights to acquire 1,193,364 shares of Workhorse Common Stock (the “Rights”). The Rights were issued pre-Merger in exchange for the cancellation of the 2024 Warrants. The Rights are periodically marked-to-market using the closing price of Workhorse Common Stock. During the three and six months ended June 30, 2026, we recorded $0.2 million and $1.9 million, respectively, of income related to changes in the fair value of the Rights. As of June 30, 2026, all Rights have been exercised, and no shares remain issuable under the stock Rights liability. Liquidity and Capital Resources; Going Concern We have financed our operations primarily through sales of equity securities and issuances of debt. We have utilized this capital for R&D to fund designing, building and delivering trucks to customers and for working capital purposes. We had sales of $7.9 million, incurred a net loss of $40.1 million and used $40.6 million of cash in operating activities during the six months ended June 30, 2026. As of June 30, 2026, we had $9.6 million of cash and cash equivalents and $0.7 million in restricted cash. As a result of our recurring losses from operations, accumulated deficit, projected capital needs, delays in bringing our vehicles to market and lower than expected market demand, management determined that substantial doubt exists regarding our ability to continue as a going concern within one year after the issuance date of the accompanying Condensed Consolidated Financial Statements. Our ability to continue as a going concern is contingent upon successful execution of management’s intended plan over the next twelve months to improve our liquidity and working capital, which includes, but is not limited to: •Generating revenue by increasing sales of our vehicles and other services; 27 •Generating revenue by developing a containerized mobile AI data center product line; •Reducing redundant expenses and limiting non-strategic capital expenditures; •Realizing synergies from the Merger, including savings from reducing contract manufacturers for Motiv products by manufacturing them in the Workhorse production facility; •Continuing efforts to lower the total bill of material cost of our vehicles to be in line with internal combustion engine (“ICE”) vehicles; •Successfully entering the mobile AI data center category and developing the new product line; •Obtaining proceeds from our current financing arrangements; and •The successful consummation of a potential equity or equity-linked financing. It is essential that we have access to capital as we bring our existing line of vehicles to market, scale up production and sales of such vehicles and continue to develop additional variations of our existing vehicles and our next generation of vehicles. There is no assurance that we will be successful in implementing management’s plans to generate liquidity to fund these activities or other aspects of our short and long-term strategy, that our projections of our future capital needs will prove accurate or that any additional funding would be available or sufficient to continue operations in future periods. Our revenues from operations are unlikely to be sufficient to meet our liquidity requirements for the twelve months following the date of the issuance of our Condensed Consolidated Financial Statements, and, accordingly, our ability to continue as a going concern depends on our ability to obtain and receive proceeds from external financing. We currently expect that our primary source of financing will be the Credit Agreements and a potential equity or equity-linked financing. Because the public float of our Common Stock is currently less than $75.0 million, the SEC’s “baby shelf” rules will limit the amount of securities we can offer and sell on Form S-3, including Common Stock and all other securities, to one-third of our public float in any twelve-month period. Accordingly, our ability to obtain liquidity through public sales of securities is substantially limited. Subject to certain conditions, the Credit Agreements permit the Company to raise funds through an equity or equity-linked financing; however, the consummation of such a transaction is not probable as of the issuance date of the accompanying Condensed Consolidated Financial Statements. Because of the foregoing, our ability to obtain additional proceeds from financing is extremely limited under current conditions, and if we are unable to obtain such proceeds, we may need to further adjust our operations and seek protection by filing a voluntary petition for relief under the Bankruptcy Code. If this were to occur, the value available to our various stakeholders, including our creditors and stockholders, is uncertain and trading prices for our securities may bear little or no relationship to the actual recovery, if any, by holders of our securities in bankruptcy proceedings, if any. These conditions raise substantial doubt regarding our ability to continue as a going concern for a period of at least one year from the date of issuance of these accompanying Condensed Consolidated Financial Statements. We may also rely on other debt financing or other sources of capital funding such as through the sale of assets to obtain sufficient financial resources to fund our operating activities. If we are unable to maintain sufficient financial resources, our business, financial condition and results of operations, as well as our ability to continue to develop, produce and market our vehicle programs and satisfy our obligations as they become due, we will be materially and adversely affected. This could affect future vehicle program production and sales. Failure to receive additional proceeds will have a material, adverse impact on our business operations. There can be no assurance that we will be able to obtain the additional proceeds needed to achieve our goals on acceptable terms or at all. Additionally, any additional equity or equity-linked financings would likely have a dilutive effect on the holdings of our existing stockholders. Our current level of cash and cash equivalents is not sufficient to execute our business plan. For the foreseeable future, we will incur operating expenses, capital expenditures and working capital funding that will deplete our cash on hand. These conditions raise substantial doubt regarding our ability to continue as a going concern for a period of at least one year from the date of issuance of these Condensed Consolidated Financial Statements. 28 Summary of Cash Flows Six Months Ended June 30, (in thousands) 2026 2025 Net cash used in operating activities (40,591) (21,714) Net cash used in investing activities (270) (270) Net cash provided by financing activities 38,250 18,000 Cash Flows from Operating Activities Our cash flows from operating activities are affected by our cash investments to support the business in R&D, manufacturing, and SG&A. Our operating cash flows are also affected by our working capital needs to support fluctuations in accounts receivable, inventory, accounts payable and other current assets and liabilities. During the six months ended June 30, 2026 and 2025, net cash used in operating activities was $40.6 million and $21.7 million, respectively. The increase in net cash used in operations was primarily attributable to higher net losses of $14.6 million in the first six months of 2026 as compared to the prior year. Cash Flows from Investing Activities Cash used in investing activities related primarily to capital expenditures, totaling $0.3 million for the six months ended June 30, 2026, and $0.3 million for the six months ended June 30, 2025. Capital expenditures in 2026 were due to investments in tooling and equipment required as we transition the manufacturing of legacy Motiv vehicles in the Workhorse manufacturing facility in Union City, IN as a result of the Merger. Cash Flows from Financing Activities Net cash provided by financing activities during the six months ended June 30, 2026, was $38.3 million, which was attributable to proceeds received during the period from the Cash Flow Credit Agreement and Customer Order Credit Agreement. Net cash provided by financing activities during the six months ended June 30, 2025, was $18.0 million, which was attributable to proceeds received during the period from the A&R Senior Note. Future Purchase Commitments From time to time in the ordinary course of business, we enter into agreements with vendors for the purchase of components and raw materials to be used in the manufacture of our products. However, due to contractual terms, variability in the precise growth curves of our development and production ramps, and opportunities to renegotiate pricing, we generally do not enter into binding and enforceable purchase orders under such contracts beyond the needs of our current production schedule and expected supplier lead times. The timing and magnitude of purchase orders beyond such period could change materially based on customer order volumes and other factors. Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. Critical Accounting Estimates A discussion of our critical accounting estimates is contained in the 2025 Form 10-K, under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Recent Accounting Pronouncements A description of recently issued and adopted accounting pronouncements is contained in Note 14, Recent Accounting Pronouncements, of the Condensed Consolidated Financial Statements. 29