Workhorse Group (WKHS) risk factors, FY2024 10-K

Risks Related to our Business and Operations

1. 01Substantial doubt exists regarding our ability to continue as a going concern through the twelve months following the date of the issuance of the Consolidated Financial Statements accompanying this Annual Report on Form 10-K
2. 02customers or to expand our operations
3. 03The unavailability, reduction, elimination or adverse application of government subsidies and, incentives and, or any failure by states or other governmental entities to adopt or enforce regulations, could have an adverse effect on our business, prospects, financial condition and operating results
4. 04Uncertain global macro-economic and political conditions could materially adversely affect our results of operations and financial condition
5. 05The current conflicts in Ukraine and the Middle East and any resulting sanctions could have an adverse impact on our current operations
6. 06Our business could be adversely affected by trade tariffs or other trade barriers
7. 07We may experience delays in launching and ramping up production or we may be unable to control our manufacturing costs
8. 08Our results of operations have not resulted in profitability and we may not be able to achieve profitability going forward
9. 09If our vehicles fail to perform as expected, our ability to develop, market and sell our electric vehicles could be harmed
10. 10We currently have a limited number of customers and prospective customers, with no long-term agreements with existing customers, and we expect that a significant portion of our future sales will be from a limited number of customers. The loss of any of these customers could materially harm our business
11. 11Regulatory requirements may have a negative impact upon our business
12. 12safety measures. The cost of these compliance activities and the risks, delays, and expenses incurred in connection with such compliance could be substantial
13. 13We may incur costs, expenses and penalties related to regulatory matters, governmental investigations, legal proceedings and other claims, which could have a material adverse effect on the Company's business, financial position, results of operations, cash flows or liquidity
14. 14Pandemics, epidemics, disease outbreaks and other public health crises, such as the COVID-19 pandemic, have disrupted our business and operations, and future public health crises could materially adversely impact our business, financial condition, liquidity and results of operations
15. 15Our limited operating history makes it difficult for us to evaluate our future business prospects and make decisions based on those estimates of our future performance
16. 16We do not receive progress payments on orders of our vehicles, and if a purchaser fails to pay upon delivery, we may not be able to recoup the costs we incurred in producing such vehicles
17. 17Our business, prospects, financial condition and operating results will be adversely affected if we cannot reduce and adequately control the costs and expenses associated with operating our business, including our material and production costs
18. 18If the market for commercial electric vehicles does not develop broadly and quickly than it is currently developing, our business, prospects, financial condition and operating results will be adversely affected
19. 19If we are unable to scale our operations at our Union City, IN facility in an expedited manner from our limited low volume production to high volume production, our business, financial position, results of operations, cash flows and liquidity will be adversely affected
20. 20We depend upon key personnel and need additional personnel. The loss of key personnel or the inability to attract additional personnel may adversely affect our business and results of operations
21. 21Our electric vehicles compete for market share with vehicles powered by other vehicle technologies that may prove to be more attractive than ours
22. 22Changes in the market for electric vehicles could cause our products to become obsolete or lose popularity
23. 23We may be unable to keep up with changes in electric vehicle technology and, as a result, may suffer a decline in our business and competitive position
24. 24The failure of certain key suppliers to provide us with the necessary components of our products according to our schedule and at price, quality levels and volumes acceptable to us could have a severe and negative impact upon our business
25. 25Continued disruption of supply, shortage of materials or increases in costs, in particular for battery packs could harm our business
26. 26Product liability or other claims could have a material adverse effect on our business
27. 27Our success may depend on protecting our intellectual property rights
28. 28We may be exposed to liability for infringing upon the intellectual property rights of other companies
29. 29Our business may be adversely affected by union activities
30. 30impose additional costs on us or expose us to new or additional risks
31. 31We face risks associated with security breaches through cyber-attacks, cyber intrusions, or otherwise, which could pose a risk to our systems, networks and services

Risks Related to our Financing Arrangements

1. 32We did not immediately receive the net proceeds from the Tenth Additional 2024 Note and may never receive certain of such proceeds. Any proceeds received pursuant to the 2024 Notes will be received only upon satisfaction of certain terms and conditions set forth in the Lockbox Letter
2. 33Provisions in our 2024 Notes and 2024 Warrants may deter or prevent a business combination that may be favorable to you
3. 34our obligations under the 2024 Notes

Risks Related to Owning Our Common Stock

1. 35The Company has been provided with a compliance period of 180 calendar days, or until March 31, 2025, to regain compliance with the minimum bid price. If the Company does not regain compliance by March 31, 2025, the Company may be eligible for an additional grace period subject to certain conditions
2. 36While management has taken steps to remediate these control weaknesses, the material weaknesses may still be unresolved. Consequently, our internal control over financial reporting was not effective as of December 31, 2024
3. 37Our stock price and trading volume may be volatile, which could result in substantial losses for our stockholders
4. 38We have not paid cash dividends in the past and have no immediate plans to pay cash dividends
5. 39Stockholders may experience future dilution as a result of our existing and future financings
6. 40price per share at which we sell additional shares of our Common Stock, or securities convertible or exchangeable into Common Stock, in future transactions may be higher or lower than the price per share paid by our historical investors
7. 41Our charter documents and Nevada law may inhibit a takeover that stockholders consider favorable
8. 42There are limitations on director/officer liability