Motiv Power Systems, Inc. Releases 2023-2024 Audited and Restated Financial Statements: Key Highlights and Investor Implications

Overview

Motiv Power Systems, Inc. (“Motiv”), a company specializing in electrified chassis and electric vehicle technology for medium-duty transportation, has released its audited and restated consolidated financial statements for the years ended December 31, 2023 and 2024. The report includes significant information crucial for investors and shareholders, including updates on the company’s financial position, operational performance, capital structure, going concern risks, and a major upcoming merger event.

Key Financial Highlights

• Revenues: Fell sharply from \$16.9 million in 2023 to \$7.0 million in 2024, a decrease of approximately 58%.
• Net Loss: Increased from \$46.8 million in 2023 to \$51.6 million in 2024.
• Gross Loss: Improved slightly from a gross loss of \$12.6 million in 2023 to \$6.1 million in 2024, but the company continues to operate below breakeven.
• Operating Expenses: Rose from \$30.0 million in 2023 to \$35.2 million in 2024, driven in part by a \$6.2 million impairment on a discontinued product line (the Argo Class 6 Cab).
• Cash Position: Ended 2024 with \$6.6 million in cash, up from \$4.3 million at 2023 year-end.
• Accumulated Deficit: Stands at \$254.9 million as of December 31, 2024, up from \$203.3 million at the end of 2023.
• Stockholders’ Equity (Deficit): Negative equity improved slightly from \$(55.6) million in 2023 to \$(40.8) million in 2024.

Major Corporate Events and Capital Structure Changes

• Restatement of Financials: The 2024 financial statements were restated to fix errors in the weighted average shares outstanding and net loss per share calculations, primarily due to a 10-for-1 reverse stock split and conversion of preferred stock into common stock. This resulted in a significant adjustment in reported per-share loss but did not affect the total net loss or equity values.
• Recapitalization: In June 2024, all outstanding Series A, B, and C preferred stock were converted into common stock, followed by a 10-for-1 reverse stock split. This fundamentally altered the company’s equity structure.
• Debt Conversion: Simultaneously, \$50 million of convertible notes (plus interest) held by related parties were converted into Series A Preferred Stock, effectively reducing debt but increasing equity dilution. An additional \$15.6 million in extinguished debt was treated as additional paid-in capital.
• Senior Secured Promissory Notes: Motiv continued to fund operations via related party loans, with the principal and compounded interest balance on its senior secured notes reaching \$68.4 million at year-end 2024, and further advances in 2025 pushing this figure to an estimated \$101 million by August 2025.
• Impairment Charge: The company wrote off a \$6.2 million investment in the Argo Class 6 Cab product line, citing technological infeasibility and lack of alternative use.

Going Concern and Liquidity Risks

• Substantial Doubt About Continuing as a Going Concern: The company is facing significant working capital deficiencies, recurring losses, and negative cash flows from operations. Management has stated that these conditions raise substantial doubt about Motiv’s ability to continue as a going concern over the next 12 months.
• Reliance on Key Customers and Suppliers: In 2024, 69% of revenue came from two customers, and 93% of accounts receivable at year-end was owed by a single customer. The loss of such customers would have a material impact. Similarly, there is significant supplier concentration for components.
• Ongoing Need for Capital: The company expects to continue raising funds to support operations, development, and scaling, but there is no assurance that additional funds will be available or on favorable terms.

Imminent Merger with Workhorse Group

• Merger Announcement: On August 15, 2025, Motiv and Workhorse Group Inc. (Nasdaq: WKHS) announced that they had entered into a definitive merger agreement. After completion, pre-merger Motiv investors will own approximately 62.5% of the combined company, while Workhorse shareholders will retain about 26.5%.
• Use of Proceeds: All proceeds from the merger are expected to be used to repay Motiv’s outstanding senior secured notes (~\$101 million at signing). There is anticipated to be no distribution to Motiv’s equity holders from the merger.
• Closing Timeline: The transaction is expected to close in Q4 2025, subject to shareholder approval and customary conditions.

Other Notable Details

• Warranty Reserve: As of December 31, 2024, the company had a warranty reserve of \$2.7 million.
• Legal Matters: The company is not involved in any major litigation as of the reporting date, aside from one trademark dispute and a previously settled issue with the California Energy Commission.
• Stock-Based Compensation: The company continues to grant stock options to employees, with 19.2 million options outstanding at the end of 2024 and a remaining unrecognized compensation cost of \$1.2 million.

Investor Implications and Potential Price-Sensitive Issues

• Merger with Workhorse: While the merger may create long-term strategic value, the fact that all proceeds will be used for debt repayment and that there is no expected distribution to Motiv equity holders is critical. This could be negative for existing shareholders, as their equity will likely be diluted or eliminated with no immediate financial benefit.
• Going Concern Risk: The explicit disclosure of “substantial doubt” about the company’s ability to continue is a material risk that should not be overlooked.
• Operational and Revenue Decline: The drastic reduction in revenue and continued high losses suggest continued operational challenges and may impact the company’s valuation and investor confidence.
• Restatement of Financials: The need to restate loss per share due to an error could impact investor trust in management and reporting accuracy.
• Customer and Supplier Concentration: Heavy reliance on a few customers and suppliers increases business risk, making the company vulnerable to revenue and supply chain shocks.

Conclusion

Investors should be aware of the significant financial and operational challenges facing Motiv Power Systems. The upcoming merger with Workhorse Group represents a major turning point, but with all proceeds earmarked for debt repayment and no expected distribution to current equity holders, the deal could result in substantial dilution or loss of value for existing shareholders. The persistent going concern risk, heavy losses, restatement of financials, and reliance on a few key customers and suppliers further underscore the risks associated with the company.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any security. Investors should conduct their own due diligence or consult with a financial advisor before making investment decisions. The analysis is based on the company’s audited and restated financial statements for the years ended December 31, 2023 and 2024, and subsequent events through August 2025. Forward-looking statements and projections are subject to risks and uncertainties.

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