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

Summary of Key Findings

• Ongoing Substantial Losses and Working Capital Deficiency
• Going Concern Warning
• Major Balance Sheet Recapitalization and Debt-to-Equity Conversion
• Reverse Stock Split and Restatement of EPS
• Highly Concentrated Customer and Supplier Base
• Pending Merger with Workhorse Group Inc.
• No Distribution Expected to Equity Holders in Merger

Detailed Financial Performance and Developments

1. Ongoing Substantial Losses and Liquidity Concerns

Motiv Power Systems, Inc. reported significant net losses for two consecutive years: \$46.8 million in 2023 and \$51.6 million in 2024. The company’s accumulated deficit reached \$254.9 million at the end of 2024. Cash used in operations was \$38.2 million in 2024, and despite raising capital, the company ended the year with just \$6.6 million in cash. The auditors included a going concern warning due to the company’s significant working capital deficiency and need for additional funds to meet obligations and sustain operations. These factors cast significant doubt on the company’s ability to continue as a going concern without further financing or drastic operational changes.

2. Major Recapitalization and Debt Conversion

In June 2024, Motiv executed a major balance sheet recapitalization:

• Conversion of all Series A-1, A-2, B, C-1, C-2, and C-3 preferred stock into common stock.
• Conversion of \$50 million in related party convertible debt into 44.6 million shares of Series A Preferred Stock (at \$1.12/share).
• The total principal and compounded interest extinguished through this transaction was \$65.6 million, and the transaction is treated as additional paid-in capital.
• After the equity conversions, the company effected a 10-for-1 reverse stock split.

This recapitalization significantly altered the capital structure, eliminated large preferred stock overhangs, and converted substantial debt into equity, reducing liabilities but also diluting existing shareholders.

3. Restatement of Earnings Per Share

The company restated its 2024 financial statements due to an error in the calculation of weighted average shares outstanding. The error:

• Resulted in an overstatement of loss per share, which was restated from \$(65.3) to \$(9.4) per share for 2024, a substantial correction due to the increased share count after conversions and the reverse split.
• Weighted average number of shares used was restated from 789,702 to 5,468,097 for 2024.

Net loss and other line items were unaffected, but this change materially affects per-share figures and is particularly important for investors and analysts.

4. Revenue Decline and Margins

Revenue dropped sharply from \$16.9 million in 2023 to \$7.0 million in 2024, a decline of over 58%. Gross losses improved somewhat but remained deeply negative: \$(12.6) million in 2023 and \$(6.1) million in 2024. Cost of revenues also decreased in line with sales, but the company remains unprofitable at the gross margin level.

5. Customer and Supplier Concentration Risks

The company’s revenues and accounts receivable are highly concentrated:

• In 2023, two customers accounted for 67% of revenue; in 2024, two customers accounted for 69%.
• At December 31, 2024, one customer accounted for approximately 93% of accounts receivable.
• On the procurement side, two suppliers accounted for 30% of total purchases in 2024, and two vendors made up 35% of accounts payable.

Loss of any of these counterparties would have a significant adverse impact on operations and financial results.

6. Ongoing Need for Additional Capital

Despite restructuring, Motiv still has a significant cash burn and will require additional financing to continue operations. There is no assurance that future financing will be available on acceptable terms, or at all. Failure to secure additional funding may result in the company delaying, reducing, or ceasing operations.

7. Pending Merger with Workhorse Group Inc. – Major Price-Sensitive Event

On August 15, 2025, Motiv and Workhorse Group Inc. (Nasdaq: WKHS) announced a definitive merger agreement. Key terms:

• All-stock transaction: pre-merger Motiv investors will own approximately 62.5% of the combined company, and Workhorse shareholders approximately 26.5%.
• The deal is subject to Workhorse shareholder approval and customary closing conditions, targeting completion in Q4 2025.
• All proceeds from the merger are expected to be used to satisfy the outstanding principal and accrued interest on the A&R notes (~\$101 million at signing).
• There is expected to be NO distribution to Motiv’s current equity holders.

This means that current Motiv shareholders are likely to experience a complete loss of their equity upon closing of the merger, which is a highly material and price-sensitive disclosure.

8. Other Noteworthy Items

• No dividends have ever been declared on common stock.
• Significant net operating loss carryforwards: \$185.3 million federal and \$215.5 million California at end of 2024, but realization is subject to future taxable income and ownership change limitations.
• Stock-based compensation plans were expanded, with 24.5% of post-closing capitalization reserved for new grants.
• Legal: The company settled a \$2.1 million claim with the California Energy Commission, and has a pending trademark dispute, but there are otherwise no material litigations.

Key Risks and Investor Takeaways

• Imminent risk of total equity loss for current shareholders due to the merger with Workhorse.
• Ongoing losses, negative cash flow, and continued financing needs create major financial risk.
• Extremely high customer and supplier concentration exposes the company to operational shocks.
• Liquidity risk remains high; strategic changes or additional capital raises (on possibly unfavorable terms) are likely necessary even if the merger does not close.

Conclusion

The 2023-2024 reporting period for Motiv Power Systems, Inc. is defined by deep losses, drastic capital structure changes, and a pending merger that is expected to wipe out the value of current equity holdings. The most price-sensitive and material news is the merger with Workhorse Group, which is expected to result in no distribution to Motiv’s equity holders, indicating a likely total loss for existing shareholders.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with a qualified financial advisor before making investment decisions. The information herein is based on the audited and restated financial statements of Motiv Power Systems, Inc. for the years ended December 31, 2023 and 2024, and subsequent events up to August 29, 2025. Actual outcomes may differ materially from those discussed or implied.

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