SG&A expenses for the full year 2022 increased to $73.2 million from $40.2 million in 2021. The increase was primarily driven by the $20.0 million legal settlement expense and a $6.5 million increase in professional and legal services primarily related to the securities and shareholder derivative litigation. The increase was also attributable to an increase of $11.1 million in employee and labor related expenses, including stock compensation, increased headcount and the appointments of the new executive leadership team during the year.

R&D expenses for the full year 2022 increased to $23.2 million from $11.6 million in 2021. The increase was primarily due to a $6.1 million increase in employee and related expenses resulting from an increase in headcount, a $2.4 million increase in prototype components and a $2.2 million increase in consulting fees to support the expanding product roadmap such as the new W56 and WNext truck chassis platforms and continuing development of the HorseFly and HALO drones.

Net interest expense for the full year 2022 decreased to $1.8 million compared to $12.6 million in 2021. The decrease was primarily due to a reduction of $7.0 million related to fair value adjustments and losses on conversion of the convertible notes and a $6.4 million reduction in contractual interest expense.

Other income for the full year 2022 increased to $13.6 million from a loss of $225.4 million in 2021. The increase was primarily attributable to gains from the sale of inventory related to obsolete C1000 vehicle parts. The 2021 losses are related to unfavorable changes in fair value and sale of the investment in Lordstown Motors Corp., which was sold during the third quarter of 2021.

For the years ended December 31, 2022 and 2021, the Company incurred taxable losses and thus no provisions for income tax expense have been recorded.

Net loss was $117.3 million compared to net loss of $401.3 million last year. Loss from operations for the 2022 was $129.1 million compared to $185.1 million in 2021.

2023 Guidance

“The Workhorse team exited 2022 with the momentum to prepare the Company for expanded operations in 2023,” said Workhorse CFO Bob Ginnan. “Looking ahead, we will focus on manufacturing, operational excellence and financial discipline, as we ramp up sales, production and deliveries of commercial vehicles and drones to generate significant revenue growth in 2023, with revenue expected in the range between $75 million and $125 million. We’re confident we have the necessary cash and access to capital to meet our objectives, which, in combination with our strategic plan, will allow Workhorse to deliver on our goals and generate increased value for our customers and shareholders.”

Conference Call

Workhorse management will hold a conference call today (March 1, 2023) at 10:00 a.m. Eastern time (7:00 a.m. Pacific time) to discuss these results and answer related questions.

U.S. dial-in: 877-407-8289
International dial-in: 201-689-8341

Please call the conference telephone number 10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at 949-574-3860.

The conference call will be broadcast live and available for replay here and via the Investor Relations section of Workhorse's website.

A telephonic replay of the conference call will be available after 1:00 p.m. Eastern time on the same day through March 8, 2023.

Toll-free replay number: 877-660-6853
International replay number: 201-612-7415
Replay ID: 13736525

Annual Meeting of Stockholders

The Company also announced that its Annual Meeting of Stockholders will take place on May 2, 2023, with a record date of March 6, 2023.

About Workhorse Group Inc.

Workhorse is a technology company focused on providing ground and air-based electric vehicles to the last-mile delivery sector. As an American original equipment manufacturer, we design and build high performance, battery-electric trucks and drones. Workhorse also develops cloud-based, real-time telematics performance monitoring systems that are fully integrated with our vehicles and enable fleet operators to optimize energy and route efficiency. All Workhorse vehicles are designed to make the movement of people and goods more efficient and less harmful to the environment. For additional information visit workhorse.com.

Forward-Looking Statements

The discussions in this press release contain forward-looking statements reflecting our current expectations that involve risks and uncertainties. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. When used in this press release, the words “anticipate,” “expect,” “plan,” “believe,” “seek,” “estimate” and similar expressions are intended to identify forward-looking statements. These are statements that relate to future periods and include, but are not limited to, statements about the features, benefits and performance of our products, our ability to introduce new product offerings and increase revenue from existing products, expected expenses including those related to selling and marketing, product development and general and administrative, our beliefs regarding the health and growth of the market for our products, anticipated increase in our customer base, expansion of our products functionalities, expected revenue levels and sources of revenue, expected impact, if any, of legal proceedings, the adequacy of liquidity and capital resources, and expected growth in business. Forward-looking statements are statements that are not historical facts. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from the forward-looking statements contained in this press release. Factors that could cause actual results to differ materially include, but are not limited to: our ability to develop and manufacture our new product portfolio, including the W4 CC, W750, W56 and WNext platforms; our ability to attract and retain customers for our existing and new products; risks associated with obtaining orders and executing upon such orders; supply chain disruptions, including constraints on steel, semiconductors and other material inputs and resulting cost increases impacting our company, our customers, our suppliers or the industry; our ability to capitalize on opportunities to deliver products to meet customer requirements; our limited operations and need to expand and enhance elements of our production process to fulfill product orders; the ability to protect our intellectual property; market acceptance for our products; our ability to control our expenses; potential competition, including without limitation shifts in technology; volatility in and deterioration of national and international capital markets and economic conditions; global and local business conditions; acts of war (including without limitation the conflict in Ukraine) and/or terrorism; the prices being charged by our competitors; our inability to retain key members of our management team; our inability to raise additional capital to fund our operations and business plan; our inability to maintain our listing of our securities on the Nasdaq Capital Market; our inability to satisfy our customer warranty claims; the outcome of any regulatory or legal proceedings; our liquidity and other risks and uncertainties and other factors discussed from time to time in our filings with the Securities and Exchange Commission (“SEC”), including our annual report on Form 10-K filed with the SEC. Forward-looking statements speak only as of the date hereof. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based, except as required by law.

Media Contact:
Aaron Palash / Greg Klassen
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449

Investor Relations Contact:
Matt Glover and Tom Colton
Gateway Investor Relations
949-574-3860
WKHS@gatewayir.com

Workhorse Group Inc. Consolidated Statements of Operations (Unaudited)
	Three Months Ended December 31,
		2022				2021
Sales, net of returns and allowances	$	3,447,420			$	(1,999,256	)
Cost of sales		21,213,206				99,921,494
Gross loss		(17,765,786	)			(101,920,750	)
Operating expenses
Selling, general and administrative		13,526,669				15,689,842
Research and development		8,047,594				2,821,058
Total operating expenses		21,574,263				18,510,900
Loss from operations		(39,340,049	)			(120,431,650	)
Interest income (expense), net		453,111				(35,685,050	)
Other income (loss)		233,028				—
(Loss) income before (benefit) provision for income taxes		(38,653,910	)			(156,116,700	)
(Benefit) provision for income taxes		—				(13,159	)
Net (loss) income	$	(38,653,910	)		$	(156,103,541	)
Net (loss) income attributable to common stockholders per share - basic	$	(0.24	)		$	(1.08	)
Net (loss) income attributable to common stockholders per share - diluted	$	(0.24	)		$	(1.08	)
Weighted average number of common shares outstanding - basic		162,905,508				144,966,458
Weighted average number of common shares outstanding - diluted		162,905,508				144,966,458