Workhorse (WKHS) 10-Q 9 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	May 09, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	Workhorse Group Inc.
Entity Central Index Key	1,425,287
Trading Symbol	WKHS
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q1
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		42,139,800

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 753,563	$ 4,069,477
Accounts receivable	304,374	1,013,423
Lease receivable	41,375	45,300
Inventory	5,027,569	4,621,942
Prepaid expenses and deposits	215,769	946,134
Current assets, Total	6,342,650	10,696,276
Property, plant and equipment, at cost:
Land	700,000	700,000
Buildings	5,900,000	5,900,000
Leasehold improvements	19,236	19,225
Software	86,050	86,050
Equipment	829,742	829,742
Vehicles and prototypes	156,567	156,567
Less: accumulated depreciation	(2,143,942)	(2,095,571)
Net property, plant and equipment	5,547,653	5,596,013
Lease receivable	231,700	212,004
Assets, Total	12,122,003	16,504,293
Current liabilities:
Accounts payable	4,202,116	4,311,135
Accrued liabilities	1,757,392	1,718,397
Accounts payable, related parties	116,226	54,914
Customer deposits	267,000	54,405
Current portion of long-term debt	381,746	381,497
Current liabilities, Total	6,724,480	6,520,348
Principal amount of notes payable	5,750,000	5,750,000
Less: unamortized discount and debt issuance costs	493,750	987,500
Notes payable	5,256,250	4,762,500
Total current liabilities	11,980,730	11,282,848
Long-term debt	1,700,608	1,709,881
Stockholders' equity (deficit):
Series A preferred stock, par value of $.001 per share 75,000,000 shares authorized, 0 shares issued and outstanding at March 31, 2018 and December 31, 2017
Common stock, par value of $.001 per share 100,000,000 shares authorized, 41,966,550 shares issued and outstanding at March 31, 2018 and 41,529,181 shares issued and outstanding at December 31, 2017	41,966	41,529
Additional paid-in capital	109,106,507	107,760,036
Accumulated deficit	(110,707,808)	(104,290,001)
Stockholders' equity (deficit), Total	(1,559,335)	3,511,564
Liabilities and Stockholders' Equity (Deficit), Total	$ 12,122,003	$ 16,504,293

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Series A preferred stock, par value	$ 0.001	$ 0.001
Series A preferred stock, shares authorized	75,000,000	75,000,000
Series A preferred stock, shares issued	0	0
Series A preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	41,966,550	41,529,181
Common stock, shares outstanding	41,966,550	41,529,181

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Income Statement [Abstract]
Net sales	$ 560,229	$ 1,570,037
Cost of sales	1,714,370	4,312,088
Gross loss	(1,154,141)	(2,742,051)
Operating expenses
Selling, general and administrative	2,400,147	1,899,582
Research and development	2,337,631	3,243,322
Total operating expenses	4,737,778	5,142,904
Interest expense, net	525,887	35,651
Net loss	$ (6,417,806)	$ (7,920,606)
Basic and diluted loss per share	$ (0.16)	$ (0.24)
Weighted average number of common shares outstanding	40,258,234	32,965,419

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash flows from operating activities:
Net loss	$ (6,417,806)	$ (7,920,606)
Adjustments to reconcile net loss from operations to cash used by operations:
Depreciation	48,359	143,142
Amortized discount and debt issuance costs on Senior Secured Notes	493,750
Stock based compensation	72,178	327,262
Effects of changes in operating assets and liabilities:
Accounts receivable and lease receivable	693,278	(349,300)
Inventory	(405,627)	(2,602,652)
Prepaid expenses and deposits	730,365	(1,278,374)
Accounts payable and accrued liabilities	(70,024)	(1,278,532)
Accounts payable, related parties	61,312	(77,242)
Customer deposits	212,595
Net cash used by operations	(4,581,620)	(13,036,302)
Cash flows from investing activities:
Capital expenditures		(35,883)
Proceeds from lease receivable		110,718
Net cash provided by investing activities		74,835
Cash flows from financing activities:
Payments on long-term debt	(9,024)	(4,788)
Issuance of common stock	1,187,415	22,485,999
Exercise of warrants and options	87,315	251,581
Net cash provided by financing activities	1,265,706	22,732,792
Change in cash and cash equivalents	(3,315,914)	9,771,325
Cash at the beginning of the period	4,069,477	469,570
Cash at the end of the period	$ 753,563	$ 10,240,895

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical)	3 Months Ended
	Mar. 31, 2017USD ($)
Supplemental disclosure of non-cash activities:
Conversion of shareholders advances into common stock	$ 229,772
Conversion of accrued interests into common stock	26,727
Common stock	172
Additional paid-in capital	$ 256,327

Summary of Significant Accounti

Summary of Significant Accounting Principles	3 Months Ended
	Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES	1. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES The following accounting principles and practices are set forth to facilitate the understanding of data presented in the condensed consolidated financial statements: Nature of operations and principles of consolidation Workhorse Group Inc. and its predecessor companies (“Workhorse”, the “Company”, “we”, “us” or “our”) is a technology company focused on providing sustainable and cost-effective solutions to the commercial transportation sector. As an American manufacturer, we design and build high performance battery-electric electric vehicles and aircraft that make movement of people and goods more efficient and less harmful to the environment. As part of the Company’s solution, it also develops cloud-based, real-time telematics performance monitoring systems that enable fleet operators to optimize energy and route efficiency. Although the Company operates as a single unit through its subsidiaries, it approaches its development through two divisions, Automotive and Aviation. The Company’s core products, under development and/or in manufacture, are the medium duty step van, the light duty pickup, the delivery drone and the manned multicopter. Workhorse, formerly known as Title Starts Online, Inc. and AMP Holding Inc., was incorporated in the State of Nevada in 2007 with $3,100 of capital from the issuance of common shares to the founding shareholder. On August 11, 2008, the Company received a Notice of Effectiveness from the U.S. Securities and Exchange Commission, and on September 18, 2008, the Company closed a public offering in which it accepted subscriptions for an aggregate of 200,000 shares of its common stock, raising $50,000 less offering costs of $46,234. With this limited capital, the Company did not commence operations and remained a “shell company” (as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended). On December 28, 2009, the Company entered into and closed a Share Exchange Agreement with the Shareholders of Advanced Mechanical Products, Inc. (n/k/a Workhorse Technologies, Inc.) (“AMP” or “Workhorse Technologies”) pursuant to which the Company acquired 100% of the outstanding securities of AMP in exchange for 14,890,904 shares of the Company’s common stock. Considering that, following the merger, the AMP Shareholders control the majority of the outstanding voting common stock of the Company, and effectively succeeded the Company’s otherwise minimal operations to those that are AMP. AMP is considered the accounting acquirer in this reverse-merger transaction (the “Transaction”). A reverse-merger transaction is considered and accounted for as a capital transaction in substance; it is equivalent to the issuance of AMP securities for net monetary assets of the Company, which are de minimis, accompanied by a recapitalization. Accordingly, goodwill or other intangible assets have not been recognized in connection with the Transaction. AMP is the surviving entity and the historical financials following the Transaction were those of AMP. The Company was a shell company immediately prior to the Transactions pursuant to the terms of the Share Exchange Agreement. As a result of the Transaction, the Company operations focused on the design, marketing and sale of vehicles with an all-electric power train and battery systems. Consequently, we believe that the Transaction caused the Company to cease to be a shell company as it had operations following the Transaction. The Company formally changed its name to AMP Holding Inc. on May 24, 2010. Since the Transaction, the Company has devoted the majority of its resources to the development of an all-electric drive system capable of moving heavy large vehicles ranging from full size SUV’s up to and including medium duty commercial trucks. Additionally, in February 2013, the Company formed a new wholly owned subsidiary, Workhorse Motor Works Inc. (f/k/a AMP Trucks Inc.), an Indiana corporation. On March 13, 2013, Workhorse Motor Works Inc. closed on the acquisition of an asset purchase of assets from Workhorse Custom Chassis, LLC. The assets included in this transaction included: The Workhorse brand, access to the dealer network of 440 dealers nationwide, intellectual property, and all physical assets which included the approximately 250,000 sq. ft. of facilities on 48 acres of land in Union City, Indiana. This acquisition allows the Company to position itself as a medium duty OEM capable of producing new chassis with electric, propane, compressed natural gas, and hybrid configurations, as well as gasoline drive systems. On April 16, 2015, the Company filed Articles of Merger with the Secretary of State of the State of Nevada to change the name from “AMP Holding Inc.” to “Workhorse Group Inc.”. The Company believes that this change allowed investors, customers and suppliers to better associate the Company with the Workhorse brand, which is well known in the market. The condensed consolidated financial statements include Workhorse Group Inc. and its wholly owned subsidiaries, together referred as “The Company”. Intercompany transactions and balances are eliminated in consolidation. The Company’s wholly owned subsidiaries include Workhorse Technologies Inc., Workhorse Motor Works Inc. and Workhorse Properties Inc. Basis of presentation The financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has limited revenues and a history of negative working capital and stockholders’ deficits. These conditions raise substantial doubt about the ability of the Company to continue as a going concern. In view of these matters, continuation as a going concern is dependent upon the continued operations of the Company, which, in turn, is dependent upon the Company’s ability to meet its financial requirements, raise additional capital, and successfully carry out its future operations. The financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary, should the Company not continue as a going concern. The Company has continued to raise capital. Management believes the proceeds from these offerings, future offerings, and the Company’s anticipated revenue, provides an opportunity to continue as a going concern. If additional funding is required, the Company plans to obtain working capital from either debt or equity financing from the sale of common stock, preferred stock, and/or convertible debentures. Obtaining such working capital is not assured. In the opinion of Management, the Unaudited Condensed Consolidated Financial Statements include all adjustments that are necessary for the fair presentation of Workhorse’s respective financial conditions, results of operations and cash flows for the interim periods presented. Such adjustments are of a normal, recurring nature. Intercompany balances and transactions are eliminated in consolidation. The results of operations and cash flows for the interim periods presented may not necessarily be indicative of full-year results. It is suggested that these financial statements be read in conjunction with the audited consolidated financial statements and notes thereto of Workhorse contained in its Annual Report on Form 10-K for the year ended December 31, 2017. Certain reclassifications were made to the prior year financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operation or stockholders’ equity.

Inventory

Inventory	3 Months Ended
	Mar. 31, 2018
Inventory Disclosure [Abstract]
INVENTORY	2. INVENTORY As of March 31, 2018, and December 31, 2017, our inventory consisted of the following: 2018 2017 Raw Materials $ 4,105,661 $ 3,205,618 Work in Process 921,908 1,416,324 Finished Goods - - $ 5,027,569 $ 4,621,942

Long-Term Debt

Long-Term Debt	3 Months Ended
	Mar. 31, 2018
Debt Disclosure [Abstract]
LONG-TERM DEBT	3. LONG-TERM DEBT Long-term debt consists of the following: March 31, December 31, Senior Secured Notes, due June 30, 2018 (discount is based on imputed interest rate of 26%) $ 5,750,000 $ 5,750,000 Less: unamortized discount and debt issuance costs on Senior Secured Notes (493,750 ) (987,500 ) Net Senior Secured Notes 5,256,250 4,762,500 Secured mortgage payable to Bank for the purchase of the 100 Commerce Drive Building due in monthly installments of $11,951. 1,732,354 1,741,378 Note payable, former building owner interest payment only due in monthly installments of $1,604 interest at 5.5%. A balloon payment of $350,000 plus unpaid interest due August 2018. 350,000 350,000 7,338,604 6,853,878 Less current portion 5,637,996 5,143,997 Long term debt $ 1,700,608 $ 1,709,881 On December 26, 2017, as part of its initial efforts to spin-off SureFly, the Company entered into a Securities Purchase Agreement with several existing institutional investors pursuant to which the company issued original issue discount Senior Secured Notes in the aggregate principal amount of $5,750,000 in consideration of gross proceeds of $5,000,000 paid by the Spin-Off Investors. The loan is convertible into SureFly equity upon achieving the spin-out. Amortization expense related to the debt issuance costs and unamortized discounts for the Senior Secured Notes was $493,750 for the quarter ended March 31, 2018.

Revenue

Revenue	3 Months Ended
	Mar. 31, 2018
Revenue Recognition and Deferred Revenue [Abstract]
REVENUE	4. REVENUE Change in Accounting Principle In May 2014, the FASB issued ASU Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers (Topic 606)". The guidance in this ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example, insurance contracts or lease contracts). This guidance requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. Beginning in January 2018, the Company adopted the provisions of ASU 2014-09 Topic 606 under the modified retrospective method, which requires a cumulative effect adjustment to the opening balance of retained earnings on the date of adoption. This approach was applied to contracts not completed as of December 31, 2017. No significant change to revenue recognition, as previously recognized, was identified. At date of adoption, there was no adjustment to retained earnings related to the adoption of ASU 2014-09. At date of adoption, there was no significant change to our past revenue recognition practices and therefore no adjustment to the opening balance of retained earnings was required. Revenue Recognition Net sales include products and shipping and handling charges, net of estimates for customer allowances. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products. All revenue is recognized when we satisfy our performance obligations under the contract. We recognize revenue by transferring the promised products to the customer, with the majority of revenue recognized at the point in time the customer obtains control of the products. We recognize revenue for shipping and handling charges at the time the products are delivered to or picked up by the customer. The majority of our contracts have a single performance obligation and are short term in nature. Accounts Receivable Credit is extended based upon an evaluation of the customer's financial condition. Accounts receivable are stated at their estimated net realizable value. The allowance for doubtful accounts is based on an analysis of customer accounts and our historical experience with accounts receivable write-offs. The Company has elected the following practical expedients allowed under ASU 2014-09: · Performance obligations are satisfied within one year from a given reporting date, consequently we omit disclosure of the transaction price apportioned to remaining performance obligations on open orders Disaggregation of Revenue Our revenues related to the following types of business were as follows for the periods ended March 31: Three Months Ended 2018 2017 Automotive $ 404,854 $ 1,568,500 Aviation - - Other 155,375 1,537 Total revenues $ 560,229 $ 1,570,037

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2018
Income Tax Disclosure [Abstract]
INCOME TAXES	5 INCOME TAXES As the Company has not generated taxable income since inception, the cumulative deferred tax assets remain fully reserved, and no provision or liability for federal or state income taxes has been included in the financial statements.

Earnings Per Share

Earnings Per Share	3 Months Ended
	Mar. 31, 2018
Earnings Per Share [Abstract]
EARNINGS PER SHARE	6. EARNINGS PER SHARE Basic loss per share is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. For all periods presented, all of the Company’s common stock equivalents were excluded from the calculation of diluted loss per common share because they were anti-dilutive, due to the Company’s net losses.

Recent Accounting Developments

Recent Accounting Developments	3 Months Ended
	Mar. 31, 2018
Accounting Changes and Error Corrections [Abstract]
RECENT ACCOUNTING DEVELOPMENTS	7. RECENT ACCOUNTING DEVELOPMENTS Accounting Guidance Adopted in 2018 Effective January 1, 2018, we adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, and affects the guidance in ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). ASU No. 2016-10 clarifies the following two aspects of Topic 606: evaluating whether promised goods and services are separately identifiable and determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property, which is satisfied at a point in time, or a right to access the entity’s intellectual property, which is satisfied over time. The Company adopted ASU No. 2016-10, using the modified retrospective approach, which did not have a material impact on the Company’s condensed consolidated financial statements. Additional information is available in Note 4, “Revenue.” Effective January 1, 2018, we adopted FASB ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), and affects the guidance in ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” . When another party is involved in providing goods or services to a customer, ASU No. 2014-09 requires an entity to determine whether the nature of its promise is to provide the specified good or service itself (that is, the entity is a principal) or to arrange for that good or service to be provided by the other party (that is, the entity is an agent). The amendments in ASU No. 2016-08 are intended to improve the operability and understandability of the implementation guidance in ASU No. 2014-09 on principal versus agent considerations by offering additional guidance to be considered in making the determination. The Company adopted ASU No. 2016-08, using the modified retrospective approach, which did not have a material impact on the Company’s condensed consolidated financial statements. Additional information is available in Note 4, “ Revenue. Accounting Guidance Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires a lessee to recognize in the statement of financial position a liability to make lease payments (“the lease liability”) and a right-of-use asset representing its right to use the underlying asset for the lease term, initially measured at the present value of the lease payments. When measuring assets and liabilities arising from a lease, the lessee should include payments to be made in optional periods only if the lessee is reasonably certain, as defined, to exercise an option to the lease or not to exercise an option to terminate the lease. Optional payments to purchase the underlying asset should be included if the lessee is reasonably certain it will exercise the purchase option. Most variable lease payments should be excluded except for those that depend on an index or a rate or are in substance fixed payments. A lessee shall classify a lease as a finance lease if it meets any of five listed criteria: 1) The lease transfers ownership of the underlying asset to the lessee by the end of the lease term. 2) The lease grants the lessee and option to purchase the underlying asset that the lessee is reasonably certain to exercise. 3) The lease term is for the major part of the remaining economic life of the underlying asset. 4) The present value of the sum of the lease payments and any residual value guaranteed by the lessee equals or exceeds substantially all of the fair value of the underlying asset. 5) The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. For finance leases, a lessee shall recognize in the statement of comprehensive income interest on the lease liability separately from amortization of the right-of-use asset. Amortization of the right-of-use asset shall be on a straight-line basis, unless another basis is more representative of the pattern in which the lessee expects to consume the right-of-use asset’s future economic benefits. If the lease does not meet any of the five criteria, the lessee shall classify it as an operating lease and shall recognize a single lease cost on a straight-line basis over the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The amendments in this update are to be applied using a modified retrospective approach, as defined, and are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018. Early application is permitted. The Company is currently evaluating the financial statement impact of adopting the new guidance.

Private Placement Memorandum an

Private Placement Memorandum and Stock Offering	3 Months Ended
	Mar. 31, 2018
Private Placement Memorandum And Stock Offering
PRIVATE PLACEMENT MEMORANDUM AND STOCK OFFERING	8. PRIVATE PLACEMENT MEMORANDUM AND STOCK OFFERING On February 1, 2017, the Company announced the completion of its underwritten public offering of 6,500,000 shares of its common stock at a public offering price of $3.00 per share. In addition, the underwriters exercised an option to purchase an additional 975,000 shares of common stock at the public offering price, less the underwriting discounts and commissions. All of the shares in the offering were sold by Workhorse Group, with gross proceeds to Workhorse Group of approximately $22.4 million and net proceeds of approximately $20.5 million, after deducting underwriting discounts and commissions and estimated offering expenses. On June 22, 2017, Workhorse entered into an at the market issuance sales agreement (the “Cowen Agreement”) with Cowen and Company, LLC (“Cowen”) under which the Company may offer and sell, from time to time at its sole discretion, shares of its Common Stock having an aggregate offering price of up to $25,000,000 through Cowen as its sales agent. As of March 31, 2018, the Company issued 1,060,783 shares from this facility. On September 14, 2017, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Cowen relating to the public offering and sale (the “Offering”) of 3,749,996 shares of the Company’s common stock, and five-year warrants (exercisable beginning on the date of issuance) to purchase up to an aggregate of 2,812,497 shares of the Company’s common stock. Each investor received a warrant to purchase 0.75 shares of the Company’s common stock at an exercise price of $3.80 per share, for each share of common stock purchased. Pursuant to the Underwriting Agreement, Cowen purchased 3,749,996 shares of the Company’s common stock and accompanying warrants at a price per share of $3.20. The net proceeds to the Company were approximately $10.9 million after deducting underwriting discounts and commissions and offering expenses. The sale of such shares and accompanying warrants closed on September 18, 2017. The warrants contain full ratchet anti-dilution protection upon the issuance of any common stock, securities convertible into common stock or certain other issuances at a price below the then existing exercise price of the warrants, with certain exceptions.

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2018
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	9. SUBSEQUENT EVENTS The Company evaluates events and transactions occurring subsequent to the date of the condensed consolidated financial statements for matters requiring recognition or disclosure in the condensed consolidated financial statements. The accompanying condensed consolidated financial statements consider events through May 9, 2018, the date on which the condensed consolidated financial statements were available to be issued. On April 26, 2018, the Company entered into and closed Subscription Agreements with accredited investors (the “April 2018 Accredited Investors”) pursuant to which the April 2018 Accredited Investors purchased 531,066 shares of the Company’s common stock (“April 2018 Shares”) for a purchase price of $1,444,500 or $2.72 per share.

Summary of Significant Accoun16

Summary of Significant Accounting Principles (Policies)	3 Months Ended
	Mar. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of operations and principles of consolidation	Nature of operations and principles of consolidation Workhorse Group Inc. and its predecessor companies (“Workhorse”, the “Company”, “we”, “us” or “our”) is a technology company focused on providing sustainable and cost-effective solutions to the commercial transportation sector. As an American manufacturer, we design and build high performance battery-electric electric vehicles and aircraft that make movement of people and goods more efficient and less harmful to the environment. As part of the Company’s solution, it also develops cloud-based, real-time telematics performance monitoring systems that enable fleet operators to optimize energy and route efficiency. Although the Company operates as a single unit through its subsidiaries, it approaches its development through two divisions, Automotive and Aviation. The Company’s core products, under development and/or in manufacture, are the medium duty step van, the light duty pickup, the delivery drone and the manned multicopter. Workhorse, formerly known as Title Starts Online, Inc. and AMP Holding Inc., was incorporated in the State of Nevada in 2007 with $3,100 of capital from the issuance of common shares to the founding shareholder. On August 11, 2008, the Company received a Notice of Effectiveness from the U.S. Securities and Exchange Commission, and on September 18, 2008, the Company closed a public offering in which it accepted subscriptions for an aggregate of 200,000 shares of its common stock, raising $50,000 less offering costs of $46,234. With this limited capital, the Company did not commence operations and remained a “shell company” (as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended). On December 28, 2009, the Company entered into and closed a Share Exchange Agreement with the Shareholders of Advanced Mechanical Products, Inc. (n/k/a Workhorse Technologies, Inc.) (“AMP” or “Workhorse Technologies”) pursuant to which the Company acquired 100% of the outstanding securities of AMP in exchange for 14,890,904 shares of the Company’s common stock. Considering that, following the merger, the AMP Shareholders control the majority of the outstanding voting common stock of the Company, and effectively succeeded the Company’s otherwise minimal operations to those that are AMP. AMP is considered the accounting acquirer in this reverse-merger transaction (the “Transaction”). A reverse-merger transaction is considered and accounted for as a capital transaction in substance; it is equivalent to the issuance of AMP securities for net monetary assets of the Company, which are de minimis, accompanied by a recapitalization. Accordingly, goodwill or other intangible assets have not been recognized in connection with the Transaction. AMP is the surviving entity and the historical financials following the Transaction were those of AMP. The Company was a shell company immediately prior to the Transactions pursuant to the terms of the Share Exchange Agreement. As a result of the Transaction, the Company operations focused on the design, marketing and sale of vehicles with an all-electric power train and battery systems. Consequently, we believe that the Transaction caused the Company to cease to be a shell company as it had operations following the Transaction. The Company formally changed its name to AMP Holding Inc. on May 24, 2010. Since the Transaction, the Company has devoted the majority of its resources to the development of an all-electric drive system capable of moving heavy large vehicles ranging from full size SUV’s up to and including medium duty commercial trucks. Additionally, in February 2013, the Company formed a new wholly owned subsidiary, Workhorse Motor Works Inc. (f/k/a AMP Trucks Inc.), an Indiana corporation. On March 13, 2013, Workhorse Motor Works Inc. closed on the acquisition of an asset purchase of assets from Workhorse Custom Chassis, LLC. The assets included in this transaction included: The Workhorse brand, access to the dealer network of 440 dealers nationwide, intellectual property, and all physical assets which included the approximately 250,000 sq. ft. of facilities on 48 acres of land in Union City, Indiana. This acquisition allows the Company to position itself as a medium duty OEM capable of producing new chassis with electric, propane, compressed natural gas, and hybrid configurations, as well as gasoline drive systems. On April 16, 2015, the Company filed Articles of Merger with the Secretary of State of the State of Nevada to change the name from “AMP Holding Inc.” to “Workhorse Group Inc.”. The Company believes that this change allowed investors, customers and suppliers to better associate the Company with the Workhorse brand, which is well known in the market. The condensed consolidated financial statements include Workhorse Group Inc. and its wholly owned subsidiaries, together referred as “The Company”. Intercompany transactions and balances are eliminated in consolidation. The Company’s wholly owned subsidiaries include Workhorse Technologies Inc., Workhorse Motor Works Inc. and Workhorse Properties Inc.
Basis of presentation	Basis of presentation The financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has limited revenues and a history of negative working capital and stockholders’ deficits. These conditions raise substantial doubt about the ability of the Company to continue as a going concern. In view of these matters, continuation as a going concern is dependent upon the continued operations of the Company, which, in turn, is dependent upon the Company’s ability to meet its financial requirements, raise additional capital, and successfully carry out its future operations. The financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary, should the Company not continue as a going concern. The Company has continued to raise capital. Management believes the proceeds from these offerings, future offerings, and the Company’s anticipated revenue, provides an opportunity to continue as a going concern. If additional funding is required, the Company plans to obtain working capital from either debt or equity financing from the sale of common stock, preferred stock, and/or convertible debentures. Obtaining such working capital is not assured. In the opinion of Management, the Unaudited Condensed Consolidated Financial Statements include all adjustments that are necessary for the fair presentation of Workhorse’s respective financial conditions, results of operations and cash flows for the interim periods presented. Such adjustments are of a normal, recurring nature. Intercompany balances and transactions are eliminated in consolidation. The results of operations and cash flows for the interim periods presented may not necessarily be indicative of full-year results. It is suggested that these financial statements be read in conjunction with the audited consolidated financial statements and notes thereto of Workhorse contained in its Annual Report on Form 10-K for the year ended December 31, 2017. Certain reclassifications were made to the prior year financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operation or stockholders’ equity.

Inventory (Tables)

Inventory (Tables)	3 Months Ended
	Mar. 31, 2018
Inventory Disclosure [Abstract]
Schedule of components of inventory	2018 2017 Raw Materials $ 4,105,661 $ 3,205,618 Work in Process 921,908 1,416,324 Finished Goods - - $ 5,027,569 $ 4,621,942

Long-Term Debt (Tables)

Long-Term Debt (Tables)	3 Months Ended
	Mar. 31, 2018
Debt Disclosure [Abstract]
Schedule of long-term debt	March 31, December 31, Senior Secured Notes, due June 30, 2018 (discount is based on imputed interest rate of 26%) $ 5,750,000 $ 5,750,000 Less: unamortized discount and debt issuance costs on Senior Secured Notes (493,750 ) (987,500 ) Net Senior Secured Notes 5,256,250 4,762,500 Secured mortgage payable to Bank for the purchase of the 100 Commerce Drive Building due in monthly installments of $11,951. 1,732,354 1,741,378 Note payable, former building owner interest payment only due in monthly installments of $1,604 interest at 5.5%. A balloon payment of $350,000 plus unpaid interest due August 2018. 350,000 350,000 7,338,604 6,853,878 Less current portion 5,637,996 5,143,997 Long term debt $ 1,700,608 $ 1,709,881

Revenue (Tables)

Revenue (Tables)	3 Months Ended
	Mar. 31, 2018
Revenue Recognition and Deferred Revenue [Abstract]
Schedule of disaggregation revenue	Three Months Ended 2018 2017 Automotive $ 404,854 $ 1,568,500 Aviation - - Other 155,375 1,537 Total revenues $ 560,229 $ 1,570,037

Summary of Significant Accoun20

Summary of Significant Accounting Principles (Details Textual) - USD ($)	Feb. 01, 2017	Sep. 18, 2008	Dec. 31, 2007
Summary of Significant Accounting Principles (Textual)
Amount raise by subscriptions of common stock		$ 50,000
Subscriptions for aggregate shares of common stock	6,500,000	200,000
Offering costs of common stock		$ 46,234
Shareholder [Member]
Summary of Significant Accounting Principles (Textual)
Amount raise by subscriptions of common stock			$ 3,100

Summary of Significant Accoun21

Summary of Significant Accounting Principles (Details Textual 1) - AMP Holding Inc. [Member] - Share Exchange Agreement [Member]	1 Months Ended
	Dec. 28, 2009shares
Summary of Significant Accounting Principles (Textual)
Number of outstanding securities in exchange of common stock	14,890,904
Acquired outstanding securities , description	Company acquired 100% of the outstanding securities.

Summary of Significant Accoun22

Summary of Significant Accounting Principles (Details Textual 2)	Mar. 13, 2013ft²aDealer
Summary of Significant Accounting Principles (Textual)
Number of dealers | Dealer	440
Area of facilities covered (in sq ft) | ft²	250,000
Area of land (in acres) | a	48

Inventory (Details)

Inventory (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Components of inventories
Raw Materials	$ 4,105,661	$ 3,205,618
Work in Process	921,908	1,416,324
Finished Goods
Inventory	$ 5,027,569	$ 4,621,942

Long-Term Debt (Details)

Long-Term Debt (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Senior Secured Notes, due June 30, 2018 (discount is based on imputed interest rate of 26%)	$ 5,750,000	$ 5,750,000
Less: unamortized discount and debt issuance costs on Senior Secured Notes	(493,750)	(987,500)
Net Senior Secured Notes	5,256,250	4,762,500
Long term debt	7,338,604	6,853,878
Less current portion	381,746	381,497
Long-term debt	1,700,608	1,709,881
Secured mortgage payable to Bank [Member]
Debt Instrument [Line Items]
Long term debt	1,732,354	1,741,378
Note payable to former building owner [Member]
Debt Instrument [Line Items]
Long term debt	$ 350,000	$ 350,000

Long-Term Debt (Details Textual

Long-Term Debt (Details Textual)	3 Months Ended
	Mar. 31, 2018USD ($)Employee
Debt Instrument [Line Items]
Unamortized discount	$ 493,750
Secured mortgage payable to Bank [Member]
Debt Instrument [Line Items]
Number of Commerce Drive Building | Employee	100
Monthly installments	$ 11,951
Senior Secured Notes (Member)
Debt Instrument [Line Items]
Percentage of interest payable	26.00%
Debt due date	June 30, 2018
Note payable to former building owner [Member]
Debt Instrument [Line Items]
Monthly installments	$ 1,604
Percentage of interest payable	5.50%
Balloon payment	$ 350,000
Debt due date	August 2,018

Revenue (Details)

Revenue (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Total revenues	$ 560,229	$ 1,570,037
Automotive [Member]
Total revenues	404,854	1,568,500
Other [Member]
Total revenues	155,375	1,537
Aviation [Member]
Total revenues

Private Placement Memorandum 27

Private Placement Memorandum and Stock Offering (Details) - USD ($)	Sep. 14, 2017	Jun. 22, 2017	Feb. 01, 2017	Sep. 18, 2008	Mar. 31, 2018
Private Placement Memorandum and Stock Offering (Textual)
Shares of common stock public offering			6,500,000	200,000
Value of common stock offering				$ 50,000
Public offering price per share			$ 3
Purchase of common stock, shares	3,749,996		975,000
Gross of proceeds from issuance of initial public offering			$ 22,400,000
Net of proceeds from issuance of initial public offering	$ 10,900,000		$ 20,500,000
Warrants exercise price per share	$ 3.20
Underwriting Agreement [Member]
Private Placement Memorandum and Stock Offering (Textual)
Shares of common stock public offering	3,749,996
Purchase of common stock, shares	2,812,497
Underwriting commitments, description	Each investor received a warrant to purchase 0.75 shares of the Company’s common stock at an exercise price of $3.80 per share, for each share of common stock purchased.
Warrants expiration term	5 years
Cowen Agreement [Member]
Private Placement Memorandum and Stock Offering (Textual)
Value of common stock offering		$ 25,000,000
Shares issued					1,060,783

Subsequent Events (Details)

Subsequent Events (Details) - Subsequent Events [Member]	1 Months Ended
	Apr. 26, 2018USD ($)$ / sharesshares
Subsequent Events (Textual)
Purchase of common stock | shares	531,066
Purchase price | $	$ 1,444,500
Price per share | $ / shares	$ 2.72