Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

References in this report (the "Quarterly Report") to "we," "us" or the "Company" refer to Aptera Motors Corp. References to our "management" or our "management team" refer to our officers and directors. The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements

This Quarterly Report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding the Company's financial position, business strategy and our plans and objectives for future operations, are forward-looking statements. Words such as "expect," "believe," "anticipate," "intend," "estimate," "seek," "plan," "may," "will," "could" and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect our current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company's annual report on Form 10-K for the year ended December 31, 2025 filed with the U.S. Securities and Exchange Commission (the "SEC") and Part II, Item 1A, "Risk Factors" of this Quarterly Report. The Company's securities filings can be accessed on the EDGAR section of the SEC's website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

OVERVIEW

Aptera Motors Corp. is a public benefit corporation and development stage company focused on the development and commercialization of solar electric vehicles. In October 2025, the Company completed a direct listing of its Class B Common Stock on The Nasdaq Capital Market.

The Company has not commenced production or generated any revenue from the sale of its products. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which is dependent upon the Company obtaining additional financing and ultimately achieving profitable operations. To that end, in October 2025, we established an equity line of credit ("ELOC") as a mechanism to incrementally access capital. We utilized this ELOC between mid-November 2025 and September 2026 to raise approximately $5.3 million in aggregate gross proceeds. Furthermore, during the nine months ended September 30, 2026, we raised an aggregate of approximately $23.1 million in gross proceeds, consisting of $9.0 million from a follow-on public offering in January 2026, an additional $8.1 million from subsequent warrant exercises during the first quarter of 2026, including a warrant inducement transaction completed in March 2026, and approximately $6.0 million from a warrant inducement transaction completed in July 2026.

Subsequent to quarter end, on October 1, 2026, we entered into an at-the-market sales agreement for the sale of up to $19.0 million of Class B Common Stock (the "ATM program"). This management's discussion and analysis discusses the Company's progress to date, its challenges, and its plans for the future, but should be read in conjunction with the consolidated financial statements and accompanying notes.

The July 2026 warrant inducement transaction, which closed on July 13, 2026, resulted in the issuance of 4,320,000 July Warrants at an exercise price of $2.25 per share, subject to a six-month lock-up before becoming exercisable. The additional 4,320,000 July Warrants, if fully exercised for cash, would generate approximately $9.7 million in additional gross proceeds beginning in approximately January 2027. This transaction, together with the Company's continued access to the ELOC facility, the ATM program, and the currently exercisable warrants described in Note 7, are the key sources of near-term and medium-term liquidity that we are relying upon in our evaluation of the Company's ability to continue as a going concern.

Aptera was formed as a Delaware corporation on March 4, 2019, and transitioned to a Delaware public benefit corporation on September 30, 2025, for the purpose of engaging in the production of energy-efficient, solar-powered vehicles. We first began accepting reservations for our vehicle, generally secured by a $100 reservation fee, in December 2020, and as of September 30, 2026, we had more than 49,000 reservation holders. We conducted two promotional programs that allowed investors to secure priority delivery positions for initial customer vehicles. Under the first program, the Accelerator Program, which ran from January 2023 through January 2024, the initial 2,000 delivery positions were offered to investors making minimum investments of $10,000, with placement determined by investment amount. Participants in the Accelerator Program invested an average of approximately $18,700. Under the second program, which was conducted from April to July 2025, an additional 1,000 delivery positions were made available to investors making minimum investments of $5,000. We have not delivered any products to customers and have not recognized any revenue from the sale of vehicles.

During the past three years, we engaged with strategic partners to supply validated production parts, and we are currently executing our validation vehicle program. While we require substantial capital to commence commercial production, core physical assets-including our proprietary Body in Carbon (BinC) structural tooling and automated transport systems-are physically on-site and undergoing final engineering assessments. Alongside efforts to secure necessary financing, our current operational focus remains on completing this validation and durability testing process to ensure the reliability of our production-intent design. Our marketing team is expected to engage with the public to educate them on our brand proposition, grow our base of reservation holders, and optimize our initial production mix. As a result of these activities, the Company expects to continue to experience increased spending on production equipment and tooling.

During the nine months ended September 30, 2026, we achieved several key operational and regulatory milestones. In May 2026, we drove the first five validation vehicles off our newly established low-volume validation assembly line at our Carlsbad facility. In June 2026, during real-world validation testing, our solar electric vehicle achieved more than 4 kilowatt-hours of daily solar generation, exceeding our internal solar charging targets. Additionally, on June 18, 2026, we received a Certificate of Conformity from the U.S. Environmental Protection Agency for the 2026 Aptera Launch Edition, one of the two primary federal certifications required before a vehicle can be legally sold in the United States. With the Certificate of Conformity in hand, the remaining federal requirement that must be satisfied before we can begin customer deliveries is compliance with the Federal Motor Vehicle Safety Standards, which we are working to demonstrate using vehicles built on our low-volume validation assembly line.

During the third quarter of 2026, we continued to advance toward production. In July 2026, we announced a partnership with RepairPal to provide certified service for our customers nationwide and TÜV Rheinland independently measured more than 4 kilowatt-hours of usable solar energy delivered to the vehicle's battery on each of three test days. In August 2026, we issued purchase orders for the bodies and chassis, including frame and suspension, for our initial production vehicles. Also in August 2026, we entered into a Strategic Partnership Agreement with Shanghai Launch Automotive Technology Co., Ltd. ("Launch"), under which Launch will serve as a manufacturing and contract-engineering partner. See Part II, Item 1A "Risk Factors" of this Quarterly Report.

Our production timeline remains dependent on our ability to secure sufficient capital. On October 1, 2026, we announced updated estimates of our capital requirements, which supersede the estimates included in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026. We currently estimate that approximately $25 million is required to reach start of series production, down from the $40 million to $45 million previously estimated. This amount is expected to fund supplier purchases for initial vehicles, remaining tooling, and the final low-volume assembly line at our Carlsbad, California facility. We intend to use the net proceeds from the November 2026 registered direct offering toward these requirements. We plan to begin building initial production vehicles and to begin customer deliveries as soon as practicable, subject to timely financing. We estimate that approximately $65 million in total (approximately $40 million beyond start of production) is required to reach a production rate of 500 vehicles per month, the rate at which we believe we could fund ongoing operations from vehicle sales, and approximately $50 million more for tooling and equipment to scale toward approximately 20,000 vehicles per year, for a total of approximately $115 million, compared with the $180 million to $205 million previously estimated. All capital and timing estimates depend on our obtaining financing on acceptable terms and on a timely basis, as well as on supplier performance and regulatory approvals.

Commencing production also depends on key factors beyond funding, including:

	●	Availability of resources: Production is contingent on the availability of materials, components, manufacturing facilities, and an uninterrupted supply chain.
	●	Addressing technical challenges: We may encounter further technical challenges during our validation programs that require redesign, mechanical modification, or alternative sourcing of components.
	●	Meeting regulatory requirements: We must meet all necessary safety and regulatory requirements to certify our vehicles.

Historically, we have experienced challenges in raising capital in the amounts needed to fully fund our operations, and we have faced production delays due to financial constraints, supply chain disruptions, technological challenges, and regulatory requirements. While we currently do not anticipate any major supply chain disruptions, changes in global trade policies, including the imposition of new tariffs or changes to existing tariffs, could impact the cost and availability of components and materials, potentially affecting our production timelines and profitability. We have experienced price fluctuations for vehicle components and labor in the past, which have led to increased costs and negatively affected our results of operations.

We are actively working to address these challenges through our direct listing, recent capital raises, utilization of our ELOC (subject to lock-up periods and facility limitations), our ATM program, and our partnership with Launch. We will provide further updates on our progress as we achieve significant milestones. However, we cannot assure you that we will be successful in securing the remaining necessary funding, overcoming technical challenges, or meeting regulatory requirements on a timely basis, or at all.

Operating Expenses

General, Selling and Administrative

General, selling and administrative expenses consist of administrative, compliance, legal, investor relations, financial operations, and information technology services. They include related department salaries, office expenses, meals and entertainment costs, software/applications for operational use, and other general and administrative expenses, including but not limited to technology subscriptions and travel expenses. These expenses account for a significant portion of our operating expenses.

Research and Development

We spend significant resources on engineering, tooling and design capabilities, which are classified as research and development expenses. Research and development expenses consist primarily of personnel costs, materials to build prototype and validation vehicles, specialized out-sourced engineering services, facilities and software licenses.

Results of Operations

Comparison of the results of operations for the three months ended September 30, 2026 and September 30, 2025

General, Selling and Administrative Expenses

		For the three months ended September 30, (in thousands)
(in thousands)		2026				2025				$ Change				% Change
Stock-based compensation		$	1,900			$	1,099			$	801				73	%
Corporate and overhead expenses			2,172				2,072				100				5	%
Depreciation			49				42				7				17	%
Selling, general and administrative		$	4,121			$	3,213			$	908				28	%

The increase in selling, general and administrative expenses was primarily driven by higher employee stock-based compensation. Sales and marketing expenses declined $0.3 million as marketing activities were reduced following the October 2025 direct listing. Legal expenses declined $0.3 million compared to the 2025 period, which contained higher fees related to the Zaptera intellectual property claim and other non-recurring matters.

These decreases were more than offset by approximately $0.5 million of higher consulting, contractor and personnel costs, approximately $0.2 million of higher public company costs, including directors' and officers' liability insurance premiums, investor relations and transfer agent fees, and higher software, travel and other operating costs.

Historically, we have tightly managed our administrative footprint by utilizing third-party consultants and outsourced professional services. As we transition toward final vehicle validation and commercial production, we expect to shift away from certain outsourced arrangements and bring more administrative and operational resources in-house on a full-time basis. To support this growth while prioritizing the allocation of cash toward production readiness, we have increasingly utilized equity-based remuneration. This includes a transition to settling all Board of Director compensation and executive bonuses in stock, as well as the broader use of long-term restricted stock unit awards. While we expect this strategy to preserve capital liquidity, it will result in elevated non-cash share-based compensation expense in future periods.

Consequently, we anticipate that our baseline selling, general and administrative expenses will increase as we scale. Furthermore, we expect to incur sustained, incremental expenses related to operating as a public company, including elevated legal, accounting, insurance, and investor relations costs. Additionally, in connection with our ongoing efforts to remediate the material weaknesses in internal control over financial reporting identified at year-end, we expect to incur near-term increases in professional fees and personnel costs as we implement enhancements to our control environment.

Research and Development Expenses

		For the three months ended September 30, (in thousands)
(in thousands)		2026				2025				$ Change				% Change
Engineering, design and development		$	6,998			$	3,261			$	3,737				115	%
Stock-based compensation			1,897				1,377				520				38	%
Depreciation			634				91				543				597	%
Research and Development		$	9,529			$	4,729			$	4,800				102	%

The increase in research and development expenses was primarily driven by higher engineering, design, and development expenses, including $1.2 million of higher personnel costs from engineering headcount additions, a $2.4 million increase in outside consulting for vehicle build, testing, and validation, and approximately $0.6 million of other engineering costs. These increases were partially offset by a $0.4 million decrease in parts, materials, and supplies for the validation vehicle build. In addition, stock-based compensation increased, reflecting $0.3 million of higher employee awards and $0.2 million related to vendor services. Depreciation expense increased as a result of production tooling and equipment being placed in service in the first half of 2026.

As we continue to advance toward commercial production, our objective is to direct as much available capital as possible to vehicle validation, safety testing, and production readiness. To preserve liquidity, we expect to continue using equity-based compensation for engineering and technical staff. We anticipate that our baseline research and development expenses will remain elevated in the near term as we finalize pre-production milestones. Upon the commencement of commercial production, we expect certain engineering and manufacturing personnel costs to be capitalized into inventory and subsequently recognized as cost of goods sold.

Other Income (Expense)

Other income (expense) changed from other income of $2.5 million for the three months ended September 30, 2025 to other expense of $0.3 million for the three months ended September 30, 2026. The change was primarily due to lower grant income from the California Energy Commission, lower interest income, and a loss of approximately $0.4 million on the disposal of certain production tooling that we no longer expected to use.

Net Loss

As a result of the foregoing, the Company's net loss for the three months ended September 30, 2026 was $14.0 million compared to $5.5 million for the three months ended September 30, 2025.

Comparison of the results of operations for the nine months ended September 30, 2026 and September 30, 2025

General, Selling and Administrative Expenses

		For the nine months ended September 30, (in thousands)
(in thousands)		2026				2025				$ Change				% Change
Stock-based compensation		$	5,535			$	12,386			$	(6,851	)			(55	)%
Corporate and overhead expenses			6,941				6,685				256				4	%
Depreciation			146				126				20				16	%
Selling, general and administrative		$	12,622			$	19,197			$	(6,575	)			(34	)%

The decrease in selling, general and administrative expenses was primarily driven by lower stock-based compensation, reflecting a $7.4 million decrease in equity-based advisory fees issued to non-employees and a $0.6 million increase in employee share-based compensation. Sales and marketing expenses also decreased $0.8 million as marketing activities were reduced following the direct listing in October 2025, and legal expenses decreased $0.3 million.

These decreases were partially offset by approximately $0.8 million of higher public company costs, including directors' and officers' insurance, investor relations and transfer agent fees, $0.3 million of higher consulting and contractor costs, $0.3 million of higher cash personnel costs, and higher software, travel and facilities costs, resulting in a net decrease in selling, general and administrative expenses of $6.6 million, or 34%, compared to the same period in 2025.

Research and Development Expenses

		For the nine months ended September 30, (in thousands)
(in thousands)		2026				2025				$ Change				% Change
Engineering, design and development		$	16,310			$	7,659			$	8,651				113	%
Stock-based compensation			5,318				5,876				(558	)			(9	)%
Depreciation			896				277				619				223	%
Research and Development		$	22,524			$	13,812			$	8,712				63	%

The increase in research and development expenses was primarily driven by higher engineering, design, and development expenses, including $3.0 million of higher personnel costs from engineering headcount additions, a $4.5 million increase in outside consulting for vehicle build, testing, and validation, a $0.2 million increase in parts, materials, and supplies for the validation vehicle build, and approximately $1.0 million of other engineering costs, including recruiting, engineering software, and freight expenses.

These increases were partially offset by lower stock-based compensation, reflecting a $0.4 million decrease in employee awards and a $0.5 million decrease in Chery-related expense, including a $0.4 million out-of-period adjustment, partially offset by $0.3 million related to warrants issued to Launch. Depreciation expense also increased as additional production tooling and equipment were placed in service during the period.

Other Income (Expense)

Other income (expense) decreased primarily due to lower California Energy Commission grant reimbursement income and reduced interest income. Other income (expense) for the nine months ended September 30, 2026 also includes a loss of approximately $0.4 million on the disposal of certain production tooling that we no longer expected to use.

Net Loss

As a result of the foregoing, the Company's net loss for the nine months ended September 30, 2026 was $35.0 million compared to $28.4 million for the nine months ended September 30, 2025.

Liquidity and Capital Resources

As of September 30, 2026, the Company had $32.4 million in total assets. Our primary source of liquidity at that date was $9.2 million in cash and cash equivalents. We did not have a recognized grant funds receivable balance as of September 30, 2026, as we maintain a full allowance against the remaining $0.7 million balance due to uncertainties regarding the timing of the capital raises required to trigger those reimbursements.

Our existing cash and cash equivalents are not sufficient to fund our baseline operations for the next twelve months, nor are they sufficient to advance our vehicle production business plan. These factors continue to raise substantial doubt about our ability to continue as a going concern. After considering the plans described above, we have concluded that substantial doubt about our ability to continue as a going concern has not been alleviated because our plans are dependent on events and conditions that are not within our control, including our ability to raise additional capital on acceptable terms and in amounts sufficient to fund our operating and capital needs.

Our plan to address our liquidity needs and fund operations over the next twelve months relies primarily on accessing capital through the ELOC, sales under our ATM program, the exercise of outstanding warrants, and potentially other public or private financings.

On July 13, 2026, during the third quarter of 2026, the Company closed a warrant inducement transaction that generated approximately $6.0 million in gross cash proceeds and resulted in the issuance of 4,320,000 July Warrants at an exercise price of $2.25 per share, subject to a six-month lock-up before becoming exercisable. The additional 4.3 million July Warrants, if fully exercised for cash, would generate approximately $9.7 million in additional gross proceeds beginning in approximately January 2027. On October 1, 2026, subsequent to quarter-end, the Company entered into a sales agreement for the ATM program of up to $19.0 million of Class B Common Stock; while our public float is below $75 million, sales under the program are limited to one-third of our public float in any 12-month period. This transaction, together with the ATM program, the Company's continued access to the ELOC facility and the currently exercisable warrants described in Note 7, are the key sources of near-term and medium-term liquidity that we are relying upon in our evaluation of the Company's ability to continue as a going concern. There can be no assurance that holders of the outstanding warrants will elect to exercise for cash or that the Company will be able to draw down sufficient amounts under the ELOC or the ATM program. In November 2026, subsequent to quarter-end, we entered into a securities purchase agreement for a registered direct offering for gross proceeds of approximately $6.0 million, before deducting placement agent fees and estimated offering expenses (see Note 9).

During the nine months ended September 30, 2026, net cash used in operating activities was $23.3 million, compared to $10.9 million for the same period in 2025. This increase in operating cash usage was driven primarily by higher personnel costs and outside consulting for vehicle build, testing, and validation, as discussed under research and development expenses above, as well as the elevated professional fees noted above. Operating cash usage also included $3.1 million of advance payments for materials for our upcoming validation and initial production vehicle builds, increasing prepaid expenses and other current assets to $4.0 million as of September 30, 2026. Upon receipt, materials used in validation vehicles will be recognized as research and development expense, and materials used in vehicles intended for sale will be capitalized as inventory and recognized in cost of goods sold when those vehicles are sold.

To fund these operations and investments, net cash provided by financing activities was $23.1 million during the nine months ended September 30, 2026. This was primarily the result of three key financing transactions. On January 26, 2026, we closed a registered public offering, issuing 4,500,000 units (each consisting of one share of Class B Common Stock and one accompanying warrant) for gross proceeds of $9.0 million. Furthermore, during the first quarter of 2026, we received an additional $8.1 million in aggregate gross proceeds from warrant exercises, which included a $6.3 million warrant inducement transaction completed in March 2026. During the third quarter of 2026, we received an additional $6.0 million in aggregate gross proceeds from warrant exercises in connection with a warrant inducement transaction completed in July 2026. In addition, during the nine months ended September 30, 2026, we sold 1,065,000 shares of Class B Common Stock under our ELOC facility for aggregate net proceeds of approximately $2.3 million.

We currently estimate that approximately $25 million is required to reach start of series production and approximately $65 million in total to reach a production rate of 500 vehicles per month. We intend to use the net proceeds from the November 2026 registered direct offering toward these requirements. We plan to begin building initial production vehicles and to begin customer deliveries as soon as practicable, subject to timely financing. We are proactively deploying current liquidity to procure critical long-lead components and advance validation milestones. The ELOC and our ATM program provide potential mechanisms to access capital incrementally, subject to the conditions and limitations previously described. Our ability to effectively utilize these facilities is highly dependent on the trading volume and market price of our Class B Common Stock.

As of September 30, 2026, warrants to purchase up to an aggregate of 6,614,670 shares of the Company's Class B common stock that were sold to investors carried exercise prices that, if fully exercised for cash, would generate approximately $17.1 million in additional gross proceeds.

Our awarded $21.9 million grant from the California Energy Commission (the "CEC") remains a component of our potential future liquidity. Through September 30, 2026, we have been reimbursed approximately $5.8 million, and approximately $16.1 million of the award remains. We anticipate receiving further portions of the grant only if we are able to secure sufficient financing to make the eligible expenditures and meet the project milestones.

Long-Term Cash Requirements

Beyond our immediate capital needs to reach start of production and a production rate of 500 vehicles per month, our long-term business plan requires us to raise substantial additional capital for future growth and operational expansion. Our material cash requirements beyond the next 12 months are expected to include, but are not limited to, the following:

	●	Scaling to High-Volume Production: We estimate needing approximately $50 million, in addition to the approximately $65 million required to reach a production rate of 500 vehicles per month, for tooling and equipment to scale toward our high-volume production target of approximately 20,000 vehicles per year.
	●	Future Manufacturing Capacity: To meet our longer-term production targets that exceed the capacity of our current facility, we expect to require additional manufacturing capacity. This may involve securing or constructing new, larger facilities, which would represent a material future capital expenditure, the cost and timing of which has not yet been determined.
	●	Expansion of Sales and Service Infrastructure: Our anticipated direct-to-consumer model will require significant investment to scale nationally. We expect to need to fund the establishment of regional pre-delivery and service centers, as well as expand our fleet of mobile service vehicles to support our customers and/or form relationships with third party vendors to provide this level of service.
	●	Research and Development: To maintain our competitive advantage, we intend to continue investing in research and development. This includes developing future vehicle models, enhancing our proprietary solar and battery technology, and exploring other applications for our technology.

	●	Working Capital: As we begin and scale production, our need for working capital is expected to increase significantly. The cash required to fund raw materials, work-in-process, and finished goods inventory is expected to increase substantially as our production volume grows.
	●	Public Company Costs: We expect to continue to incur significant legal, accounting, and other expenses as a public company that we did not incur as a private company.

Our ability to fund these long-term requirements is dependent upon our ability to successfully utilize the ELOC, raise substantial additional capital through future equity or debt financings, and there can be no assurance that the ELOC will provide sufficient capital or that other financing will be available on favorable terms, or at all. Failure to obtain sufficient funding would materially adversely affect our business plan and our ability to continue as a going concern.

Liabilities

As of September 30, 2026, the Company's total liabilities were $11.5 million. Major existing liabilities include $2.6 million in accrued liabilities, $4.1 million in unearned reservation fees, and $1.7 million in operating lease liabilities.

Commitment and Contingencies

Leases

As of September 30, 2026, we leased approximately 77,000 square feet of office, manufacturing and assembly space at our principal facility in Carlsbad, California under an operating lease agreement that expires March 31, 2028. For the nine months ended September 30, 2026, we recorded $0.8 million of lease expense.

Purchase Orders

We regularly enter into purchase obligations with vendors and service providers, which represent expected payments and commitments during the normal course of our business. These purchase obligations are generally cancellable with or without notice and without penalty, although certain vendor agreements provide for cancellation fees or penalties. As of September 30, 2026, we had approximately $5.0 million in open purchase orders.

Strategic Partnership Agreement

Under the Strategic Partnership Agreement, we agreed to pay Launch up to RMB 300 million for manufacturing, engineering, tooling, testing, and related services under work orders agreed upon from time to time, of which up to RMB 200 million is payable in cash and up to RMB 100 million through the issuance of warrants. See Note 7 to the condensed consolidated financial statements.

Litigation and Regulation

Various aspects of our business and service areas are subject to U.S. federal, state, and local regulation, as well as regulation outside the United States.

As of the date of this Quarterly Report, the Company is responding to a subpoena related to an ongoing SEC Investigation.

Zaptera

In August 2024, Zaptera USA, Inc. ("Zaptera") filed a complaint against Aptera Motors Corp. in the U.S. District Court for the Southern District of California alleging design patent infringement, misappropriation of trade secrets, and declaratory judgment of patent ownership, among other claims.

In April 2026, the Company entered into a settlement agreement with Zaptera. Pursuant to the terms of the settlement, the Company agreed to issue 105,000 shares of Class B Common Stock and warrants to purchase up to 210,000 shares of Class B Common Stock, resulting in a recognized litigation settlement charge of approximately $0.6 million during the three months ended March 31, 2026. On April 9, 2026, all claims related to the action were dismissed with prejudice.

As of September 30, 2026 and the date of this Quarterly Report, the warrants to purchase up to 210,000 shares of Class B Common Stock have been issued and are reflected in the warrant activity table above. As of September 30, 2026, the 105,000 shares of Class B Common Stock had not yet been issued. Accordingly, the 105,000 shares are not reflected in the Company's issued and outstanding share count as of September 30, 2026. Subsequent to quarter end, in October 2026, the Company issued the 105,000 shares of Class B Common Stock to Zaptera.

SEC Investigation

In January 2025, we received a subpoena for documents from the staff of the SEC related to our securities offerings and the production, design, and manufacture of our vehicles (the "SEC Investigation"). This subpoena is part of the ongoing SEC Investigation. We are cooperating fully with the investigation and are producing documents in response to the subpoena.

The SEC has informed us that the investigation does not mean that it has concluded that anyone has violated the law and that the receipt of the subpoena does not mean that the SEC has a negative opinion of any person, entity, or security. However, we cannot provide any assurances as to the outcome of this investigation or its potential effect, if any, on our Company.