lvwr-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-41511

LiveWire Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware

87-4730333

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

3700 West Juneau Avenue

(650) 447-8424

Milwaukee, Wisconsin 53208

(Address of principal executive office)

(Issuer’s Telephone Number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value per share	LVWR	New York Stock Exchange
Warrants to purchase common stock	LVWR WS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Emerging growth company

☒

Non-accelerated filer

☒

Smaller reporting company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

Number of shares of the registrant’s common stock outstanding at November 4, 2024: 203,250,248 shares

LiveWire Group, Inc.

Form 10-Q

For The Quarter Ended September 30, 2024


Part I	Financial Information	6
Item 1.	Financial Statements	6
	Consolidated Statements of Operations and Comprehensive Loss	6
	Consolidated Balance Sheets	7
	Consolidated Statements of Cash Flows	8
	Consolidated Statements of Shareholders’ Equity	9
	Notes to Consolidated Financial Statements	10
	1. Description of Business and Basis of Presentation	10
	2. New Accounting Standards	10
	3. Revenue	12
	4. Income Taxes	13
	5. Earnings Per Share	13
	6. Additional Balance Sheet Information	14
	7. Warrant Liabilities	14
	8. Fair Value	16
	9. Product Warranty and Recall Campaigns	17
	10. Commitments and Contingencies	17
	11. Related Party Transactions	18
	12. Reportable Segments	20
	13. Restructuring	19
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	34
Item 4.	Controls and Procedures	35
Part II	Other Information	35
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Issuer Purchases of Equity Securities	36
Item 3.	Defaults Upon Senior Securities	36
Item 4.	Mine Safety Disclosures	36
Item 5.	Other Information	37
Item 6.	Exhibits	38
Signatures		39

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report include, but are not limited to statements regarding future results of operations and financial position, industry and business trends, equity compensation, business strategy, plans, market growth, plans and objectives relating to the Company’s climate commitment, and the Company’s objectives for future operations.

The forward-looking statements in this Quarterly Report are only predictions. The Company has based these forward-looking statements largely on current expectations and projections about future events and financial trends that the Company believes may affect the Company’s business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the Company’s history of losses and expectation to incur significant expenses and continuing losses for the foreseeable future; the Company’s future capital requirements and sources and uses of cash; the Company’s ability to obtain funding for its operations and manage costs; risks related to retail partners being unwilling to participate in the Company’s go-to-market business model or its inability to establish or maintain relationships with customers for the Company’ electric vehicles; the Company’s business, expansion plans and opportunities, including its ability to scale its operations and manage its future growth effectively; the effects on the Company’s future business of competition, the pace and depth of electric vehicle adoption generally and its ability to achieve planned competitive advantages with respect to its electric vehicles and products, including with respect to reliability, safety and efficiency; the Company’ ability to execute its business model, including market acceptance of its planned electric vehicles; risks related to the Company’s limited operating history, the rollout of its business and the timing of expected business milestones, including the Company’s ability to develop and sell electric vehicles of sufficient quality and appeal to customers on schedule and on a large scale; the Company’s financial and business performance, including financial projections and business metrics and any underlying assumptions thereunder; changes in the Company’s strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans; the Company’s ability to attract and retain a large number of customers; risks related to challenges the Company faces as a pioneer into the highly-competitive and rapidly-evolving electric vehicle industry; risks related to Harley Davidson, Inc. (“H-D”) making decisions for its overall benefit that could negatively impact the Company’s overall business; risks related to the Company’s relationship with H-D and its impact on the Company’s other business relationships; the Company’s ability to leverage contract manufacturers, including H-D and Kwang Yang Motor Co., Ltd., KYMCO Capital Fund I Co., Ltd., SunBright Investment Co., Ltd., CycleLoop Co., Ltd. and Kwang Yang Holdings Limited (collectively, the “KYMCO Group”), to contract manufacture its electric vehicles; risks related to potential delays in the design, manufacture, financing, regulatory approval, launch and delivery of the Company’s electric vehicles; risks related to building out the Company’s supply chain, including the Company’s dependency on its existing suppliers and the Company’s ability to source suppliers, in each case many of which are single-sourced or limited-source suppliers, for its critical components such as batteries and semiconductor chips; the Company’s ability to rely on third-party and public charging networks; the Company’s ability to attract and retain key personnel; risks related to the Company’s business and H-D’s business overlapping and being perceived as competitors; the Company’s inability to maintain a strong relationship with H-D or to resolve favorably any disputes that may arise between the Company and H-D; the Company’s dependency on H-D for a number of services, including services relating to quality and safety testing, and if those service arrangements terminate, it may require significant investment for the Company to build its own safety and testing facilities, or the Company may be required to obtain such services from another third-party at increased costs; risks related to any decision by the Company to electrify H-D products, or the products of any other company; the Company’s expectations regarding its ability to obtain and maintain intellectual property protection and not infringe on the rights of others; potential harm caused by misappropriation of the Company’s data and compromises in cybersecurity; changes in laws, regulatory requirements, governmental incentives and fuel and energy prices; the impact of health epidemics on the Company’s business, the other risks it face and the actions it may take in response thereto; litigation, regulatory proceedings, complaints, product liability claims and/or adverse; the possibility that the Company may be adversely affected by other economic, business and/or competitive factor publicity; and; the other important factors discussed in Part II, “Item 1A. Risk Factors” in this Quarterly Report, as well as in Item “1A. Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. The forward-looking statements are made as of the date of the filing of this report November 6, 2024, and the Company disclaims any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. The forward-looking statements in this Quarterly Report are based upon information available to the Company as of the date of this Quarterly Report, and while the Company believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and the Company’s statements should not be read to indicate that the Company has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should read this Quarterly Report and the documents that the Company references in this Quarterly Report and have filed as exhibits to this Quarterly Report with the understanding that actual future results, performance and achievements may be materially different from what the Company expects. The Company qualifies all of the forward-looking statements by these cautionary statements. The forward-looking statements in this report speak only as of the date of this Quarterly Report. Except as required by applicable law, the Company does not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report, whether as a result of any new information, future events or otherwise.

As used in this Quarterly Report, unless otherwise stated or the context requires otherwise, references to “LiveWire,” the “Company,” “we,” “us,” and “our,” refer to LiveWire Group, Inc. and its consolidated subsidiaries.

PART I

Item 1. Financial Statements

LIVEWIRE GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except per share amounts)

(Unaudited)


	Three months ended				Nine months ended
	September 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
Revenue, net	$	4,445	$	8,144	$	15,872	$	22,932
Costs and expenses:
Cost of goods sold (including related party amounts of $2,857 and $12,396 for three and nine months ended September 30, 2024, respectively, and $2,094 and $9,585 for three and nine months ended September 30, 2023, respectively; see Note 11)	5,965		7,052		23,301		23,516
Selling, administrative and engineering expense (including related party amounts of $2,756 and $8,241 for three and nine months ended September 30, 2024, respectively, and $3,338 and $11,527 for three and nine months ended September 30, 2023, respectively; see Note 11)	25,005		26,435		77,683		81,650
Total operating costs and expenses	30,970		33,487		100,984		105,166
Operating loss	(26,525)		(25,343)		(85,112)		(82,234)


Interest income	1,252		2,726		4,864		8,172
Change in fair value of warrant liabilities	2,581		8,038		9,131		(2,332)
Loss before income taxes	(22,692)		(14,579)		(71,117)		(76,394)
Income tax (benefit) provision	2		(1)		26		63
Net loss	(22,694)		(14,578)		(71,143)		(76,457)
Other comprehensive loss:
Foreign currency translation adjustments	5		(7)		(19)		(7)
Comprehensive loss	$	(22,689)	$	(14,585)	$	(71,162)	$	(76,464)

Net loss per share, basic and diluted (Note 5)	$	(0.11)	$	(0.07)	$	(0.35)	$	(0.38)

The accompanying notes are integral to the consolidated financial statements.

LIVEWIRE GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except par value)


	(Unaudited)
	September 30, 2024		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	88,442	$	167,904
Accounts receivable, net	1,670		4,295
Accounts receivable from related party	541		3,402
Inventories, net	33,358		32,122
Other current assets	3,363		3,004
Total current assets	127,374		210,727
Property, plant and equipment, net	34,863		37,682
Goodwill	8,327		8,327
Deferred tax assets	6		4
Lease assets	965		1,868
Intangible assets, net	1,122		1,347
Other long-term assets	5,641		6,192
Total assets	$	178,298	$	266,147
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,865	$	3,554
Accounts payable to related party	14,501		20,371
Accrued liabilities	19,064		21,189
Current portion of lease liabilities	512		1,152
Total current liabilities	35,942		46,266
Long-term portion of lease liabilities	491		792
Deferred tax liabilities	112		93
Warrant liabilities	3,188		12,319
Other long-term liabilities	908		814
Total liabilities	40,641		60,284
Commitments and contingencies (Note 10)
Shareholders' equity:
Preferred Stock, $0.0001 par value; 20,000 shares authorized; no shares issued and outstanding as of September 30, 2024 and December 31, 2023	—		—
Common Stock, $0.0001 par value; 800,000 shares authorized; 203,526 issued and 203,250 outstanding as of September 30, 2024 and 203,210 issued and 203,030 outstanding as of December 31, 2023	20		20
Treasury Stock, at cost: September 30, 2024 - 276 shares and December 31, 2023 - 180 shares	(2,896)		(1,969)
Additional paid-in-capital	343,666		339,783
Accumulated deficit	(203,131)		(131,988)
Accumulated other comprehensive (loss) income	(2)		17
Total shareholders' equity	137,657		205,863
Total liabilities and shareholders' equity	$	178,298	$	266,147

The accompanying notes are integral to the consolidated financial statements.

LIVEWIRE GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Nine months ended
	September 30, 2024		September 30, 2023
Cash flows from operating activities:
Net loss	$	(71,143)	$	(76,457)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	7,737		2,814
Change in fair value of warrant liabilities	(9,131)		2,332
Stock compensation expense	3,883		6,566
Provision for doubtful accounts	25		45
Deferred income taxes	17		63
Inventory write-down	4,294		1,664
Cloud computing arrangements development costs	—		(470)
Other, net	(477)		(677)
Changes in current assets and liabilities:
Accounts receivable, net	2,600		(2,313)
Accounts receivable from related party	2,861		(128)
Inventories	(5,530)		(5,238)
Other current assets	(113)		2,679
Accounts payable and accrued liabilities	(1,143)		(2,149)
Accounts payable to related party	(5,870)		15,393
Net cash used by operating activities	(71,990)		(55,876)
Cash flows from investing activities:
Capital expenditures	(6,661)		(10,970)
Net cash used by investing activities	(6,661)		(10,970)
Cash flows from financing activities:
Proceeds received from exercise of warrants (Note 7)	—		1,554
Repurchase of common stock	(927)		—
Net cash provided (used) by financing activities	(927)		1,554
Effect of exchange rate changes on cash and cash equivalents	116		—
Net decrease in cash and cash equivalents	$	(79,462)	$	(65,292)

Cash and cash equivalents:
Cash and cash equivalents—beginning of period	$	167,904	$	265,240
Net decrease in cash and cash equivalents	(79,462)		(65,292)
Cash and cash equivalents—end of period	$	88,442	$	199,948

The accompanying notes are integral to the consolidated financial statements.

LIVEWIRE GROUP, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands)

(Unaudited)


	Common Stock			Additional paid-in capital		Accumulated Deficit		Accumulated other comprehensive income (loss)		Treasury Stock		Total
	Issued shares	Balance
Balance, December 31, 2023	203,210	$	20	$	339,783	$	(131,988)	$	17	$	(1,969)	$	205,863
Net loss	—	—		—		(23,644)		—		—		(23,644)
Other comprehensive loss, net of tax	—	—		—		—		(18)		—		(18)
Share-based compensation expense	200	—		2,282		—		—		—		2,282

Repurchase of common stock	—	—		—		—		—		(706)		(706)
Balance, March 31, 2024	203,410	20		342,065		(155,632)		(1)		(2,675)		183,777
Net loss	—	—		—		(24,805)		—		—		(24,805)
Other comprehensive loss, net of tax	—	—		—		—		(6)		—		(6)
Share-based compensation expense	116	—		281		—		—		—		281
Repurchase of common stock	—	—		—		—		—		(221)		(221)

Balance, June 30, 2024	203,526	20		342,346		(180,437)		(7)		(2,896)		159,026
Net loss	—	—		—		(22,694)		—		—		(22,694)
Other comprehensive loss, net of tax	—	—		—		—		5		—		5
Share-based compensation expense	—	—		1,320		—		—		—		1,320


Balance, September 30, 2024	203,526	$	20	$	343,666	$	(203,131)	$	(2)	$	(2,896)	$	137,657


	Common Stock			Additional paid-in capital		Accumulated Deficit		Accumulated other comprehensive income (loss)		Treasury Stock		Total
	Issued shares	Balance
Balance, December 31, 2022	202,403	$	20	$	329,218	$	(22,438)	$	—	$	—	$	306,800
Net loss	—	—		—		(21,147)		—		—		(21,147)

Share-based compensation expense	6	—		1,824		—		—		—		1,824
Balance, March 31, 2023	202,409	20		331,042		(43,585)		—		—		287,477
Net loss	—	—		—		(40,732)		—		—		(40,732)

Share-based compensation expense	—	—		2,378		—		—		—		2,378
Shareholder warrants exercised	—	—		6		—		—		—		6
Balance, June 30, 2023	202,409	20		333,426		(84,317)		—		—		249,129
Net loss	—	—		—		(14,578)		—		—		(14,578)
Other comprehensive loss, net of tax	—	—		—		—		(7)		—		(7)
Share-based compensation expense	—	—		2,364		—		—		—		2,364
Shareholder warrants exercised	135	—		1,630		—		—		—		1,630
Balance, September 30, 2023	202,544	$	20	$	337,420	$	(98,895)

SEC Form 10-Q filed by LiveWire Group Inc.