Workhorse Group, Inc. Annual report pursuant to Section 13 and 15(d)

Summary of Significant Accounting Principles (Tables)

12 Months Ended

Dec. 31, 2017

	December 31, 2017
	As Reported			Adjustments			As Restated
Assets

Current assets:
Cash and cash equivalents	$	4,069,477		$	-		$	4,069,477
Accounts receivable		1,013,423			-			1,013,423
Lease receivable current		45,300			-			45,300
Inventory		4,236,506			385,436			4,621,942
Prepaid expenses and deposits		946,134			-			946,134
		10,310,840			385,436			10,696,276

Property, plant and equipment, net		5,596,013			-			5,596,013
Lease receivable long-term		212,004			-			212,004

		16,118,857			385,436			16,504,293

Liabilities and Stockholders' Equity (Deficit)

Current liabilities:
Accounts payable		5,539,864			62,993			5,602,857
Accrued liabilities		1,126,675			(700,000	)		426,675
Accounts payable, related parties		54,914			-			54,914
Customer deposits		54,405			-			54,405
Current portion of long-term debt		381,497			-			381,497
		7,157,355			(637,007	)		6,520,348

Principal amount of notes payable		5,750,000			-			5,750,000
Less unamortized discount and debt issuance costs		987,500			-			987,500
Notes payable		4,762,500			-			4,762,500

Long-term debt		1,709,881			-			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 December 31, 2017 and December 31, 2016		-			-			-
Common stock, par value of $.001 per share 100,000,000 shares authorized, 41,529,181 shares issued and outstanding at December 31, 2017 and 27,578,864 shares issued and outstanding at December 31, 2016		41,529			-			41,529
Additional paid-in capital		107,760,036			-			107,760,036
Accumulated deficit		(105,312,444	)		1,022,443			(104,290,001	)
		2,489,121			1,022,443			3,511,564

	$	16,118,857		$	385,436		$	16,504,293

	December 31, 2017
	As Reported			Adjustments			As Restated

Sales	$	10,846,460		$	-		$	10,846,460

Cost of Sales		24,516,863			-			24,516,863
Gross loss		(13,670,403	)		-			(13,670,403	)

Operating Expenses
Selling, general and administrative		10,328,211			(700,000	)		9,628,211
Research and development		18,060,180			(322,443	)		17,737,737
Total operating expenses		28,388,391			(1,022,443	)		27,365,948

Interest expense, net		180,437			-			180,437

Net loss	$	(42,239,231	)	$	1,022,443		$	(41,216,788	)

Basic and diluted loss per share		(1.09	)		0.03			(1.06	)

Weighted average number of common shares outstanding		38,755,796			-			38,755,796

	December 31, 2017
	As Reported			Adjustments		As Restated
STOCKHOLDERS' EQUITY
Common stock, par value of $.001 per share and 100,000,000 shares authorized 41,529,181 shares issued and outstanding		41,529			-		41,529
Series A preferred stock, par value of $.001 per share and 75,000,000 shares authorized 0 shares issued and outstanding		-			-		-
Additional paid-in capital		107,760,036			-		107,760,036
Accumulated deficit		(105,312,444	)		1,022,443		(104,290,001	)
Total stockholders' equity (deficit)		2,489,121			1,022,443		3,511,564

	December 31, 2017
	As Reported			Adjustments			As Restated

Cash flows from operating activities:
Net loss	$	(42,239,231	)	$	1,022,443		$	(41,216,788	)
Adjustments to reconcile net loss from operations to cash used by operations:
Depreciation		549,973			-			549,973
Stock based compensation		1,433,192			-			1,433,192
Effects of changes in operating assets and liabilities:
Accounts receivable		(223,133	)		-			(223,133	)
Inventory		(1,771,671	)		(385,436	)		(2,157,107	)
Prepaid expenses and deposits		(196,971	)		-			(196,971	)
Accounts payable		3,777,320			(637,007	)		3,140,313
Accounts payable, related parties		(46,425	)		-			(46,425	)
Customer deposits		54,405			-			54,405
Net cash used by operations		(38,662,541	)		-			(38,662,541	)

Cash flows from investing activities:
Capital expenditures		(143,355	)		-			(143,355	)
Net cash used by investing activities		(143,355	)		-			(143,355	)

Cash flows from financing activities:
Proceeds from notes payable		4,762,500			-			4,762,500
Proceeds from advances		26,732			-			26,732
Payments on long-term debt		(76,572	)		-			(76,572	)
Issuance of common and preferred stock		37,042,468			-			37,042,468
Exercise of warrants and options		650,675			-			650,675
Net cash provided by financing activities		42,405,803			-			42,405,803

Change in cash and cash equivalents		3,599,907			-			3,599,907

Cash at the beginning of the period		469,570			-			469,570
Cash at the end of the period	$	4,069,477		$	-		$	4,069,477

	Approximate net operating loss ($ millions)		Carryover to be used against taxable income generated through year

	3.6		2030
	6.7		2031
	3.9		2032
	4.7		2033
	6.1		2034
	9.0		2035
	18.7		2036
	39.7		2037