What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-21 compared with 2024-02-23 · 290 added, 187 removed, 849 unchanged (36% of the section changed)

19 unchanged sentences

Reportable Segments and Geographic Information

Restructuring

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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Loss before income taxes ( 93,882 ) ( 109,472 ) ( 78,971 )

Income tax (benefit) provision 78 ( 33 ) 138

Income tax provision (benefit) 43 78 ( 33 )

Net loss ( 93,925 ) ( 109,550 ) ( 78,938 )

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Comprehensive loss $ ( 93,930 ) $ ( 109,533 ) $ ( 79,083 )

Net loss per share, basic and diluted $ ( 0.54 ) $ ( 0.46 ) $ ( 0.42 )

Net loss per share, basic and diluted (Note 6) $ ( 0.46 ) $ ( 0.54 ) $ ( 0.46 )

The accompanying notes are integral to the consolidated financial statements.

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800,000 shares authorized;

203,210 issued and 203,030 outstanding as of December 31, 2023 and 202,403 issued and outstanding as of December 31, 2022

203,787 shares issued and 203,423 shares outstanding as of December 31, 2024 and 203,210 shares issued and 203,030 shares outstanding as of December 31, 2023

Treasury Stock, at cost:

2023 - 180 shares, 2022 - no shares

December 31, 2024 - 364 shares, December 31, 2023 - 180 shares

( 3,413 ) ( 1,969 )

Additional paid-in-capital 344,409 339,783

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Depreciation and amortization 10,041 5,832 4,401

Change in valuation of contingent consideration liability — — 49

Payment of contingent consideration in excess of acquisition date fair value — — ( 413 )

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Inventory write-down 5,750 2,719 1,074

Loss on disposal of property, plant, and equipment — — 850

Cloud computing arrangements development costs ( 45 ) ( 1,312 ) ( 4,894 )

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Repurchase of common stock ( 1,444 ) ( 1,969 ) —

Proceeds received from sale of warrants 1,557 — —

Proceeds received from exercise of warrants (Note 6) — 1,557 —

Borrowings on notes payable to related party (Note 16) — — 15,333

Repayment on notes payable to related party (Note 16) — — ( 1,000 )

Net proceeds from the Business Combination and PIPE Investments (Note 4) — — 293,717

Payment of contingent consideration up to acquisition date fair value (Note 11) — ( 1,767 ) ( 1,836 )

Payment of contingent consideration up to acquisition date fair value — — ( 1,767 )

Transfers from Parent (Note 16) — — 59,051

Net cash provided (used) by financing activities ( 412 ) 366,334 84,757

Net increase (decrease) in cash and cash equivalents $ ( 97,336 ) $ 262,572 $ 267

Net cash (used) provided by financing activities ( 1,444 ) ( 412 ) 366,334

Effect of exchange rate changes on cash and cash equivalents $ ( 96 ) $ — $ —

Net (decrease) increase in cash and cash equivalents $ ( 103,467 ) $ ( 97,336 ) $ 262,572

Cash and cash equivalents:

Cash and cash equivalents—beginning of period $ 167,904 $ 265,240 $ 2,668

Net increase (decrease) in cash and cash equivalents ( 97,336 ) 262,572 267

Net (decrease) increase in cash and cash equivalents ( 103,467 ) ( 97,336 ) 262,572

Cash and cash equivalents—end of period $ 64,437 $ 167,904 $ 265,240

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands, except share amounts)

(In thousands)

Common Stock Additional

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Balance, December 31, 2021 — $ — $ — $ — $ 145 $ 19,780 $ — $ 19,925

Net loss — — — — — ( 68,292 ) ( 68,292 )

Other comprehensive income, net of tax — — — — ( 85 ) — ( 85 )

Net contribution from H-D — — — — — 86,279 86,279

Balance, December 31, 2021 — — — — 145 19,780 19,925

Net loss prior to the Business Combination — — — — — ( 56,500 ) — ( 56,500 )

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Balance, December 31, 2023 203,210 20 339,783 ( 131,988 ) 17 — ( 1,969 ) 205,863

Net loss — — — ( 93,925 ) — — — ( 93,925 )

Other comprehensive loss, net of tax — — — — ( 5 ) — — ( 5 )

Share-based compensation 577 — 4,626 — — — 4,626

Repurchase of common stock — — — — — — ( 1,444 ) ( 1,444 )

Balance, December 31, 2024 203,787 $ 20 $ 344,409 $ ( 225,913 ) $ 12 $ — $ ( 3,413 ) $ 115,115

The accompanying notes are integral to the consolidated financial statements.

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Description of Business and Basis of Presentation

LiveWire Group, Inc., a Delaware corporation, and its consolidated subsidiaries are referred to in these Consolidated financial statements and notes as “we,” “our,” “us,” the “Company,” or “LiveWire.” The Company is focused on pioneering the growing two wheel electric motorcycle market.

We design and sell electric motorcycles and electric balance bikes with related electric motorcycle parts, accessories, and apparel.

LiveWire Group, Inc., a Delaware corporation, and its consolidated subsidiaries are referred to in these consolidated financial statements and notes as “we,” “our,” “us,” the “Company,” or “LiveWire.” The Company designs and sells electric motorcycles and electric balance bikes for kids with related electric motorcycle parts, accessories, and apparel.

The Company operates in two segments:

Electric Motorcycles and STACYC.

LiveWire was a direct, wholly owned subsidiary of AEA-Bridges Impact Corp (“ABIC”), which was originally incorporated as a Cayman Islands exempted company on July 29, 2020 as a special purpose acquisition company (“SPAC”) with the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities.

On September 26, 2022, the Company consummated a previously announced business combination pursuant to a business combination agreement, dated as of December 12, 2021 (the “Business Combination Agreement”), by and among ABIC, LiveWire Group Inc., (formerly known as LW EV Holdings, Inc.), LW EV Merger Sub, Inc., a Delaware corporation (“Merger Sub”), Harley-Davidson, Inc., a Wisconsin corporation (H-D), and LiveWire EV, LLC (“Legacy LiveWire”), a wholly-owned subsidiary of H-D.

On September 26, 2022, the Company consummated a previously announced business combination and related financing transactions (collectively the “Business Combination”) pursuant to a business combination agreement, dated as of December 12, 2021 (the “Business Combination Agreement”), by and among AEA-Bridges Impact Corp (“ABIC”), LiveWire Group Inc., (formerly known as LW EV Holdings, Inc.), LW EV Merger Sub, Inc., a Delaware corporation (“Merger Sub”), Harley-Davidson, Inc., a Wisconsin corporation (“H-D”), and LiveWire EV, LLC (“Legacy LiveWire”), a wholly-owned subsidiary of H-D.

Pursuant to the terms of the Business Combination Agreement:

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Electric Motorcycles are sold at wholesale to a network of independent dealers and at retail through a Company-owned dealership and through online sales.

The STACYC segment primarily focuses on the designing and selling of electric balance bike for kids.

Prior to November 5, 2024, the Company’s products were sold at retail through selection international partners primarily in Europe.

The STACYC segment primarily focuses on the designing and selling of electric balance bike for kids, and related parts and accessories.

The STACYC segment products are sold at wholesale to independent dealers and independent distributors, as well as direct to consumers online.

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The net effect of the settlement of transactions with H-D is reflected in the consolidated statements of cash flows as a financing activity and in the consolidated balance sheets as “Net Parent company investment.”

• Within the Consolidated financial statements and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes.

• Certain comparative amounts have been reclassified to conform to the current year presentation.

Summary of Significant Accounting Policies

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All intercompany accounts and material intercompany transactions have been eliminated.

Use of Estimates – The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported in the Consolidated financial statements and the accompanying notes.

Foreign Currency - The Company’s international subsidiaries use their respective local currency as their functional currency.

Assets and liabilities of international subsidiaries have been translated at period-end exchange rates, and revenues and expenses have been translated using average exchange rates for the period.

Monetary assets and liabilities denominated in a currency that is different from an entity's functional currency are remeasured from the transactional currency to the entity's functional currency on a monthly basis.

The aggregate transaction losses resulting from foreign currency remeasurements was $ 206 thousand, $ 97 thousand, and $ 0 for the years ended December 31, 2024, 2023 and 2022, respectively.

Use of Estimates – The preparation of financial statements in conformity with U.S.

GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes.

Actual results could differ from those estimates.

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The Company limits its credit risk with respect to cash by maintaining cash and cash equivalents with high quality financial institutions.

At times, the Company’s cash and cash equivalents may exceed federally insured limits.

We perform periodic credit evaluations of our customers’ financial condition

and generally do not require collateral.

At December 31, 2023, and 2022, 56.2 % and 36.2 %, respectively, of our net accounts receivable balance was due from the KTM customer group, driven by sales through the STACYC segment.

No other single customer or customer group represented 10% or greater of net accounts receivable.

Accounts Receivable, net – Accounts receivable primarily relate to sales of electric balance bikes to independent dealers and independent distributors and are presented in Accounts receivable, net on the Consolidated balance sheets.

All sales of electric motorcycles and related products to independent dealers in the U.S.

and Canada are financed by the purchasing independent dealers through Harley-Davidson Financial Services, Inc.

At times, the Company’s cash and cash

equivalents may exceed federally insured limits.

We perform periodic credit evaluations of our customers’ financial condition and generally do not require collateral.

At December 31, 2023, 56.2 % of our net accounts receivable balance was due from the KTM customer group, driven by sales through the STACYC segment.

No other single customer or customer group represented 10% or greater of net accounts receivable at December 31, 2024 and 2023.

Accounts Receivable, net – Accounts receivable primarily relate to sales of electric balance bikes to independent dealers and independent distributors, electric motorcycle sales to non-H-D dealers in the United States, and electric motorcycle sales in Europe, and are presented in Accounts receivable, net on the consolidated balance sheets.

Payment terms from these customers range from 30 days to 364 days.

The Company has elected the practical expedient available under ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) that allows entities to not adjust the promised amount of consideration for the effects of a significant financing component if the entity expects, at contract inception, that the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

All sales of electric motorcycles and related products to independent H-D dealers in the U.S.

and Canada are financed by the purchasing independent H-D dealers through Harley-Davidson Financial Services, Inc.

(“HDFS”), a wholly owned subsidiary of H-D.

Sales to online and retail customers may also be financed by HDFS.

Amounts financed through HDFS, not yet remitted to the Company by HDFS are generally settled within 30 days.

Accounts receivable related to these sales are recorded in Accounts receivable from related party on the consolidated balance sheets.

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Implementation costs incurred during the application development stage are capitalized and amortized over the term of the hosting arrangement on a straight-line basis.

The Company capitalized $ 1,312 thousand and $ 4,930 thousand of costs during 2023 and 2022, respectively, to implement cloud computing arrangements.

The Company capitalized $ 45 thousand, $ 1,312 thousand, and $ 4,930 thousand of costs during the years ended December 31, 2024, 2023, and 2022, respectively, to implement cloud computing arrangements.

Capitalized cloud computing arrangement costs are included within Other long-term assets on the consolidated balance sheets.

Amortization expense totaled $ 839 thousand and $ 35 thousand for the years ended December 31, 2023 and 2022, respectively, and is presented within Selling, administrative and engineering expense on the Consolidated statements of operations and comprehensive loss.

There were no cloud computing arrangement costs capitalized and no amortization expense incurred in 2021.

Amortization expense totaled $ 957 thousand, $ 839 thousand, and $ 35 thousand for the years ended December 31, 2024, 2023, and 2022, respectively, and is presented within Selling, administrative and engineering expense on the consolidated statements of operations and comprehensive loss.

Impairment of Long-Lived Assets – The Company periodically evaluates the carrying value of long-lived assets, which consist of property, plant and equipment, intangible assets, and cloud computing arrangements, to be held and used when events and circumstances indicate the carrying amount may not be recoverable.

Such events and circumstances include significant decreases in the market price for similar assets, significant adverse changes to the extent and manner in which the asset is used, an adverse change in legal factors or business climate, an accumulation of costs that exceed the estimated cost to acquire or develop a similar asset, and continuing losses that exceed forecasted costs.

Such events and circumstances include significant

decreases in the market price for similar assets, significant adverse changes to the extent and manner in which the asset is used, an adverse change in legal factors or business climate, an accumulation of costs that exceed the estimated cost to acquire or develop a similar asset, and continuing losses that exceed forecasted costs.

When the carrying value of a long-lived asset is not recoverable based on the existence of one or more of the above indicators, recoverability is determined by comparing the carrying amount of the asset to net future undiscounted cash flows that the asset is expected to generate.

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The Company also reviews the useful life of its long-lived assets when events and circumstances indicate that the actual useful life may be shorter than originally estimated.

In the event the actual useful life is deemed to be shorter than the original useful life,

depreciation or amortization is adjusted prospectively so that the remaining book value is depreciated or amortized over the revised useful life.

In the event the actual useful life is deemed to be shorter than the original useful life, depreciation or amortization is adjusted prospectively so that the remaining book value is depreciated or amortized over the revised useful life.

Research and Development Expenses – Expenditures for research activities relating to product development are charged against income as incurred.

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Warrant Liabilities - The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks.

The Company evaluates all of its financial instruments, including issued share purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC Topic 815, Derivatives and Hedging (“ASC 815”).

The Company evaluates all of its financial instruments, including issued share purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to the Financial Accounting Standards Board (“FASB”) ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC Topic 815, Derivatives and Hedging (“ASC 815”).

The Company accounts for the Public Warrants and Private Placement Warrants, both further described in Note 10, Warrants Liabilities , in accordance with the guidance contained in ASC 815 under which the Public and Private Warrants (collectively, the “Warrants”) do not meet the criteria for equity treatment and must be recorded as liabilities.

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New Accounting Standards

Accounting Standards Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No.

Accounting Standards Adopted in 2024

In November 2023, FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

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The main provisions of ASU 2023-07 require a public entity to disclose on an annual and interim basis:

(i) significant segment expenses provided to the chief operating decision maker, (ii) an amount representing the difference between segment revenue less segment expenses disclosed under the significant segment expense principle and each reported measure of segment profit or loss and a description of its composition, (iii) provide all annual disclosures about a reportable segment's profit or loss and assets currently required under Topic 280 in interim periods, (iv) clarify that if the chief operating decision maker uses more than one measure of a segment's profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report one or more of those additional measures of segment profit, (v) the title and position of the chief operating decision maker and an explanation of how the chief operating decision maker uses the reported measure of segment profit or loss in assessing segment performance and deciding how to allocate resources, and (vi) all disclosures required by ASU 2023-07 and all existing segment disclosures under Topic 280 for an entity with a single reportable segment.

The new guidance is effective for the fiscal years beginning after December 15, 2023 and for interim periods within fiscal years

beginning after December 15, 2024.

Early adoption is permitted.

The Company is still evaluating the impact ASU 2023-07 will have on the Company's consolidated financial statement disclosures.

clarify that if the chief operating decision maker uses more than one measure of a segment's profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report one or more of those additional measures of segment profit, (v) the title and position of the chief operating decision maker and an explanation of how the chief operating decision maker uses the reported measure of segment profit or loss in assessing segment performance and deciding how to allocate resources, and (vi) all disclosures required by ASU 2023-07 and all existing segment disclosures under Topic 280 for an entity with a single reportable segment.

The new guidance was effective for the fiscal years beginning after December 15, 2023.

The Company adopted this guidance as of December 31, 2024, which resulted in enhanced quantitative and qualitative disclosures provided in Note 17 Reportable Segments and Geographic Information related to the items described above.

Accounting Standards Not Yet Adopted

In December 2023, the FASB issued ASU No.

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The new guidance is effective for the fiscal years beginning after December 15, 2024.

adoption is permitted.

The Company is still evaluating the impact ASU 2023-09 will have on the Company's consolidated financial statement disclosures.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), which is intended to improve the disclosures about a public business entity's expenses and provide more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of goods sold and selling, administrative and engineering expense).

The main provisions of ASU 2024-03 require a public entity at each interim and annual reporting period to (i) disclose the amounts of purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion included in each relevant expense caption presented on the face of the income statement within continuing operations, (ii) include certain amounts that are already required to be disclosed under current generally accepted accounting principles in the same disclosure as the other disaggregation requirements, (iii) disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, and (iv) disclose the total amount of selling expenses and, in annual reporting periods, an entity's definition of selling expenses.

In January 2025, the FASB issued ASU No.

2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) Clarifying the Effective Date, which is intended to clarify the effective date of ASU No.

As clarified in ASU 2025-01, the new guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

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Revenue from the sale of LiveWire One electric motorcycles, electric balance bikes, as well as parts and accessories and apparel are recorded when control is transferred to the customer, generally at the time of shipment to independent dealers and distributors or at the time of delivery to retail customers.

S2 electric motorcycles contain two performance obligations, which is the sale of the electric motorcycle and a stand ready obligation to transfer Firmware Over The Air (“FOTA”) software updates to the electric motorcycle, when-and-if available, to the customer.

Revenue on the sale of the S2 electric motorcycle is recorded at a point-in-time when control is transferred to the customer.

S2 electric motorcycles, being motorcycles produced from LiveWire’s S2 platform using the Arrow Architecture model, contain two performance obligations, which is the sale of the electric motorcycle and a stand ready obligation to transfer Firmware Over The Air (“FOTA”) software updates to the electric motorcycle, when-and-if available, to the customer.

Revenue on the sale of the S2 electric motorcycles is recorded at a point-in-time when control is transferred to the customer.

As the unspecified FOTA software updates to S2 electric motorcycles are provided when-and-if they become available, revenue related to these updates is recognized ratably over the period the updates will be provided, estimated by management to be five years, commencing when control of the electric motorcycle is transferred to the customer.

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The Company allocates the transaction price among the performance obligations in proportion to the standalone selling price of the Company’s performance obligations.

The Company offers sales incentive programs to independent dealers and retail customers designed to promote the sale of its products.

The Company offers sales incentive programs to independent dealers, distributors and retail customers designed to promote the sale of its products.

The Company estimates its variable consideration related to its sales incentive programs using the expected value method.

The Company accounts for consideration payable to a customer as part of its sales incentives as a reduction of revenue, which is accrued at the later of the date the related sale is recorded or the date the incentive program is both approved and communicated.

The Company offers the right to return eligible parts and accessories and apparel and, in limited circumstances, on electric motorcycles.

The Company accounts for consideration payable as part of its sales incentives as a reduction of revenue, which is accrued at the later of the date the related sale is recorded or the date the incentive program is both approved and communicated.

Variable consideration related to sales incentives and rights to return is adjusted at the earliest of when the amount of consideration the Company expects to receive changes, or the consideration becomes fixed.

During 2024, the Company revised its retail partner strategy in the Electric Motorcycles segment and introduced new incentives with its retail partners.

As a result of incentives, for the year ended December 31, 2024, the Company recorded $ 848 thousand of adjustments for variable consideration related to previously recognized sales.

Adjustments for variable consideration related to previously recognized sales was no t material for the years ended December 31, 2023 and 2022.

The Company offers the right to return eligible parts and accessories and apparel, electric balance bikes, and, in limited circumstances, on electric motorcycles.

The Company estimates returns based on an analysis of historical trends and probability of returns and records revenue on the initial sale only in the amount that it expects to be entitled.

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The refund liability is remeasured for changes in the estimate at each reporting date with a corresponding adjustment to revenue.

The Company had a refund asset of $ 299 thousand and zero at December 31, 2023 and December 31, 2022, respectively.

The Company had a refund liability of $ 327 thousand and zero at December 31, 2023 and December 31, 2022, respectively.

Adjustments for variable consideration related to previously recognized sales were not material for the years ended December 31, 2023, 2022 and 2021.

The Company records a refund asset at the carrying amount of the goods at the time of sale, less any expected costs to recover the goods and any expected reduction in value as a reduction to Cost of goods sold.

This amount is monitored and adjusted for any change in value as necessary.

The refund asset of $ 377 thousand and $ 299 thousand were included in Other current assets as of December 31, 2024 and 2023, respectively, and $ 154 thousand and $ 52 thousand of the refund liability were included in Accrued liabilities as of December 31, 2024 and 2023, respectively, in the Company’s consolidated balance sheets.

The remainder of the refund liability of $ 252 thousand and $ 275 thousand were recorded as an offset to Accounts Receivable from related party as of December 31, 2024 and 2023, respectively, in the Company’s consolidated balance sheets, as these amounts will be repaid to HDFS.

Shipping and handling costs associated with freight after control of a product has transferred to a customer are accounted for as fulfillment costs in Cost of goods sold.

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Contract Liabilities

The Company maintains certain contract liability balances related to payments received at contract inception in advance of the Company’s performance under the contract that generally relates to customer deposits for electric balance bikes and electric motorcycles and consideration received upon transfer of control of the S2 motorcycle for FOTA software updates.

Contract liabilities are recognized as revenue once the Company performs under the contract.

The current portion of contract liabilities of $ 214 thousand and $ 163 thousand were included in Accrued liabilities and the long-term portion of contract liabilities of $ 245 thousand and zero were included in Other long-term liabilities in the Company's Consolidated balance sheets as of December 31, 2023 and December 31, 2022, respectively.

The Company expects to recognize all $ 214 thousand of the current portion of unearned revenue in 2024.

The current portion of contract liabilities of $ 174 thousand and $ 214 thousand were included in Accrued liabilities and the long-term portion of contract liabilities of $ 393 thousand and $ 245 thousand were included in Other long-term liabilities in the Company's consolidated balance sheets as of December 31, 2024 and December 31, 2023, respectively.

The Company expects to recognize $ 174 thousand included in Accrued Liabilities over of the next twelve months.

The Company expects to recognize $ 393 thousand included in Other long-term liabilities over the next five years.

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Under this method of accounting, ABIC was treated as the acquired company for financial reporting purposes.

The net assets of ABIC were stated at carrying value, with no goodwill or other intangible assets recorded.

The net assets of ABIC were stated at carrying value, with no goodwill or other intangible assets recorded resulting from the Business Combination.

Operations prior to the Business Combination are those of Legacy LiveWire.

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(i) a one-time issuance of 6,250,000 Earn Out Shares if the volume-weighted average price (“VWAP”) of Common Stock is greater than or equal to $ 14.00 over any 20 trading days within any 30 consecutive trading day period;

and (ii) a one-time issuance of 6,250,000 Earn Out Shares if the VWAP of Common Stock is greater than or equal to $ 18.00 over any 20 trading days within any 30 consecutive trading-day period ((i) and (ii) each, a “Triggering Event”), in each case, during a period beginning 18 months from the Closing Date and expiring five years thereafter (the “Earn Out Period”).

in each case, during a period beginning 18 months from the Closing Date and expiring five years thereafter (the “Earn Out Period”).

Additionally, if there is a change of control of the Company prior to the expiration of the Earn Out Period that will result in the holders of Common Stock receiving a price per share equal to or in excess of the applicable share price of LiveWire in connection with a Triggering Event, then immediately prior to the consummation of such change of control, any Triggering Event that has not occurred will be deemed to have occurred, LiveWire will issue the applicable Earn Out Shares to H-D and H-D will be eligible to participate in such change of control.

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As of September 25, 2022, the value of assets and liabilities and related tax effects to be retained by H-D at Separation was $ 8,192 thousand and $ 13,375 thousand, respectively.

Adjustments for transfers and separations are reflected in the Company's Consolidated financial statements for the year ended December 31, 2022 and were comprised of the retention of assets and liabilities by H-D including Accounts receivable, net of $ 339 thousand, Inventories, net of $ 7,576 thousand, Other current assets of $ 205 thousand, Deferred tax assets of $ 72 thousand, Accounts payable of $ 4,427 thousand, Accrued liabilities of $ 5,184 thousand, Deferred tax liabilities of $ 46 thousand, Long-term supplier liability of $ 3,435 thousand and Other long-term liabilities of $ 283 thousand.

Adjustments for transfers and separations are reflected in the Company's consolidated financial statements for the year ended December 31, 2022 and were comprised of the retention of assets and liabilities by H-D including Accounts receivable, net of $ 339 thousand, Inventories, net of $ 7,576 thousand, Other current assets of $ 205 thousand, Deferred tax assets of $ 72 thousand, Accounts payable of $ 4,427 thousand, Accrued liabilities of $ 5,184 thousand, Deferred tax liabilities of $ 46 thousand, Long-term supplier liability of

$ 3,435 thousand and Other long-term liabilities of $ 283 thousand.

The net balance of separation-related adjustments of $ 5,183 thousand was transferred to Additional paid-in capital prior to the consummation of the Business Combination, as represented in the consolidated statements of shareholders’ equity.

The most significant assets retained by the Parent included materials that relate to the manufacture of LiveWire One electric motorcycles.

The most significant liabilities retained and settled by the Parent included employee liabilities related to service rendered prior to the closing of the business combination, accounts payable outstanding for amounts owed to suppliers to manufacture electric motorcycles, a supplier liability for an excess firm purchase commitment, and certain warranty liabilities associated with the Harley-Davidson branded LiveWire motorcycle (see disclosure in Note 12, Product Warranty and Recall Campaigns).

The income tax (benefit) provision has been calculated using the separate return method, which is meant to reflect how taxes would have been recorded, had the Company filed its own tax return.

The income tax (benefit) provision for the years ended December 31, consists of the following (in thousands):

The income tax provision (benefit) has been calculated using the separate return method, which is meant to reflect how taxes would have been recorded, had the Company filed its own tax return.

The income tax provision (benefit) for the years ended December 31, consists of the following (in thousands):

2024 2023 2022

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Foreign ( 9 ) ( 4 ) —

Deferred income tax (benefit) provision 74 ( 99 ) ( 22 )

Total income tax (benefit) provision $ 78 $ ( 33 ) $ 138

Deferred income tax provision (benefit) 22 74 ( 99 )

Total income tax provision (benefit) $ 43 $ 78 $ ( 33 )

The components of loss before income taxes for the years ended December 31, were as follows (in thousands):

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Loss before income taxes $ ( 93,882 ) $ ( 109,472 ) $ ( 78,971 )

The reconciliation of the (benefit) provision for income taxes at the U.S.

federal statutory income tax rate of 21% to the Company’s income tax (benefit) provision for the years ended December 31, is shown below (in thousands):

The reconciliation of the provision (benefit) for income taxes at the U.S.

federal statutory income tax rate of 21% to the Company’s income tax provision (benefit) for the years ended December 31, is shown below (in thousands):

2024 2023 2022

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Foreign rate differential 4 3 5

Nondeductible (benefits) expenses ( 293 ) 43 420

Unrecognized tax benefits including interest and penalties — — 6

Unbenefited losses 28,250 11,582 14,770

Nondeductible expenses (benefits) 609 ( 293 ) 43

Unbenefited losses and credits 27,421 28,250 11,582

Valuation allowance 3,555 1,381 7,397

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Other ( 132 ) ( 314 ) 35

Income tax (benefit) provision $ 78 $ ( 33 ) $ 138

Income tax provision (benefit) $ 43 $ 78 $ ( 33 )

The Company generated operating losses in each of the years presented.

The income tax benefit recognized related to these losses was zero for each of the years ended December 31, 2023, 2022, and 2021.

The income tax provision (benefit) recognized related to these losses was zero for each of the years ended December 31, 2024, 2023, and 2022.

Operating results of the U.S.

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federal and combined state tax returns of H-D and these tax attributes have been fully utilized by H-D and are no longer available to the Company for future use.

Future income tax (benefits) provisions may be impacted by future changes in the utilization of LiveWire attributes by H-D.

The difference between the benefit at the statutory rate and the income tax (benefit) provision related to these operating losses is reflected in the table above as unbenefited losses.

Future income tax provisions (benefits) may be impacted by future changes in the utilization of LiveWire attributes by H-D.

The difference between the benefit at the statutory rate and the income tax provision (benefit) related to these operating losses is reflected in the table above as unbenefited losses.

After an assessment of the positive and negative evidence regarding the realizability of the separate state NOLs reflected in the financials, it was determined a valuation allowance continues to be required on separate state NOLs.

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After such an assessment, it was determined a valuation allowance continues to be required.

The difference between the benefit at the statutory rate and the income tax (benefit) provision related to these valuation allowances is reflected in the table above as valuation allowance.

The Company’s Non-US entities generated both income tax and operating losses for a net income tax provision of $ 7 thousand.

The difference between the benefit at the statutory rate and the income tax provision (benefit) related to these valuation allowances is reflected in the table above as valuation allowance.

The Company’s Non-US entities generated both income tax and operating losses for a net income tax provision of $ 12 thousand and $ 7 thousand for the years ended December 31, 2024 and 2023, respectively.

Non-US operating losses cannot be utilized by H-D, therefore a deferred tax asset was recorded.

6 unchanged sentences

Net operating loss and credit carryforwards 7 4

UNICAP 138 91

Amortization, book in excess of tax 1,051 1,018

18 unchanged sentences

Unrecognized tax benefits, beginning of period $ — $ 162

Increase (decrease) in unrecognized tax benefits for tax positions take in prior period ( 162 ) 162

Decrease in unrecognized tax benefits for tax positions take in prior period — ( 162 )

Unrecognized tax benefits, end of period $ — $ —

2 unchanged sentences

There were zero gross interest and penalties associated with unrecognized tax benefits recognized in the consolidated balance sheets at December 31, 2024 and 2023, respectively, due to the NOL and valuation allowance positions.

The Company made $ 7 thousand in income tax payments for the year ended December 31, 2024.

The Company did not make any income tax payments for the years ended December 31, 2023 and 2022.

7 unchanged sentences

Diluted EPS is computed using the weighted-average number of shares of common stock, plus the effect of potentially dilutive securities.

The Company applies the treasury method to calculate the dilution impact of share-based awards —restricted stock units, performance share units, and warrants.

The Company applies the treasury method to calculate the dilution impact of share-based awards- restricted stock, performance share units, and warrants.

Because the Company has reported a net loss for all periods presented, diluted net loss per share is the same as basic net loss per share as all of the potentially dilutive shares were anti-dilutive in those periods.

11 unchanged sentences

Prior to the Business Combination date, the Company did not have any issued and outstanding common stock or any common share equivalents.

Accordingly, for 2021, the net loss per share was calculated based on the 161,000,000 shares of Common Stock distributed to H-D in exchange for the membership interests of Legacy LiveWire.

Accordingly, prior to the consummation of the Business Combination, the weighted average-shares deemed outstanding was calculated based on the 161,000,000 shares of Common Stock distributed to H-D in exchange for the membership interests of Legacy LiveWire.

At the time of the Business Combination, additional shares of Common Stock were issued, which are reflected in the weighted-average shares outstanding as of December 31, 2024, 2023, and 2022.

1 unchanged sentence

Potential shares of common stock are excluded from the computation of diluted net loss per share if their effect would have been anti-dilutive for the periods presented or if the issuance of shares is contingent upon events that did not occur by the end of the period.

For the years ended December 31, 2023 and 2022, 2,617 thousand and 2,495 thousand employee stock compensation plan awards, respectively, were excluded from the computation of diluted net loss per share because the effect would have been anti-dilutive.

For the years ended December 31, 2023 and 2022, 30,365 thousand and 30,500 thousand warrants, respectively, were excluded from the computation of diluted net loss per share because the effect would have been anti-dilutive.

There were no anti-dilutive employee stock compensation awards or warrants for 2021.

For the years ended December 31, 2024, 2023, and 2022, 1,377 thousand, 2,617 thousand and 2,495 thousand employee stock compensation plan awards, respectively, were excluded from the computation of diluted net loss per share because the effect would have been anti-dilutive.

For the years ended December 31, 2024, 2023, and 2022, 30,365 thousand, 30,365 thousand, and 30,500 thousand warrants, respectively, were excluded from the computation of diluted net loss per share because the effect would have been anti-dilutive.

Additionally, the Company has not included the impact of the Earn-Out Shares, discussed in Note 1, Description of Business and Basis of Presentation, in the calculation of EPS as the triggering events have not occurred.

Additional Balance Sheet Information

Inventories, net consisted of the following as of December 31, (in thousands):

Inventories, net consisted of the following (in thousands):

Raw materials and work in process $ — $ 486

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Software, net of accumulated amortization, included in Property, plant and equipment, net, was $ 12,072 thousand and $ 14,395 thousand as of December 31, 2024 and 2023, respectively.

The Company had $ 4,933 thousand and $ 7,748 thousand related to purchases of property, plant and equipment included in Accrued liabilities as of December 31, 2023 and December 31, 2022, respectively.

The Company had $ 3,651 thousand related to purchases of property, plant and equipment included in Accounts payable as of December 31, 2021.

The Company had $ 1,989 thousand, $ 4,933 thousand, and $ 7,748 thousand related to purchases of property, plant and equipment included in Accrued liabilities as of December 31, 2024, 2023, and 2022, respectively.

Other long-term assets consisted primarily of capitalized implementation costs incurred in connection with cloud computing arrangements that do not include a license to internal-use software in accordance with Accounting Standards Update 2018-15.

1 unchanged sentence

Payroll and employee benefits $ 5,757 $ 7,077

Accrued restructuring 675 —

Engineering 2,614 5,215

4 unchanged sentences

Accrued capital expenditures 1,989 4,933

Other 2,363 2,665

Accrued liabilities $ 17,960 $ 21,189

(1) For the year ended December 31, 2024, included in “Other” is an accrual for $ 1,802 thousand for an unfavorable arbitration ruling related to a supplier claim discussed in Note 14.

Goodwill and Other Intangible Assets

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The carrying amount of goodwill was $ 8,327 thousand as of December 31, 2024 and 2023.

Intangible assets, net, excluding goodwill, consisted of trademarks, patents, distributor relationships, and non-compete agreements with estimated remaining useful lives ranging from 5 to 10 years.

Intangible assets are amortized on a straight-line basis and the weighted-average amortization period for all amortizable intangibles on a combined basis is 8.5 years.

The weighted average amortization period for trademarks, non-compete agreement, and other intangibles is 10 years, 5 years, and 5.5 years, respectively.

Intangible assets, excluding goodwill, consist of trademarks, developer technology, patents, distributor relationships, and non-compete agreements, with estimated useful lives ranging from 5 to 10 years.

Intangible assets are amortized on a straight-line basis.

The total weighted-average amortization period for all amortizable intangible assets is 8.5 years.

The weighted average amortization period for trademarks, the most significant intangible asset, is 10 years.

Intangible assets at December 31, were as follows (in thousands):

4 unchanged sentences

$ 3,580 $ ( 2,522 ) $ 1,058 $ 3,580 $ ( 2,233 ) $ 1,347

Amortization of intangible assets, net, excluding goodwill, recorded in Selling, administrative and engineering expense on the Consolidated statements of operations and comprehensive loss was $ 462 thousand for 2023 and 2022, respectively.

Amortization of intangible assets, net, excluding goodwill, recorded in Selling, administrative and engineering expense on the consolidated statements of operations and comprehensive loss was $ 289 thousand for the year ended December 31, 2024 and $ 462 thousand for the years ended December 31, 2023 and 2022, respectively.

Future amortization of the Company's intangible assets as of December 31, 2024 is as follows (in thousands):

Thereafter 42

The Company assesses for impairment of intangible assets with definite lives only if events occur that indicate that the carrying amount of an intangible asset may not be recoverable.

1 unchanged sentence

For goodwill, the reporting units used in assessing impairment is the same as the Company’s two operating segments and reportable segments as described in Note 17, Reportable Segments and Geographic Information.

Our assessment for impairment of goodwill utilized a discounted cash flow analysis and a guideline public company market approach to determine the fair value of the reporting unit for comparison to the corresponding carrying value, and a reconciliation of the Company’s concluded values for each reporting unit to the Company’s market capitalization.

The Company’s assessment for impairment of goodwill utilized a discounted cash flow analysis and a guideline public company market approach to determine the fair value of the reporting unit for comparison to the corresponding carrying value, and a reconciliation of the Company’s concluded values for each reporting unit to the Company’s market capitalization.

Based upon the Company’s annual goodwill impairment analyses, the Company concluded there were no impairments to goodwill for any periods presented.

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The Company has operating lease arrangements for real estate.

The Company’s leases have a remaining lease term of one to four years .

The Company’s leases have a remaining lease term of one to three years .

The Company’s leases do not contain any material residual value guarantees or material restrictive covenants.

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The following table presents the components of lease costs as of December 31, (in thousands):

Lease Cost 2023 2022 2021

2024 2023 2022

Operating lease cost $ 1,163 $ 1,435 $ 1,300

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ROU assets obtained in exchange for lease obligations — 109 910

Lease modifications (1) ( 87 ) — —

Weighted-average remaining lease term (in years) 2.16 2.10 2.80

Weighted-average discount rate 3.60 % 2.69 % 2.35 %

(1) In December 2024, the Company issued notice of early termination for a lease agreement with H-D.

This termination resulted in a reduction of the right of use asset and lease liability by $ 87 thousand.

Warrant Liabilities

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The Warrants expire five years from the completion of the Business Combination.

There were 19,865,207 and 19,999,990 Public Warrants outstanding as of December 31, 2023 and 2022, respectively, and 10,500,000 Private Warrants outstanding as of both December 31, 2023 and 2022.

There were 19,865,207 Public Warrants outstanding as of both December 31, 2024 and 2023, and 10,500,000 Private Warrants outstanding as of both December 31, 2024 and 2023.

Each Warrant entitles the registered holder to purchase one share of Common Stock at a price of $ 11.50 per share.

21 unchanged sentences

The initial Private Placement Warrant purchasers, or its permitted transferees, have the option to exercise the Private Placement Warrants on a cashless basis if the reference value is between $ 10.00 and $ 18.00 .

If the Private Placement Warrants are held by holders other than the AEA-Bridges Impact Sponsor, LLC (the “Sponsor”) or its permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by the holders on the same basis as the Public Warrants.

If the Private Placement Warrants are held by holders other than AEA-Bridges Impact Sponsor, LLC (the “Sponsor”) or its permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by the holders on the same basis as the Public Warrants.

During the year ended December 31, 2024, there were no redemptions or exercises of the Public Warrants and no redemptions or exercises of the Private Warrants.

During the year ended December 31, 2023, there were no redemptions and 135 thousand exercises of the Public Warrants and no redemptions or exercises of the Private Warrants.

There were no redemptions or exercises of the Public or Private Warrants during in the period subsequent to the Business Combination in 2022.

The Company recognized expense of $ 4,020 thousand and income of $ 5,033 thousand as a change in fair value of warrant liabilities in the Consolidated statements of operations and comprehensive loss for years ended December 31, 2023 and 2022, respectively.

The Company recognized income of $ 10,770 thousand and expense of $ 4,020 thousand as a change in fair value of warrant liabilities in the consolidated statements of operations and comprehensive loss for years ended December 31, 2024 and 2023, respectively.

The Company determined the Public Warrants and Private Placement Warrants do not meet the criteria to be classified in stockholders’ equity and the fair value of the warrants should be classified as a liability.

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Share-based awards settled in cash represent grants of share-based awards that will be settled with employees in cash and are presented within Accrued liabilities and Other long-term liabilities in the consolidated balance sheets.

They are valued using the market price of the Company’s and Parent’s stock and are remeasured at each balance sheet date and are classified under Level 1 under the fair value hierarchy.

Contingent Consideration Liability

In connection with H-D’s 2019 acquisition of STACYC, Inc., the Company had a contingent consideration obligation related to an aggregate earnout payment.

The aggregate earnout payment had a potential payout ranging from $ 0 to $ 6,540 thousand based on the achievement of sales volume targets during the twelve-month performance periods beginning in June 2019, 2020, and 2021, respectively.

The Company recorded a liability of $ 4,978 thousand at the acquisition-date for the fair value based on the likelihood of contingent earn-out payments as part of the total consideration.

The contingent consideration liability related to the STACYC acquisition was considered a Level 3 liability.

As of December 31, 2020, the fair value was estimated using a Monte Carlo simulation with significant unobservable inputs, including the discount rate, revenue volatility and risk premium.

In both 2021 and 2020, the Company made payments of $ 2,180 thousand during each period based on the full achievement of performance targets for the first two annual performance periods.

As of December 31, 2021, the Company determined the maximum remaining payout of $ 2,180 thousand approximated fair value.

The final payment in 2022 of $ 2,180 thousand settled the Company’s contingent consideration obligation related to acquisition of STACYC.

They are valued using the market price of the Company’s and Harley-Davidson, Inc.’s stock and are remeasured at each balance sheet date and are classified under Level 1 under the fair value hierarchy.

Other Fair Value Measurements

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The warranty coverage for the retail customer generally begins when the product is sold to the retail customer.

The Company accrues for future warranty claims at the time of sale by the Company using an estimated cost based primarily on historical Company claim information.

The Company accrues future warranty claims at the time of sale by the Company using an estimated cost based primarily on historical Company claim information.

In the case of both warranty and recall costs, as actual experience becomes available it is used to update the accruals.

7 unchanged sentences

Settlements made during the period ( 1,035 ) ( 452 )

Currency Translation Adjustments — ( 76 )

Recalls and changes to pre-existing warranty liabilities 110 19

Transaction related adjustment (1)

Balance, end of period $ 881 $ 1,011

(1) In connection with the Separation and Business Combination, $ 787 thousand of warranties and recall liabilities were retained by H-D related to pre-transaction claims for certain H-D branded electric motorcycles.

There was no liability for recall campaigns as of December 31, 2023 and 2022 as the liability related to pre-transaction recall campaigns related to certain H-D branded electric motorcycles and was retained by H-D.

The liability for recall campaigns included in the above table was $ 120 thousand and zero as of December 31, 2024 and 2023, respectively.

Employee Benefit Plans

11 unchanged sentences

The Company had no product liability claims as of December 31, 2024 and 2023.

Litigation and Other Claims – The Company from time to time may be subject to lawsuits and other claims related to product, commercial, employee, environmental and other matters in the normal course of business.

Litigation and Other Claims – The Company from time to time may be subject to lawsuits and other claims related to product, commercial, supplier, employee, environmental and other matters in the normal course of business.

In determining costs to accrue related to these items, the Company carefully analyzes cases and considers the likelihood of adverse judgments or outcomes, as well as the potential range of possible loss.

3 unchanged sentences

The Company believes that its accruals and insurance coverage are adequate and there are no material exposures to loss in excess of amounts accrued and insured for losses related to these matters.

In December 2024, the Company received an unfavorable arbitration ruling related to the resolution of a claim from a supplier.

As a result of the ruling, the Company will pay $ 1,802 thousand to the supplier which is recorded in Accrued liabilities on the consolidated balance sheet as of December 31, 2024.

The Company recorded $ 1,664 thousand of expense in Cost of Sales in the fourth quarter of 2024 related to this ruling.

Share-Based Awards

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The expense recognized reflects the number of awards that are ultimately expected to vest based on the service and, if applicable, performance requirements of each award.

Total compensation expense related to LiveWire share-based awards was $ 9,378 thousand, $ 579 thousand, and zero for the years ended December 31, 2023, 2022, and 2021, respectively.

Total compensation expense related to LiveWire share-based awards was $ 4,519 thousand, $ 9,378 thousand, and $ 579 thousand for the years ended December 31, 2024, 2023, and 2022, respectively.

See separate discussion below related to historical H-D Share-Based Awards for description of awards and related expense.

3 unchanged sentences

Time-Based RSUs for directors vest over a one -year period.

The Company recognized $ 7,305 thousand and $ 416 thousand for the years ended December 31, 2023 and 2022, respectively, in share-based compensation expense related to the Time-Based RSUs.

There were no Time-Based RSUs outstanding prior to fiscal year 2022 and therefore no share-based compensation expense was recorded in 2021 related to the Time-Based RSUs.

The Company recognized $ 5,588 thousand, $ 7,305 thousand and $ 416 thousand for the years ended December 31, 2024, 2023, and 2022, respectively, in share-based compensation expense related to the Time-Based RSUs.

During the year ended December 31, 2022, the Company granted Performance RSUs to certain executive officers and other eligible employees.

1 unchanged sentence

The grant date fair value of the Performance RSUs was estimated using a Monte-Carlo simulation.

The Company recognized $ 2,073 thousand and $ 163 thousand of share-based compensation expense for the year ended December 31, 2023 and 2022 respectively, for the Performance RSUs.

There were no Performance RSUs granted in 2023.

There were no Performance RSUs outstanding prior to fiscal year 2022 and therefore no share-based compensation expense was recorded in 2021 related to the Performance RSUs.

The Company recognized a reduction in expense of $ 1,069 thousand for the year ended December 31, 2024 and recognized $ 2,073 thousand, and $ 163 thousand of share-based compensation expense for the years ended December 31, 2023 and 2022, respectively, for the Performance RSUs.

The reduction in expense in 2024 is a result of the impact of forfeitures in 2024 of $ 2,150 thousand related to employees who terminated during 2024.

There were no Performance RSUs granted in the years ended December 31, 2024 and 2023.

Restricted Stock Units - Settled in Stock – The fair value of the Time-Based RSUs settled in stock is determined based on the market price of the Company’s stock on the grant date.

24 unchanged sentences

Nonvested, end of period 1,992 625 2,617 $ 7.56

The activity for these awards for the year ended December 31, 2022 was as follows (in thousands, expect for per share amounts):

RSUs Performance RSUs Total

RSUs Weighted-Average Grant Date Fair Value Per Share

Nonvested, beginning of period — — — $ —

Granted 1,870 625 2,495 $ 7.34

Vested — — — $ —

Forfeited — — — $ —

Nonvested, end of period 1,870 625 2,495 $ 7.34

As of December 31, 2024, there was $ 7,635 thousand of unrecognized compensation cost related to RSUs settled in stock that is expected to be recognized over a weighted-average period of 1.5 years.

17 unchanged sentences

Nonvested, end of period 71 24 95 $ 7.01

The activity for these awards for the year ended December 31, 2022 was as follows (in thousands, expect for per share amounts):

RSUs Performance RSUs Total

RSUs Weighted-Average Grant Date Fair Value Per Share

Nonvested, beginning of period — — — $ —

Granted 64 24 88 $ 7.52

Vested — — — $ —

Forfeited — — — $ —

Nonvested, end of period 64 24 88 $ 7.52

During the year ended December 31, 2024, there were cash payments of $ 149 thousand related to these awards.

14 unchanged sentences

Nonvested, beginning of period 28 $ 37

Awards transferred to cash payment 19 $ 41

Granted — $ —

7 unchanged sentences

Nonvested, beginning of period 73 $ 38

Granted — $ —

Vested ( 40 ) $ 38

Forfeited ( 5 ) $ 36

Nonvested, end of period 28 $ 37

The activity for these awards for the year ended December 31, 2022 was as follows (in thousands, except for per share amounts):

Shares & Units Weighted-Average Fair Value Per Share

Nonvested, beginning of period — $ —

Awards transferred to cash payment 76 $ 33

3 unchanged sentences

Nonvested, end of period 73 $ 38

The total income tax benefit associated with share-based compensation recorded in the Company's Consolidated statements of operations and comprehensive loss was $ 2,201 thousand, $ 670 thousand, and zero for the years ended December 31, 2023, 2022, and 2021, respectively.

The total income tax benefit associated with share-based compensation recorded in the Company's consolidated statements of operations and comprehensive loss was $ 1,062 thousand, $ 2,201 thousand, and $ 670 thousand before valuation allowance impact for the years ended December 31, 2024, 2023, and 2022, respectively.

Treasury Stock

The Company retained $ 1,969 thousand, or 180 thousand shares of common stock, to satisfy withholding taxes in connection with the vesting of restricted stock units during the twelve months ended December 31, 2023.

The Company retained $ 1,444 thousand, or 184 thousand shares of common stock, and $ 1,969 thousand, or 180 thousand shares of common stock, to satisfy withholding taxes in connection with the vesting of restricted stock units during the years ended December 31, 2024 and 2023, respectively.

These retained shares were recorded at cost as Treasury Stock.

There were no shares of common stock retained by the Company to satisfy withholding taxes in connection with the vesting of restricted stock units for the twelve months ended December 31, 2022 and 2021.

There were no shares of common stock retained by the Company to satisfy withholding taxes in connection with the vesting of restricted stock units for the year ended December 31, 2022.

Related Party Transactions

3 unchanged sentences

Transition Services Agreement

On September 26, 2022, we entered into a Transition Services Agreement with H-D (the “Transition Services Agreement”) pursuant to which H-D provides to us various services and support on a transitional basis to allow LiveWire to develop the capability to support ourselves or to engage a third-party provider to provide those services and support.

The charges for the services are on a cost-plus basis (with a mark-up to reflect the management and administrative cost of providing the services).

The services generally commenced on the date of the Separation and were intended to terminate between six and twelve months of the date of the Separation.

We generally have the ability to (i) extend the term that a service is provided for by up to six months , subject to a maximum aggregate service term of 18 months;

and (ii) terminate any or all services early subject to a 45 -day notice period.

H-D has the right to terminate the Transition Services Agreement for our non-payment of charges.

As of December 31, 2023, we have extended certain of the services from the original termination date, which will now terminate in 2024, and may, in the future, convert a minimal number of these services to longer term under the Master Service Agreement, if needed.

On September 26, 2022, we entered into a Transition Services Agreement with H-D (the “Transition Services Agreement”) pursuant to which H-D provided to us various services and support on a transitional basis to allow LiveWire to develop the capability to support ourselves or to engage a third-party provider to provide those services and support.

The charges for the services were on a cost-plus basis (with a mark-up to reflect the management and administrative cost of providing the services).

The services generally commenced on the date of the Separation and were intended to terminate between six and twelve months of the date of the Separation, with the option to extend or convert the services to longer term under the Master Service Agreement.

All services under the Transition Services Agreement have either terminated or have been included in the Master Services Agreement executed on December 23, 2024 and effective on January 1, 2025 discussed below.

Master Services Agreement

On September 26, 2022, we entered into a Master Services Agreement with H-D (the “Master Services Agreement”) pursuant to which H-D provides us with certain services that we do not yet have the capability to perform for ourselves, including services related to testing and development, product regulatory support, color materials, finishes, paint and graphics, technical publication, application support and maintenance, service desk support, warehousing support, and safety investigation, as we may request from time to time.

The Master Services Agreement which contemplates that each of the services is set forth in a separate, mutually agreed upon statement of work.

On September 26, 2022, we entered into a master services agreement with H-D pursuant to which H-D provided us with certain services that we did not yet have the capability to perform for ourselves, including services related to testing and development, product regulatory support, color materials, finishes, paint and graphics, technical publication, application support and maintenance, service desk support, warehousing support, safety investigation, and marketing vehicle and fleet center, as we may request from time to time.

On December 23, 2024, we entered into a new Master Services Agreement (the “Master Services Agreement”) with H-D.

The Master Services Agreement became effective on January 1, 2025, and terminated the master services agreement, dated September 22, 2022, between LiveWire and H-D.

Pursuant to the Master Services Agreement, H-D will continue to provide LiveWire with certain services that LiveWire determined would be better outsourced at this time, including services that support testing and development, product regulatory support, color materials, finishes, paint and graphics, technical publication, application support and maintenance, service desk support, warehousing support, and other corporate support services.

The new Master Services Agreement incorporates a subset of support services previously provided under the now expired Transition Services Agreement including services where LiveWire utilizes H-D’s subject matter experts for targeted guidance or allow LiveWire to leverage H-D’s systems or equipment for cost savings purposes.

The Master Services Agreement contemplates that each of the services shall be provided to LiveWire as detailed under the terms of the Master Services Agreement and the exhibit thereto or as set forth in a separate, mutually agreed upon letter agreement.

The Master Services Agreement also provides that any service or project not contemplated by the Master Services Agreement will be set forth in a separate, mutually agreed upon side letter or letter agreement, and any fee for such service or project will be separate than the fee provided for in the Master Services Agreement.

The Master Services Agreement has an initial term of seven years and will be renewable upon mutual agreement.

The Master Services Agreement or any statement of work may be terminated by either party upon the other party’s material, uncured breach.

H-D may also terminate the agreement upon LiveWire’s change of control or, at the end of a calendar year, in the event that LiveWire failed to engage H-D to manufacture at least forty percent of LiveWire’s production during that calendar year.

The charges for the services are on a cost-plus basis (with a mark-up to reflect the management and administrative cost of providing the services).

The Master Services Agreement or any related letter agreement for additional services may be terminated by either party upon the other party’s material, uncured breach.

H-D may also terminate the agreement upon LiveWire’s change of control or, at the end of a calendar year upon 180 days written notice, in the event that LiveWire failed to engage H-D to manufacture at least forty percent of LiveWire’s production during that calendar year.

The charges for the services will be a flat monthly fee representing cost plus a markup.

A joint steering committee composed of senior executives and/or designees of each party will meet annually to formulate a forecast and plan for LiveWire’s anticipated service needs, as well as adjust the monthly fee as appropriate, and will oversee the progress of the services and address any disputes.

Contract Manufacturing Agreement

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Transactions Associated with Service Agreements with H-D

Cost of goods sold - There are $ 23,433 thousand and $ 1,685 thousand of Cost of goods sold with H-D related to purchases from H-D on the Consolidated statements of operations and comprehensive loss for the year ended December 31, 2023 and the period subsequent to the Business Combination in 2022, respectively, of which $ 17,053 thousand and $ 1,585 thousand, respectively, are related to purchases from H-D, primarily motorcycles, under the terms of the Contract Manufacturing Agreement.

These purchases of motorcycles from H-D are sold to the Company’s customers resulting in Cost of goods sold.

Also included in the total Cost of goods sold with H-D for 2023 is a provision of $ 6,309 thousand, of which $ 2,552 thousand was recorded in the fourth quarter of 2023, related to a liability for excess inventory components held by H-D that the Company expects to be obligated to reimburse H-D under the terms of the Contract Manufacturing Agreement.

This amount represents the Company’s best estimate of liability as of December 31, 2023 and is subject to adjustment based on final negotiations with H-D regarding amounts owed under the terms of the Contract Manufacturing Agreement.

Selling, administrative and engineering - During the year ended December 31, 2023, and for the period subsequent to the Business Combination in 2022, there were $ 14,993 thousand and $ 3,485 thousand, respectively, in expenses associated with services rendered in conjunction with the various service agreements with H-D, which are presented within Selling, administrative and engineering on the Consolidated statements of operations and comprehensive loss.

Account payable to related party - As of December 31, 2023 and 2022, there is $ 20,371 thousand and $ 5,733 thousand, respectively, due to H-D and presented as Accounts payable to related party on the Consolidated balance sheets.

Of the amount outstanding to H-D as of December 31, 2023 and 2022, $ 10,020 thousand and $ 1,942 thousand, respectively, is associated with inventory purchased under the Contract Manufacturing Agreement and $ 4,042 thousand and $ 3,791 thousand, respectively, is associated with services under the various Separation Agreements with H-D and $ 6,309 thousand as of December 31, 2023 is associated with the obligation to reimburse H-D for excess inventory components held by H-D as discussed above.

Cost of goods sold - For the years ended December 31, 2024, 2023, and the period subsequent to the Business Combination in 2022 there are $ 19,533 thousand, $ 23,433 thousand, and $ 1,685 thousand respectively, of Cost of goods sold with H-D on the consolidated statements of operations and comprehensive loss.

Of the Costs of goods sold with H-D, $ 19,611 thousand, $ 17,053 thousand, and $ 1,585 thousand are related to purchases, primarily motorcycles, under the terms of the Contract Manufacturing Agreement for the years ended December 31, 2024, 2023, and the period subsequent to the Business Combination in 2022, respectively.

These purchases of electric motorcycles from H-D are sold to the Company’s customers resulting in Cost of goods sold.

Also included in the total Cost of goods sold with H-D for the years ended December 31, 2024 and 2023 is a reduction in expense of $ 153 thousand and a provision of $ 6,309 thousand, respectively, related to a liability for excess inventory components held by H-D that the Company expects to be obligated to reimburse H-D under the terms of the Contract Manufacturing Agreement.

Selling, administrative and engineering - During the years ended December 31, 2024, 2023, and the period subsequent to the Business Combination in 2022 there were $ 10,164 thousand, $ 14,993 thousand, and $ 3,485 thousand respectively, in expenses associated with services rendered in conjunction with the various service agreements with H-D, which are presented within Selling, administrative and engineering on the consolidated statements of operations and comprehensive loss.

Accounts payable to related party - As of December 31, 2024 and 2023, there is $ 9,762 thousand and $ 20,371 thousand, respectively, due to H-D and presented as Accounts payable to related party on the consolidated balance sheets.

Of the amount outstanding to H-D, as of December 31, 2024 and 2023, $ 2,914 thousand and $ 10,020 thousand, respectively, is associated with inventory purchased under the Contract Manufacturing Agreement, $ 692 thousand and $ 4,042 thousand, respectively, is associated with services under the various service agreements with H-D, and $ 6,156 thousand and $ 6,309 thousand, respectively, is associated with the obligation to reimburse H-D for excess inventory components held by H-D that the Company expects to be obligated to reimburse H-D under the terms of the Contract Manufacturing Agreement.

This amount represents the Company’s best estimate of the liability as of each of the balance sheet dates and is subject to adjustment based on final negotiations with H-D regarding amounts owed under the terms of the Contract Manufacturing Agreement.

Financing from Business Combination

1 unchanged sentence

The Business Combination further resulted in adjustments for assets and liabilities, and the related currency translation adjustments, which will remain with H-D in accordance with the separation agreement.

As of the year

ended December 31, 2022 the adjustments resulted in a net increase of $ 5,183 thousand to Additional paid-in capital.

For additional information around the Business Combination, refer to FN 4 Business Combination.

As of the year ended December 31, 2022 the adjustments resulted in a net increase of $ 5,183 thousand to Additional paid-in capital.

For additional information around the Business Combination, refer to Note 4 Business Combination.

Convertible Delayed Draw Term Loan Agreement

On February 14, 2024, the Company entered into a Convertible Delayed Draw Term Loan Agreement (the “Convertible Term Loan”) with H-D providing for term loans from H-D to the Company in one or more advances up to an aggregate principal amount of $ 100 million.

The outstanding principal under the Convertible Term Loan bears interest at a floating rate per annum, as calculated by H-D as of the date of each advance and as of each June 1 and December 1 thereafter, equal to the sum of (i) the forward-looking term rate based on SOFR (i.e., the secured overnight financing rate published by the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate)) for a 6 -month interest period, plus (ii) 4.00 %.

The Company may elect to pay up to 100% of the amount of any interest due by increasing the outstanding principal amount of the applicable advance.

The Convertible Term Loan does not include affirmative covenants impacting the operations of the Company.

The Convertible Term Loan includes negative covenants restricting the ability of the Company to incur indebtedness, create liens, sell assets, make investments, make fundamental changes, make dividends or other restricted payments and enter into affiliate transactions.

The Convertible Term Loan has a maturity date of the earlier of (i) 24 months from the date of the first draw on the loan or (ii) October 31, 2026.

In the event that the Convertible Term Loan cannot be settled in cash by the Company at maturity, unless otherwise agreed between the Company and H-D, the Convertible Term Loan will be converted to equity of Company at a conversion price per share of common stock of the Company equal to 90 % of the volume weighted average price per share of Common Stock for the 30 trading days immediately preceding the conversion date.

As of December 31, 2024 , there were no amounts outstanding under the Convertible Term Loan and the Company remained in compliance with all of the existing covenants.

Other Transactions

Sales of electric motorcycles and related products to independent dealers and customers are primarily financed through Harley Davidson Financial Services (“HDFS”), a wholly owned subsidiary of H-D;

S ales of electric motorcycles and related products to independent dealers in the U.S.

and Canada are primarily financed through Harley Davidson Financial Services (“HDFS”), a wholly owned subsidiary of H-D;

therefore, the Company’s accounts receivable related to these sales are recorded in Accounts receivable from related party on the consolidated balance sheets .

Amounts financed through HDFS, not yet remitted to the Company by HDFS are generally settled within 30 days.

As of December 31, 2023 and 2022, there is $ 3,351 thousand and $ 388 thousand, respectively, due from HDFS and other related receivables due from H-D, which is presented as Accounts receivable from related party on the Consolidated balance sheets.

During the year ended December 31, 2023 and for the period subsequent to the Business Combination in 2022, the Company recorded $ 113 thousand and $ 141 thousand in related party sales between the Company and H-D with $ 71 thousand and $ 100 thousand in cost of sales, respectively.

All sales were for the STACYC segment who sells balance bikes to H-D dealers.

As of December 31, 2023 and 2022, there is $ 51 thousand and $ 137 thousand, respectively, due from H-D, which is presented as Accounts receivable from related party on the Consolidated balance sheets.

As of December 31, 2024 and 2023, there is $ 356 thousand and $ 3,351 thousand, respectively, due from HDFS and other related receivables due from H-D, which is presented within Accounts receivable from related party on the consolidated balance sheets.

During the years ended December 31, 2024, 2023, and the period subsequent to the Business Combination in 2022, the Company recorded $ 96 thousand, $ 113 thousand, and $ 141 thousand, respectively, in related party sales between the Company and H-D with $ 74 thousand, $ 71 thousand, and $ 100 thousand, respectively, in Cost of goods sold.

All sales were for the STACYC segment which sells electric balance bikes to H-D.

As of December 31, 2024 and 2023, there was $ 43 thousand and $ 51 thousand, respectively, due from H-D, which is presented within Accounts receivable from related party on the consolidated balance sheets.

On September 26, 2022, the Company entered into a lease agreement with H-D to sublease a Product Development Center.

Additionally, on August 28, 2023, the Company amended a lease agreement with H-D for office space to extend the term of the lease to a 12-month period expiring on September 26, 2024.

The Company provided notice to H-D to terminate this lease effective February 28, 2025.

On August 28, 2023, the Company amended a lease agreement with H-D for office space to extend the term of the lease to a 12 -month period, which expired on September 26, 2024 and is now renewed on a month-to-month basis.

On September 4, 2024, the Company entered into a lease agreement with H-D to sublease office space in California, which expires on October 31, 2027.

These are classified as operating leases.

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As of December 31, 2023, the right of use asset included within Lease assets, short-term lease liability included within Current portion of lease liabilities, and long-term lease liability included within Long-term portion of lease liabilities in the consolidated balance sheets were $ 274 thousand, $ 162 thousand, and $ 112 thousand, respectively.

In addition, the Company incurred $ 176 thousand and $ 45 thousand, respectively, in rent expense during the year ended December 31, 2023, and for the period subsequent to the Business Combination in 2022, respectively, which is included within Selling, administrative and engineering expense on the Consolidated statements of operations and comprehensive loss.

In addition, the Company incurred $ 177 thousand, $ 176 thousand, and $ 45 thousand respectively, in rent expense during the years ended December 31, 2024, 2023, and the period subsequent to the Business Combination in 2022, which is included within Selling, administrative and engineering expense on the consolidated statements of operations and comprehensive loss.

In conjunction with the relocation of LiveWire Labs from California, announced in 2024, the Company moved its equipment from LiveWire Labs to an H-D location in Milwaukee, Wisconsin in September 2024.

During the fourth quarter of 2024, the Company began occupying a portion of the space in the H-D location, including operating certain of its equipment, and using a portion for office space.

As of December 31, 2024, the Company and H-D were finalizing the terms of a lease for space in this as building.

The Company and H-D finalized negotiations and executed a lease agreement related to this space on January 30, 2025.

The Company will record an ROU asset and ROU liability of approximately $ 500 thousand in the first quarter of 2025, which has been reduced for a $ 500 thousand lease incentive to be provided from H-D for tenant improvements.

The initial term of the

agreement is 60 months with a renewal option for another 60 months.

As of the current date, the Company does not believe it is reasonably certain of exercising the renewal option and, therefore, the lease term is 60 months.

Prior to the Separation, the Company did not operate as a standalone business and the consolidated financial statements were derived from the consolidated financial statements and accounting records of H-D.

The Convertible Term Loan does not include affirmative covenants impacting the operations of the Company.

The Convertible Term Loan has a maturity date of the earlier of (i) 24 months from the date of the first draw on the loan or (ii) October 31, 2026.

Allocation of Expenses and Related Party Activity Prior to the Separation

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The Company’s electric motorcycles are produced in manufacturing facilities shared with H-D.

Certain costs of goods sold for shared facilities and shared manufacturing of $ 3,402 thousand and $ 4,442 thousand for the period prior to the Business Combination, and the twelve months ended December 31, 2021, respectively, were specifically identified or allocated, mainly based on standard cost of production.

Certain costs of goods sold for shared facilities and shared manufacturing of $ 3,402 thousand for the period prior to the Business Combination in the year ended December 31, 2022 were specifically identified or allocated, mainly based on standard cost of production.

Operating expense allocation

H-D provided technology support, marketing, engineering, shared assets, finance, and other corporate and administrative services such as treasury, human resources, and legal, to the Company.

These expenses of $ 2,702 thousand and $ 2,166 thousand for the period prior to the Business Combination and the twelve months ended December 31, 2021, respectively, have been allocated to the Company and are included in Selling, administrative and engineering expense in the Consolidated statements of operations and comprehensive loss, where direct assignment of costs incurred by H-D was not possible or practical.

These expenses of $ 2,702 thousand, in the year ended December 31, 2022 subsequent to Business Combination in the year ended December 31, 2022, have been allocated to the Company and are included in Selling, administrative and engineering expense in the consolidated statements of operations and comprehensive loss, where direct assignment of costs incurred by H-D was not possible or practical.

These costs were allocated using related drivers associated with the nature of the business, such as gross revenue and wholesale motorcycle shipments.

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Under this centralized cash management approach, H-D provided funds to the Company.

Cash transfers from H-D related to services and funding for operations provided by H-D were $ 59,051 thousand and $ 85,493 thousand for the nine months ended September 25, 2022 and year ended December 31, 2021, respectively.

Cash transfers from H-D related to services and funding for operations provided by H-D were $ 59,051 thousand for the nine months ended September 25, 2022.

Net contributions from H-D are included within Net Parent company investment in the consolidated statements of shareholders' equity.

For the 9 months ended For the 12 months ended

Net contribution from H-D reconciliation to transfers from H-D September 25, 2022 December 31, 2021

For the 9 months ended

Net contribution from H-D reconciliation to transfers from H-D September 25, 2022

Net contribution from H-D $ 79,922

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Transfers from H-D per cash flow statement $ 59,051

Prior to the Business Combination, there were three lines of credit agreements with H-D, two of which were entered into on December 23, 2020 and the third was entered into on July 6, 2021.

There were no financial covenants associated with these lines of credit.

Each of these agreements allowed for earlier payment on demand of H-D in the event of default.

All three lines of credit were repaid prior to the Business Combination.

The Company’s first line of credit agreement had a maximum borrowing limit of $ 5,000 thousand with an interest rate of 6.6 %.

This line of credit was amended and restated on December 22, 2021.

The Company had no outstanding amounts under this line of credit at December 31, 2021.

The Company’s second line of credit agreement had a maximum borrowing limit of $ 10,000 thousand with an interest rate of 6.6 %.

This line of credit agreement limited the use of proceeds to the payment of contingent consideration related to the

Company’s purchase agreement for the acquisition of STACYC on March 4, 2019.

The Company had $ 5,333 thousand outstanding under this line of credit at December 31, 2021.

The Company’s third line of credit agreement had a maximum borrowing limit of $ 60,000 thousand with an interest rate of 6.6 %.

This line of credit was amended and restated on December 22, 2021.

The Company had $ 100 thousand outstanding under this line of credit at December 31, 2021.

Interest paid on the notes payable to related party was $ 0 thousand and $ 59 thousand for the for the nine months ended September 25, 2022, and the twelve months ended December 31, 2021, respectively.

During the twelve months ended December 31, 2022, the Company borrowed $ 15,333 thousand under the lines of credit agreements prior to their final settlement on June 24, 2022.

During the year ended December 31, 2022, the Company borrowed $ 15,333 thousand under the lines of credit agreements prior to their final settlement on June 24, 2022.

Pursuant to the Separation Agreement, H-D elected to settle all notes payable to related party outstanding as of June 24, 2022, including accrued interest, through capital contribution and without any cash being exchanged between the Company and H-D.

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Reportable Segments and Geographic Information

The Company’s reportable segments and significant segment expenses are determined based on how the Company’s Chief Operating Decision Maker (CODM) assesses performance and decides how to allocate resources for the Company.

The Company’s Chief Executive Officer is the Company’s CODM.

Operating loss is the measure of profit and loss used by the CODM to assess performance and to decide how to allocate resources for each of the Company’s reportable segments.

Operating loss is used to monitor actual results versus planned and prior period results for each segment based on their respective profitability objectives and business models.

Operating loss is also used to allocate human and capital resources among the reportable segments.

Additionally, operating loss is a key metric used to establish and pay variable compensation to employees at all levels.

The Company operates in two segments:

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The Electric Motorcycles segment also sells electric motorcycle parts, accessories, and apparel.

The Company’s products are sold at wholesale to a network of independent dealers and at retail through a Company-owned dealership and through online sales, and direct to customers through select international partners primarily in Europe.

The Company’s products are sold at wholesale to a network of independent dealers and at retail through a Company-owned dealership and through online sales.

Prior to November 5, 2024, the Company’s products were sold at retail through select international partners primarily in Europe.

The STACYC segment consists of the business activities related to the design and sales of the STACYC brand of electric balance bikes for kids.

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and Canada, including powersports dealers, H-D dealers, bicycle retailers and direct to customers online.

In Australia and Europe, STACYC sells its products through independent distributors.

In Australia and Europe, STACYC sells its products through independent distributors and direct to customers online in Europe.

Selected segment information is set forth below for the years ended December 31, (in thousands):

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Selling, administrative and engineering expense:

People Costs (1)

45,507 49,672 34,938

Other segment items (2)

41,356 51,190 44,898

Total selling, administrative and engineering expense 86,863 100,862 79,836

Operating loss $ ( 105,500 ) $ ( 116,611 ) $ ( 89,105 )

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Selling, administrative and engineering expense:

Operating income 622 4,150 2,115

Operating loss $ ( 115,989 ) $ ( 84,955 ) $ ( 68,182 )

People Costs (1)

3,877 3,489 2,473

Marketing (3)

2,894 3,032 2,431

Other segment items (4)

3,939 2,834 3,119

Total selling, administrative and engineering expense 10,710 9,355 8,023

Operating (loss) income $ ( 4,856 ) $ 622 $ 4,150

Consolidated operating loss ( 110,356 ) ( 115,989 ) ( 84,955 )

Other income, net — — 235

Interest expense related party — — ( 475 )

Interest income 5,704 10,537 1,191

Change in fair value of warrant liabilities 10,770 ( 4,020 ) 5,033

Loss before income taxes $ ( 93,882 ) $ ( 109,472 ) $ ( 78,971 )

(1) People expenses include salary and related fringe costs, including payroll tax and health and welfare costs, as well as short-term incentive compensation and long-term incentive compensation in the form of share-based awards.

(2) Other segment items for Electric Motorcycles include depreciation and amortization, marketing, rent and facilities costs, warranty, supplies and materials, costs paid for services performed by H-D under the TSA and MSA agreements, travel costs, other professional services and miscellaneous expenses.

These costs are all included in Selling, administrative and engineering expense.

(3) Marketing expenses include costs related to digital and print media, social media, website maintenance, consumer experiences, product placement, sponsorships and market research.

(4) Other segment items for STACYC include depreciation and amortization, rent and facilities costs, warranty, supplies and materials, travel costs, other professional services and miscellaneous expenses.

These costs are all included in Selling, administrative and engineering expense.

Additional segment information is set forth below as of December 31, (in thousands):

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Depreciation and amortization $ 9,690 $ 351 $ 10,041

Non-cash stock compensation expense $ 4,159 $ 467 $ 4,626

Capital expenditures $ 7,972 $ 96 $ 8,068

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Depreciation and amortization $ 5,312 $ 520 $ 5,832

Non-cash stock compensation expense $ 8,506 $ 420 $ 8,926

Capital expenditures $ 13,453 $ 9 $ 13,462

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Depreciation and amortization $ 3,882 $ 519 $ 4,401

Non-cash stock compensation expense $ 367 $ 27 $ 394

Capital expenditures $ 14,081 $ — $ 14,081

Customer Information - For the years ended December 31, 2023, 2022 and 2021, LiveWire generated more than 10% of its consolidated sales from the KTM customer group.

These sales amounted to 31 %, 33 %, and 17 % for the years ended December 31, 2023, 2022 and 2021, respectively, and were included in the STACYC segment.

Customer Information - For the year ended December 31, 2024, no single customer or customer group represented 10% or greater of net accounts receivable.

For the years ended December 31, 2023 and 2022, LiveWire generated more than 10% of its consolidated sales from the KTM customer group.

T hese sales amounted to 31 %, and 33 % for the years ended 2023 and 2022, respectively, and were included in the STACYC segment.

Geographic Information – Included in the consolidated financial statements are the following amounts relating to geographic locations for the years ended December 31, (in thousands):

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(2) Long-lived assets include all long-term assets except those specifically excluded under ASC Topic 280, Segment Reporting , such as deferred income taxes.

(3) Prior year amounts have been reclassified to confirm to current year presentation.

Restructuring

On April 24, 2024, the Company announced a plan (“April 2024 Plan”) to both relocate the operations of LiveWire Labs, the Company’s west coast product development facility, from Mountain View, California, to Milwaukee, Wisconsin, and streamline headcount at the Company.

The Company believes this plan will enable synergies and optimize efficiencies in product development and simplify the Company’s overall path to future profitability.

In conjunction with this plan, the Company recorded $ 3,043 thousand of employee termination benefits, primarily severance, during the year ended December 31, 2024 within Selling, administrative and engineering expense on the consolidated statements of operations and comprehensive loss in the Electric Motorcycle segment.

Of this amount, $ 1,797 thousand related to one-time employee termination benefits recorded pursuant to ASC 420, Exit or Disposal Cost Obligations (“ASC 420”) and the remainder was related to existing contractual arrangements with employees recorded pursuant to ASC 712, Compensation – Nonretirement Postemployment Benefits (“ASC 712”).

Additionally, the Company incurred $ 709 thousand of expenses for the year ended December 31, 2024 related to employee relocation and equipment move costs in conjunction with these actions, which was recorded within Selling, administrative and engineering expense on the consolidated statements of operations and comprehensive loss in the Electric Motorcycles segment.

As of December 31, 2024, there is $ 304 thousand remaining to be paid related to this reorganization.

This amount will be paid in 2025 and there are no other amounts expected to be incurred under this plan.

In September 2024, continuing its focus on the Company’s path to profitability and furthering its strategy, the Company executed a reorganization of its Sales and Marketing function and Product Development and Design function (“September 2024 reorganization”), including consolidating each of these functions under singular leadership and other headcount reductions.

In conjunction with this reorganization, the Company recorded $ 1,271 thousand of employee termination benefits, primarily severance, for the year ended December 31, 2024.

This amount was recorded within the Electric Motorcycles segment and presented within Selling, administrative and engineering on the consolidated statements of operations and comprehensive loss.

Of this amount, $ 776 thousand related to one-time employee termination benefits recorded pursuant to ASC 420, and the remainder was related to existing contractual arrangements with employees recorded pursuant to ASC 712.

As of December 31, 2024, there is $ 371 thousand remaining to be paid related to this reorganization.

This amount will be paid in 2025 and there are no other amounts expected to be incurred under this reorganization.

The Company recognized a reduction in stock compensation expense of $ 3,753 thousand in the year ended December 31, 2024 resulting from forfeitures of awards related to employees who terminated during 2024 resulting from the above actions.

The Company also recorded $ 863 thousand of accelerated depreciation related to LiveWire Labs leasehold improvements resulting from the move from Mountain View, California to Milwaukee, Wisconsin in the year ended December 31, 2024.

These amounts were recorded within Selling, administrative and engineering expense on the consolidated statements of operations and comprehensive loss in the Electric Motorcycles segment.

The following table displays a roll-forward of the restructuring liability recorded within the Company’s consolidated balance sheets and the related cash flow activity (in thousands):

Employee Termination Benefits Other Total

Balance at December 31, 2023 $ — $ — $ —

Reserve Established:

April 2024 Plan 3,043 709 3,752

September 2024 reorganization 1,271 — 1,271

Total Reserve Established 4,314 709 5,023

April 2024 Plan ( 2,751 ) ( 697 ) ( 3,448 )

September 2024 reorganization ( 900 ) — ( 900 )

Total Payments ( 3,651 ) ( 697 ) ( 4,348 )

Balance at December 31, 2024 $ 663 $ 12 $ 675

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data