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What changed in LiveWire Group, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of LiveWire Group, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+392 added−430 removedSource: 10-K (2024-02-23) vs 10-K (2023-03-06)

Top changes in LiveWire Group, Inc.'s 2023 10-K

392 paragraphs added · 430 removed · 310 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

60 edited+15 added−18 removed97 unchanged
Biggest changeAs a result, we are and may become subject to existing and emerging federal, state, local and international laws and regulations related to the privacy, security and protection of such information, such as the Federal Trade Commission (“FTC”) Act, the GLBA, the TCPA, the CAN-SPAM Act, California Consumer Privacy Act as amended by the California Privacy Rights Act (“CCPA”), the Virginia Consumer Data Protection Act (“VCDPA”), the Colorado Privacy Act (“CPA”), the Connecticut Data Privacy Rights Act (“CTDPA”) and the Utah Consumer Privacy Act (“UCPA”).
Biggest changeAs a result, we are and may become subject to existing and emerging federal, state, local and international laws and regulations related to the privacy, security and protection of such information, such as the Federal Trade Commission (“FTC”) Act, the GLBA, the TCPA, the CAN-SPAM Act, California Consumer Privacy Act as amended by the California Privacy Rights Act (“CCPA”) and comprehensive state privacy laws that share similarities with the CCPA, such as the Virginia Consumer Data Protection Act (“VCDPA”), the Colorado Privacy Act (“CPA”), the Connecticut Data Privacy Rights Act (“CTDPA”), the Utah Consumer Privacy Act (“UCPA”), the Montana Consumer Data Privacy Act (the “MCDPA”), the Oregon Consumer Privacy Act (the "OCPA"), the Texas Data Privacy and Security Act (the “TDPSA”), the Tennessee Information Protection Act (“TIPA”), the Iowa Consumer Data Protection Act (“ICDPA”), the Delaware Personal Data Privacy Act (“DPDPA”), and the Indiana Consumer Data Protection Act (“INCDPA”). 14 In the United States, while there is not a single generally applicable federal law governing the processing of personal information, there are federal laws that apply to the processing of certain types of information, or the processing of personal information by certain types of entities, and the Federal Trade Commission and state attorneys general may bring enforcement actions against companies that engage in processing of personal information in a manner that constitutes an “unfair” or “deceptive” trade practice.
Item 1. Business General LiveWire Group, Inc., a Delaware corporation, and its consolidated subsidiaries are referred to in this Form 10-K as “we,” “our,” “us,” the “Company,” or “LiveWire.” LiveWire is an industry-leading all-electric motorcycle brand with a focus on pioneering the rapidly growing two-wheel electric motorcycle space.
Item 1. Business General LiveWire Group, Inc., a Delaware corporation, and its consolidated subsidiaries are referred to in this Form 10-K as “we,” “our,” “us,” the “Company,” or “LiveWire.” LiveWire is an industry-leading all-electric motorcycle brand with a focus on pioneering the growing two-wheel electric motorcycle space.
We perpetually license to H-D all intellectual property (other than marks or software) that we own as of the Separation and all improvements thereto. If either party makes improvements to the other party’s IP, such improvements will be jointly owned by the parties. The licenses are generally royalty-free.
We perpetually license to H-D all intellectual property (other than marks or software) that we own as of the Separation and all improvements thereto. If either party makes improvements to the other party’s intellectual property, such improvements will be jointly owned by the parties. The licenses are generally royalty-free.
Lead in Brand Desirability - LiveWire’s ambition is to create the most desirable electric motorcycle brand in the world. As a brand, LiveWire leverages Soulful by Design as its consumer-facing position. This differentiates LiveWire from others in the 6 category, showcasing a rider’s connection to the world through the LiveWire riding experience.
Lead in Brand Desirability - LiveWire’s ambition is to create the most desirable electric motorcycle brand in the world. As a brand, LiveWire leverages Soulful by Design as its consumer-facing position. This differentiates LiveWire from others in the category, showcasing a rider’s connection to the world through the LiveWire riding experience.
To sell vehicles directly to residents of these states, we must conduct the sale out of state through our California location, over the internet or telephonically. LiveWire retail partners who have obtained dealer licenses within these certain states will sell vehicles directly to residents within these states.
To sell vehicles directly to residents of these states, we must conduct the sale out of state through our California location, over the internet or telephonically or through LiveWire retail partners who have obtained dealer licenses within these certain states to sell vehicles directly to residents within these states.
Additionally, our comprehensive health and welfare benefits program provides our employees with a variety of medical and dental plans, plus voluntary benefits like vision or critical illness protection. 12 Regulatory Considerations Environmental, Health and Safety Regulations Environmental, Health and Safety Regulations in the United States Certain of our operations, properties and products are subject to stringent and comprehensive international, federal, state and local laws and regulations governing matters including environmental protection, occupational health and safety, and the release or discharge of materials into the environment (including air emissions and wastewater discharges).
Additionally, our comprehensive health and welfare benefits program provides our employees with a variety of medical and dental plans, plus voluntary benefits like vision or critical illness protection. 11 Regulatory Considerations Environmental, Health and Safety Regulations Environmental, Health and Safety Regulations in the United States Certain of our operations, properties and products are subject to stringent and comprehensive international, federal, state and local laws and regulations governing matters including environmental protection, occupational health and safety, and the release or discharge of materials into the environment (including air emissions and wastewater discharges).
Notwithstanding any termination of the Tax Matters Agreement, the agreement will continue in effect with respect to any payment or indemnification due for all taxable periods prior to the termination during which the Tax Matters Agreement was in effect. 9 Electric Motorcycles Segment The Electric Motorcycles segment focuses on the development and sales of electric motorcycles as well as parts, accessories, and apparel.
Notwithstanding any termination of the Tax Matters Agreement, the agreement will continue in effect with respect to any payment or indemnification due for all taxable periods prior to the termination during which the Tax Matters Agreement was in effect. 8 Electric Motorcycles Segment The Electric Motorcycles segment focuses on the development and sales of electric motorcycles as well as parts, accessories, and apparel.
The Electric Motorcycles segment primarily focuses on the designing and selling of electric motorcycles and also sells electric motorcycle parts, accessories, and apparel. Electric motorcycles are sold at wholesale to a network of independent dealers and retailers, at retail through a Company-owned dealer, and through online sales.
The Electric Motorcycles segment primarily focuses on the designing and selling of electric motorcycles and also sells electric motorcycle parts, accessories, and apparel. Electric motorcycles are sold at wholesale to a network of independent dealers and retailers, at retail through a Company-owned dealership, and through online sales.
The duration of trademark registrations vary from country to country, but it is typically for ten years with unlimited ten-year renewal terms, subject to the payment of maintenance and renewal fees and the laws of the jurisdiction in which the trademark is registered.
The duration of trademark registrations varies from country to country, but it is typically for ten years with unlimited ten-year renewal terms, subject to the payment of maintenance and renewal fees and the laws of the jurisdiction in which the trademark is registered.
For additional information, see the section entitled “ Risk Factors—Risks Related to Information Technology, Intellectual Property, Data Security and Privacy. ” Internet Access The Company’s website address is http://www.livewire.com .
For additional information, see the section entitled “ Risk Factors—Risks Related to Information Technology, Intellectual Property, Data Security and Privacy. ” Internet Access The Company’s website address is http://www.livewire.com . The Company’s website address for investor relations is http://investor.livewire.com/ .
H-D is one of the most recognized motorcycle brands in the world, with capabilities to design, develop, manufacture, market and distribute vehicles to major markets around the globe. Beyond the transitional service agreements tied to the Separation, LiveWire intends to leverage H-D’s capabilities in two key areas: technical and other services and contract manufacturing.
H-D is one of the most recognized motorcycle brands in the world, with capabilities to design, develop, manufacture, market and distribute vehicles to major markets around the globe. Beyond the transitional service agreements tied to the Separation (as defined below), LiveWire intends to leverage H-D’s capabilities in two key areas: technical and other services and contract manufacturing.
This proposal is subject to feedback from a consultation process but reflects the UK’s broader strategy to phase out new combustion engines in all transport (including heavy duty vehicles) by 2040.
This plan is subject to feedback from a consultation process but reflects the UK’s broader strategy to phase out new combustion engines in all transport (including heavy duty vehicles) by 2040.
The Company's Notice of Annual Meeting and Proxy Statement for its 2023 annual meeting of shareholders, which will include information related to the compensation of the Company's named executive officers, will be made available through its investor relations website.
The Company's Notice of Annual Meeting and Proxy Statement for its 2024 annual meeting of shareholders, which will include information related to the compensation of the Company's named executive officers, will be made available through its investor relations website.
Beginning for calendar year 2024, LiveWire will be subject to a minimum annual volume commitment for each product and pay a deficit fee for failure to meet the minimum under the Contract Manufacturing Agreement.
Beginning for calendar year 2025, LiveWire will be subject to a minimum annual volume commitment for each product and pay a deficit fee for failure to meet the minimum under the Contract Manufacturing Agreement.
While we expect competition to grow as the market shifts to younger riders and more players begin to make serious investments, we believe STACYC'’s established brand with the combination of commitment, capabilities and market position positions STACYC to compete effectively in the growing electric balance bike market. 11 Parts, accessories, and apparel – Parts and accessories products include replacement parts and mechanical and cosmetic accessories, clothing and riding gear.
While we expect competition to grow as the market shifts to younger riders and more players begin to make serious investments, we believe STACYC'’s established brand with the combination of commitment, capabilities and market position allows STACYC to compete effectively in the growing electric balance bike market. 10 Parts, accessories, and apparel – Parts and accessories products include replacement parts and mechanical and cosmetic accessories, clothing and riding gear.
The requirements vary depending on the location where our regulated activities are conducted. The following summarizes certain existing environmental, health and safety laws and regulations applicable to our operations and products. National Highway Traffic Safety Administration (“NHTSA”) Safety and Self-Certification Obligations.
The requirements vary depending on the location where our regulated activities are conducted. The following summarizes certain, but not all, existing environmental, health and safety laws and regulations applicable to our operations and products. National Highway Traffic Safety Administration (“NHTSA”) Safety and Self-Certification Obligations.
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 are intended to terminate between six and twelve months of the date of the Separation.
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 serv ices). 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.
Capture Global Share of the Electric Motorcycle Market - LiveWire strategically selects our retail partners based upon their commitment to electric, location and capabilities to support the electric vehicle capture. Our 2023 priority markets include the United States and leading countries in Europe such as Germany, France, the Netherlands, and the United Kingdom.
Capture Global Share of the Electric Motorcycle Market - LiveWire strategically selects our retail partners based upon their commitment to electric, location and capabilities to support the electric vehicle capture. Our 2024 priority markets include the United States, Canada and leading countries in Europe such as Germany, France, Switzerland, the Netherlands, and the United Kingdom.
Unlike the United States, once we start operating in this market, we must obtain pre-approval from regulators to import and sell our electric vehicles into the EU and countries that recognize EU certification or have regulatory regimes aligned with the EU (collectively referred to as “Europe”).
Unlike the United States, once we started operating in this market, we had to obtain pre-approval from regulators to import and sell our electric vehicles into the EU and countries that recognize EU certification or have regulatory regimes aligned with the EU (collectively referred to as “Europe”).
These laws and regulations can give rise to liability for oversight costs, compliance costs, bodily injury (including workers’ compensation), fines, and penalties. Additionally, non-compliance could result in delay or suspension of production or cessation of operations. Environmental, Health and Safety Regulations in the European Union Europe Type Approval. We intend to export electric vehicles to Europe.
These laws and regulations can give rise to liability for oversight costs, compliance costs, bodily injury (including workers’ compensation), fines, and penalties. Additionally, non-compliance could result in delay or suspension of production or cessation of operations. Environmental, Health and Safety Regulations in the European Union Europe Type Approval. We have begun to export electric vehicles to certain countries in Europe.
The Clean Air Act requires that we obtain an EPA-issued Certificate of Conformity and a certification from the California Air Resources Board (“CARB”) with respect to emissions from our electric vehicles, and include labeling providing consumer information such as miles per gallon of gas-equivalent ratings and maximum range on a single charge.
The Clean Air Act requires that we obtain an EPA-issued Certificate of Conformity and a certification from CARB with respect to emissions from our electric vehicles and include labeling providing consumer information such as miles per gallon of gas-equivalent ratings and maximum range on a single charge.
We expect our introduction of Firmware Over the Air (“FOTA”) to allow for continual upgrades and refinements to the electric motorcycle in the field, greatly reducing the need and inconvenience for service or repair appointments for setting or software updates. With FOTA-enabled electronic control units on the vehicle, each subsystem becomes remotely addressable and updatable.
The introduction of Firmware Over the Air (“FOTA”) allows for continual upgrades and refinements to the electric motorcycle in the field, greatly reducing the need and inconvenience for service or repair appointments for setting or software updates. With FOTA-enabled electronic control units on the vehicle, each subsystem becomes remotely addressable and updatable.
The Master Services Agreement which contemplates that each of the services is set forth in a separate, mutually agreed upon statement of work. The Master Services Agreement has 7 an initial term of seven years and will be renewable upon mutual agreement.
The Master Services Agreement states that each of the services is set forth in a separate, mutually agreed upon statement of work. The Master Services Agreement has an initial term of seven years and will be renewable upon mutual agreement.
The Company’s website address for investor relations is http://investor.livewire.com/ . 16 The Company’s Annual Report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and any amendments to those reports, are available on its investor relations website free of charge as soon as reasonably practicable after it electronically files such material with, or furnishes such material to, the United States Securities and Exchange Commission (“SEC”).
The Company’s Annual Report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and any amendments to those reports, are available on its investor relations website free of charge as soon as reasonably practicable after it electronically files such material with, or furnishes such material to, the United States Securities and Exchange Commission (“SEC”).
For example, in the UK, the government has proposed that all new motorcycles are to be fully zero emissions at the tailpipe from 2035, or earlier if it is determined that a faster transition seems feasible.
For example, in the UK, the government is consulting on future plans that all new motorcycles are to be fully zero emissions at the tailpipe from 2035, or earlier if it is determined that a faster transition seems feasible.
The Certificate of Conformity is required each model year for electric vehicles sold in states covered by the Clean Air Act’s standards, and is also required each model year for vehicles sold in states that have sought and received a waiver from the EPA to utilize California standards. Battery Safety and Testing.
The Certificate of Conformity is required each model year for electric vehicles sold in states covered by the Clean Air Act’s standards and is also required each model year for vehicles sold in states that have sought and received a waiver from the EPA to utilize California’s mobile source standards.
These tests evaluate battery function and performance as well as resilience to conditions including immersion, humidity, fire and other potential hazards. Hazardous Substances. We are subject to regulations governing the proper handling, storage, transportation and disposal of products containing hazardous substances.
These tests evaluate battery function and performance as well as resilience to conditions including immersion, humidity, fire and other potential hazards. Hazardous Substances. We are subject to regulations governing the proper handling, storage, transportation and disposal of hazardous substances, including those contained in our battery packs.
STACYC segment revenue by product line for the last three fiscal years was as follows (in thousands): 2022 2021 2020 Electric balance bikes $ 29,669 $ 23,130 $ 14,602 Parts, accessories and apparel 3,165 2,971 1,942 Revenue, net $ 32,834 $ 26,101 $ 16,544 Electric Balance Bikes – STACYC focuses on developing products and experiences that help kids develop sooner and empower them to define their own ride.
STACYC segment revenue by product line for the last three fiscal years was as follows (in thousands): 2023 2022 2021 Electric balance bikes $ 22,865 $ 29,669 $ 23,130 Parts, accessories and apparel 3,610 3,165 2,971 Revenue, net $ 26,475 $ 32,834 $ 26,101 Electric Balance Bikes – STACYC focuses on developing products and experiences that help kids develop sooner and empower them to define their own ride.
Human Capital Management Our People and Culture As of December 31, 2022, the Company’s global workforce was comprised of approximately 225 employees, including approximately 207 and 18 employees within the Electric Motorcycles and STACYC segments, respectively. Of all employees, 94% are based in the U.S., and substantially all employees are salaried.
Human Capital Management Our People and Culture As of December 31, 2023, the Company’s global workforce was comprised of approximately 248 employees, including approximately 227 and 21 employees within the Electric Motorcycles and STACYC segments, respectively. Of all employees, 94% are based in the U.S., and substantially all employees are salaried.
The LiveWire ONE is, the LiveWire S2, and future products will be at the time of production, fully compliant with all such Safety Standards without the need for any exemptions.
The LiveWire ONE and the LiveWire S2 Del Mar are, and future products will be expected to be, at the time of production, fully compliant with all such Safety Standards without the need for any exemptions.
The process for certification in Europe is known as “Type Approval” and requires LiveWire to demonstrate to a regulatory agency in the EU, referred to as the Competent Authority, that our electric vehicles meet all EU safety and emission standards.
The process for certification in Europe is known as “Type Approval” and requires LiveWire to demonstrate to a regulatory agency in the EU, referred to as the Competent Authority, that our electric vehicles meet all EU safety and emission standards. The vehicles being exported to Europe have received these approvals and comply with all EU safety and emission standards.
In addition, our products are also subject to certain laws and regulations that have been enacted or proposed, e.g., “Right to Repair,” laws, that could require us to provide third-party access to our network and/or vehicle systems. Environmental Protection Agency (“EPA”) Certificate of Conformity.
In addition, our products are also subject to certain laws and regulations that have been enacted or proposed, e.g., “Right to Repair” laws, that could require us to provide third-party access to our network and/or vehicle systems. Environmental Protection Agency (“EPA”) and California Air Resources Board (“CARB”) Certificates of Conformity and Regulations.
While we expect competition to grow as the market shifts to electric, and more players begin to make serious investments, we believe the Electric Motorcycles segment is the only player and established brand with the combination of technology, manufacturing, and market position to lead the growing electric motorcycle market.
While we expect competition to grow as the market shifts to electric, and more players begin to make serious investments, we believe the Electric Motorcycles segment is the only player and established brand with the combination of technology, manufacturing, and market position to lead the growing electric motorcycle market. 9 Parts, accessories, and apparel – Parts, accessories, and apparel products include replacement parts and mechanical and cosmetic accessories, clothing and accessories.
Electric Motorcycles segment revenue by product line for the last three fiscal years was as follows (in thousands): 2022 2021 2020 Electric motorcycles $ 13,171 $ 8,706 $ 12,846 Parts, accessories and apparel 828 999 1,473 Revenue, net $ 13,999 $ 9,705 $ 14,319 Electric Motorcycles – The Electric Motorcycles segment sells electric powered motorcycles under the LiveWire brand.
Electric Motorcycles segment revenue by product line for the last three fiscal years was as follows (in thousands): 2023 2022 2021 Electric motorcycles $ 11,087 $ 13,171 $ 8,706 Parts, accessories and apparel 461 828 999 Revenue, net $ 11,548 $ 13,999 $ 9,705 Electric Motorcycles – The Electric Motorcycles segment sells electric powered motorcycles under the LiveWire brand.
By expanding into Europe and the United Kingdom, we will also become subject to laws, regulations and standards covering data protection and marketing and advertising, including the EU General Data Protection Regulation (“GDPR”) and the United Kingdom data protection regime, consisting primarily of the UK General Data Protection Regulation and the UK Data Protection Act (together referred to as the “UK GDPR”).
Due to our operations in Europe, including the United Kingdom, we are subject to laws, regulations and standards covering data protection and marketing and advertising, including the EU General Data Protection Regulation (“GDPR”) and the United Kingdom data protection regime, consisting primarily of the UK General Data Protection Regulation and the UK Data Protection Act (together referred to as the “UK GDPR”).
H-D may terminate the agreement earlier upon our breach under certain circumstances, our bankruptcy or insolvency, or our unpermitted assignment of the agreement. 8 Joint Development Agreement On September 26, 2022 we entered into a Joint Development Agreement with H-D (the “Joint Development Agreement”) pursuant to which the parties may agree to engage in joint development projects, which would be set forth in one or more mutually agreed project work statements.
Joint Development Agreement On September 26, 2022, we entered into a Joint Development Agreement with H-D (the “Joint Development Agreement”) pursuant to which the parties may agree to engage in joint development projects, which would be set forth in one or more mutually agreed project work statements.
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.
We generally have the ability to (i) extend the term that a service is provided for by u p 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.
Marketing occurs primarily through digital and experiential activities as well as through more traditional promotional and advertising activities. The Electric Motorcycles segment is making investments to provide potential customers with many other opportunities to engage with the brand and try Electric Motorcycles segment products. Additionally, the Electric Motorcycles segment’s dealers engage in a wide range of local marketing and events.
The Electric Motorcycles segment is making investments to provide potential customers with many other opportunities to engage with the brand and try Electric Motorcycles segment products. Additionally, the Electric Motorcycles segment’s dealers engage in a wide range of local marketing and events.
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, safety investigation, and marketing vehicle and fleet center, as we may request from time to time.
As of December 31, 2023, we have extended a limited number of the services from the original termination date, which will now terminate in 2024, and may, in the future, convert a minimal number of those services to longer term under the Master Service Agreement, if needed. 6 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, safety investigation, and marketing vehicle and fleet center, as we may request from time to time.
LiveWire’s inclusion in H-D’s consolidated group may result in H-D utilizing certain tax attributes that LiveWire generates, including net operating losses, and LiveWire will receive no compensation from H-D for the use of such attributes.
LiveWire’s inclusion in H-D’s consolidated group may result in H-D utilizing certain tax attributes that LiveWire generates, including net operating losses and credits, and LiveWire will receive no compensation from H-D for the use of such attributes, but they may be used to offset any future liabilities that may be owed by LiveWire to H-D under the Tax Matters Agreement.
The Trademark License Agreement has an initial term of two years and automatically renews for successive two-year periods unless either party gives notice of non-renewal at least 60 days prior to the end of the then-current term.
The Trademark License Agreement has an initial term of two years and automatically renews for successive two-year periods unless either party gives notice of non-renewal at least 60 days prior to the end of the then-current term. H-D may terminate the agreement earlier upon our breach under certain circumstances, our bankruptcy or insolvency, or our unpermitted assignment of the agreement.
Electric motorcycles are sold by combining both digital and physical touchpoint, including to a network of independent retailers, and at retail direct to consumers through a Company-owned dealer, and through online sales.
Electric motorcycles are sold by combining both digital and physical touchpoints, including to a network of independent dealers, and at retail direct to consumers through a Company-owned dealership, online sales, and direct to customers through select international partners primarily in Europe.
Business Combination On September 26, 2022, the Company consummated a business combination pursuant to a business combination agreement, dated as of December 12, 2021 (the “Business Combination Agreement”), by and among ABIC, LiveWire EV Holdings, Inc., a Delaware corporation (now known as “LiveWire Group, 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.
In connection with the transactions (the “Business Combination”) pursuant to the business combination agreement, dated as of December 12, 2021 (the “Business Combination Agreement”), by and among ABIC, LiveWire EV Holdings, Inc., a Delaware corporation (now known as “LiveWire Group, Inc.”), LW EV Merger Sub, Inc., a Delaware corporation (“Merger Sub”), Harley-Davidson, Inc.
Through strategic and business assessments of our intellectual property, we rely on a combination of patents, trade secrets, copyrights, service marks, trademarks, domains, contractual terms and enforcement mechanisms across various international jurisdictions to establish and protect intellectual property related to our current and future business and operations.
Through strategic and business assessments of our intellectual property, we rely on a combination of patents, trade secrets, copyrights, service marks, trademarks, domains, contractual terms and enforcement mechanisms across various international jurisdictions to establish and protect intellectual property related to our current and future business and operations. 15 As of December 31, 2023, we held 14 utility patents and 21 design patents, and had filed an additional 16 utility patent applications and 5 design patent applications in the U.S.
STACYC Segment The STACYC segment primarily focuses on the designing and selling of electric balance bikes for kids. The STACYC segment products are sold at wholesale to independent dealers and independent distributors, as well as, direct to consumers online.
The STACYC segment products are sold at wholesale to independent dealers and independent distributors, as well as, direct to consumers online.
In relation to our batteries, disposal would be governed by the Batteries Directive, which imposes, among other obligations, certain requirements in relation to the disposal of batteries, such as that producers of batteries and producers of other products that incorporate a battery are responsible for the waste management of batteries that they place on the market, in particular the financing of collection and recycling schemes. 14 Environmental, Health and Safety Regulations in the Rest of World Should we expand into jurisdictions outside of the USA and EU, other jurisdictions also have a favorable regulatory environment with respect to electric motorcycles.
In relation to our batteries, disposal would be governed by the Batteries Directive, which imposes, among other obligations, certain requirements in relation to the disposal of batteries, such as that producers of batteries and producers of other products that incorporate a battery are responsible for the waste management of batteries that they place on the market, in particular the financing of collection and recycling schemes. 13 Environmental, Health and Safety Regulations in Canada In Canada, vehicles must meet the Motor Vehicle Safety Act (MVSA) requirements.
As a result, our battery packs are subject to federal and state environmental laws and regulations that govern regarding the handling and disposal of waste, including, in some instances, the remanufacture, recycling and disposal of hazardous waste. 13 The laws governing hazardous substances and hazardous waste also may impose strict, joint and several liability for the investigation and remediation of areas where hazardous substances may have been released or disposed.
As a result, our battery packs are subject to federal and state environmental laws and regulations that govern regarding the handling and disposal of waste, including, in some instances, the remanufacture, recycling and disposal of hazardous waste.
Trademark License Agreement On September 26, 2022, we entered into a Trademark License Agreement with H-D (the “Trademark License Agreement”) pursuant to which H-D granted to us a royalty-free license to use certain H-D trademarks with respect to our products.
Each party owns improvements that it creates to its own intellectual property, and the parties jointly own improvements that one party creates to the other party’s intellectual property, without a right of accounting. 7 Trademark License Agreement On September 26, 2022, we entered into a Trademark License Agreement with H-D (the “Trademark License Agreement”) pursuant to which H-D granted to us a royalty-free license to use certain H-D trademarks with respect to our products.
We have completed the applicable UN Manual tests for our production battery packs, and the test results demonstrate our compliance with the PHMSA regulations. We currently use transition metal oxide cells in our high-voltage battery packs. Our battery packs include certain packaging materials that contain trace amounts of hazardous chemicals whose use, storage and disposal is regulated under federal law.
We have completed the applicable UN Manual tests for our production battery packs, and the test results demonstrate our compliance with the PHMSA regulations. For example, our battery packs have received UN38.3 compliance for shipping of the units. 12 We currently use transition metal oxide cells in our high-voltage battery packs.
We do not view any individual patent as being material to our business. Subject to required payments of annuities or maintenance fees, United States design patents have a term of 15 years from the date of issuance, and United States utility patents have a term of 20 years from the priority application date.
Subject to required payments of annuities or maintenance fees, United States design patents have a term of 15 years from the date of issuance, and United States utility patents have a term of 20 years from the priority application date. Accordingly, our U.S. patents that have already been issued will expire between 2031 and 2041.
The LiveWire ONE is assembled at H-D’s facility in York, Pennsylvania. With the introduction of the S2 platform, LiveWire powertrains will be assembled in H-D’s Powertrain Operations in Menomonee Falls, Wisconsin, and overall vehicle assembly will continue to be in the York facility alongside the LiveWire ONE.
With the introduction of the S2 platform, LiveWire powertrains are assembled in H-D’s Powertrain Operations in Menomonee Falls, Wisconsin, and overall vehicle assembly will continue to be in the York facility. Raw Materials and Purchased Components – The Electric Motorcycles segment continues to establish and reinforce long-term, mutually beneficial relationships with its suppliers.
In addition, through a continued focus on collaboration and strong supplier relationships, the Electric Motorcycles segment believes it is positioned to achieve its strategic objectives and deliver cost and quality improvements over the long-term. The principal raw materials in Electric Motorcycles segment’s products include battery cells, semi-conductor chips, steel and aluminum castings, forgings, steel sheet and bar.
Through these collaborative relationships, the Electric Motorcycles segment gains access to technical and commercial resources for application directly to product design, development and manufacturing initiatives. In addition, through a continued focus on collaboration and strong supplier relationships, the Electric Motorcycles segment believes it is positioned to achieve its strategic objectives and deliver cost and quality improvements over the long-term.
Additional raw materials in Electric Motorcycles segment’s products include certain motorcycle components including, but not limited to, batteries, tires, seats, electrical components, instruments and wheels. The Electric Motorcycles segment closely monitors the overall viability of its supply base. The Electric Motorcycles segment is proactively working with its suppliers in an effort to minimize disruptions resulting from supply chain challenges.
The Electric Motorcycles segment closely monitors the overall viability of its supply base. The Electric Motorcycles segment is proactively working with its suppliers in an effort to minimize disruptions resulting from supply chain challenges. STACYC Segment The STACYC segment primarily focuses on the designing and selling of electric balance bikes for kids.
Accordingly, our U.S. patents that have already been issued will expire between 2031 and 2040. Our foreign patents generally have similar expiration dates, but may vary from country to country, the duration being set according to the laws of the jurisdiction in which the patent issues.
Our foreign patents generally have similar expiration dates, but may vary from country to country, the duration being set according to the laws of the jurisdiction in which the patent issues. Our trademarks, logos, domain names, and service marks are used to establish and maintain our reputation with our customers, and the goodwill associated with our businesses.
Parts, accessories, and apparel – Parts, accessories, and apparel products include replacement parts and mechanical and cosmetic accessories, clothing and accessories. 10 Marketing – The Electric Motorcycles segment’s brand, products and the riding experience are marketed to consumers in the United States and select international markets.
Marketing – The Electric Motorcycles segment’s brand, products and the riding experience are marketed to consumers in the United States and select international markets. Marketing occurs primarily through digital and experiential activities as well as through more traditional promotional and advertising activities.
Share the Love of Riding - Since 2012, STACYC’s mission has been to Share the Love of Riding , designing and selling electric stability bikes for children, enabling the development of their skillset and powering their journey to independence on two wheels. STACYC’s portfolio includes four sizes of product for children ages 3 to 12.
Our location in Malibu, California opened in February 2022, giving riders an additional venue to experience the LiveWire brand. 5 Share the Love of Riding - STACYC’s mission has been to Share the Love of Riding , designing and selling electric stability bikes for kids, enabling the development of their skillset and powering their journey to independence on two wheels.
Additional states, Virginia, Colorado, Connecticut and Utah, also recently enacted comprehensive data privacy laws. Virginia passed the VCDPA, Colorado passed the CPA, Connecticut passed the CTDPA and Utah passed the UCPA.
Additional states, Virginia, Colorado, Connecticut, Utah, Oregon, Texas, Montana, Iowa, Delaware, Tennessee, and Indiana have also enacted comprehensive data privacy laws.
Our trademarks, logos, domain names, and service marks are used to establish and maintain our reputation with our customers, and the goodwill associated with our businesses. As of December 31, 2022, we had 38 registered trademarks and had an additional 30 pending trademark applications with domestic and foreign trademark offices.
As of December 31, 2023, we had 75 registered trademarks and had an additional 31 pending trademark applications with domestic and foreign trademark offices.
The company sells through powersports dealers, in addition to digital channels, while leveraging licensing deals with traditional powersport OEMs to increase reach and scale. Strategic Partnerships LiveWire benefits from two important strategic partners: H-D and the KYMCO Group.
STACYC’s portfolio includes four sizes of product for kids ages 3 to 12. The Company sells through powersports dealers, in addition to digital channels, while leveraging licensing deals with traditional powersport Original Equipment Manufacturers (“OEM”) to increase reach and scale.
As of December 31, 2022, we held 9 utility patents and 20 design patents, and had filed an additional 8 utility patent applications and 3 design patent applications in the U.S. We also held 45 patents and 11 patent applications that are foreign counterparts of some of our U.S. patents and patent applications with foreign patent offices.
We also held 128 patents and 18 patent applications that are foreign counterparts of some of our U.S. patents and patent applications with foreign patent offices. We do not view any individual patent as being material to our business.
Removed
Pursuant to the terms of the Business Combination Agreement: (a) on September 23, 2022, ABIC migrated to and domesticated as a Delaware corporation (“Domesticated ABIC”) (the “Domestication”), in connection with which all of ABIC’s (i) outstanding ordinary shares were converted, on a one-for-one basis, into common stock, par value $0.0001 per share, of Domesticated ABIC, (ii) outstanding warrants were converted, on a one-for-one basis, into warrants to acquire one share each of common stock of Domesticated ABIC and (iii) outstanding units were canceled and instead entitle the holder thereof to, per unit, one share of common stock of Domesticated ABIC and one-half of one warrant of Domesticated ABIC; (b) on September 26, 2022, H-D and Legacy LiveWire consummated the separation of the Legacy LiveWire business and the other transactions contemplated by the Separation Agreement (the “Separation Agreement”), by and between H-D and Legacy LiveWire, dated as of September 26, 2022 (the “Separation”); (c) following the Domestication and immediately following the Separation, Merger Sub merged with and into Domesticated ABIC, with Domesticated ABIC surviving as a direct, wholly-owned subsidiary of LiveWire (the “Merger”), and LiveWire continuing as the public company in the Merger, with each share of common stock of Domesticated ABIC being converted into the right of the holder thereof to receive one share of LiveWire common stock, par value $0.0001 (“Common Stock”); (d) immediately following the Merger, H-D caused all of the membership interests of Legacy LiveWire (“Legacy LiveWire Equity” ) held by ElectricSoul, LLC (the “Legacy LiveWire Equityholder”), a Delaware limited liability company and a subsidiary of H-D, to be contributed to LiveWire in exchange for 161,000,000 shares of Common Stock and the right to receive up to an additional 12,500,000 shares of Common Stock in the future (the “Earn-Out Shares”, and the transactions contemplated by this clause (d), collectively, the “Exchange”), and as a result of the Exchange, Legacy LiveWire became a direct, wholly owned subsi diary of LiveWire; (e) immediately following the consummation of the Exchange, LiveWire contributed 100% of the outstanding equity interests of Legacy LiveWire to Domesticated ABIC (clauses (a) through (e) collectively, the “Business Combination”).
Added
(“H-D”), and LiveWire EV, LLC (“Legacy LiveWire”), a wholly-owned subsidiary of H-D, we entered into a number of agreements with H-D, including the Separation Agreement, dated as of September 26, 2022, by and between H-D and Legacy LiveWire and consummated the separation of the Legacy LiveWire business and other transaction contemplated by the Separation Agreement (the “Separation”).
Removed
Holders of 36,597,112 of ABIC’s Class A Ordinary Shares sold in its initial public offering (the “Initial Shares”) exercised their right to have such shares redeemed for a full pro rata portion of the trust account holding the proceeds from ABIC’s initial public offering, calculated as of two business days prior to the consummation of the Business Combination, which was approximately $10.06 per share, or $368.1 million in the aggregate. 5 An aggregate of $368.1 million was paid from the ABIC’s trust account to holders who exercised their right to have their Initial Shares redeemed, and the remaining balance immediately prior to the Closing of approximately $34 million remained in the trust account and was used to fund the Business Combination.
Added
Strategic Partnerships LiveWire benefits from two important strategic partners: H-D and Kwang Yang Motor Co., Ltd., KYMCO Capital Fund I Co., Ltd., SunBright Investment Co., Ltd., CycleLoop Co., Ltd. and Kwang Yang Holdings Limited (collectively, the “KYMCO Group”).
Removed
In connection with the Business Combination, the AEA-Bridges Impact Sponsor, LLC, a Cayman Islands limited liability company (the “Sponsor”), forfeited an aggregate of 2,000,000 Class B Ordinary Shares of ABIC in accordance with the Investor Support Agreement, dated as of December 12, 2021 (the “Investor Support Agreement”), by and among the Sponsor, LiveWire, ABIC, John Garcia, John Replogle and George Serafeim.
Added
H-D has the right to terminate the Transition Services Agreement for our non-payment of charges.
Removed
The remaining Class B Ordinary Shares of ABIC held by the Sponsor automatically converted to 7,950,000 shares of Common Stock.
Added
On February 14, 2024, the Contract Manufacturing Agreement was amended to extend the period of which H-D is the exclusive manufacturer from five years as described above to six years.
Removed
Pursuant to investment agreements entered into in connection with the Business Combination Agreement, Kwang Yang Motor Co., Ltd., KYMCO Capital Fund I Co., Ltd., SunBright Investment Co., Ltd., CycleLoop Co., Ltd. and Kwang Yang Holdings Limited (collectively, the “KYMCO Group”) agreed to subscribe for an aggregate of 10,000,000 newly-issued shares of Common Stock at a purchase price of $10.00 per share for an aggregate purchase price of $100 million (the “KYMCO PIPE Investment”).
Added
The principal raw materials in Electric Motorcycles segment’s products include battery cells, semi-conductor chips, steel and aluminum castings, forgings, steel sheet and bar. Additional raw materials in Electric Motorcycles segment’s products include certain motorcycle components including, but not limited to, batteries, tires, seats, electrical components, instruments and wheels.
Removed
Pursuant to the Business Combination Agreement, and an investment agreement entered into prior to the closing of the Business Combination (the “Closing”), the Legacy LiveWire Equityholder agreed to subscribe for an aggregate of 10,000,000 newly-issued shares of Common Stock at a purchase price of $10.00 per share for an aggregate purchase price of $100 million (the “Legacy LiveWire Equityholder PIPE Investment” and, together with the KYMCO PIPE Investment, the “PIPE Investments”).
Added
On November 28, 2023, CARB published staff regulatory proposals which in part are aimed at harmonizing on road motorcycle (“ONMC”) emission standards with Euro 5 standards. This proposal aims to increase the number of zero-emission motorcycles sold each year, starting in model year 2028 up to 50% of new motorcycles sold in 2035.
Removed
At the closing of the Business Combination, LiveWire consummated the PIPE Investments.
Added
The proposed regulations would also begin awarding zero-emission motorcycle credits for Model Year 2024 on a voluntary basis. In addition, CARB plans to propose new regulations in 2024 for On-Road Motorcycles and Zero-Emission Motorcycles as part of CARB’s broader Mobile Source Strategy. Battery Safety and Testing.
Removed
Pursuant to the Business Combination Agreement, H-D caused the Legacy LiveWire Equityholder to pay and deliver to LiveWire an amount in cash equal to $100 million, which is the H-D Backstop Amount (as defined in the Business Combination Agreement) in exchange for 10,000,000 shares of Common Stock (the “H-D Backstop Shares”) at a purchase price of $10.00 per H-D Backstop Share.
Added
Our battery packs include certain packaging materials that contain trace amounts of hazardous chemicals whose use, storage and disposal is regulated under federal law.
Removed
Additionally, H-D was reimbursed for $20.1 million of transaction costs and advisory fees incurred. After giving effect to the Business Combination, the redemption of Initial Shares as described above, the issuance of the H-D Backstop Shares and the consummation of the PIPE Investments, there were 202,402,888 shares of Common Stock issued and outstanding.
Added
The laws governing hazardous substances and hazardous waste also may impose strict, joint and several liability for the investigation and remediation of areas where hazardous substances may have been released or disposed.
Removed
The Business Combination was accounted for as a reverse recapitalization. Throughout this section, unless otherwise noted, the “Company”, “we,” “us” or “our” and similar terms refer to Legacy LiveWire and its subsidiaries prior to the consummation of the Business Combination, and LiveWire and its subsidiaries after the consummation of the Business Combination.
Added
Such agreements are pending formal adoption by EU political institutions. In addition, pursuant to the Energy Performance of Buildings Direction (“EPBD”) that is scheduled for enforcement in 2024, new infrastructure such as homes and businesses must be built so there is enough power to support charging stations for electric vehicles including motorcycles. Hazardous Substances.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

180 edited+28 added−77 removed441 unchanged
Biggest changeWe have yet to achieve positive operating cash flow and, given our projected funding needs, our ability to generate positive cash flow is uncertain. • Our limited operating history makes evaluating our business and future prospects difficult and may increase the risk of your investment. • We may be unable to develop and produce electric vehicles of sufficient quality, on a schedule and at scale, that would appeal to a large customer base. • If we fail to achieve unit sales expectations, our business, prospects, financial condition and operating results could be adversely impacted. • We are a pioneer in a new space.
Biggest changeWe have yet to achieve positive operating cash flow and, given our projected funding needs, our ability to generate positive cash flow is uncertain. • Our research and development efforts may not yield the expected results, or results on expected timelines or at expected costs. • Increases in costs, disruption of supply or shortage of materials, including but not limited to, lithium-ion battery cells and key semiconductor chip components necessary for our electric vehicles, could materially and negatively affect our business. • Our limited operating history makes evaluating our business and future prospects difficult. • We may be unable to develop and produce electric vehicles of sufficient quality, on a schedule and at scale, that would appeal to a large customer base. • We are a pioneer in a new space.
While our Electric Motorcycles segment currently focuses on the LiveWire One and the S2 Del Mar, we expect our product roadmap to expand beyond the LiveWire One and introduce new models in other categories or using other technologies that we have less experience in as we may adjust our strategies and plans from time to time to remain competitive as a pioneer in a new industry.
While our Electric Motorcycles segment currently focuses on the LiveWire One and the S2 Del Mar, we expect our product roadmap to expand beyond the LiveWire One and the S2 Del Mar and introduce new models in other categories or using other technologies that we have less experience in as we may adjust our strategies and plans from time to time to remain competitive as a pioneer in a new industry.
We expect to incur significant costs in complying with these regulations.
We expect to incur significant costs in complying with these regulations.
Under certain federal and state environmental laws, our liability for such conditions may be joint and several with other owners/operators or through our contract manufacturer, so that we may be held responsible for more than our share of the contamination or other damages, or even for the entire share. Liability under these laws is generally strict.
Under certain federal and state environmental laws, our liability for such conditions may be joint and several with other owners/operators or through our contract manufacturer, so that we may be held responsible for more than our share, or even for the entire share, of the contamination or other damages. Liability under these laws is generally strict.
The continued development of and the ability to sell our electric vehicles at scale, including the LiveWire One, the S2 Del Mar, and future electric vehicles, are and will be subject to risks, including with respect to: • our ability to secure necessary funding; • our ability to develop and launch a light model electric vehicle at scale and at competitive profit margins for our business; • our ability to negotiate and execute definitive agreements, and maintain arrangements on reasonable terms, with our various suppliers for hardware, software or services necessary to engineer or manufacture parts or components of our electric vehicles; • securing necessary components, services or licenses on acceptable terms and in a timely manner; • delays by us in delivering final component designs to our suppliers; • our ability to accurately produce electric vehicles within specified design tolerances; • quality controls, including within our production operations, that prove to be ineffective or inefficient; • defects in design and/or manufacture that cause our electric vehicles not to perform as expected or that require repair, field actions, product recalls or design changes; • delays, disruptions or increased costs in our third-party outsourcing partners’ and our third-party suppliers’ supply chain, including raw material supplies; • other delays, cost overruns and backlog in manufacturing and research and development of new models; • obtaining required regulatory approvals and certifications; • compliance with environmental, safety and similar regulations; and 19 • our ability to attract, recruit, hire, retain and train skilled employees.
The continued development of and the ability to sell our electric vehicles at scale, including the LiveWire One, the S2 Del Mar, and future electric vehicles, are and will be subject to risks, including with respect to: • our ability to secure necessary funding; • our ability to develop and launch a light model electric vehicle at scale and at competitive profit margins for our business; • our ability to negotiate and execute definitive agreements, and maintain arrangements on reasonable terms, with our various suppliers for hardware, software or services necessary to engineer or manufacture parts or components of our electric vehicles; • securing necessary components, services or licenses on acceptable terms and in a timely manner; • delays by us in delivering final component designs to our suppliers; • our ability to accurately produce electric vehicles within specified design tolerances; • quality controls, including within our production operations, that prove to be ineffective or inefficient; • defects in design and/or manufacture that cause our electric vehicles not to perform as expected or that require repair, field actions, product recalls or design changes; • delays, disruptions or increased costs in our third-party outsourcing partners’ and our third-party suppliers’ supply chain, including raw material supplies; • other delays, cost overruns and backlog in manufacturing and research and development of new models; • obtaining required regulatory approvals and certifications; • compliance with environmental, safety and similar regulations; and • our ability to attract, recruit, hire, retain and train skilled employees.
We may experience operational and financial risks in connection with separating from H-D if we are unable to: • successfully separate the operations, as well as the accounting, financial controls, management information, technology, data, human resources and other administrative systems and functions, of H‑D from our operations and systems; • successfully identify, validate, qualify and contract with replacement or second-source manufacturing, engineering, development and testing service providers (or stand up such capabilities internally) to act as second sources or 21 replacement sources of such services in the event H-D is unable to provide such services or our agreements with H-D to provide the same expire or are terminate; • successfully identify and realize potential synergies with H-D; and • fully identify potential risks and liabilities associated with H-D, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities, litigation or other claims in connection with H-D, including claims from terminated employees, former stockholders, H-D dealers, or other third parties, and other known and unknown liabilities.
We may experience operational and financial risks in connection with separating from H-D if we are unable to: • successfully separate the operations, as well as the accounting, financial controls, management information, technology, data, human resources and other administrative systems and functions, of H‑D from our operations and systems; • successfully identify, validate, qualify and contract with replacement or second-source manufacturing, engineering, development and testing service providers (or stand up such capabilities internally) to act as second sources or replacement sources of such services in the event H-D is unable to provide such services or our agreements with H-D to provide the same expire or are terminate; • successfully identify and realize potential synergies with H-D; and • fully identify potential risks and liabilities associated with H-D, including intellectual property infringement claims, violations of laws, commercial disputes, tax liabilities, litigation or other claims in connection with H-D, including claims from terminated employees, former stockholders, H-D dealers, or other third parties, and other known and unknown liabilities.
We will remain an emerging growth company until the earlier of (a) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (b) the last day of the fiscal year following the fifth anniversary of the date of the completion of the IPO of ABIC; (c) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (d) the date on which we are deemed to be a large accelerated filer under the rules of the SEC, which means the market value of our Common Stock that is held by non-affiliates exceeds $700 million as of the prior 53 June 30th.
We will remain an emerging growth company until the earlier of (a) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more; (b) the last day of the fiscal year following the fifth anniversary of the date of the completion of the IPO of ABIC; (c) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (d) the date on which we are deemed to be a large accelerated filer under the rules of the SEC, which means the market value of our Common Stock that is held by non-affiliates exceeds $700 million as of the prior June 30th.
The Warrant Agreement provides that in the following circumstances holders of warrants who seek to exercise their warrants will not be permitted to do so for cash and will, instead, be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act: (i) if the shares of Common Stock issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the terms of the Warrant Agreement; (ii) if we have so elected and the shares of Common Stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition 54 of “covered securities” under Section 18(b)(1) of the Securities Act; and (iii) if we have so elected and we call the public warrants for redemption.
The Warrant Agreement provides that in the following circumstances holders of warrants who seek to exercise their warrants will not be permitted to do so for cash and will, instead, be required to do so on a cashless basis in accordance with Section 3(a)(9) of the Securities Act: (i) if the shares of Common Stock issuable upon exercise of the warrants are not registered under the Securities Act in accordance with the terms of the Warrant Agreement; (ii) if we have so elected and the shares of Common Stock are at the time of any exercise of a warrant not listed on a national securities exchange such that they satisfy the definition of “covered securities” under Section 18(b)(1) of the Securities Act; and (iii) if we have so elected and we call the public warrants for redemption.
We have limited experience in the actual provision of charging solutions to customers, and the facilitation of these services is subject to challenges, which include: • successful integration with existing third-party charging networks, including obtaining necessary licenses for charging solutions on commercially acceptable terms; • inadequate capacity or over capacity in certain areas, security risks or risk of damage to vehicles, charging equipment or real or personal property; • access to sufficient charging infrastructure; • the potential for lack of customer acceptance of our charging solutions; and • the risk that government support for electric vehicle and alternative fuel solutions and infrastructure may not continue.
We have limited experience in the actual provision of charging solutions to customers, and the facilitation of these services is subject to challenges, which include: • successful integration with existing third-party charging networks, including obtaining necessary licenses for charging solutions on commercially acceptable terms; • inadequate capacity or over capacity in certain areas, security risks or risk of damage to vehicles, charging equipment or real or personal property; 27 • access to sufficient charging infrastructure; • the potential for lack of customer acceptance of our charging solutions; and • the risk that government support for electric vehicle and alternative fuel solutions and infrastructure may not continue.
The market price for our Common Stock may fluctuate significantly in response to a number of factors, most of which we cannot control, including, among others: • the development and sustainability of an active trading market for our Common Stock; • trends and changes in consumer preferences in the industries in which we operate; • changes in general economic or market conditions or trends in our industry or the economy as a whole and, in particular, in the consumer and advertising marketplaces; • changes in key personnel; • our entry into new markets; • changes in our operating performance; • investors’ perceptions of our prospects and the prospects of the businesses in which we participate; • fluctuations in quarterly revenue and operating results, as well as differences between our actual financial and operating results and those expected by investors; • the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC; • announcements relating to litigation; • guidance, if any, that we provide to the public, any changes in such guidance or our failure to meet such guidance; 50 • changes in financial estimates or ratings by any securities analysts who follow our Common Stock, our failure to meet such estimates or failure of those analysts to initiate or maintain coverage of our Common Stock; • downgrades in our credit ratings or the credit ratings of our competitors; • investor perceptions of the investment opportunity associated with our Common Stock relative to other investment alternatives; • the inclusion, exclusion or deletion of our stock from any trading indices; • future sales of our Common Stock by our officers, directors and significant stockholders; • other events or factors, including those resulting from system failures and disruptions, hurricanes, wars, acts of terrorism, other natural disasters or responses to such events; • price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; and • changes in accounting principles.
The market price for our Common Stock may fluctuate significantly in response to a number of factors, most of which we cannot control, including, among others: 47 • the development and sustainability of an active trading market for our Common Stock; • trends and changes in consumer preferences in the industries in which we operate; • changes in general economic or market conditions or trends in our industry or the economy as a whole and, in particular, in the consumer and advertising marketplaces; • changes in key personnel; • our entry into new markets; • changes in our operating performance; • investors’ perceptions of our prospects and the prospects of the businesses in which we participate; • fluctuations in quarterly revenue and operating results, as well as differences between our actual financial and operating results and those expected by investors; • the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC; • announcements relating to litigation; • guidance, if any, that we provide to the public, any changes in such guidance or our failure to meet such guidance; • changes in financial estimates or ratings by any securities analysts who follow our Common Stock, our failure to meet such estimates or failure of those analysts to initiate or maintain coverage of our Common Stock; • downgrades in our credit ratings or the credit ratings of our competitors; • investor perceptions of the investment opportunity associated with our Common Stock relative to other investment alternatives; • the inclusion, exclusion or deletion of our stock from any trading indices; • future sales of our Common Stock by our officers, directors and significant stockholders; • other events or factors, including those resulting from system failures and disruptions, hurricanes, wars, acts of terrorism, other natural disasters or responses to such events; • price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole; and • changes in accounting principles.
If any action, the subject matter of which is within the scope the forum provisions of the Warrant Agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”); and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
If any action, the subject matter of which is within the scope the forum provisions of the Warrant Agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder shall be deemed to have consented to (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”); and (y) having service of process 52 made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
While we have developed systems and processes designed to protect the availability, integrity, confidentiality and security of us and our customers’, riders’, website visitors’, employees’ and others’ data, our security measures or those of our third-party service providers or vendors could fail and result in security incidents, including unauthorized access to or disclosure, acquisition, encryption, modification, misuse, loss, destruction or other compromise of such data.
While we have developed systems and processes designed to protect the availability, integrity, confidentiality and security of us and our customers’, riders’, website visitors’, employees’ and others’ data and information, our security measures or those of our third-party service providers or vendors could fail and result in security incidents, including unauthorized access to or disclosure, acquisition, encryption, modification, misuse, loss, destruction or other compromise of such data.
A normal battery is designed to retain up to 80% of its original capacity 25 after 30,000 miles when operating under normal conditions. Although common to all electric vehicles, lithium-ion battery aging may negatively influence potential customers’ electric vehicle purchase decisions. Our business may suffer if our products or features contain defects or fail to perform as expected.
A normal battery is designed to retain up to 80% of its original capacity after 30,000 miles when operating under normal conditions. Although common to all electric vehicles, lithium-ion battery aging may negatively influence potential customers’ electric vehicle purchase decisions. Our business may suffer if our products or features contain defects or fail to perform as expected.
Even for those jurisdictions we have analyzed, the laws in this area can be complex, difficult to interpret and may change over time. Continued regulatory limitations and other obstacles interfering with our ability to sell electric vehicles directly to consumers could have a negative and material impact on our business, prospects, financial condition and operating results.
Even for those jurisdictions we have analyzed, the laws in this area can be complex, difficult to interpret and may change over time. Continued regulatory limitations and other obstacles 44 interfering with our ability to sell electric vehicles directly to consumers could have a negative and material impact on our business, prospects, financial condition and operating results.
Even if we are able to successfully develop our electric vehicles and attract customers, there can be no assurance 18 that we will be financially successful. For example, as we expand our electric vehicle portfolio, including the introduction of lower-priced electric motorcycles, and expand internationally, we will need to manage costs effectively to sell those products at our expected margins.
Even if we are able to successfully develop our electric vehicles and attract customers, there can be no assurance that we will be financially successful. For example, as we expand our electric vehicle portfolio, including the introduction of lower-priced electric motorcycles, and expand internationally, we will need to manage costs effectively to sell those products at our expected margins.
Our electric motorcycles are quieter compared to internal combustion engine motorcycles, which may subject riders to greater risks. To the extent accidents associated with our quieter electric motors occur, we could be subject to liability, negative publicity, government scrutiny and further regulation. Any of these results could materially and adversely affect our business, prospects, financial condition and operating results.
Our electric motorcycles are quieter compared to internal combustion engine motorcycles, which may subject riders to greater risks. To the extent accidents associated with our quieter electric motors occur, we could be subject to liability, negative 29 publicity, government scrutiny and further regulation. Any of these results could materially and adversely affect our business, prospects, financial condition and operating results.
In addition, H-D’s insurers may deny coverage to us for liabilities associated with certain occurrences of indemnified liabilities prior to the Separation. Moreover, even if we ultimately succeed in recovering from H-D or such insurance providers any amounts for which we are held liable, we may be temporarily required to bear these losses.
In addition, H-D’s insurers may deny coverage to us for liabilities associated with certain occurrences of indemnified liabilities prior to the Separation. Moreover, even if we ultimately succeed in 37 recovering from H-D or such insurance providers any amounts for which we are held liable, we may be temporarily required to bear these losses.
You may be unable to sell your securities unless a market can be established or sustained. 51 If securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they change their recommendations regarding our Common Stock adversely, then the price and trading volume of our Common Stock could decline.
You may be unable to sell your securities unless a market can be established or sustained. If securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they change their recommendations regarding our Common Stock adversely, then the price and trading volume of our Common Stock could decline.
Even if we are able to obtain a license, it could be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us. In addition, we may be unable to obtain these licenses on commercially reasonable terms, if at all, and our 45 challenge of third-party patents may be unsuccessful.
Even if we are able to obtain a license, it could be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us. In addition, we may be unable to obtain these licenses on commercially reasonable terms, if at all, and our challenge of third-party patents may be unsuccessful.
Alternatively, if a court were to find these provisions of the certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.
Alternatively, if a court were to find these provisions of the certificate of incorporation inapplicable to, or 51 unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.
We may choose to or be compelled to undertake product recalls or take other similar actions, which could adversely affect our brand image, business and operating results. • We depend on suppliers, including critical and single sourced suppliers, to deliver components according to schedules, prices, quality and volumes that are acceptable to us.
We may choose to or be compelled to undertake product recalls or take other similar actions, which could adversely affect our brand image, business and operating results. 17 • We depend on suppliers, including critical and single sourced suppliers, to deliver components according to schedules, prices, quality and volumes that are acceptable to us.
We collect, receive, store, transmit and otherwise process different types of information about or related to a range of individuals, including our customers, riders of our electric vehicles, website visitors, users of our mobile application, our 41 employees, job applicants and employees of other companies that we do business with (such as our vendors and suppliers).
We collect, receive, store, transmit and otherwise process different types of information about or related to a range of individuals, including our customers, riders of our electric vehicles, website visitors, users of our mobile application, our employees, job applicants and employees of other companies that we do business with (such as our vendors and suppliers).
We are subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws, and noncompliance with such laws can subject us to administrative, civil and criminal fines and penalties, collateral consequences, remedial measures and legal expenses, all of which could adversely affect our business, results of operations, financial condition and reputation.
We are subject to anti-corruption, anti-bribery, anti-money laundering, financial and economic sanctions and similar laws, and noncompliance with such laws can subject us to administrative, civil and criminal fines and penalties, collateral 45 consequences, remedial measures and legal expenses, all of which could adversely affect our business, results of operations, financial condition and reputation.
The CCPA requires covered companies to, among other things, provide new disclosures to California consumers and affords such consumers new privacy rights such as rights to access and delete their personal information, opt out of certain sales of personal information (a concept that is defined broadly) and receive detailed information about how their personal information is collected, used and shared.
The CCPA requires covered companies to, among other things, provide certain disclosures to California consumers and affords such consumers certain privacy rights such as rights to access and delete their personal information, opt out of certain sales of personal information (a concept that is defined broadly) and receive detailed information about how their personal information is collected, used and shared.
Moreover, our proprietary information, intellectual property or personal information that we hold could be compromised or misappropriated and our reputation may be adversely affected. If these systems do not operate as we expect them to, we may be required to expend significant resources to make corrections or find alternative sources for performing these functions.
Moreover, our proprietary information, confidential information, intellectual property or personal information that we hold could be compromised or misappropriated and our reputation may be adversely affected. If these systems do not operate as we expect them to, we may be required to expend significant resources to make corrections or find alternative sources for performing these functions.
The electric vehicle industry is intensely competitive, and we may 22 not be successful in building, maintaining and strengthening our relationship with customers. If we do not develop and maintain a strong brand, our business, prospects, financial condition and operating results could be materially and adversely impacted.
The electric vehicle industry is intensely competitive, and we may not be successful in building, maintaining and strengthening our relationship with customers. If we do not develop and maintain a strong brand, our business, prospects, financial condition and operating results could be materially and adversely impacted.
To the extent we are unable to meet user expectations or experience difficulties in facilitating access to charging solutions, our reputation and business, prospects, financial condition and operating results may be materially and adversely affected. 28 Our electric vehicles use lithium-ion battery cells.
To the extent we are unable to meet user expectations or experience difficulties in facilitating access to charging solutions, our reputation and business, prospects, financial condition and operating results may be materially and adversely affected. Our electric vehicles use lithium-ion battery cells.
Additionally, any indemnity from H-D may not be sufficient to insure us against 40 the full amount of liabilities for which we may be allocated responsibility, and H-D may not be able to satisfy its indemnification obligations in the future. Third parties may seek to hold us responsible for H-D’s liabilities.
Additionally, any indemnity from H-D may not be sufficient to insure us against the full amount of liabilities for which we may be allocated responsibility, and H-D may not be able to satisfy its indemnification obligations in the future. Third parties may seek to hold us responsible for H-D’s liabilities.
The FCPA also requires companies to make and keep books, records and accounts that accurately reflect transactions and dispositions of assets and to 48 maintain a system of adequate internal accounting controls. The U.K. Bribery Act also prohibits non-governmental “commercial” bribery and soliciting or accepting bribes.
The FCPA also requires companies to make and keep books, records and accounts that accurately reflect transactions and dispositions of assets and to maintain a system of adequate internal accounting controls. The U.K. Bribery Act also prohibits non-governmental “commercial” bribery and soliciting or accepting bribes.
Risks that we face in undertaking this expansion include, among others: • attracting and hiring skilled and qualified personnel to support our expanded operations at existing facilities or operations at any facilities we may construct or acquire in the future; • managing a larger organization with a great number of employees in different divisions and geographies; • training and integrating new employees into our operations to meet the growing demands of our business; • controlling expenses and investments in anticipation of expanded operations; • establishing or expanding design, manufacturing and sales; • managing regulatory requirements, permits and labor issues and controlling costs in connection with the construction of additional facilities or the expansion of existing facilities; and • implementing and enhancing administrative infrastructure, systems and processes.
Risks that we face in undertaking this expansion include, among others: • attracting and retaining skilled and qualified personnel to support our expanded operations at existing facilities or operations at any facilities we may construct or acquire in the future; • managing a larger organization with a great number of employees in different divisions and geographies; • training and integrating new employees into our operations to meet the growing demands of our business; • controlling expenses and investments in anticipation of expanded operations; • establishing or expanding design, manufacturing and sales; • managing regulatory requirements, permits and labor issues and controlling costs in connection with the construction of additional facilities or the expansion of existing facilities; and • implementing and enhancing administrative infrastructure, systems and processes.
Loss of a significant customer or a significant reduction in pricing or order volume from a significant customer could materially reduce STACYC’s revenue and operating results in any reporting period. 31 In addition, STACYC is subject to credit risk of its customers, and its operating results depend on receipt of timely payments from its customers.
Loss of a significant customer or a significant reduction in pricing or order volume from a significant customer could materially reduce STACYC’s revenue and operating results in any reporting period. In addition, STACYC is subject to credit risk of its customers, and its operating results depend on receipt of timely payments from its customers.
For example, we may not be aware of existing patents or patent applications that could be pertinent to our business as many patent applications are filed confidentially in the United States and are not published until 18 months following the applicable filing date.
For example, we may not be aware of existing patents or patent applications that could be pertinent to 42 our business as many patent applications are filed confidentially in the United States and are not published until 18 months following the applicable filing date.
Such agreements include the Contract Manufacturing Agreement, Tax Matters Agreement, Master Services Agreement, Transition Services Agreement and certain others. The amounts payable under these agreements could be significant and could prohibit or restrict us from using these funds in other aspects of our business.
Such agreements include the Contract Manufacturing Agreement, Tax Matters Agreement, Master Services Agreement, Transition Services 36 Agreement and certain others. The amounts payable under these agreements could be significant and could prohibit or restrict us from using these funds in other aspects of our business.
See “Description of Our Securities.” We are an “emerging growth company” and the reduced disclosure requirements applicable to emerging growth companies may make our Common Stock and warrants less attractive to investors. We are an “emerging growth company,” as defined in the JOBS Act.
See “Description of Our Securities.” 50 We are an “emerging growth company” and the reduced disclosure requirements applicable to emerging growth companies may make our Common Stock and warrants less attractive to investors. We are an “emerging growth company,” as defined in the JOBS Act.
All lithium-ion batteries are consumable components that become less effective as they chemically age. As lithium-ion batteries chemically age, the amount of charge they can hold diminishes, which may result in a perceptible decrease in range for an electric vehicle.
All lithium-ion batteries are consumable components that become less effective as they chemically age. As lithium-ion batteries chemically age, the amount of charge they can hold diminishes, which may result in a perceptible decrease in range for an 24 electric vehicle.
Other factors that may influence the adoption of alternative fuel vehicles, and specifically electric vehicles, include: • perceptions about electric vehicles quality, safety, design, performance and cost, especially if adverse events or accidents occur that are linked to the quality or safety of electric vehicles, whether or not such electric vehicles are produced by us or other manufacturers; • perceptions about electric vehicles’ safety in general, in particular safety issues that may be attributed to the use of advanced technology, including electric vehicles systems; 29 • range anxiety, including the decline of an electric vehicle’s range resulting from deterioration over time in the battery’s ability to hold a charge; • the availability of new energy vehicles; • the availability of service and charging stations for electric vehicles; • the costs and challenges of installing home charging equipment, including for multi-family, rental and densely populated urban housing; • the environmental consciousness of consumers, and their adoption of electric vehicles; • the occurrence of negative incidents, or perception that negative incidents have occurred, with respect to our or our competitors’ electric vehicles resulting in adverse publicity and harm to consumer perceptions in electric vehicles generally; • the higher initial upfront purchase price of electric vehicles, despite lower cost of ongoing operating and maintenance costs, compared to internal combustion engines vehicles; • perceptions about and the actual cost of alternative fuel; • belief that electric vehicles may subject riders and passengers to greater risks because electric vehicles are quieter compared to internal combustion engine vehicles; • regulatory, legislative and political changes; and • macroeconomic factors.
Other factors that may influence the adoption of alternative fuel vehicles, and specifically electric vehicles, include: • perceptions about electric vehicles quality, safety, design, performance and cost, especially if adverse events or accidents occur that are linked to the quality or safety of electric vehicles, whether or not such electric vehicles are produced by us or other manufacturers; • perceptions about electric vehicles’ safety in general, in particular safety issues that may be attributed to the use of advanced technology, including electric vehicles systems; • range anxiety, including the decline of an electric vehicle’s range resulting from deterioration over time in the battery’s ability to hold a charge; • the availability of new energy vehicles; • the availability of service and charging stations for electric vehicles; • the costs and challenges of installing home charging equipment, including for multi-family, rental and densely populated urban housing; • the environmental consciousness of consumers, and their adoption of electric vehicles; • the occurrence of negative incidents, or perception that negative incidents have occurred, with respect to our or our competitors’ electric vehicles resulting in adverse publicity and harm to consumer perceptions in electric vehicles generally; • the higher initial upfront purchase price of electric vehicles, despite lower cost of ongoing operating and maintenance costs, compared to internal combustion engines vehicles; • perceptions about and the actual cost of alternative fuel, including the capacity and reliability of the electric grid; • belief that electric vehicles may subject riders and passengers to greater risks because electric vehicles are quieter compared to internal combustion engine vehicles; • regulatory, legislative and political changes; and • macroeconomic factors.
Additionally, if consumer interest rates increase substantially or if financial service providers tighten lending standards or restrict their lending to certain classes of credit, customers may not desire or be able to obtain 30 financing to purchase our electric vehicles.
Additionally, if consumer interest rates increase substantially or if financial service providers tighten lending standards or restrict their lending to certain classes of credit, customers may not desire or be able to obtain financing to purchase our electric vehicles.
We are subject to cybersecurity risks to our various systems and software and any material failure, weakness, interruption, cyber event, incident or breach of security could prevent us from effectively operating our business.
We are subject to cybersecurity risks to our various information systems and software and any material failure, weakness, interruption, cyber event, incident or breach of security could prevent us from effectively operating our business.
Historically, motorcycle customers have expected motorcycle manufacturers to periodically introduce new and improved vehicle models. To meet these expectations, we intend to introduce new electric motorcycle models and enhanced versions of existing models. The electric vehicle market is new and quickly evolving.
Historically, motorcycle customers have expected motorcycle manufacturers to periodically introduce new and improved vehicle models. To meet these expectations, we intend to introduce new electric motorcycle models and enhanced versions of 20 existing models. The electric vehicle market is new and quickly evolving.
The spread of COVID-19 and associated variants has also created a disruption in the manufacturing, delivery and overall supply chain of vehicle manufacturers and suppliers and has led to a global decrease in vehicle sales in markets around the world.
The spread of COVID-19 and associated variants also created a disruption in the manufacturing, delivery and overall supply chain of vehicle manufacturers and suppliers and led to a global decrease in vehicle sales in markets around the world.
We may not succeed in continuing to maintain and strengthen the LiveWire brand. 17 • We have an established standard of quality and associated consumer expectations through our H-D motorcycle lineage.
We may not succeed in continuing to maintain and strengthen the LiveWire brand. • We have an established standard of quality and associated consumer expectations through our H-D motorcycle lineage.
The GDPR also generally prohibits the transfer of personal data subject to those regimes outside of the EU/UK (including to the United States) unless a lawful data transfer solution has been implemented or a data transfer derogation applies.
The GDPR generally prohibits the transfer of personal data subject to those regimes outside of the EU/UK (including to the United States) unless a lawful data transfer solution has been implemented or a data transfer derogation applies.
If the price of our common stock is low or volatile, we may not be able to acquire other companies or fund a joint venture project using our stock as consideration.
If the price of 49 our common stock is low or volatile, we may not be able to acquire other companies or fund a joint venture project using our stock as consideration.
In 2019, H-D acquired STACYC Inc. and began selling electric balance bikes, which are currently sold under the STACYC and H-D IRONe brands, as well as through private label arrangements.
In 2019, H-D acquired STACYC Inc. and began selling electric balance bikes, which are currently sold under the STACYC and H-D brands, as well as through private label arrangements.
We cannot be sure that these systems upon which we rely, including those of our third-party vendors or suppliers, will be effectively implemented, maintained or expanded as planned.
We cannot be sure that these information systems upon which we rely, including those of our third-party vendors or suppliers, will be effectively implemented, maintained or expanded as planned.
Our suppliers may not be willing or able to sustainably meet our timelines or our cost, quality and volume needs, or to do so may cost us more, which may require us to replace them with other sources. 26 In addition, if our suppliers experience substantial financial difficulties, cease operations or otherwise face business disruptions, we would be required to take measures to ensure components and materials remain available.
Our suppliers may not be willing or able to sustainably meet our timelines or our cost, quality and volume needs, or to do so may cost us more, which may require us to replace them with other sources. 25 In addition, if our suppliers experience substantial financial difficulties, cease operations or otherwise face business disruptions, we would be required to take measures to ensure components and materials remain available.
Volatility in demand may lead to lower vehicle unit sales, which may result in downward price pressure and adversely affect our business, prospects, financial condition and operating results.
Volatility in 28 demand may lead to lower vehicle unit sales, which may result in downward price pressure and adversely affect our business, prospects, financial condition and operating results.
The development and implementation of the standards and controls necessary for us to achieve the level of accounting standards required of a public company in the US may require costs greater than expected.
The development and implementation of the standards and controls necessary for us to achieve the level of accounting standards required of a public company in the US may require costs greater than 54 expected.
Redemption of the outstanding warrants could force you to (i) exercise your warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, we expect would be substantially less than the market value of your warrants.
Redemption of the outstanding warrants could force you to (i) exercise your warrants and pay the exercise price therefore at a time when it may be disadvantageous for you to do so, (ii) sell your warrants at the then-current market price when you might otherwise wish to hold your warrants or (iii) accept the nominal redemption price which, at the time the outstanding warrants are called for redemption, we expect would be substantially less than the market value of your warrants.
There is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted by the central banks and financial authorities of some of the world’s leading economies, including the United States. There have been concerns over the downturn in economic output caused by the COVID-19 pandemic, the conflict in Ukraine and inflationary pressure.
There is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted by the central banks and financial authorities of some of the world’s leading economies, including the United States. There have been concerns over the downturn in economic output caused by the COVID-19 pandemic, the conflict in Ukraine, the Israeli-Palestinian conflict and inflationary pressure.
Furthermore, fluctuations or shortages in petroleum and other economic conditions may cause us to experience significant increases in freight charges and material costs. Substantial increases in the prices for our materials or prices charged to us, such as those charged by battery cell or semiconductor chip suppliers, would increase our operating costs and could reduce our margins.
Furthermore, fluctuations or shortages in petroleum and changes in economic conditions may cause us to experience significant increases in freight charges and material costs. Substantial increases in the prices for our materials or prices charged to us, such as those charged by battery cell or semiconductor chip suppliers, would increase our operating costs and could reduce our margins.
Risks Related to the Separation and Our Ongoing Relationship with H-D O ur business and H-D’s business overlap and we may compete, or be perceived as competitors, in certain markets. Both LiveWire and H-D are companies whose primary business involves producing, marketing and selling vehicles and related products.
Risks Related to the Separation and Our Ongoing Relationship with H-D Our business and H-D’s business overlap and we may compete, or be perceived as competitors, in certain markets. Both LiveWire and H-D are companies whose primary business involves producing, marketing and selling vehicles and related products.
There has been increased focus, including by consumers, investors, employees and other stockholders, as well as by governmental and non-governmental organizations, on ESG matters generally and with regard to our industry specifically. 27 We have undertaken, and plan to continue undertaking, ESG initiatives.
There has been increased focus, including by consumers, investors, employees and other stockholders, as well as by governmental and non-governmental organizations, on ESG matters generally and with regard to our industry specifically. 26 We have undertaken, and plan to continue undertaking, ESG initiatives.
A significant cyber incident could impact production capability, harm our reputation, cause us to breach our contracts with other parties or subject us to regulatory actions or litigation, any of which could materially affect our business, prospects, financial condition and operating results.
A significant cybersecurity incident could impact production capability, harm our reputation, cause us to breach our contracts with other parties or subject us to regulatory actions or litigation, any of which could materially affect our business, prospects, financial condition and operating results.
Actual or threatened war, including the conflict in Ukraine, terrorist activities, political unrest, civil strife and other geopolitical uncertainty could have a similar adverse effect on our business, prospects, financial condition and operating results.
Actual or threatened war, including the conflict in Ukraine, the Israeli-Palestinian conflict, terrorist activities, political unrest, civil strife and other geopolitical uncertainty could have a similar adverse effect on our business, prospects, financial condition and operating results.
For example, our misuse of or failure to secure 43 personal information could result in violation of data privacy laws and regulations, proceedings against us by governmental entities or others, and/or result in significant liability and damage to our reputation and credibility.
For example, our misuse of or failure to secure 40 personal information could result in violation of data privacy laws and regulations, proceedings against us by governmental entities or others, and/or result in significant liability and damage to our reputation and credibility.
However, the resolution that we actually reach may be less favorable than if we were dealing with an unaffiliated party. 38 The agreements we entered into with H-D may be amended upon agreement between the parties.
However, the resolution that we actually reach may be less favorable than if we were dealing with an unaffiliated party. 35 The agreements we entered into with H-D may be amended upon agreement between the parties.
In addition, we may use various forms of financing to cover future funding requirements for our activities and changes in interest rates can affect our net revenues, finance costs, and margins.
In addition, we may use various forms of financing to cover future funding requirements for our activities and changes in interest rates can affect our finance costs and margins.
The CPRA’s amendments to the CCPA imposes additional data protection obligations on covered companies, including certain consumer rights processes, the right to correct personal information, and opt-outs for certain uses of sensitive personal information and the sharing of personal information for targeted advertising purposes; such requirements look back to January 2022.
The CPRA’s amendments to the CCPA have imposed additional data protection obligations on covered companies, including certain consumer rights processes, the right to correct personal information, and opt-outs for certain uses of sensitive personal information and the sharing of personal information for targeted advertising purposes; such requirements look back to January 2022.
For example, due to the recent global semiconductor supply shortage, other supply chain issues including the COVID-19 pandemic, the conflict in Ukraine, and the current inflationary environment in the United States, the cost of input materials, components and processes required to produce our electric vehicles is expected to increase, and we may need to increase the prices of our electric vehicles in response to these cost pressures.
For example, due to the global semiconductor supply shortage, other supply chain issues including the COVID-19 pandemic, the conflict in Ukraine, the Israeli-Palestinian military conflict, and the current inflationary environment in the United States, the cost of input materials, components and processes required to produce our electric vehicles is expected to 19 increase, and we may need to increase the prices of our electric vehicles in response to these cost pressures.
Failure to become profitable could materially and adversely affect the value of your investment. If we are ever to achieve profitability, it will be dependent upon the successful development and commercial introduction and acceptance of our electric vehicles, such as the LiveWire One and the S2 Del Mar, and our services, which may not occur.
Failure to become profitable could materially and adversely affect the value of our Common Stock. If we are ever to achieve profitability, it will be dependent upon the successful development and commercial introduction and acceptance of our electric vehicles, such as the LiveWire One and the S2 Del Mar, and our services, which may not occur.
There is no guarantee that our warrants will be in the money prior to their expiration, and as such, our warrants may expire worthless. In addition, at the current exercise price of $11.50 per share, we will receive up to $350.8 million from the exercise of the warrants, assuming the exercise in full of all of the warrants for cash.
There is no guarantee that our warrants will be in the money prior to their expiration, and as such, our warrants may expire worthless. In addition, at the current exercise price of $11.50 per share, we will receive up to $349.2 million from the exercise of the warrants, assuming the exercise in full of all of the warrants for cash.
In addition, a growth in popularity of electric vehicles without a significant expansion in battery cell production capacity could result in shortages which would result in increased materials costs to us and would impact our projected manufacturing and delivery timelines, and adversely affect our business, prospects, financial condition and operating results. Electric vehicles are inherently new products.
In addition, a growth in popularity of electric vehicles without a significant expansion in battery cell production capacity could result in shortages which would result in increased materials costs to us and would impact our projected manufacturing and delivery timelines, and adversely affect our business, prospects, financial condition and operating results.
There is growing concern that a gradual increase in global average temperatures may cause an adverse change in weather patterns around the globe, resulting in an increase in the frequency and severity of such natural disasters.
There is growing concern that a gradual increase in global average temperatures as a result of climate change may cause an adverse change in weather patterns around the globe, resulting in an increase in the frequency and severity of such natural disasters.
In the EU and the United Kingdom, informed consent is required for the placement of most cookies or similar technologies that store information, or access information stored, on a user’s device and for direct electronic marketing.
In the EU and the UK, informed consent is required for the placement of most cookies or similar technologies that store information, or access information stored, on a user’s device and for direct electronic marketing.
Our brand and reputation could be materially and negatively affected through negative publicity regarding H-D and its products and services. • We may experience operational and financial risks if we fail to effectively and appropriately separate the LiveWire business from the H-D business. • H-D could make decisions for the benefit of its overall business that could negatively impact our overall business. • Our relationship with H-D may impact our other business relationships or potential business relationships. • Leveraging contract manufacturers, including H-D, KYMCO and other potential partners, to contract manufacture electric vehicles is subject to risks. • If retail partners are unwilling to participate in our go-to-market business model or are unable or ineffective in establishing or maintaining relationships with customers for electric vehicles, it may adversely impact our business. • Our research and development efforts may not yield the expected results, or results on expected timelines or at expected costs. • If we are unable to establish and maintain confidence in our long-term business prospects among customers and analysts and within our industry, or are subject to negative publicity, then our business, prospects, financial condition and operating results may suffer materially. • We, our outsourcing partners, and our suppliers are subject to numerous regulations.
Our brand and reputation could be materially and negatively affected through negative publicity regarding H-D and its products and services. • We may experience operational and financial risks if we fail to effectively and appropriately separate the LiveWire business from the H-D business. • H-D could make decisions for the benefit of its overall business that could negatively impact our overall business. • Our relationship with H-D may impact our other business relationships or potential business relationships. • Leveraging contract manufacturers, including H-D, KYMCO and other potential partners, to contract manufacture electric vehicles is subject to risks. • If retail partners are unwilling to participate in our go-to-market business model or are unable or ineffective in establishing or maintaining relationships with customers for electric vehicles, it may adversely impact our business. • If we are unable to establish and maintain confidence in our long-term business prospects among customers and analysts and within our industry, or are subject to negative publicity, then our business, prospects, financial condition and operating results may suffer materially. • We, our outsourcing partners, and our suppliers are subject to numerous regulations.
Furthermore, many competitors headquartered outside the U.S. experience a financial benefit from a strengthening in the U.S. dollar relative to their home currency that can enable them to reduce prices to U.S. consumers. The Company is also subject to risks associated with changes in prices of commodities.
Furthermore, many competitors headquartered outside the U.S. experience a financial benefit from a strengthening in the U.S. dollar relative to their home currency that can enable them to reduce prices to U.S. consumers. We are also subject to risks associated with changes in prices of commodities.
As entirely new products, there is no historical basis for making judgments on the demand for our electric vehicles, our ability to develop, produce and deliver electric vehicles, or our profitability in the future.
As new products, there is limited historical basis for making judgments on the demand for our electric vehicles, our ability to develop, produce and deliver electric vehicles, or our profitability in the future.
In addition, we and our third-party vendors or suppliers that host our data may encounter attempted attacks on their networks that may take a variety of forms, including denial of service attacks, infrastructure attacks, botnets, malicious file attacks, cross-site scripting, credential abuse, ransomware, bugs, viruses, worms, and malicious software programs.
In addition, we and our third-party vendors or suppliers that host our data may encounter attempted attacks on their networks and information systems that may take a variety of forms, including denial of service attacks, infrastructure attacks, botnets, malicious file attacks, cross-site scripting, credential abuse, phishing, social engineering, ransomware, bugs, viruses, worms, and malicious software programs.
The historical financial information we have included in this Form 10-K does not necessarily reflect what our financial position, results of operations or cash flows would have been had we been an independent entity during the historical periods presented.
The historical financial information through the Closing of the Business Combination we have included in this Form 10-K does not necessarily reflect what our financial position, results of operations or cash flows would have been had we been an independent entity during the historical periods presented.
If current tax incentives and federal tax incentives for two wheeled vehicles are not available in the future, our business, prospects, financial condition and operating results could be materially and negatively affected. Our electric motorcycles’ quiet performance compared to internal combustion engine motorcycles may subject riders to greater risks.
If current state tax incentives for two wheeled vehicles expire and if new federal and state tax incentives for two wheeled vehicles are not enacted in the future, our business, prospects, financial condition and operating results could be materially and negatively affected. Our electric motorcycles’ quiet performance compared to internal combustion engine motorcycles may subject riders to greater risks.
We could become subject to claims for toxic torts, natural resource damages and other damages as well as for the investigation and 47 cleanup of soil, surface water, groundwater, and other media.
We could become subject to claims for toxic torts, natural resource damages and other damages as well as for the investigation and cleanup of contamination in the soil, surface water, groundwater, and other media.
Such claims may arise, for example, out of conditions at sites that we currently lease, own or operate, as well as at sites that we previously leased, owned or operated, or at sites that we may acquire.
Such claims may arise, for example, out of conditions at sites that we currently lease, own or operate, as well as at sites that we previously leased, owned or operated, at sites that we may acquire, or at third-party disposal sites.
For example, COVID-19, including associated variants, the recent conflict in Ukraine and inflationary pressure, may cause disruptions to and delays in our operations, including shortages and delays in the supply of certain parts, including semiconductors, materials and equipment necessary for the production of our vehicles, and the various internal designs and processes we may adopt in an effort to remedy or mitigate impacts of such disruptions and delays may result in higher costs.
For example, COVID-19, the conflict in Ukraine, the Israeli-Palestinian military conflict, and inflationary pressure, may cause disruptions to and delays in our operations, including shortages and delays in the supply of certain parts, including semiconductors, materials and equipment necessary for the production of our vehicles, and the various internal designs and processes we may adopt in an effort to remedy or mitigate impacts of such disruptions and delays may result in higher costs.
These risks include: • conforming our electric vehicles to various international regulatory requirements where our electric vehicles are sold and serviced, which requirements may change over time; • expenditures related to foreign lawsuits and liability; • difficulties in staffing and managing foreign operations; • difficulties establishing relationships with, or disruption in the supply chain from, international suppliers; • difficulties attracting customers in new jurisdictions; • difficulties in attracting effective distributors, dealers or sales agents, as the case may be; 33 • foreign government taxes, regulations and permit requirements, including foreign taxes that we may not be able to offset against taxes imposed upon us in the United States, and foreign tax and other laws limiting our ability to repatriate funds to the United States; • fluctuations in foreign currency exchange rates and interest rates, including risks related to any foreign currency swap or other hedging activities we undertake; • United States and foreign government trade restrictions, tariffs and price or exchange controls; • foreign labor laws, regulations and restrictions; • changes in diplomatic and trade relationships; • laws and business practices favoring local companies; • difficulties protecting or procuring intellectual property; • the adoption of the LiveWire brand versus competitive foreign brands; • political instability, natural disasters, war or events of terrorism and health epidemics, such as the COVID-19 pandemic or the conflict in Ukraine; and • the strength of international economies.
These risks include: • conforming our electric vehicles to various international regulatory requirements where our electric vehicles are sold and serviced, which requirements may change over time; • expenditures related to foreign lawsuits and liability; • difficulties in staffing and managing foreign operations; • difficulties establishing relationships with, or disruption in the supply chain from, international suppliers; • difficulties attracting customers in new jurisdictions; • difficulties in attracting effective distributors, dealers or sales agents, as the case may be; • foreign government taxes, regulations and permit requirements, including foreign taxes that we may not be able to offset against taxes imposed upon us in the United States, and foreign tax and other laws limiting our ability to repatriate funds to the United States; • fluctuations in foreign currency exchange rates and interest rates, including risks related to any foreign currency swap or other hedging activities we undertake; • United States and foreign government trade restrictions, tariffs and price or exchange controls; • foreign labor laws, regulations and restrictions; • changes in diplomatic and trade relationships; • laws and business practices favoring local companies; • difficulties protecting or procuring intellectual property; • the adoption of the LiveWire brand versus competitive foreign brands; • political instability, natural disasters, war or events of terrorism and health epidemics, such as the COVID-19 pandemic, the conflict in Ukraine or the Israeli-Palestinian conflict; and • the strength of international economies. 31 If we fail to successfully address these risks, our business, prospects, financial condition and operating results could be materially and adversely affected.
In particular, increased demand for semiconductor chips in 2020, due in part to the COVID-19 pandemic and increased demand for consumer electronics that use these chips, has resulted in a severe global shortage of chips in 2021 and 2022, which we expect to continue as a consequence of the continuing COVID-19 pandemic, inflation of raw material costs and the conflict in Ukraine.
In particular, increased demand for semiconductor chips in 2020, due in part to the COVID-19 pandemic and increased demand for consumer electronics that use these chips, has resulted in a severe global shortage of chips in 2021, 2022 and 2023, which we expect to continue in 2024 as a consequence of the COVID-19 pandemic, inflation of raw material costs, the conflict in Ukraine and the Israeli-Palestinian military conflict.
Unexpected changes in business conditions, materials pricing, including inflation of raw material costs, labor issues, wars, trade policies, natural disasters, health epidemics such as the global COVID-19 pandemic, trade and shipping disruptions, port congestions and other factors beyond our or our suppliers’ control could also affect these suppliers’ ability to deliver components to us or to remain solvent and operational.
Unexpected changes in business conditions, materials pricing, including inflation of raw material costs, labor issues, wars, trade policies, natural disasters, health epidemics, trade and shipping disruptions, port congestions and other factors beyond our or our suppliers’ control could also affect these suppliers’ ability to deliver components to us or to remain solvent and operational.
Unfavorable changes to, or failure by us, our outsourcing partners or our suppliers to comply with, these regulations could materially and negatively affect our business, prospects, financial condition and operating results.
We, our outsourcing partners, and our suppliers are subject to numerous regulations. Unfavorable changes to, or failure by us, our outsourcing partners or our suppliers to comply with, these regulations could materially and negatively affect our business, prospects, financial condition and operating results.
Maintaining such confidence may be complicated by certain factors, including those that are largely outside of our control, such as our limited operating history; customer unfamiliarity with our electric vehicles and electric vehicles and electric motorcycles in general; any delays in scaling production, delivery and service operations to meet demand; competition and uncertainty regarding the future of our electric vehicles and electric vehicles and electric motorcycles in general; and our production and sales performance compared with market expectations. 23 We, our outsourcing partners, and our suppliers are subject to numerous regulations.
Maintaining such confidence may be complicated by certain factors, including those that are largely outside of our control, such as our limited operating history; customer unfamiliarity with our electric vehicles and electric vehicles and electric motorcycles in general; any delays in scaling production, delivery and service operations to meet demand; competition and uncertainty regarding the future of our electric vehicles and electric vehicles and electric motorcycles in general; and our production and sales performance compared with market expectations.
Acquisitions could result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities, the occurrence of significant goodwill impairment charges, amortization expenses for other intangible assets and exposure to potential unknown liabilities of the acquired business. Moreover, the costs of identifying and consummating acquisitions may be significant.
Acquisitions could result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities, the occurrence of significant goodwill impairment charges, amortization expenses for other intangible assets and exposure to potential unknown liabilities of the acquired business.

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Item 2. Properties

Properties — owned and leased real estate

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Item 2. Properties LiveWire has a virtual headquarters to utilize the best engineering talent across the globe. As of December 31, 2022, we leased office facilities in multiple locations in the United States for the Electric Motorcycles and STACYC segments. We intend to procure additional space as we add employees and expand geographically.
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Properties A summary of the principal operating properties as of December 31, 2023 is as follows: Type of Facility Location Status Corporate Office Milwaukee, WI Leased Product development center Wauwatosa, WI Leased LiveWire Labs - Research and development activities Mountain View, CA Leased LiveWire Labs - Customer experience center Malibu, CA Leased LiveWire Labs - Retail operations Canoga Park, CA Leased LiveWire Labs - Marketing displays and test rides Los Angeles, CA Leased 56
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We believe that our facilities are adequate to meet our needs for the immediate future, and that, should it be needed, suitable additional space will be available to accommodate any such expansion of our operations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings Refer to Note 14, Commitments and Contingencies, to the Notes to Consolidated financial statements for a discussion of certain legal proceedings in which the Company is involved. Item 4. Mine Safety Disclosures Not Applicable. 58 PART II
Biggest changeThe 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. Refer to Note 14, Commitments and Contingencies, to the Notes to Consolidated financial statements. Item 4. Mine Safety Disclosures Not Applicable. 57 PART II
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Item 3. Legal Proceedings 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.
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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. The Company accrues for matters when losses are both probable and estimable.
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Any amounts accrued for these matters are monitored on an ongoing basis and are updated based on new developments or new information as it becomes available for each matter. The Company, through H-D, also maintains insurance coverage for product liability exposures.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeOn September 26, 2022, we issued (i) 20,000,000 shares of Common Stock as part of a PIPE Investment at a price per share of $10.00, generating gross proceeds of $200,000,000 and (ii) 10,000,000 shares of Common Stock as part of the H-D Backstop Amount at a price per share of $10.00, generating gross proceeds of $100,000,000.
Biggest changeOn September 26, 2022, (i) pursuant to investments agreements entered into in connection with the Business Combination, we issued 10,000,000 shares of Common Stock to KYMCO Group at a price per share of $10.00, generating gross proceeds of $100,000,000, (ii) pursuant to the Business Combination and an investments agreement entered into in connection with the Business Combination, we issued 10,000,000 shares of Common Stock to the Legacy LiveWire Equityholder at a price per share of $10.00, generating gross proceeds of $100,000,000 and (iii) 10,000,000 shares of Common Stock as part of the H-D Backstop Amount (as defined herein) at a price per share of $10.00, generating gross proceeds of $100,000,000.
We have never declared or paid cash dividends on our common stock nor do we anticipate paying any such cash dividends in the foreseeable future. 9/26/2022 9/30/2022 10/31/2022 11/30/2022 12/31/2022 LiveWire Group, Inc. $ 100 $ 76 $ 88 $ 74 $ 52 S&P 500 Index $ 100 $ 98 $ 106 $ 112 $ 106 Item 6.
We have never declared or paid cash dividends on our common stock nor do we anticipate paying any such cash dividends in the foreseeable future. 9/26/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 LiveWire Group, Inc. $ 100 $ 76 $ 52 $ 69 $ 126 $ 74 $ 120 S&P 500 Index $ 100 $ 98 $ 106 $ 106 $ 112 $ 106 $ 106 59 Item 6.
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings; Purchases of Equity Securities by the Issuer or Affiliated Purchaser Sales of Unregistered Equity Securities The information required has been previously disclosed in our Current Report on Form 8-K filed with the Securities and Exchange Commission on September 30, 2022.
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Offerings; Purchases of Equity Securities by the Issuer or Affiliated Purchaser Sales of Unregistered Equity Securities Other than the information that has been previously disclosed in our Current Report on Form 8-K filed with the Securities and Exchange Commission on September 30, 2022, there were no unregistered sales of equity securities for the twelve months ended December 31, 2023, or for the period between September 30, 2022 and December 31, 2022.
After deducting payments to existing stockholders of approximately $368.1 million in connection with their exercise of redemption rights, the remaining balance immediately prior to the Closing (as defined herein) of approximately $34 million remained in the trust account. The remaining amount in the trust account and the PIPE Investment were used to fund the Merger and related transaction expenses.
After deducting payments to existing stockholders of approximately $368.1 million in connection with their exercise of redemption rights, the remaining balance immediately prior to closing of the Business Combination (the “Closing”) (as defined herein) of approximately $34 million remained in the trust account.
Stock Performance Graph The following information in this Item 5 is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under the Securities Exchange Act of 1934 or to the liabilities of Section 18 of the Securities Exchange Act of 1934, and will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates it by reference into such a filing. 59 The SEC requires the Company to include a line graph presentation comparing cumulative five-year common stock returns, or in the case of LiveWire the Business Combination date, with a broad-based stock index and either a nationally recognized industry index or an index of peer companies selected by the Company.
Stock Performance Graph The following information in this Item 5 is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under the Securities Exchange Act of 1934 or to the liabilities of Section 18 of the Securities Exchange Act of 1934, and will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates it by reference into such a filing.
Holders of Record As of March 1, 2023, there were 11 shareholders of record of our Common Stock and 3 holders of record of our warrants to purchase our Common Stock.
Holders of Record As of February 21, 2024, there were 10 shareholders of record of our Common Stock and 3 holders of record of our warrants to purchase our Common Stock.
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Purchases of Equity Securities We did not repurchase shares of our Common Stock during the three months ended December 31, 2022.
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The remaining amount in the trust account and the PIPE Investment were used to fund the Business Combination and related transaction expenses. 58 Purchases of Equity Securities The Company’s share repurchases, which consisted of shares of Common Stock surrendered to satisfy withholding taxes in connection with the vesting of restricted stock units were as follows during the quarter ended December 31, 2023: 2023 Fiscal Date of Vest Total Number of Shares Repurchased Average Price Per Share Paid Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs December 1 - December 31 180,055 $ 10.94 — — The LiveWire Group, Inc. 2022 Incentive Award Plan provides that the withholding obligations be settled by the Company retaining shares that are part of the award.
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During the fourth quarter of 2023, the Company retained 180 thousand shares of common stock to satisfy withholding taxes in connection with the vesting of restricted stock units.
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The SEC requires the Company to include a line graph presentation comparing cumulative five-year common stock returns, or in the case of LiveWire the Business Combination date, with a broad-based stock index and either a nationally recognized industry index or an index of peer companies selected by the Company.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThis information is subject to revision. • Retail motorcycle unit sales – LiveWire defines retail motorcycle unit sales as the sum of Company retail motorcycle unit sales and independent retail motorcycle unit sales. • Company-owned dealer – Dealer owned and operated by LiveWire to sell electric motorcycles, related products, and services. • Independent retail partners (Electric Motorcycles) – Retail partners owned and operated by independent entities under contract with LiveWire to sell LiveWire electric motorcycles, related products and services. • Electric balance bike unit sales (STACYC) – LiveWire defines electric balance bike unit sales as the number of electric balance bikes sold by LiveWire for which LiveWire recognized revenue during the period. • Independent retail partners (STACYC) – Retail partners owned and operated by independent entities under contract with LiveWire to sell STACYC electric balance bikes, related products and services. 62 The following table details the key business metric amounts for the periods indicated: Year Ended 2022 2021 Wholesale motorcycle unit sales: US 394 119 International (1) 50 313 Total wholesale motorcycle unit sales 444 432 Company retail motorcycle unit sales – US 153 29 Total LiveWire motorcycle unit sales 597 461 Retail motorcycle unit sales: Company retail motorcycle unit sales (2) 153 29 Independent retail partners (3) 534 933 Total retail motorcycle unit sales 687 962 Retail motorcycle unit sales: US 459 566 International 228 396 Total Retail motorcycle unit sales 687 962 Electric balance bike unit sales: US 29,281 37,878 International 18,810 10,405 Total electric balance bike unit sales 48,091 48,283 (1) International wholesale motorcycle unit sales represent sales of H-D branded LiveWire motorcycles prior to the Business Combination.
Biggest changeThe following table details the key business metric amounts for the periods indicated: Year Ended 2023 2022 Wholesale Motorcycle Unit Sales: US 533 394 International (1) — 50 Total Wholesale Motorcycle Unit Sales 533 444 Company Retail Motorcycle Unit Sales: US 95 153 International 32 — Total Company Retail Motorcycle Unit Sales 127 153 Total LiveWire Motorcycle Unit Sales 660 597 Retail Motorcycle Unit Sales: Company Retail Motorcycle Unit Sales (2) 95 153 Independent Retail Partners (3) 210 534 Total Retail Motorcycle Unit Sales 305 687 Retail Motorcycle Unit Sales: US 305 459 International — 228 Total Retail Motorcycle Unit Sales 305 687 Electric Balance Bike Unit Sales: US 21,172 29,281 International 10,941 18,810 Total Electric Balance Bike Unit Sales 32,113 48,091 (1) International Wholesale Motorcycle Unit Sales represent sales of H-D branded LiveWire motorcycles prior to the Business Combination for the year ended December 31, 2022.
Following the Business Combination, LiveWire received net proceeds of approximately $293.7 million as more fully described below. On September 26, 2022, LiveWire consummated the Merger with ABIC resulting in net proceeds of approximately $293.7 million, including a $100 million investment from H-D and a $100 million investment from KYMCO through a PIPE.
Following the Business Combination, LiveWire received net proceeds of approximately $293.7 million as more fully described below. On September 26, 2022, LiveWire consummated the Business Combination with ABIC resulting in net proceeds of approximately $293.7 million, including a $100 million investment from H-D and a $100 million investment from KYMCO through a PIPE.
The fair value of the Private Placement Warrants was determined by using the quoted market price of the Public Warrants as the Private Warrants have terms and provisions that impact the fair value assessment that are identical to those of the Public Warrants, including the exercise price, exercisability and exercise period.
The fair value of the Private Placement Warrants is determined by using the quoted market price of the Public Warrants as the Private Warrants have terms and provisions that impact the fair value assessment that are identical to those of the Public Warrants, including the exercise price, exercisability and exercise period.
The accrued cost of a recall is based on an estimate of the cost to repair each affected vehicle and the number of vehicles expected to be repaired based on historical data concerning the percentage of affected customers that take advantage of recall offers.
The accrued cost of a recall or field action is based on an estimate of the cost to repair each affected vehicle and the number of vehicles expected to be repaired based on historical data concerning the percentage of affected customers that take advantage of recall or field action offers.
As of December 31, 2022 and December 31, 2021, this total includes 13 and 27 partners, respectively, that were actively working to complete the licensing required to sell LiveWire motorcycles as of the end of the period. LiveWire intends to grow this network as it expands its distribution capabilities.
As of December 31, 2023 and 2022, this total includes 4 and 13 partners, respectively, that were actively working to complete the licensing required to sell LiveWire motorcycles as of the end of the period. LiveWire intends to grow this network as it expands its distribution capabilities.
Key Business Metrics To analyze LiveWire’s business performance, determine financial forecasts and help develop long-term strategic plans, management reviews the following key business metrics, which are important measures that represent the growth of the business: • Wholesale motorcycle unit sales – LiveWire defines wholesale motorcycle unit sales as the number of electric motorcycles sold by LiveWire to independent dealers for which LiveWire recognized revenue during the period. • Company retail motorcycle unit sales – LiveWire defines Company retail motorcycle unit sales as the number of new electric motorcycles sold at retail by LiveWire through its Company-owned dealer or through online sales for which LiveWire recognized revenue during the period.
Key Business Metrics To analyze LiveWire’s business performance, determine financial forecasts and help develop long-term strategic plans, management reviews the following key business metrics, which are important measures that represent the growth of the business: • Wholesale Motorcycle Unit Sales – LiveWire defines Wholesale Motorcycle Unit Sales as the number of electric motorcycles sold by LiveWire to independent dealers for which LiveWire recognized revenue during the period. • Company Retail Motorcycle Unit Sales – LiveWire defines Company Retail Motorcycle Unit Sales as the number of new electric motorcycles sold at retail by LiveWire through its Company-owned dealership, through online sales or direct to customers through select international partners for which LiveWire recognized revenue during the period.
Management believes that cash on hand, including the proceeds received from the Business Combination, will provide sufficient liquidity to meet LiveWire’s projected obligations, including those related to existing contractual obligations, for at least the next twelve months.
Management believes that cash on hand, including the proceeds received from the Business Combination, and the Convertible Term Loan, will provide sufficient liquidity to meet LiveWire’s projected obligations, including those related to existing contractual obligations, for at least the next twelve months.
LiveWire believes the likelihood that warrant holders will exercise their Warrants, and therefore the amount of cash proceeds LiveWire would receive, is dependent upon the trading price of its Common Stock. As of December 31, 2022, the reported sales price of Common Stock was $4.85 per share.
LiveWire believes the likelihood that warrant holders will exercise their Warrants, and therefore the amount of cash proceeds LiveWire would receive, is dependent upon the trading price of its Common Stock. As of December 31, 2023, the reported sales price of Common Stock was $11.31 per share.
The fair value of the Public Warrants was determined using the quoted market price as of the valuation date.
The fair value of the Public Warrants is determined using the quoted market price as of the valuation date.
Operating income from the STACYC segment was $4,150 thousand for the year ended December 31, 2022, compared to operating income of $2,115 thousand for the year ended December 31, 2021. Refer to the Electric Motorcycles and STACYC Segment discussions for a more detailed analysis of the factors affecting operating results.
Operating income from the STACYC segment was $622 thousand for the year ended December 31, 2023, compared to operating income of $4,150 thousand for the year ended December 31, 2022. Refer to the Electric Motorcycles and STACYC Segment discussions for a more detailed analysis of the factors affecting operating results.
H-D introduced its first electric motorcycle in late 2019 as the “Harley-Davidson LiveWire.” In 2021, building on early success and the continued growth in the global market demand for electric vehicles, H-D launched LiveWire as a standalone electric vehicle division, with the first LiveWire-branded product, the LiveWire ONE, debuting in 60 July 2021, followed by a special launch edition of 100 S2 Del Mars in May 2022.
H-D introduced its first electric motorcycle in late 2019 as the “Harley-Davidson LiveWire.” In 2021, building on early success and the continued growth in the global market demand for electric vehicles, H-D launched LiveWire as a standalone electric vehicle division, with the first LiveWire-branded product, the LiveWire ONE, debuting in July 2021, followed by a special launch edition of S2 Del Mars in May 2022 with full production and sales beginning in the third quarter of 2023.
LiveWire plans to use its current cash on hand, including the financing raised through the Business Combination and PIPE Financing, to support its core business operations and strategic plan, invest in new product development, and enhance its global manufacturing and distribution capabilities.
LiveWire plans to use its current cash on hand, including the financing raised through the Business Combination and PIPE Financing, and available funds under the Convertible Term Loan to support its core business operations and strategic plan, invest in new product development, and enhance its global manufacturing and distribution capabilities.
In the event of the exercise of any of Warrants for cash, LiveWire will receive the proceeds from such exercise. Assuming the exercise in full of all of Warrants for cash, LiveWire would receive an aggregate of approximately $350.8 million, but would not receive any proceeds from the sale of the shares of Common Stock issuable upon such exercise.
Assuming the exercise in full of all of Warrants for cash, LiveWire would receive an aggregate of approximately $349.2 million, but would not receive any proceeds from the sale of the shares of Common Stock issuable upon such exercise.
Additionally LiveWire received ABIC’s cash held in trust account of $13.6 million and the $100 million equity backstop provided by the H-D Backstop Amount in exchange for 10,000,000 shares of Common Stock for a purchase price of $10.00 per share pursuant to the terms of the Business Combination Agreement.
Additionally, LiveWire received ABIC’s cash held in trust account of $13.6 million and the $100 million equity backstop provided by the H-D Backstop Amount in exchange for 10,000,000 shares of Common Stock for a purchase price of $10.00 per share pursuant to the terms of the Business Combination Agreement. 66 In the event of the exercise of any of Warrants for cash, LiveWire will receive the proceeds from such exercise.
LiveWire must rely on information that its independent retail partners supply concerning new retail sales, and LiveWire does not regularly verify the information that its independent retail partners supply. This information is subject to revision.
LiveWire must rely on information that its Independent Retail Partners supply concerning new retail sales, and LiveWire does not regularly verify the information that its Independent Retail Partners supply.
Valuation of Warrant Liabilities - Upon consummation of the Business Combination, the Company assumed 30,499,990 warrants to purchase LiveWire's Common Stock, comprised of 19,999,990 public warrants, originally issued by ABIC as part of its IPO of units (the “Public Warrants”) and 10,500,000 of outstanding warrants originally issued in a private placement in connection with the IPO of ABIC (the “Private Placement Warrants”, collectively with the Public Warrants, the “Warrants”).
See Note 16, Related Party Transactions, in the Consolidated financial statements for further details. 69 Valuation of Warrant Liabilities - Upon consummation of the Business Combination, the Company assumed 30,499,990 warrants to purchase LiveWire's Common Stock, comprised of 19,999,990 public warrants, originally issued by ABIC as part of its IPO of units (the “Public Warrants”) and 10,500,000 of outstanding warrants originally issued in a private placement in connection with the IPO of ABIC (the “Private Placement Warrants”, collectively with the Public Warrants, the “Warrants”).
The Company operates in two segments: Electric Motorcycles and STACYC. LiveWire’s Electric Motorcycles segment sells electric motorcycles, related parts and accessories and apparel in the United States, while the STACYC segment sells electric balance bikes, related parts and accessories and apparel in the United States and certain international markets.
LiveWire’s Electric Motorcycles segment sells electric motorcycles, related parts and accessories and apparel in the United States and certain international markets, while the STACYC segment sells electric balance bikes for kids, related parts and accessories and apparel in the United States and certain international markets.
The Electric Motorcycles segment reported an operating loss of $89,105 thousand for the year ended December 31, 2022, as compared to an operating loss of $70,297 thousand for the year ended December 31, 2021.
The Electric Motorcycles segment reported an operating loss of $116,611 thousand for the year ended December 31, 2023, as compared to an operating loss of $89,105 thousand for the year ended December 31, 2022.
In addition, as a result of the Business Combination completed on September 26, 2022, LiveWire may be subject to certain payments in the event minimum purchase commitments under the Contract Manufacturing Agreement with H-D are not met beginning in the year 2024. 67 Cash Flow Activity The following table presents condensed highlights from our Consolidated statements of cash flows for the years ended December 31, 2022 and 2021 (in thousands): 2022 2021 Net cash used by operating activities $ (89,681) $ (74,539) Net cash used by investing activities (14,081) (9,951) Net cash provided by financing activities 366,334 84,757 Net increase in cash, cash equivalents and restricted cash $ 262,572 $ 267 The overall increase in cash during the year ended December 31, 2022 was due primarily to an increase in cash resulting from the Business Combination.
In addition, as a result of the Business Combination completed on September 26, 2022, LiveWire will be subject to certain payments in the event minimum purchase commitments under the Contract Manufacturing Agreement with H-D are not met beginning in the year 2025. 67 Cash Flow Activity The following table presents condensed highlights from our Consolidated statements of cash flows for the years ended December 31, 2023 and 2022 (in thousands): 2023 2022 Net cash used by operating activities $ (83,462) $ (89,681) Net cash used by investing activities (13,462) (14,081) Net cash (used) provided by financing activities (412) 366,334 Net increase in cash and cash equivalents $ (97,336) $ 262,572 The overall decrease in cash during the year ended December 31, 2023 was due primarily to a decrease in net cash provided by financing activities.
LiveWire plans to expand the LiveWire brand globally in 2023 with the introduction of the LiveWire ONE electric motorcycle to the European market and the launch of the S2 platform. 61 Basis of Presentation Refer to Note 1, Description of Business and Basis of Presentation, in the Consolidated financial statements for a discussion of the underlying basis used to prepare the Consolidated financial statements.
LiveWire plans to continue to expand globally in 2024 with the introduction of the S2 platform to the European market. Basis of Presentation Refer to Note 1, Description of Business and Basis of Presentation, in the Consolidated financial statements for a discussion of the underlying basis used to prepare the Consolidated financial statements.
LiveWire is focused on innovating and developing technology in the electric vehicle market. LiveWire’s vision is to create the next generation of electric motorcycles with products and experiences that merge the power and technology of electric with the unique soulful connection that comes from an analog machine.
LiveWire’s vision is to create the next generation of electric motorcycles with products and experiences that merge the power and technology of electric with the unique soulful connection that comes from an analog machine.
As discussed below, on September 26, 2022 as part of the Business Combination, LiveWire, which included LiveWire branded electric motorcycles and STACYC, became a separate, publicly traded company. LiveWire’s net loss for 2022 was $78,938 thousand compared to $68,292 thousand in 2021.
As discussed below, on September 26, 2022 as part of the 60 Business Combination, LiveWire, which included LiveWire branded electric motorcycles and STACYC, became a separate, publicly traded company. LiveWire’s net loss for the year ended December 31, 2023 was $109,550 thousand compared to $78,938 thousand for the year ended December 31, 2022.
Retail motorcycle unit sales made through both the Company-owned dealer and independent retail partners are a key measure of consumer demand and market share for LiveWire’s electric motorcycles. Total electric balance bike unit sales is a key driver of revenue and profit for STACYC.
Wholesale motorcycle unit shipments and Company Retail Motorcycle Unit Sales are key drivers of revenue and profit for the Electric Motorcycles segment. Retail Motorcycle Unit Sales made through both the Company-owned dealership and Independent Retail Partners are a key measure of consumer demand and market share for LiveWire’s electric motorcycles.
Accordingly for carve-out financial statement purposes, certain shared costs have been allocated to LiveWire and are reflected as expenses in the accompanying Consolidated financial statements prior to the Business Combination.
Corporate Allocations - Historically, prior to the Business Combination, LiveWire had been managed and operated in the normal course of business by H-D. Accordingly for carve-out financial statement purposes, certain shared costs have been allocated to LiveWire and are reflected as expenses in the accompanying Consolidated financial statements prior to the Business Combination.
In 2019, H-D acquired STACYC Inc. and began selling electric balance bikes. Electric motorcycles are sold at wholesale to a network of independent retail partners, at retail through a Company-owned dealer, and through online sales. Electric balance bikes are sold at wholesale to independent dealers and independent distributors, as well as direct to consumers online.
In 2019, H-D acquired STACYC Inc. and began selling electric balance bikes for kids. Electric motorcycles are sold at wholesale to a network of Independent Retail Partners, at retail through a Company-owned dealership and through online sales, and direct to customers through select international partners primarily in Europe.
Under this method of accounting, ABIC was treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination was treated as the equivalent of LiveWire issuing stock for the net assets of ABIC, accompanied by a recapitalization. The net assets of ABIC were stated at historical cost, with no goodwill or other intangible assets recorded.
Accordingly, the Business Combination was treated as the equivalent of LiveWire issuing stock for the net assets of ABIC, accompanied by a recapitalization. The net assets of ABIC were stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are those of Legacy LiveWire.
The following table details the number of retail partners: As of As of December 31, 2022 December 31, 2021 Electric Motorcycles Company-owned dealer 1 1 Independent retail partners: U.S. 75 44 International — — Total Electric Motorcycles Independent Retail Partners 75 44 Total Electric Motorcycles Retail Partners 76 45 STACYC Independent retail partners: U.S. 1,979 1,851 International 127 127 Total STACYC Independent Retail Partners 2,106 1,978 63 The Electric Motorcycles retail partners shown above include those that have been contracted by LiveWire to sell LiveWire motorcycles.
This information is subject to revision. 62 The following table details the number of retail partners: As of As of December 31, 2023 December 31, 2022 Electric Motorcycles Company-owned dealership 1 1 Independent Retail Partners: U.S. 83 75 International 43 — Total Electric Motorcycles Independent Retail Partners 126 75 Total Electric Motorcycles Retail Partners 127 76 STACYC Independent Retail Partners: U.S. 1,975 1,979 International 137 127 Total STACYC Independent Retail Partners 2,112 2,106 The Electric Motorcycles retail partners shown above include those that have been contracted by LiveWire to sell LiveWire motorcycles.
The income recognized was due to the decrease in the estimated fair value of the warrants between September 26, 2022, the closing date of the Business Combination, and December 31, 2022, due to fluctuations in the market price of the warrants. See Note 10, Warrant Liabilities, in the Consolidated financial statements for further discussion.
The income recognized of $5,033 thousand was due to the decrease in the estimated fair value of the warrants between September 26, 2022, the closing date of the Business Combination, and December 31, 2022, related to fluctuations in the market price of the warrants.
LiveWire’s net losses reflect the start-up nature of LiveWire’s business including investments in product development as LiveWire continues to focus on technological innovation that will support future products and growth, and investments in talent and capabilities to support the new company. The Electric Motorcycles segment operating losses were partially offset by favorable operating income at STACYC.
LiveWire’s net losses reflect the early-stage nature of LiveWire’s business including investments in product development as LiveWire continues to focus on technological innovation that it expects will support future products and growth, and investments in talent and capabilities to support the new company.
LiveWire expects its capital expenditures and working capital requirements to increase substantially in the near future, as it grows the business, develops its customer support and marketing infrastructure and expands its research and product development efforts. LiveWire had $20,517 thousand of purchase order commitments related to capital expenditures as of December 31, 2022 to be purchased in fiscal year 2023.
LiveWire expects its capital expenditures and working capital requirements to increase substantially in the near future, as it grows the business, develops its customer support and marketing infrastructure and expands its research and product development efforts.
Financing Activities Net cash provided by financing activities increased by $281,577 thousand to $366,334 thousand for the year ended December 31, 2022 compared to $84,757 thousand for the year ended December 31, 2021.
Financing Activities Net cash provided by financing activities decreased by $366,746 thousand to $412 thousand net cash used by financing activities for the year ended December 31, 2023 compared to $366,334 thousand net cash provided by financing activities for the year ended December 31, 2022.
In the case of both warranty and recall costs, as actual experience becomes available it is used to update the accruals. The factors affecting actual warranty and recall costs can be volatile. As a result, actual warranty claims experience and recall costs may differ from estimates, which could lead to material changes in our accrued warranty and recall costs.
In the case of both warranty and recall costs, as actual experience becomes available it is used to update the accruals. The factors affecting actual warranty and recall or field action costs can be volatile.
LiveWire historically managed liquidity risk by effectively managing its working capital, capital expenditures and cash flows. As an early growth company, LiveWire does not expect to generate positive cash flow from operations over the next twelve months. Prior to the Business Combination, H-D supported LiveWire’s operating, investing and financing activities.
Liquidity and Capital Resources As of December 31, 2023 and 2022, LiveWire’s cash and cash equivalents were $167,904 thousand and $265,240 thousand, respectively. As an early growth company, LiveWire does not expect to generate positive cash flow from operations over the next twelve months. Prior to the Business Combination, H-D supported LiveWire’s operating, investing and financing activities.
The Electric Motorcycles segment operating loss for 2022 was $89,105 thousand, compared to an operating loss of $70,297 thousand in 2021.
The Electric Motorcycles segment operating loss for the year ended December 31, 2023 was $116,611 thousand, compared to an operating loss of $89,105 thousand for the year ended December 31, 2022.
The decrease was due to higher capital expenditures related to investments to support the product development and engineering of future products. LiveWire expects to fund future cash flows used in investing activities with the financing raised through the Business Combination and PIPE Financing. LiveWire estimates capital expenditures to be between $20 million and $25 million in 2023.
LiveWire expects to fund future cash flows used in investing activities with the financing raised through the Business Combination, PIPE Financing and the Convertible Term Loan. LiveWire estimates capital expenditures to be between $15 million and $20 million in 2024.
LiveWire’s material contractual operating cash commitments at December 31, 2022 relate to leases as discussed further in Note 9, Leases, in the Consolidated financial statements.
Otherwise, there have been no material changes in the Company’s cash obligations and commitments since the end of fiscal year 2023. LiveWire’s material contractual operating cash commitments at December 31, 2023 relate to leases as discussed further in Note 9, Leases, in the Consolidated financial statements.
Cost of Goods Sold Cost of goods sold for the year December 31, 2022 increased by $1,262 thousand, or 5.7%, to $23,268 thousand from $22,006 thousand for the year ended December 31, 2021.
Cost of Goods Sold Cost of goods sold for the year December 31, 2023 increased by $4,029 thousand, or 17.3%, to $27,297 thousand from $23,268 thousand for the year ended December 31, 2022.
The change was primarily driven by interest income earned on money market fund investments entered into using funds from the Business Combination. The Company had an investment of $257,000 thousand in money market funds as of December 31, 2022.
Interest Income Interest income for the year ended December 31, 2023 was $10,537 thousand compared to $1,191 thousand for the year ended December 31, 2022. The change was primarily driven by interest income earned on money market fund investments entered into using funds from the Business Combination.
Results of Operations The following table presents consolidated results of operations for the years ended December 31, 2022 and 2021 (in thousands): Year Ended December 31, 2022 2021 $ Change % Change Operating loss from Electric Motorcycles $ (89,105) $ (70,297) $ (18,808) 26.8 % Operating income from STACYC 4,150 2,115 2,035 96.2 % Total operating loss (84,955) (68,182) (16,773) 24.6 % Other income, net 235 302 (67) (22.2) % Interest expense related party (475) (293) (182) 62.1 % Interest income 1,191 19 1,172 nm Change in fair value of warrant liabilities 5,033 — 5,033 nm Loss before income taxes (78,971) (68,154) (10,817) 15.9 % Income tax (benefit) provision (33) 138 (171) (123.9) % Net loss (78,938) (68,292) $ (10,646) 15.6 % Other comprehensive loss: Foreign currency translation adjustments (145) (85) (60) 70.6 % Comprehensive loss $ (79,083) $ (68,377) $ (10,706) 15.7 % Net loss per share, basic and diluted $ (0.46) $ (0.42) $ (0.04) 9.5 % * nm - not meaningful Operating Income (Loss) The Company reported an operating loss of $84,955 thousand for the year ended December 31, 2022 compared to an operating loss of $68,182 thousand for the year ended December 31, 2021.
Results of Operations The following table presents consolidated results of operations for the years ended December 31, 2023 and 2022 (in thousands): Year Ended December 31, 2023 2022 $ Change % Change Operating loss from Electric Motorcycles $ (116,611) $ (89,105) $ (27,506) 30.9 % Operating income from STACYC 622 4,150 (3,528) (85.0) % Total operating loss (115,989) (84,955) (31,034) 36.5 % Other income, net — 235 (235) (100.0) % Interest expense related party — (475) 475 (100.0) % Interest income 10,537 1,191 9,346 nm Change in fair value of warrant liabilities (4,020) 5,033 (9,053) (179.9) % Loss before income taxes (109,472) (78,971) (30,501) 38.6 % Income tax (benefit) provision 78 (33) 111 (336.4) % Net loss (109,550) (78,938) $ (30,612) 38.8 % Other comprehensive loss: Foreign currency translation adjustments 17 (145) 162 (111.7) % Comprehensive loss $ (109,533) $ (79,083) $ (30,450) 38.5 % Net loss per share, basic and diluted $ (0.54) $ (0.46) $ (0.08) 17.4 % * nm - not meaningful 63 Operating Income (Loss) The Company reported an operating loss of $115,989 thousand for the year ended December 31, 2023 compared to an operating loss of $84,955 thousand for the year ended December 31, 2022.
Income Tax (Benefit) Provision The income tax benefit for the year ended December 31, 2022 was $33 thousand, as compared to income tax expense of $138 thousand for the year ended December 31, 2021. The tax benefit was driven by the reduction in the net deferred tax liability position.
Income Tax (Benefit) Provision The income tax provision for the year ended December 31, 2023 was $78 thousand, as compared to an income tax benefit of $33 thousand for the year ended December 31, 2022.
Additionally, LiveWire may from time to time initiate certain voluntary recall campaigns. The estimated costs associated with voluntary recalls are recorded when the liability is both probable and estimable. This generally occurs when LiveWire’s management approves and commits to a recall.
Estimated warranty costs are recorded at the time of sale and are based primarily on historical LiveWire claim and industry information. Additionally, LiveWire may from time-to-time initiate certain voluntary recall campaigns or field actions. The estimated costs associated with voluntary recalls or field actions are recorded when the liability is both probable and estimable.
Management believes that the following are some of the more critical judgment areas in the application of accounting policies that currently affect LiveWire’s financial condition and results of operations. Product Warranty and Recalls - LiveWire provides a limited warranty on the new electric motorcycles for a period of two years, except for the battery which is covered for five years.
Management believes that the following are some of the more critical judgment areas in the application of accounting policies that currently affect LiveWire’s financial condition and results of operations.
Interest Expense Related Party Interest expense related party for the year ended December 31, 2022 increased by $182 thousand, to $475 thousand from $293 thousand for the year ended December 31, 2021 due to an increase in related party notes payable prior to their settlement on June 24, 2022. 64 Interest Income Interest income for the year ended December 31, 2022 was $1,191 thousand compared to $19 thousand for the year ended December 31, 2021.
Interest Expense Related Party Interest expense related party for the year ended December 31, 2023 was zero compared to $475 thousand for the year ended December 31, 2022. The change was driven by settlement of the related party notes payable on June 24, 2022.
Other Income, Net Other income, net for the year ended December 31, 2022 was $235 thousand compared to $302 thousand for the year ended December 31, 2021. The change was primarily driven by a reduction in net periodic benefit plan income.
Other Income, Net Other income, net for the year ended December 31, 2023 was zero compared to $235 thousand for the year ended December 31, 2022.
Segment Results Electric Motorcycles The following table presents consolidated results of operations for the Electric Motorcycles segment for the years ended December 31, 2022 and 2021 (in thousands): 2022 2021 $ Change % Change Revenue: Electric motorcycles $ 13,171 $ 8,706 $ 4,465 51.3 % Parts, accessories and apparel 828 999 (171) (17.1) % Revenue, net 13,999 9,705 4,294 44.2 % Cost of goods sold 23,268 22,006 1,262 5.7 % Gross profit (9,269) (12,301) 3,032 (24.6) % Operating expenses: Selling, administrative and engineering expense 79,836 57,996 21,840 37.7 % Operating loss $ (89,105) $ (70,297) $ (18,808) 26.8 % Revenue Revenue for the year ended December 31, 2022 increased by $4,294 thousand, or 44.2%, to $13,999 thousand from $9,705 thousand for the year ended December 31, 2021.
The 2022 taxable income benefit was driven by the reduction of the net deferred tax liability as a result of the requirement to capitalize research and experimental expenditures starting in tax years beginning after December 31, 2021. 64 Segment Results Electric Motorcycles The following table presents consolidated results of operations for the Electric Motorcycles segment for the years ended December 31, 2023 and 2022 (in thousands): 2023 2022 $ Change % Change Revenue: Electric motorcycles $ 11,087 $ 13,171 $ (2,084) (15.8) % Parts, accessories and apparel 461 828 (367) (44.3) % Revenue, net 11,548 13,999 (2,451) (17.5) % Cost of goods sold 27,297 23,268 4,029 17.3 % Gross profit (15,749) (9,269) (6,480) 69.9 % Operating expenses: Selling, administrative and engineering expense 100,862 79,836 21,026 26.3 % Operating loss $ (116,611) $ (89,105) $ (27,506) 30.9 % Revenue Revenue for the year ended December 31, 2023 decreased by $2,451 thousand, or 17.5%, to $11,548 thousand from $13,999 thousand for the year ended December 31, 2022.
Operating Activities LiveWire had negative cash flow from operating activities during 2022 and 2021. Net cash used in operating activities increased by $15,142 thousand to $89,681 thousand for the year ended December 31, 2022 compared to $74,539 thousand for the year ended December 31, 2021.
Net cash used in operating activities decreased by $6,219 thousand to $83,462 thousand for the year ended December 31, 2023 compared to $89,681 thousand for the year ended December 31, 2022.
STACYC The following table presents consolidated results of operations for the STACYC segment for the years ended December 31, 2022 and 2021 (in thousands): 2022 2021 Increase (Decrease) % Change Revenue: Electric balance bikes $ 29,669 $ 23,130 $ 6,539 28.3 % Parts, accessories and apparel 3,165 2,971 194 6.5 % Revenue, net 32,834 26,101 6,733 25.8 % Cost of goods sold 20,661 16,374 4,287 26.2 % Gross profit 12,173 9,727 2,446 25.1 % Operating expenses: Selling, administrative and engineering expense 8,023 7,612 411 5.4 % Operating income $ 4,150 $ 2,115 $ 2,035 96.2 % Revenue Revenue for the year ended December 31, 2022 increased by $6,733 thousand, or 25.8%, to $32,834 thousand from $26,101 thousand for the year ended December 31, 2021.
The increase was primarily due to product development costs relating to the S2 platform, costs incurred related to the delivery of Del Mar, and increases in personnel costs primarily related to higher headcount to support the stand-up of the new LiveWire organization. 65 STACYC The following table presents consolidated results of operations for the STACYC segment for the years ended December 31, 2023 and 2022 (in thousands): 2023 2022 Increase (Decrease) % Change Revenue: Electric balance bikes $ 22,865 $ 29,669 $ (6,804) (22.9) % Parts, accessories and apparel 3,610 3,165 445 14.1 % Revenue, net 26,475 32,834 (6,359) (19.4) % Cost of goods sold 16,498 20,661 (4,163) (20.1) % Gross profit 9,977 12,173 (2,196) (18.0) % Operating expenses: Selling, administrative and engineering expense 9,355 8,023 1,332 16.6 % Operating income $ 622 $ 4,150 $ (3,528) (85.0) % Revenue Revenue for the year ended December 31, 2023 decreased by $6,359 thousand, or 19.4%, to $26,475 thousand from $32,834 thousand for the year ended December 31, 2022.
Factors that could cause or contribute to these differences include those factors discussed below and elsewhere in this Form 10-K, particularly in “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” discussions. Overview and 2022 Highlights LiveWire is an industry-leading all-electric vehicle brand with a mission to pioneer the rapidly growing two-wheel electric motorcycle space.
Factors that could cause or contribute to these differences include those factors discussed below and elsewhere in this Form 10-K, particularly in “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” discussions. Business Combination On December 12, 2021, H-D entered into the Business Combination Agreement with ABIC, to effect the separation of its electric vehicle business.
The increase was primarily due to an increase in cash from the Business Combination of $293.7 million and an increase in proceeds from borrowing on notes payable to related party of $13,233 thousand. This was partially offset by decreased cash transfers from H-D prior to the separation of $26,442 thousand.
The decrease was primarily due to cash received in the prior year from the Business Combination of $293,717 thousand, proceeds from borrowing on notes payable to related party of $15,333 thousand, and cash transfers from H-D related to services and funding for operations of $59,051 thousand.
The STACYC segment operating income for 2022 was $4,150 thousand, as compared to $2,115 thousand in 2021. The improvement in operating income was driven by increased revenue and margin mix. Refer to the STACYC segment analysis below for further discussion.
Refer to the Electric Motorcycles segment analysis below for further discussion. The STACYC segment operating income for the year ended December 31, 2023 was $622 thousand, as compared to $4,150 thousand for the year ended December 31, 2022.
Recent Developments Business Combination On December 12, 2021, H-D entered into the Business Combination Agreement with ABIC, to effect the separation of its electric vehicle business. On September 16, 2022, the Business Combination was approved in an ABIC shareholder vote, and it closed on September 26, 2022. The Business Combination was accounted for as a reverse recapitalization.
On September 16, 2022, the Business Combination was approved in an ABIC shareholder vote, and it closed on September 26, 2022. The Business Combination was accounted for as a reverse recapitalization. Under this method of accounting, ABIC was treated as the “acquired” company for financial reporting purposes.
LiveWire believes these key business metrics provide useful information to help investors understand and evaluate LiveWire’s business performance. Wholesale motorcycle unit shipments and Company retail motorcycle unit sales are key drivers of revenue and profit for the Electric Motorcycles segment.
After the Business Combination, any remaining inventory of H-D branded LiveWire motorcycles is owned by H-D, and any related sales are recognized by H-D. LiveWire believes these key business metrics provide useful information to help investors understand and evaluate LiveWire’s business performance.
Cost of Goods Sold Cost of goods sold for the year December 31, 2022 increased by $4,287 thousand, or 26.2%, to $20,661 thousand from $16,374 thousand for the year ended December 31, 2021.
Cost of Goods Sold Cost of goods sold for the year December 31, 2023 decreased by $4,163 thousand, or 20.1%, to $16,498 thousand from $20,661 thousand for the year ended December 31, 2022. The decrease was primarily due to lower volumes in alignment with the decreased revenue described above.
Change in Fair Value of Warrant Liabilities Change in fair value of warrant liabilities for the year ended December 31, 2022 was $5,033 thousand. The warrant liabilities were recorded as part of the Business Combination and therefore did not exist in the prior year results for LiveWire.
The warrant liabilities were recorded as part of the Business Combination and therefore did not exist prior to September 26, 2022. See Note 10, Warrant Liabilities, in the Consolidated financial statements for further discussion.
Results of Operations 2021 Compared to 2020 Refer to “Management's Discussion and Analysis of Financial Condition and Results of Operations” within our final prospectus filed on December 16, 2022 with the SEC pursuant to Rule 424(b) under the Securities Act for a detailed discussion of the results of operations for 2021 compared to 2020. 66 Liquidity and Capital Resources As of December 31, 2022 and 2021, LiveWire’s cash and cash equivalents were $265,240 thousand and $2,668 thousand, respectively.
Results of Operations 2022 Compared to 2021 Refer to “Management's Discussion and Analysis of Financial Condition and Results of Operations” within our Annual Report on Form 10-K for the year ended December 31, 2022 filed on March 6, 2023 with the SEC for a detailed discussion of the results of operations for 2022 compared to 2021.
Selling, Administrative and Engineering Expense Selling, administrative and engineering expense for the year ended December 31, 2022 increased by $411 thousand, or 5.4%, to $8,023 thousand from $7,612 thousand for the year ended December 31, 2021. The increase was primarily due to an increase in advertising costs online and at motocross races to support increased revenue.
Selling, Administrative and Engineering Expense Selling, administrative and engineering expense for the year ended December 31, 2023 increased by $1,332 thousand, or 16.6%, to $9,355 thousand from $8,023 thousand for the year ended December 31, 2022.
The operating loss was driven by the cost of standing up a new organization, including growing headcount and back-office support, increased costs to advance our electric vehicle systems, and increased product development costs to deliver our S2 platform in 2023. Refer to the Electric Motorcycles segment analysis below for further discussion.
The increased operating loss was driven by a provision for excess inventory components held by H-D that the Company expects to be obligated to reimburse H-D under the terms of Contract Manufacturing Agreement, increased selling, administrative and engineering expense for product development costs relating to the S2 platform, delivery of Del Mar, and the cost of standing up a new organization, including growing headcount and back-office support.
The increase in revenue from electric balance bikes was driven by a shift in product mix from the launch of new 18- and 20-inch electric balance bikes and higher pricing of $6,862 thousand, which was partially offset by lower shipment volumes of $323 thousand.
The decrease was primarily due to lower revenue from electric balance bikes of $6,804 thousand. The decrease in revenue from electric balance bikes was driven by lower shipment volumes of $6,229 primarily to our independent distributors and independent dealers, along with a decrease of $575 thousand due to product mix and promotions for the year ended December 31, 2023.
The overall growth of the business also resulted in increases in net operating assets, primarily inventory, and offsetting increases in operating liabilities, primarily payables and accrued expenses. Investing Activities Net cash used in investing activities increased by $4,130 thousand to $14,081 thousand for the year ended December 31, 2022 compared to $9,951 thousand for the year ended December 31, 2021.
Investing Activities Net cash used in investing activities decreased by $619 thousand to $13,462 thousand for the year ended December 31, 2023 compared to $14,081 thousand for the year ended December 31, 2022. The decrease was due to lower capital expenditures in 2023.
The increase was primarily due to increased shipments of electric motorcycles, in alignment with the increased revenue described above, partially offset by prior year non-cash reserve adjustments on the H-D branded motorcycles. 65 Selling, Administrative and Engineering Expense Selling, administrative and engineering expense for the year ended December 31, 2022 increased by $21,840 thousand, or 37.7%, to $79,836 thousand from $57,996 thousand for the year ended December 31, 2021.
Selling, Administrative and Engineering Expense Selling, administrative and engineering expense for the year ended December 31, 2023 increased by $21,026 thousand, or 26.3%, to $100,862 thousand from $79,836 thousand for the year ended December 31, 2022.
Removed
Operations prior to the Business Combination are those of Legacy LiveWire.
Added
See Note 4, Business Combination, in the Consolidated financial statements for further detail related to the Business Combination. Overview and 2023 Highlights LiveWire is an industry-leading all-electric vehicle brand with a mission to pioneer the growing two-wheel electric motorcycle space. The Company operates in two segments: Electric Motorcycles and STACYC.
Removed
See Note 4, Business Combination, in the Consolidated financial statements for further detail related to the Business Combination. 2023 Outlook For 2023, LiveWire's focus continues to be on our investment into product development, including advancing the technologies, platforms and products that will further our position as pioneers of the industry.
Added
Electric balance bikes are sold at wholesale to independent dealers and independent distributors, as well as direct to consumers online. LiveWire is focused on innovating and developing technology in the electric vehicle market.
Removed
The Harley-Davidson LiveWire motorcycles produced in 2019 and 2020 have been or will be retailed through the H-D dealership network until the remaining inventory of H-D branded LiveWire motorcycles is depleted. After the Business Combination, any remaining inventory of H-D branded LiveWire motorcycles is owned by H-D, and any related sales are recognized by H-D.
Added
The decrease in operating income was driven by lower volumes from our independent distributors and independent dealers and increased selling, administrative and engineering expense related to personnel costs and increased marketing initiatives.
Removed
The reduction of the net deferred tax liability was the result of the requirement to capitalize research and experimental expenditures starting in tax years beginning after December 31, 2021. The capitalization of these expenditures for the year ended December 31, 2022 resulted in a deferred tax asset that will reverse and offset additional deferred tax liabilities in future periods.
Added
Refer to the STACYC segment analysis below for further discussion. 2024 Outlook For 2024, LiveWire's focus continues to be on our investment into product development and product innovation, including additional models on the S2 platform, market expansion and continued cost improvements.
Removed
The increase was primarily due to higher revenue from electric motorcycles of $4,465 thousand, and was partially offset by decreases in parts and accessories and apparel revenues. The increase in revenues from electric motorcycles was primarily driven by an increase of 30% in unit sales volumes along with a $2,917 thousand decrease in sales promotions.
Added
This information is subject to revision. • Retail Motorcycle Unit Sales – LiveWire defines Retail Motorcycle Unit Sales as the sum of Company Retail Motorcycle Unit Sales and Independent Retail Motorcycle Unit Sales. • Company-owned dealership – Dealership owned and operated by LiveWire to sell electric motorcycles, related products, and services. 61 • Independent Retail Partners (Electric Motorcycles) – Retail Partners owned and operated by independent entities under contract with LiveWire to sell LiveWire electric motorcycles, related products and services. • Electric Balance Bike Unit Sales (STACYC) – LiveWire defines Electric Balance Bike Unit Sales as the number of electric balance bikes sold by LiveWire for which LiveWire recognized revenue during the period. • Independent Retail Partners (STACYC) – Retail Partners owned and operated by independent entities under contract with STACYC to sell electric balance bikes, related products and services.
Removed
The increase was primarily due to increases in product development costs incurred to deliver our S2 platform in 2023 and advance our electric vehicle systems, and increases in personnel costs primarily related to higher headcount to support the stand-up of the new LiveWire organization.
Added
Total Electric Balance Bike Unit Sales is a key driver of revenue and profit for STACYC.
Removed
The increase was primarily due to higher revenue from electric balance bikes of $6,539 thousand and parts, accessories and apparel of $194 thousand.
Added
The change was driven by net periodic benefit plan income as subsequent to the Business Combination the Company did not have similar allocations of net periodic benefit plan income from H-D and the Company does not sponsor a qualified pension plan or postretirement healthcare plan.
Removed
The increase in revenue from parts, accessories and apparel was driven by higher shipment volumes of $674 thousand, which was partially offset by an increase in promotional discounts on batteries in 2022.
Added
The Company had an investment of $161,000 thousand in money market funds as of December 31, 2023. Change in Fair Value of Warrant Liabilities Change in fair value of warrant liabilities for the year ended December 31, 2023 was a loss of $4,020 thousand compared to income of $5,033 thousand for the year ended December 31, 2022.
Removed
The increase was primarily due to a shift in product mix from the launch of new 18- and 20-inch electric balance bike, which was partially offset by slightly lower shipment volumes, in alignment with the increased revenue described above.
Added
The loss recognized of $4,020 thousand for the year ended December 31, 2023 was due to the increase in the estimated fair value of the warrants related to fluctuations in the market price of the warrants.
Removed
The increase in negative cash flow from operating activities was primarily driven by increases in product development costs and costs to advance our electric vehicle systems, and increases in personnel costs primarily related to higher headcount to support the stand-up of the new LiveWire organization.
Added
The income tax provision in 2023 was driven by the change in deferred tax liability associated with the amortization of the taxable temporary difference related to indefinite lived intangibles that are not amortized for book purposes.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAlthough LiveWire does not believe inflation has had a material impact on its financial condition given its lower production volumes, a high rate of inflation in the future may have an adverse effect on LiveWire’s ability to maintain and increase its gross margin or decrease its operating expenses as a percentage of its revenues if the selling prices of its products do not increase as much or more than its increase in costs. 70 LiveWire is also exposed to possible disruption of supply or shortage of materials, in particular for lithium-ion battery cells and key semiconductor chip components necessary for electric vehicles, and any inability to purchase raw materials and components could negatively impact LiveWire’s operations.
Biggest changeAlthough LiveWire does not believe inflation has had a material impact on its financial condition given its lower production volumes, a high rate of inflation in the future may have an adverse effect on LiveWire’s ability to maintain and increase its gross margin or decrease its operating expenses as a percentage of its revenues if the selling prices of its products do not increase as much or more than its increase in costs.
LiveWire plans to expand its business and operations internationally and expects its exposure to currency rate risk to increase as it grows its international presence. 71
LiveWire plans to expand its business and operations internationally and expects its exposure to currency rate risk to increase as it grows its international presence. 70
Item 7A. Quantitative and Qualitative Disclosures About Market Risk As of December 31, 2022, LiveWire’s cash and cash equivalents amounted to $265,240 thousand. LiveWire manages its liquidity risk by effectively managing its working capital, capital expenditures and cash flows. Financial instruments that potentially subject LiveWire to concentrations of credit risk principally consist of accounts receivable.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk As of December 31, 2023, LiveWire’s cash and cash equivalents amounted to $167,904 thousand. LiveWire manages its liquidity risk by effectively managing its working capital, capital expenditures and cash flows. Financial instruments that potentially subject LiveWire to concentrations of credit risk principally consist of accounts receivable.
Added
LiveWire is also exposed to possible disruption of supply or shortage of materials, including, but not limited to, lithium-ion battery cells and key semiconductor chip components necessary for electric vehicles, and any inability to purchase raw materials and components could negatively impact LiveWire’s operations.

Other LVWR 10-K year-over-year comparisons