SEV 10-K & 10-Q changes, risk factors and insider trading

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

The Company has not commenced production or generated any revenue from the sale of its products. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which is dependent upon the Company obtaining additional financing and ultimately achieving profitable operations. To that end, in NovemberOctober 2025, we established an equity line of credit (“ELOC”) as a mechanism to incrementally access capital. We successfully utilized this ELOC between mid-November 2025 and JanuaryJune 2026 to raise approximately $3.0$4.3 million. Furthermore, during the first quarter of 2026, we successfully raised an aggregate of approximately $17.1 million in gross proceeds, consisting of $9.0 million from a follow-on public offering in January 2026 and an additional $8.1 million from subsequent warrant exercises, including a warrant inducement transaction completed in March 2026. This management’s discussion and analysis discusses the Company’s progress to date, its challenges, and its plans for the future, but should be read in conjunction with the consolidated financial statements and accompanying notes.

Aptera was formed as a Delaware corporation on March 4, 2019, and transitioned to a Delaware public benefit corporation in October 2025, for the purpose of engaging in the production of energy-efficient, solar-powered vehicles. We first began accepting $100 reservations for our vehicle in December 2020 and as of MarchJune 31,30, 2026, we had approximately 49,00049,300 reservation holders. We conducted two promotional programs programs that allowed investors to reserve priority reservations for initial customer vehicles. Under the first program, which ran from January January 2023 through January 2024, the initial 2,000 delivery positions were offered through an auction process, resulting in an average investment investment exceeding $20,000 per position. Under the second program, which was conducted from April to August 2025, an additional 1,000 delivery delivery positions were made available to investors making minimum investments of $5,000. We have not delivered any products to customers and and have not recognized any revenue from the sale of vehicles.

Comparison of the results of operations for the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025

The decrease in selling, general and administrative expenses was primarily driven by a $3.9$3.6 million net reduction in stock-based compensation, compensation. This consistedconsisting of a $4.8$2.4 million decrease in equity-based advisory fees issued to non-employees,non-employees partially offset byand a $1.1 $1.2 million increasedecrease in employee share-based compensation. Additionally, advertisingSales and marketing expendituresexpenses decreased bydeclined $0.3 million as marketing activities million,were reflectingreduced afollowing targetedthe reallocationOctober of2025 capitaldirect towardlisting. vehicleLegal validationexpenses declined $0.5 million compared to the 2025 period, which contained higher fees related to the Zaptera intellectual property claim and productionother readiness.non-recurring matters.

These decreases were partially offset by aapproximately $0.4$0.2 million increaseof inhigher costs associated with ouroperating transition toas a publicly traded company, including compliance and directors’ and officers’ liability insurance premiums.premiums, Furthermore,investor legal expenses increased by $0.3 million, primarily associated with the accrued expenses from the April 2026 settlement of the Zaptera intellectual property matterrelations and coststransfer related toagent the ongoing SEC matter (see Part II, Item 1. Legal Proceedings).fees.

OtherThe engineering,increase design,in research and development expenses accounted for the remainder of the variance. This was primarily driven by a $0.7$3.6 million increase in engineering, design, and development expenses, driven by a $1.1 million increase in cash personnel costs resulting from strategic engineering headcount additions and, more significantly, a $1.8 million increase in outside consulting services engaged to support our vehicle validationbuild, testing, and productionvalidation program, a $0.3 program.million Additionally,increase materialsin parts, materials, and supplies expensefor related tothe validation testingvehicle increased by $0.5 million, alongside a $0.2 million aggregate increase in engineering software licenses, computer equipment,build, and third-partyapproximately contractors$0.3 necessarymillion toof equipother theengineering-related operating expanded team.cost increases. These increases were partially offset by a $0.04$2.4 million decrease in prototypestock-based toolingcompensation expenses,expense, reflectingconsisting of a $1.9 million reduction in employee share-based compensation and a $0.4 million favorable out-of-period adjustment related to the correction maturationdescribed ofin our designNote phase.2.

Other income was $0.1 million for the three months ended March 31, 2026, compared to $0.3 million for the three months ended MarchJune 31,30, 2026, compared to $1.8 million for the three months ended June 30, 2025. The decreasechange of $0.2$1.5 million was primarily due to lowera decrease in California Energy Commission grant reimbursement income fromand ourreduced California Energy Commission grant.interest income.

As a result of the foregoing, the Company’s net loss for the three months ended MarchJune 31,30, 2026 was $10.2$10.9 million compared to $10.9$12.1 million for the three months ended MarchJune 31,30, 2025.

As of MarchJune 31,30, 2026, the Company had $39.0$32.4 million in total assets. Our primary source of liquidity at that date was $17.7$10.1 million in cash and cash equivalents. We did not have a recognized grant funds receivable balance as of MarchJune 31,30, 2026, as managementwe maintainsmaintain a full allowance allowance against the remaining $0.7 million balance due to uncertainties regarding the timing of the capital raises required to trigger those those reimbursements.

Our current baseline operational cash burn rate, covering essential personnel, ongoing regulatory compliance, and fixed costs, is approximately $1.7 $2.0 to $2.0$2.2 million per month. This baseline burn rate remained elevated during the first quarterhalf of 2026 due to significant expenses associated associated with operating as a publicly traded company, costs related to our Class B commonCommon stockStock offerings, and legal and other professional fees fees related to the SEC Investigation and the Zaptera settlement. Such costs are difficult to predict with certainty but are expected to continue to be material in the near term.

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

Management’sOur plan to address the Company’sour liquidity needs and fund operations over the next twelve months relies primarily on accessing capital through the ELOC and potentially through other public market financings.

During the threesix months ended MarchJune 31,30, 2026, net cash used in operating activities was $7.9$15.9 million, compared to $3.6$7.1 million for the same period period in 2025. This increase in operating cash usage was driven not only by the elevated professional fees noted above, but primarily by strategic cash investments in parts, materials, and supplies necessary to advance our vehicle validation and production readiness, as well as a reduction in accounts payable.

To fund these operations and investments, net cash provided by financing activities was $16.0$16.7 million during the firstsix quartermonths ofended June 30, 2026. This was the result of two key financing transactions. On January 26, 2026, we closed a registered public offering, issuing 4,500,000 units (each consisting of one share of Class B commonCommon stockStock and one accompanying warrant) for gross proceeds of $9.0 million. Furthermore, we received an additional $8.1 million in aggregate gross proceeds from warrant exercises during the quarter, which included a $6.3 million warrant inducement transaction completed in March 2026. In addition, during the second quarter of 2026, we sold 605,000 shares of Class B Common Stock under our ELOC facility for aggregate net proceeds of approximately $1.3 million. Subsequent to quarter-end, on July 13, 2026, we completed a warrant inducement transaction that generated approximately $6.0 million in gross cash proceeds.

We estimate that we will require an additional $45$40 million to $50$45 million to complete vehicle validation and prepare for low-volume production—including increased spending on engineering, validation, testing, production tooling, and the hiring of additional sales, marketing, and administrative personnel. We expect that the associated work would take approximatelyless than 12 months to complete from the time such capital is fully secured. While the commencement of the 12 month final production timeline requires securing this capital in substantial tranches, we are proactively deploying current liquidity to procure critical long-lead components and advance validation milestones to compress this timeline where possible. The ELOC provides a potential mechanism to access capital incrementally, subject to the conditions and limitations previously described. Our ability to effectively utilize the ELOC is highly dependent on the trading volume and market price of our Class B commonCommon stock.Stock.

Our awarded $21.9 million grant from the CEC remains a component of our potential future liquidity. Through MarchJune 31,30, 2026, we have received approximately $3.2$17.6 million in cash disbursements. We anticipate receiving further portions of the grant only if we are able to secure sufficient financing to make the eligible expenditures and meet the project milestones.

As of MarchJune 31,30, 2026, the Company’s total liabilities were $9.3$8.0 million. Major existing liabilities include $2.3$1.1 million in accrued liabilities, $4.1 million in unearned reservation fees, and $2.3$1.9 million in operating lease liabilities.

As of MarchJune 31,30, 2026, we leased approximately 77,000 square feet of office, manufacturing and assembly space at our principal facility in Carlsbad, California under an operating lease agreement that expires March 31, 2028. For the threesix months ended MarchJune 31,30, 2026, we recorded $0.3$0.5 million of lease expense.

We regularly enter into purchase obligations with vendors and service providers, which represent expected payments and commitments during the normal course of our business. These purchase obligations are generally cancellable with or without notice and without penalty, although certain vendor agreements provide for cancellation fees or penalties. As of MarchJune 31,30, 2026, we had approximately $2.2$5.5 million in open purchase orders.

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