SEV

Aptera Motors Corp. 10-Q Summary: Quarter Ended September 30, 2025

Business Context and Reporting Period

Aptera Motors Corp. (SEV) is a development-stage company focused on solar electric vehicles. This Form 10-Q covers the three and nine months ended September 30, 2025. The Company has not yet commenced commercial production or recognized product revenue. As of the filing date, the Company is classified as a smaller reporting company and an emerging growth company. Subsequent to the period end, the Company completed a direct listing on the Nasdaq Capital Market and secured a $75 million equity line of credit.

Key Financial Metrics

Note: Financial figures are in thousands unless otherwise noted. Other income primarily consists of grant funds from the California Energy Commission.

Material Changes vs. Prior Period

• Net Loss Improvement: Net loss for the three months ended September 30, 2025, decreased to $5.5 million from $8.2 million in the same period of 2024. This improvement was driven by a significant increase in other income ($2.5 million vs. $0.1 million) due to grant fund receipts.
• Operating Expenses: Total operating expenses decreased slightly for the quarter ($7.9 million vs. $8.3 million) but increased for the nine-month period ($33.0 million vs. $27.1 million). The nine-month increase was primarily due to a $4.1 million rise in stock-based compensation within SG&A expenses.
• Liquidity: Cash and cash equivalents decreased by $1.2 million during the nine-month period to $12.0 million, compared to a $1.3 million increase in the prior year period. Net cash used in operating activities was $10.9 million for the nine months ended September 30, 2025.
• Capital Structure: All outstanding Series B-1 Preferred Stock converted to Class B Common Stock on September 30, 2025, following the effectiveness of the Company's S-1 registration statement.

Outlook, Risks, and Contingencies

Going Concern: Management has raised substantial doubt about the Company's ability to continue as a going concern. Existing cash ($12.0 million) is insufficient to fund operations for the next 12 months. The Company estimates a need for approximately $60–$70 million to complete vehicle validation and commence low-volume production.

Financing Strategy: Liquidity plans rely heavily on a $75 million Equity Line of Credit (ELOC) with New Circle Principal Investments LLC, entered into October 13, 2025, and access to public markets following the October 16, 2025, Nasdaq direct listing.

Legal and Regulatory Risks:

• SEC Investigation: The Company is cooperating with an ongoing SEC investigation regarding securities offerings and vehicle production, which began in January 2025.
• Litigation: Zaptera USA, Inc. has filed a lawsuit alleging design patent infringement and misappropriation of trade secrets. The Company intends to vigorously defend the claims.

Internal Controls: The Company identified material weaknesses in internal controls over financial reporting related to stock-based compensation accounting and lack of formalized policies. Disclosure controls and procedures were deemed not effective as of September 30, 2025.

Key Facts for Investor Verification

• Cash Runway: Verify the Company's ability to draw down the $75 million ELOC and the effectiveness of the resale registration statement required to access these funds.
• Production Timeline: Confirm the revised timeline for low-volume production, which is currently dependent on securing $60–$70 million in capital and meeting California Energy Commission grant milestones.
• Grant Dependency: Assess the risk associated with the $21.9 million California Energy Commission grant, specifically the conditions for reimbursement and the uncertainty of meeting future milestones.
• Legal Exposure: Monitor the status of the Zaptera litigation and the outcome of the SEC investigation, as unfavorable results could materially harm the business.
• Internal Controls: Track the remediation progress of material weaknesses in financial reporting, which remains incomplete as of the filing date.