`
`IN THE SUPREME COURT OF THE STATE OF NEVADA
`_______________________________________
`Supreme Court Case No.
`Electronically Filed
`Aug 25 2022 09:04 a.m.
`________________________________
`Elizabeth A. Brown
`Clerk of Supreme Court
`RAYMOND J. CHESS, GERALD B. BUDDE, H. BENJAMIN SAMUELS,
`HARRY DEMOTT, MICHAEL L. CLARK, PAMELA S. MADER, and
`JACQUELINE A. DEDO,
`
`Petitioners,
`
`v.
`EIGHTH JUDICIAL DISTRICT COURT of the State of Nevada, in and for Clark
`County; THE HONORABLE NANCY L. ALLF, DISTRICT JUDGE, DEPT. 27
`
`Respondent,
`and
`WORKHORSE GROUP, INC., ROMARIO ST. CLAIR AND
`ANDREW EVERSON
`Real Parties in Interest
`_________________________________________________________
`PETITIONERS’ APPENDIX
`(VOLUME II OF II)
`(APP194 – APP402)
`_______________________________________________
`HOLLAND & HART LLP
`J. Stephen Peek, Esq. (1758)
`Jessica E. Whelan, Esq. (14781)
`9555 Hillwood Drive, 2nd Floor
`Las Vegas, Nevada 89134
`Telephone: (702) 669-4600
`
`Attorneys for Petitioners
`
`
`19655692_v1
`
`
`
`8/24/22 8:01 PM
`
`Docket 85216 Document 2022-26520
`
`

`

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`
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`
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`INDEX TO APPENDIX IN CHRONOLOGICAL ORDER
`
`
`TAB
`
`EXHIBIT DESCRIPTION
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`DATE
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`VOL.
`
`1/24/2022
`
`3/22/2022
`
`6/3/2022
`
`I
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`I
`
`I
`
`PAGE
`NOS.
`APP001 –
`APP043
`APP044
`
`APP154 –
`APP193
`
` Consolidated Verified Stockholder
`Derivative Complaint
` Independent Directors’ Motion to
`Dismiss for Failure to Plead
`Demand Futility and For Failure to
`State a Claim
` Plaintiffs’ Memorandum of Points
`and Authorities in Opposition to
`Independent Directors’ Motion to
`Dismiss For Failure to Plead
`Demand Futility and For Failure to
`State a Claim
` Declaration of Stephen J. Oddo In
`Support of Plaintiffs’ Memorandum
`of Points and Authorities in
`Opposition to Independent
`Directors’ Motion to Dismiss For
`Failure to Plead Demand Futility
`and For Failure to State a Claim
` Appendix of Exhibits to Plaintiffs’
`Memorandum of Points and
`Authorities in Opposition to
`Independent Directors’ Motion to
`Dismiss For Failure to Plead
`Demand Futility and For Failure to
`State a Claim
` Independent Directors’ Reply
`Memorandum of Law in Further
`Support of Their Motion to Dismiss
`for Failure to Plead Demand Futility
`and For Failure to State a Claim
` Recorder’s Transcript of Hearing re:
`Motions Hearing
`
`1.
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`2.
`
`3.
`
`4.
`
`5.
`
`6.
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`7.
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`
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`6/3/2022
`
`II
`
`APP194 –
`APP196
`
`6/3/2022
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`II
`
`APP197 -
`APP323
`
`7/15/22
`
`II
`
`APP324 –
`APP355
`
`8/4/2022
`
`II
`
`APP356 –
`APP379
`
`

`

`
`
`
`
`EXHIBIT DESCRIPTION
` Order Denying Motion to Dismiss
`For Failure to Plead Demand Futility
` Notice of Entry of Order Denying
`Motion to Dismiss For Failure to
`Plead Demand Futility
`
`DATE
`
`VOL.
`
`2022/08/23
`
`2022/08/24
`
`II
`
`II
`
`PAGE
`NOS.
`APP380 –
`APP389
`APP390 –
`APP402
`
`
`INDEX TO APPENDIX IN ALPHABETICAL ORDER
`
`
`EXHIBIT DESCRIPTION
`
`DATE
`
`VOL. PAGE NOS.
`
`APP197 -
`APP323
`
`II
`
`6/3/2022
`
`Appendix of Exhibits to Plaintiffs’
`Memorandum of Points and
`Authorities in Opposition to
`Independent Directors’ Motion to
`Dismiss For Failure to Plead
`Demand Futility and For Failure to
`State a Claim
`Consolidated Verified Stockholder
`Derivative Complaint
`Declaration of Stephen J. Oddo In
`Support of Plaintiffs’ Memorandum
`of Points and Authorities in
`Opposition to Independent
`Directors’ Motion to Dismiss For
`Failure to Plead Demand Futility
`and For Failure to State a Claim
`Independent Directors’ Motion to
`Dismiss for Failure to Plead
`Demand Futility and For Failure to
`State a Claim
`Independent Directors’ Reply
`Memorandum of Law in Further
`Support of Their Motion to Dismiss
`for Failure to Plead Demand Futility
`and For Failure to State a Claim
`
`1/24/2022
`
`6/3/2022
`
`I
`
`II
`
`APP001 –
`APP043
`APP194 –
`APP196
`
`3/22/2022
`
`I
`
`APP044
`
`7/15/22
`
`II
`
`APP324 –
`APP355
`
`
`
`TAB
`
`8.
`
`9.
`
`TAB
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`5
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`1
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`4
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`2
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`6
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`

`

`
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`9
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`8
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`3
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`7
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`
`
`
`Notice of Entry of Order Denying
`Motion to Dismiss For Failure to
`Plead Demand Futility
`Order Denying Motion to Dismiss
`For Failure to Plead Demand
`Futility
`Plaintiffs’ Memorandum of Points
`and Authorities in Opposition to
`Independent Directors’ Motion to
`Dismiss For Failure to Plead
`Demand Futility and For Failure to
`State a Claim
`Recorder’s Transcript of Hearing re:
`Motions Hearing
`
`
`
`2022/08/24
`
`2022/08/23
`
`6/3/2022
`
`II
`
`II
`
`I
`
`APP390 –
`APP402
`
`APP380 –
`APP389
`
`APP154 –
`APP193
`
`8/4/2022
`
`II
`
`APP356 –
`APP379
`
`DATED this 23rd day of August 2022.
`
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`_/s/ Jessica E. Whelan___________
`J. Stephen Peek, Esq. (1758)
`Jessica E. Whelan, Esq. (14781)
`HOLLAND & HART LLP
`9555 Hillwood Drive, 2nd Floor
`Las Vegas, Nevada 89134
`
`
`
`
`
`
`
`
`
`
`
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`
`

`

`
`
`
`
`
`
`CERTIFICATE OF SERVICE
`I certify that on August 23, 2022, I submitted the foregoing Petitioners’
`
`Appendix (Volume II of II) (APP194 – APP402) for filing through the Court’s
`
`eFlex electronic filing system. Electronic notification will be sent to the following:
`
`Matthew L. Sharp, Esq.
`MATTHEW L. SHARP, LTD.
`432 Ridge Street
`Reno, Nevada 89501
`
`Gregory M. Egleston, Esq.
`Thomas J. McKenna, Esq.
`GAINEY MCKENNA & EGLESTON
`501 Fifth Ave., 19th Floor
`New York, NY 10017
`
`Attorneys for Plaintiff Andrew
`Everson and Proposed Co-Liaison
`Counsel for Plaintiffs
`
`
`Jeff Silvestri, Esq.
`Daniel I. Aquino, Esq.
`Julia L. Armendariz, Esq.
`MCDONALD CARANO LLP
`2300 West Sahara Ave, Ste 1200
`Las Vegas, NV 89102
`
`Attorneys for Defendants Duane
`A. Hughes, Steve Schrader,
`Stephen Fleming, Robert Willison,
`and Anthony Furey
`
`David C. O’Mara, Esq.
`THE O’MARA LAW FIRM, P.C.
`311 East Liberty Street
`Reno, Nevada 89501
`
`Brian J. Robbins, Esq.
`Stephen J. Oddo, Esq.
`Eric M. Carrino, Esq.
`ROBBINS LLP
`5040 Shoreham Place
`San Diego, CA 82122
`
`Attorneys for Plaintiff Romero St.
`Clair and Proposed Co-Lead
`Counsel for Plaintiffs
`
`Steve Morris, Esq.
`Rosa Solis-Rainey, Esq.
`MORRIS LAW GROUP
`801 S. Rancho Dr., Ste B4
`Las Vegas, NV 89106
`
`Attorneys for Nominal Defendant
`Workhorse Group, Inc.
`
`///
`
`///
`
`///
`
`
`
`

`

`
`
`
`
`
`
`I further certify that a copy of this document will be personally delivered as
`follows:
`
`Honorable Nancy Allf
`Department 27
`Eighth Judicial District Court
`200 Lewis Avenue
`Las Vegas, Nevada 89155
`
`
`
`
`
`
`
`LLP19655692_v1
`19655692_v1
`
`
`
`
`/s/ Valerie L. Larsen
`An Employee of Holland & Hart
`
`
`
`
`
`
`
`
`
`

`

`Electronically Filed
`6/3/2022 3:30 PM
`Steven D. Grierson
`CLERK OF THE COURT
`
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`DECL
`THE O'MARA LAW FIRM, P.C.
`DAVID C. O'MARA
`Nevada State Bar No. 8599
`311 E. Liberty Street
`Reno, NV 89501
`Telephone: (775) 323-1321
`Facsimile: (775) 323-4082
`E-mail: david@omaralaw.net
`
`MATTHEW L. SHARP, LTD.
`MATTHEW L. SHARP
`Nevada State Bar No. 4746
`432 Ridge Street
`Reno, NV 89501
`Telephone: (775) 324-1500
`Facsimile: (775) 284-0675
`E-mail: matt@mattsharplaw.com
`
`Co-Liaison Counsel for Plaintiffs
`
`[Additional Counsel listed on Signature Page]
`
`IN THE EIGHTH JUDICIAL DISTRICT COURT OF THE STATE OF NEVADA
`IN AND FOR CLARK COUNTY
`
`IN RE WORKHORSE GROUP INC.
`STOCKHOLDER DERIVATIVE
`LITIGATION
`
`This Document Relates To:
`
`ALL ACTIONS.
`
`Lead Case No. A-21-833050-B
`
`(Consolidated with Case No. A-21-836888-B)
`Dept.: 27
`
`DECLARATION OF STEPHEN J. ODDO
`IN SUPPORT OF PLAINTIFFS'
`MEMORANDUM OF POINTS AND
`AUTHORITIES IN OPPOSITION TO
`INDEPENDENT DIRECTORS' MOTION
`TO DISMISS FOR FAILURE TO PLEAD
`DEMAND FUTILITY AND FOR
`FAILURE TO STATE A CLAIM
`Hearing Date: August 4, 2022 at 10:30 a.m.
`
`Case Number: A-21-833050-B
`
`APP194
`
`

`

`
`
`I, STEPHEN J. ODDO, declare as follows:
`1.
`I am an attorney duly licensed to practice before all of the courts of the State of
`California, and am admitted to practice in this Court pursuant to Nevada Supreme Court Rule 42. I am
`a partner with Robbins LLP, co-lead counsel for plaintiffs Romario St. Clair and Andrew Everson in
`the above-captioned action. I submit this declaration in support of Plaintiffs' Memorandum of Points
`and Authorities in Opposition to Independent Directors' Motion to Dismiss for Failure to Plead Demand
`Futility and for Failure to State a Claim, which is filed contemporaneously herewith. I have personal
`knowledge of the matters stated herein and, if called upon, I could and would competently testify
`thereto.
`True and correct copies of the exhibits listed below are attached to the Appendix of
`2.
`Exhibits to Plaintiffs' Memorandum of Points and Authorities in Opposition to Independent Directors'
`Motion to Dismiss for Failure to Plead Demand Futility and for Failure to State a Claim:
`
`Exhibit
`
`Description
`
`1
`
`2
`
`3
`
`4
`
`Fuzzy Panda Research, Workhorse Group Inc. (WKHS)
`Short, The "Brakes" Fall Off The USPS Story (Oct. 8, 2020)
`
`Order Denying Defendants' Motion to Dismiss and Granting
`Lead Plaintiffs' Motion to Strike, In re Wynn Resorts, Ltd.
`Derivative Litigation, Lead Case No. A-18-769630-B (Nev.
`Dist. Ct-Clark Cty. Sept. 4, 2018)
`
`Transcript of Workhorse Group Inc. "Q2 2021 Workhorse
`Group Inc Earnings Call" (Aug. 9, 2021)
`
`Transcript of Telephonic Rulings of the Court on Defendants'
`Motion to Dismiss, Macomb Cnty. Emps.' Ret. Sys. v.
`McBride, C.A. No. 2019-0658-AGB (Del. Ch. Mar. 9, 2021)
`
`Page(s)
`
`001-054
`
`055-064
`
`065-077
`
`078-123
`
`I declare under penalty of perjury under the laws of the State of Nevada that the foregoing is
`true and correct. Executed this 3rd day of June, 2022 at San Diego, California.
`
`/s/ Stephen J. Oddo
`STEPHEN J. ODDO
`
`
`
`
`1575824
`
`- 1 -
`
`
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`13
`14
`15
`16
`17
`18
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`20
`21
`22
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`26
`27
`28
`
`
`APP195
`
`

`

`
`
`
`CERTIFICATE OF SERVICE
`I hereby certify that I am an employee of The O'Mara Law Firm, P.C., 311 E. Liberty Street,
`Reno, Nevada 89501, and on this date I served a true and correct copy of the foregoing document on all
`parties to this action through the Court's electronic filing and notification system.
`
`Dated: June 3, 2022
`
`
`
`
`
`/s/ Bryan Snyder
`BRYAN SNYDER
`
`- 2 -
`
`1
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`3
`4
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`28
`
`
`APP196
`
`

`

`Electronically Filed
`6/3/2022 3:30 PM
`Steven D. Grierson
`CLERK OF THE COURT
`
`1
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`
`APEN
`THE O'MARA LAW FIRM, P.C.
`DAVID C. O'MARA
`Nevada State Bar No. 8599
`311 E. Liberty Street
`Reno, NV 89501
`Telephone: (775) 323-1321
`Facsimile: (775) 323-4082
`E-mail: david@omaralaw.net
`
`MATTHEW L. SHARP, LTD.
`MATTHEW L. SHARP
`Nevada State Bar No. 4746
`432 Ridge Street
`Reno, NV 89501
`Telephone: (775) 324-1500
`Facsimile: (775) 284-0675
`E-mail: matt@mattsharplaw.com
`
`Co-Liaison Counsel for Plaintiffs
`
`[Additional Counsel listed on Signature Page]
`
`IN THE EIGHTH JUDICIAL DISTRICT COURT OF THE STATE OF NEVADA
`IN AND FOR CLARK COUNTY
`
`IN RE WORKHORSE GROUP INC.
`STOCKHOLDER DERIVATIVE
`LITIGATION
`
`This Document Relates To:
`
`ALL ACTIONS.
`
`Lead Case No. A-21-833050-B
`
`(Consolidated with Case No. A-21-836888-B)
`Dept.: 27
`
`APPENDIX OF EXHIBITS TO
`PLAINTIFFS' MEMORANDUM OF
`POINTS AND AUTHORITIES IN
`OPPOSITION TO INDEPENDENT
`DIRECTORS' MOTION TO DISMISS
`FOR FAILURE TO PLEAD DEMAND
`FUTILITY AND FOR FAILURE TO
`STATE A CLAIM
`Hearing Date: August 4, 2022 at 10:30 a.m.
`
`Case Number: A-21-833050-B
`
`APP197
`
`

`

`
`
`Plaintiffs Romario St. Clair and Andrew Everson ("Plaintiffs") hereby submit this Appendix of
`Exhibits to Plaintiffs' Memorandum of Points and Authorities in Opposition to Independent Directors'
`Motion to Dismiss for Failure to Plead Demand Futility and for Failure to State a Claim.
`
`Exhibit
`
`Description
`
`1
`
`2
`
`3
`
`4
`
`Fuzzy Panda Research, Workhorse Group Inc. (WKHS)
`Short, The "Brakes" Fall Off The USPS Story (Oct. 8, 2020)
`
`Order Denying Defendants' Motion to Dismiss and Granting
`Lead Plaintiffs' Motion to Strike, In re Wynn Resorts, Ltd.
`Derivative Litigation, Lead Case No. A-18-769630-B (Nev.
`Dist. Ct-Clark Cty. Sept. 4, 2018)
`
`Transcript of Workhorse Group Inc. "Q2 2021 Workhorse
`Group Inc Earnings Call" (Aug. 9, 2021)
`
`Transcript of Telephonic Rulings of the Court on Defendants'
`Motion to Dismiss, Macomb Cnty. Emps.' Ret. Sys. v.
`McBride, C.A. No. 2019-0658-AGB (Del. Ch. Mar. 9, 2021)
`
`Page(s)
`
`001-054
`
`055-064
`
`065-077
`
`078-123
`
`
`Dated: June 3, 2022
`
`
`
`
`
`
`
`
`THE O'MARA LAW FIRM, P.C.
`
`/s/ David C. O'Mara
`DAVID C. O'MARA
`311 E. Liberty Street
`Reno, NV 89501
`Telephone: (775) 323-1321
`Facsimile: (775) 323-4082
`E-mail: david@omaralaw.net
`
`MATTHEW L. SHARP, LTD.
`MATTHEW L. SHARP
`432 Ridge Street
`Reno, NV 89501
`Telephone: (775) 324-1500
`Facsimile: (775) 284-0675
`
`Co-Liaison Counsel for Plaintiffs
`
`ROBBINS LLP
`BRIAN J. ROBBINS
`STEPHEN J. ODDO
`ERIC M. CARRINO
`
`- 1 -
`
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`
`APP198
`
`

`

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`1575823
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`
`5040 Shoreham Place
`San Diego, CA 92122
`Telephone: (619) 525-3990
`Facsimile: (619) 525-3991
`E-mail: brobbins@robbinsllp.com
` soddo@robbinsllp.com
` ecarrino@robbinsllp.com
`
`GAINEY MCKENNA & EGLESTON
`GREGORY M. EGLESTON
`THOMAS J. McKENNA
`501 Fifth Ave., 19th Floor
`New York, NY10017
`Telephone: (212) 983-1300
`Facsimile: (212) 983-0383
`
`Co-Lead Counsel for Plaintiffs
`
`- 2 -
`
`APP199
`
`

`

`
`
`
`CERTIFICATE OF SERVICE
`I hereby certify that I am an employee of The O'Mara Law Firm, P.C., 311 E. Liberty Street,
`Reno, Nevada 89501, and on this date I served a true and correct copy of the foregoing document on all
`parties to this action through the Court's electronic filing and notification system.
`
`Dated: June 3, 2022
`
`
`
`
`/s/ Bryan Snyder
`BRYAN SNYDER
`
`- 3 -
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`
`APP200
`
`

`

`
`
`
`
`
`
`EXHIBIT 1
`EXHIBIT 1
`
`APP201
`
`Exhibit Page No. 001
`
`APP201
`
`

`

`Written by Fuzzy Panda Research Use of this Report implies accepting the following Terms of Service
`
`
`Workhorse Group Inc. (WKHS)
`Short
`
`
`Photo is of an Old USPS LLV on Fire – (Source) – Note: this not a photo of a Workhorse Truck but just a metaphor
`for their chances of getting the USPS Contract and what we imagine their USPS Prototype Crash looked like.
`
`
`
`
`The “Brakes” Fall Off The USPS Story:
`Workhorse’s USPS Bid has Numerous Critical Failures:
`
` USPS driver hospitalized from Workhorse parking brake failure
` Prototype EV Trucks dying during test drive
` VT Hackney Deemed the Contract’s value Immaterial
` And So Much, Much More….
`
`October 8, 2020
`
`Fuzzy Panda Research
`
`
`Disclosure: Fuzzy Panda Research and or any affiliated companies, consultants, employees, etc (the “Fuzzy Panda Affiliates”)
`have a short position in stocks of WKHS and/or DPHC (and/or options, swaps, and other derivatives related to the stock) as well
`as bonds of companies covered in such reports and research. “Fuzzy Panda Affiliates” intend to continue transactions in the
`securities of issuers covered on this site for an indefinite period after their first report on a subject company, and they may be
`short, neutral, or long at any time hereafter regardless of initial position and the views stated in research. See full disclaimer at the
`end of the report or at www.fuzzypandaresearch.com/terms
`
`Exhibit Page No. 002
`
`APP202
`
`

`

`Written by Fuzzy Panda Research October 8, 2020
`
`
`Executive Summary:
`A few weeks ago, Hindenburg Research exposed Nikola, a high-flying EV company, as an alleged
`“intricate fraud”. The stock fell over 50% in the process. Nikola has since admitted to purposely rolling a
`truck down a hill to mask the appearance of a working prototype for a promo video… Workhorse rolled
`a USPS prototype truck down a hill accidently1 after their parking brake failed causing a union
`USPS driver to be hospitalized after jumping out of the runaway vehicle. We think this debacle as
`well as the numerous other “critical failures” we will lay out, destroyed Workhorse’s chances of
`ever landing the USPS NGDV award.
`
`“The parking brake failed that [Workhorse] had designed & installed…the
`truck ran away, the USPS driver, an union member, had to jump out of the
`truck while it was moving. He was injured while jumping out of the truck…he
`was actually hospitalized. I think he broke his leg. The Post Office was very
`angry about this and it resulted in the USPS refusing to do anymore testing for
`several months”
`~“A Knowledgeable Source” close to the VT Hackney-Workhorse USPS bid 2
`
`Bulls continue to stand by the hopes that Workhorse will win the USPS (United States Postal Service)
`“NGDV” (Next Generation Development Vehicle) $6.3 billion contract and that will open a door to new
`business and lucrative contracts. We will lay out incontrovertible NEW evidence to end any speculation
`that Workhorse will be awarded any share of the USPS NGDV contract. We will also show that major
`customers shut the door on Workhorse long ago, erasing any mentions of Workhorse Partnerships from
`filings and media.
`
`• VT Hackney was the prime contract bidder in the VT Hackney-Workhorse USPS bid. We learned
`from Hackney’s parent company, ST Engineering, that they exited the bid for the USPS NGDV
`program in 2019 because any award “would not be material.”
`• A source revealed that VT Hackney-Workhorse prototypes had serious performance problems
`including numerous critical failures:
`o Some of the more notable failures were their EV prototype ran out of range and got
`stranded on a road; suspension broke when hitting railroad tracks; chassis performance
`problems; extensive door failures; safety belt failures; motor failures; ran out of power on
`multiple occasions; and the parking brake failure that injured a USPS employee was
`one of the last straws.
`o Workhorse destroyed the USPS relationship further once the USPS realized they were
`being consistently misinformed. Workhorse also occasionally misinformed their partner
`VT Hackney.
`o Workhorse was unable to handle all the work as a subcontractor, leading to poor quality
`products that missed deadlines. This resulted in VT Hackney needing to hire an
`additional subcontractor to help, Prefix.
`
`1 Incident occurred in early Spring 2018 at TRC Transportation Research Center in Mid-Ohio
`2 “A Knowledgeable Source” – We agreed to maintain the anonymity of all our sources given the sensitivity of the topics and the
`revelations they provided. As the quotations will reveal, the individuals were deeply intimate with the matters and all parties they
`were discussing
`
`Page 2 Use of this Report implies accepting Fuzzy Panda Research’s Terms of Service
`
`Exhibit Page No. 003
`
`APP203
`
`

`

`Written by Fuzzy Panda Research October 8, 2020
`
`
`•
`
`o Workhorse does not have the ability, machinery, or engineering talent to fulfill the USPS
`contract even if they somehow won.
`• Major customers like UPS have already moved on from Workhorse–UPS COMPLETELY
`removed any mention of Workhorse in all literature. The UPS contract now belongs almost
`exclusively to Workhorse competitor Arrival. Workhorse’s large UPS order is solely for on-
`demand fulfillment which UPS has not asked for in years.
`Investigator Visits! Employees told us that NO purchase orders are currently being
`fulfilled. They referred to the only trucks in the plant as “Show Units” and “Prototypes.” We
`also discovered NO Automation; NO Assembly Lines; NO IP Protection and their employees
`even let us photograph their ENGINE – the engine is nonproprietary
`• Can Stock Promotion be a “Trade Secret?” Workhorse has a nefarious past working with stock
`promoters charged with fraud; nothing has changed as we uncovered an on-going scheme that
`now appear to have moved to YouTube. The 420+ videos spell out a pattern of deceptive
`practices. Workhorse and Lordstown management have supported the stock promotion by
`actively participating in interviews with the promoters
`• Even IF Workhorse wins the USPS bid, all the economics will go to Lordstown. A licensing
`agreement between Workhorse and Lordstown shows Lordstown to be a beneficiary of a
`manufacturing ROFR in the event Workhorse wins the USPS bid. The agreement implies
`Workhorse will have limited to no economics left and that it never had the capacity to
`manufacture vehicles in the first place. We also reveal just how unprofitable the trucks actually
`are… -631% estimated Gross Margins for parts alone.
`• Very little intellectual property – Workhorse only has two (old) EV patents, one drone patent,
`and five via Navistar that were previously written off as worthless. Lordstown Motors is even
`worse and has 0 IP and selected an underfunded Slovenia company for their mission critical hub
`motor.
`Industry experts confirmed all our concerns and condemned the IP as worthless. They
`o
`also pleaded with us not to invest in the company.
`• Who is Steve Burns? (Lordstown CEO & Workhorse Founder) Evaluating past deals we
`discover a CopyCat entrepreneur who mimics topical ideas, misleads investors, and has decades
`of destroying investor capital with the same web of individuals. Burns is NOT the next Elon
`Musk but certainly might be a much more nefarious version of Trevor Milton.
`• Enter Lordstown (Workhorse 2.0?) – USPS failures and the souring relationship led Stephen
`Burns to desperately piece together a deal for GM’s Lordstown facility moving the GM factory
`and W-15 (now Endurance) assets out of Workhorse.
`Is anyone surprised the insiders are selling? The massive insider sales over recent months are
`the last perilous sign to investors of the inevitable collapse of the company.
`Upcoming (Potential) Negative Catalysts:
`• Q3 & Q4 Revenue Miss of Wall Street estimates. Wall Street has Workhorse production
`ramping - we heard and saw first-hand that it wasn’t.
`• Lordstown’s SPAC merger doesn’t close or gets delayed once GM & new investors realize
`Steve Burns & Lordstown Motors has more red flags than Nikola will they still invest?
`• Most importantly, USPS is expected to announce the NGVP contract winner(s) by year-end.
`According to BTIG analysis, the WKHS downside is to $1 a share (down 95%+) if the USPS
`contract is lost. We agree and believe that downside will soon be reality.
`
`•
`
`Page 3 Use of this Report implies accepting Fuzzy Panda Research’s Terms of Service
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`Exhibit Page No. 004
`
`APP204
`
`

`

`Written by Fuzzy Panda Research October 8, 2020
`
`For the first time ever, we reveal why VT Hackney Sold
`Their USPS Bid Rights for Just $7.6m!
`First we asked VT Hackney WHY? They told us it would be IMMATERIAL to them.
`A major part of the Workhorse bull thesis is the potential for Workhorse to win the USPS Next
`Generation Delivery Vehicle (NGDV) contract. USPS is in the final process of announcing the winner for
`the NGDV for an estimated 180,000 trucks3. The bidding process has gone on for 6 years now. The whole
`contract is estimated to be worth up to $6.3bn in revenue based on the initial USPS RFP Requested Price
`of $25,000 to $35,000 per truck (USPS RFP Source).
`VT Hackney’s parent company is ST Engineering, an $11 billion market cap publicly traded company in
`Singapore (S63:SP). You should think of ST Engineering as the Boeing or GE of Singapore. They have
`$5.8 billion in revenue and $1.2bn in the US. Suffice to say, a large conglomerate like ST Engineering,
`would not sell the rights to a large government contract for just $7.6 million if there was any chance it
`was viable ($1m cash + $6.6m WKHS stock – 8-K). Thus, it was very strange and unusual for us to see a
`lead bidder (VT Hackney) sell the rights to a $6.3 billion program like the USPS NGDV for an
`insignificant amount… without good reason. Especially after investing 5 years of time, resources, and
`R&D. We reached out4 and asked the question that no analyst seems to have the answer to: “Why?”
`They answered. ST Engineering considered the financial returns and VT Hackney’s estimated share (if
`awarded) to be immaterial to the Group. In FY 2018, ST’s net profit was ~$366m. We learned that ST
`Engineering dropped the project given that VT Hackney’s expected share of the USPS NGDV award (if
`awarded) was worth LESS THAN $19m.
`
`“…VT Hackney’s share of the USPS NGDV Program contract (if awarded) would not be
`material to the ST Engineering Group” ”…we considers transaction as material if
`exceeds 5% of Group’s last audited Net Profits”
`
`
`3 NGDV contract is for replacing the Grumman Long-Life Vehicles. As of Sept 30, 2019 the USPS currently had 140,664
`Grumman LLV’s and 20,987 RHD FFVs so 161,651 current vehicles to replace (OIG Audit of USPS Acquisition Strategy).
`4 https://www.stengg.com/en/investor-relations/ - email at ir@stengg.com or call at +65 6722-1818
`
`Page 4 Use of this Report implies accepting Fuzzy Panda Research’s Terms of Service
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`Exhibit Page No. 005
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`APP205
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`

`

`Written by Fuzzy Panda Research October 8, 2020
`
`A source REVEALED the real reasons why VT Hackney
`dropped out of the USPS NGDV bid:
`
`“I’m trying to be positive, but I’m trying to tell you the truth.”
`- A Knowledgeable Source
`
`
`With the vast majority of Workhorse’s valuation and future success reliant on the NGDV contract, we
`sought out to uncover the events of the VT Hackney-Workhorse partnership in 2016-2019 to determine if
`Workhorse truly had a chance to win the contract. Our findings and sources revealed a far worse reality
`than we could’ve imagined.
`Numerous Critical Failures – Our source revealed to us in great detail that the VT Hackney-Workhorse
`NGDV prototypes continuously experienced critical failures and breakdowns throughout their testing.
`The team’s most notable prototype failures included – motors breaking (one or two motors burnt out);
`safety belt problems; constant door problems where the doors would fail to either latch or to open;
`problems with performance of the chassis, suspension problems (including one time where the
`suspension broke when it hit a railroad track); range problems (including a couple of times where a
`truck got stranded on the road); once or twice where they ran out of power; and most notably the
`previously mentioned notorious parking brake failure resulting in a USPS employee being hospitalized.
`Workhorse has a very strained relationship with the USPS – Our source confirmed that Workhorse
`lost their original prime bid back in 2016 and as a result joined VT Hackney as a subcontractor.
`One of the simple reasons why Workhorse lost their bid was the USPS required in their specs that all
`bidders submit designs in Solidworks (a design software) and despite this Workhorse still decided to carry
`on with creating all their designs in AutoCAD. Workhorse’s reason why was that its engineers didn’t
`know Solidworks and AutoCAD was easier to use. Workhorse’s relationship with the USPS became
`increasingly strained from Workhorse “not telling the post office the 100% truth” and “misinforming [the
`USPS] over and over again” which the post office astutely realized and caught them on multiple times.
`The breaking point in the relationship appears to have been when Workhorse’s designed and
`manufactured parking brake failed during a standard downhill test. The disastrous failure resulted in the
`hospitalization of a unionized employee, who had to “dive from a runaway vehicle”. The event caused all
`of the VT Hackney-Workhorse’s prototype testing to be halted for several months. A source told us
`Hackney may not have been part of any further testing to that point in anticipation of exiting the
`partnership.
`Workhorse’s performance, quality, and design can be best described as “makeshift” and was generally
`bad for the USPS NGDV project. Workhorse parts had large variance in components (millimeters off
`from their original design); poor fit & finish; essential deliveries would miss deadlines; and overall not
`having the best design nor execution. This failure to deliver was so bad that VT Hackney eventually was
`forced to hire an additional subcontractor “Prefix” to come in to help. Workhorse apparently even
`“misinformed” VT Hackney a few times. VT Hackney’s good engineers eventually started leaving the
`project because they didn’t want to work on a losing bid.
`Could Workhorse deliver on the contract if they were awarded it? The answer is an unequivocal NO.
`Workhorse currently does not have the capacity to mass produce anything. They lack the “tooling
`engineers and the expensive stamping machines”. Another major problem was that the trucks are required
`
`Page 5 Use of this Report implies accepting Fuzzy Panda Research’s Terms of Service
`
`Exhibit Page No. 006
`
`APP206
`
`

`

`Written by Fuzzy Panda Research October 8, 2020
`
`
`to last 25 years and the Hackney-Workhorse prototypes were not able to come close to lasting a year or
`two.
`The Hackney-Workhorse Prototype had irrational economics of their prototype. Apparently the parts
`alone (excluding the motors; $10k each) and Panasonic lithium batteries ($10-12k) cost $236,000. The
`USPS price max price for the truck is $35k – each truck had a Gross Profit of at least NEGATIVE
`$226,000 and that is before labor costs. Part of these very high costs came from the fact that Workhorse
`did not manufacture the engine and key parts and instead all of those were outsourced.
`We were shocked to realize how poorly the Hackney-Workhorse prototypes performed and how bad the
`USPS and Workhorse relationship currently is. The situation at Workhorse is so much worse than anyone
`could’ve imagined that we unequivocally believe, Workhorse simply has NO chance of winning the
`NGDV contract.
`
` “Ultimately, VT Hackney threw up their hands and gave up, pretty much
`every engineer had left the project”
`- A Knowledgeable Source
`
`
`Workhorse deemed the VT Hackney purchase unworthy of a press release?
`Workhorse historically press releases virtually everything (e.g. patent filings; doing a drone or vehicle
`testing; a cancelable order; and especially all new partnerships), regardless of magnitude, so we found it
`particularly telling when it omitted the VT Partnership update. Acquiring Hackney’s assets for such a
`material contract, at a pittance of its underlying value should have been an extraordinary accomplishment
`for the company. If the underlying contract was material of course: at least more so than the “Vehicle
`Demonstration and Test Drive” it chose to announce a couple days prior. Instead, the details were buried
`in an 8-K filed SEVEN days after it was finalized (USPS NGDV Asset Agreement with ST Engineering)
`
`
`
`
`
`
`
`Page 6 Use of this Report implies accepting Fuzzy Panda Research’s Terms of Service
`
`Exhibit Page No. 007
`
`APP207
`
`

`

`Written by Fuzzy Panda Research October 8, 2020
`
`Workhorse’s Bid as a “Prime” Already Failed:
`We show conclusively that Workhorse was in fact eliminated from the process “early on”
`In April 2015 – Workhorse advanced from 40 interested suppliers to the next round of 15 prequalified
`suppliers – Source April 14, 2015 WKHS PR (Workhorse was formerly known as AMP Holdings but the
`management team changed the company’s name in 2015).
`Sept 16, 2016 –Workhorse FAILED to advance from the round of 15 bidders to 6 (link).
`Sept 19, 2016 –Workhorse joined VT Hackney’s Team (WKHS 9-19 Press Release; ST Engineering VT
`Hackney 9-21-16 press release) as one of the remaining 6 bidders added Wor