8-K/A - LVWR - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 2)

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): September 26, 2022

LiveWire Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-41511	87-4730333
(State or other jurisdiction<br>of incorporation)	(Commission<br>File Number)	(I.R.S. Employer<br>Identification No.)
3700 West Juneau Avenue<br> <br>Milwaukee, WI		53208
(Address of principal executive offices)		(Zip Code)

(650) 447-8424

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading<br>Symbol(s)	Name of each exchange<br>on which registered
Common stock, $0.0001 par value per share	LVWR	New York Stock Exchange
Warrants to purchase common stock	LVWR WS	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

INTRODUCTORY NOTE

This Amendment No. 2 on Form 8-K/A (this “Amendment No. 2”) amends Item 9.01 of the Current Report on Form 8-K filed by LiveWire Group, Inc. (the “Company”) on September 30, 2022, as amended by the Amendment No. 1 on Form 8-K/A filed on September 30, 2022 (collectively, the “Original Report”), in which the Company reported, among other events, the completion of the Business Combination. This Amendment No. 2 amends the historical financial statements provided under Items 9.01(a) and 9.01(b) in the Original Report to include (a) the unaudited interim combined financial statements of LiveWire EV, LLC., (“Legacy LiveWire”), as of September 25, 2022 and for the three and nine months ended September 25, 2022 and September 26, 2021, and (b) the unaudited pro forma condensed combined financial information of ABIC and Legacy LiveWire as of and for the nine months ended September 25, 2022 and for the year ended December 31, 2021. This Amendment No. 2 does not amend any other item of the Original Report or purport to provide an update or a discussion of any developments at the Company subsequent to the filing date of the Original Report.

Capitalized terms used but not defined herein have the meanings given in the Original Report.

Item 9.01.	Financial Statements and Exhibits.

(a) Financial statements of businesses acquired.

The audited combined financial statements of Legacy LiveWire as of and for the years ended December 31, 2021 and 2020, and the related combined statements of operations and comprehensive loss, changes in equity and cash flows for each of the three years in the period ended December 31, 2021 are incorporated herein by reference from the Original Report. The unaudited interim combined financial statements of Legacy LiveWire as of and for the periods ended June 26, 2022 and June 27, 2021 are incorporated herein by reference from the Original Report.

The unaudited interim combined financial statements of Legacy LiveWire as of September 25, 2022 and for the periods ended September 25, 2022 and September 26, 2021 are filed as Exhibit 99.5 and incorporated herein by reference.

Also included herewith as Exhibit 99.6 and incorporated herein by reference is the Management’s Discussion and Analysis of Financial Condition and Results of Operations for Legacy LiveWire for the three and nine months ended September 25, 2022.

(b) Pro forma financial information.

The unaudited pro forma condensed combined financial information of ABIC and Legacy LiveWire as of and for the six months ended June 26, 2022 and for the year ended December 31, 2021 is incorporated herein by reference from the Original Report. The unaudited pro forma condensed combined financial information of ABIC and Legacy LiveWire as of and for the nine months ended September 25, 2022 and for the year ended December 31, 2021 is filed as Exhibit 99.7 and incorporated herein by reference.

(d) Exhibits.

Exhibit <br>No.	Description
99.5	Unaudited interim combined financial statements of Legacy LiveWire as of and for the periods ended September 25, 2022 and September 26, 2021.
99.6	Management’s Discussion and Analysis of Financial Condition and Results of Operations for Legacy LiveWire for the three and nine months ended September 25, 2022.
99.7	Unaudited pro forma condensed combined financial information of AEA-Bridges Impact Corp. and Legacy LiveWire as of and for the nine months ended September 25, 2022 and for the year ended December 31, 2021.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	LiveWire Group, Inc.
Date: November 9, 2022	By:	/s/ Tralisa Maraj
	Name:	Tralisa Maraj
	Title:	Chief Financial Officer

EX-99.5

Exhibit 99.5

LiveWire EV

US GAAP Combined financialstatements

LiveWire EV

US GAAP Combined financial statements

For the three and nine month periods ended September 25, 2022 and September 26, 2021

LiveWire EV

US GAAP Combined financial statements

INDEX TO FINANCIAL STATEMENTS

LiveWire EV FINANCIAL STATEMENTS

COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS		2
COMBINED BALANCE SHEETS		3
COMBINED STATEMENTS OF CASH FLOWS		4
COMBINED STATEMENTS OF CHANGES IN EQUITY		5
1)	Description of Business and Basis of Presentation	6
2)	New Accounting Standards	8
3)	Revenue	8
4)	Income Taxes	9
5)	Additional Balance Sheet Information	9
6)	Leases	10
7)	Fair Value Measurements	11
8)	Product Warranty and Recall Campaigns	12
9)	Employee Retirement and Other Postretirement Benefits	13
10)	Commitments and Contingencies	13
11)	Share-Based Awards	13
12)	Related Party Transactions	14
13)	Subsequent Events	16

LiveWire EV

US GAAP Combined financial statements

COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 25,<br>2022			September 26,<br>2021			September 25,<br>2022			September 26,<br>2021
Revenue, net (Note 3)	$	11,953		$	7,027		$	37,615		$	22,933
Costs and expenses:
Cost of goods sold		11,800			8,795			36,987			26,050
Selling, administrative and engineering expense		22,111			15,345			57,392			45,128
Operating expense		33,911			24,140			94,379			71,178
Operating loss		(21,958	)		(17,113	)		(56,764	)		(48,245	)
Other income (expense), net		79			(8	)		235			(19	)
Interest expense related party (Note 12)		—			(74	)		(475	)		(198	)
Interest (expense) income		(3	)		1			(23	)		11
Loss before income taxes		(21,882	)		(17,194	)		(57,027	)		(48,451	)
Income tax (benefit) provision		(4	)		8			159			55
Net loss		(21,878	)		(17,202	)		(57,186	)		(48,506	)
Other comprehensive loss:
Foreign currency translation adjustments		(60	)		(40	)		(154	)		(68	)
Comprehensive loss	$	(21,938	)	$	(17,242	)	$	(57,340	)	$	(48,574	)

See accompanying notes to Combined financial statements.

LiveWire EV

US GAAP Combined financial statements

COMBINED BALANCE SHEETS

(In thousands)

	(Unaudited)<br>September 25,<br>2022			December 31,<br>2021
ASSETS
Current assets:
Cash	$	2,168		$	2,668
Restricted cash (Note 1)		100,000			—
Accounts receivable, net		3,208			6,772
Accounts receivable from related party (Note 12)		590			124
Inventories (Note 5)		33,613			16,797
Other current assets (Note 5)		931			3,556
Total current assets		140,510			29,917
Property, plant and equipment, net (Note 5)		26,111			17,894
Goodwill		8,327			8,327
Deferred tax assets		72			72
Lease assets (Note 6)		2,495			3,471
Intangible assets, net		1,925			2,271
Other long-term assets (Note 5)		2,939			—
Total assets	$	182,379		$	61,952
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	17,624		$	9,011
Accrued liabilities (Note 5)		15,538			15,574
Deferred business combination consideration (Note 1)		100,000			—
Contingent consideration liability (Note 7)		—			2,180
Notes payable to related party (Note 12)		—			103
Current portion of lease liabilities (Note 6)		1,093			1,146
Total current liabilities		134,255			28,014
Long-term supplier liability (Note 5)		3,435			5,330
Long-term portion of lease liabilities (Note 6)		1,504			2,423
Deferred tax liabilities		254			186
Long-term portion of notes payable to related party (Note 12)		—			5,699
Other long-term liabilities		424			375
Commitments and contingencies (Note 10)		—			—
Total **** liabilities		139,872			42,027
Total equity:
Net Parent investment		42,516			19,780
Accumulated other comprehensive (loss) income		(9	)		145
Total equity		42,507			19,925
Total liabilities and equity	$	182,379		$	61,952

See accompanying notes to Combined financial statements.

LiveWire EV

US GAAP Combined financial statements

COMBINED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended
	September 25,<br>2022			September 26,<br>2021
Cash flows from operating activities:
Net loss	$	(57,186	)	$	(48,506	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization		3,717			3,354
Change in valuation of contingent consideration liability		—			28
Stock compensation		(171	)		511
Deferred income taxes		68			(19	)
Payment of contingent consideration in excess of acquisition date fair value		(413	)		(344	)
Other, net		(3,031	)		(531	)
Changes in current assets and liabilities:
Accounts receivable, net		3,564			(513	)
Accounts receivable from related party		(466	)		5
Inventories		(16,816	)		1,126
Other current assets		2,615			(887	)
Accounts payable and accrued liabilities		3,929			(5,952	)
Net cash used by operating activities		(64,190	)		(51,728	)
Cash flows from investing activities:
Capital expenditures		(8,927	)		(7,747	)
Net cash used by investing activities		(8,927	)		(7,747	)
Cash flows from financing activities:
Borrowings on notes payable to related party		15,333			2,100
Repayments on notes payable to related party		—			(1,000	)
Deposit in advance of business combination		100,000			—
Payment of contingent consideration up to acquisition date fair value		(1,767	)		(1,836	)
Transfers from Parent		59,051			61,404
Net cash provided by financing activities		172,617			60,668
Net increase in cash and restricted cash		99,500			1,193
Cash and restricted cash:
Cash and restricted cash, beginning of period		2,668			2,401
Cash and restricted cash, end of period	$	102,168		$	3,594
Reconciliation of cash and restricted cash on the Combined balance sheets to the Combined<br>statements of cash flows:
Cash	$	2,168		$	3,594
Restricted cash		100,000			—
Cash and restricted cash per the Combined statements of cash flows	$	102,168		$	3,594

See accompanying notes to Combined financial statements.

LiveWire EV

US GAAP Combined financial statements

COMBINED STATEMENTS OF CHANGES IN EQUITY

(In thousands)

(Unaudited)

Changes in equity for the three months ended September 25, 2022 and September 26, 2021 were as follows:

	Net ParentInvestment			AccumulatedOtherComprehensiveIncome (Loss)			Total Equity
Balance, June 26, 2022	$	37,840		$	51		$	37,891
Net loss		(21,878	)		—			(21,878	)
Other comprehensive loss		—			(60	)		(60	)
Net contribution from Parent		26,554			—			26,554
Balance, September 25, 2022	$	42,516		$	(9	)	$	42,507
	Net ParentInvestment			AccumulatedOtherComprehensiveIncome (Loss)			Total Equity
Balance, June 27, 2021	$	13,707		$	202		$	13,909
Net loss		(17,202	)		—			(17,202	)
Other comprehensive loss		—			(40	)		(40	)
Net contribution from Parent		18,697			—			18,697
Balance, September 26, 2021	$	15,202		$	162		$	15,364

Changes in equity for the nine months ended September 25, 2022 and September 26, 2021 were as follows:

	Net ParentInvestment			AccumulatedOtherComprehensiveIncome (Loss)			Total Equity
Balance, December 31, 2021	$	19,780		$	145		$	19,925
Net loss		(57,186	)		—			(57,186	)
Other comprehensive loss		—			(154	)		(154	)
Net contribution from Parent		79,922			—			79,922
Balance, September 25, 2022	$	42,516		$	(9	)	$	42,507
	Net ParentInvestment			AccumulatedOtherComprehensiveIncome (Loss)			Total Equity
Balance, December 31, 2020	$	1,793		$	230		$	2,023
Net loss		(48,506	)		—			(48,506	)
Other comprehensive loss		—			(68	)		(68	)
Net contribution from Parent		61,915			—			61,915
Balance, September 26, 2021	$	15,202		$	162		$	15,364

See accompanying notes to Combined financial statements.

LiveWire EV

Notes to Combined financial statements

(Unaudited)

1)	Description of Business and Basis of Presentation

LiveWire EV (the “Company”) is comprised of certain net assets and operating activities related to the historical electric vehicle operations of certain wholly owned indirect subsidiaries of Harley-Davidson, Inc. (the “Parent”). The Parent has common shares listed on the New York Stock Exchange. The accompanying combined financial statements and footnotes (“Combined financial statements”) present the assets, liabilities, revenues, and expenses directly attributed to the Company, as well as certain allocations from the Parent. The Company does not operate as a separate, stand-alone entity and historically was included as part of the motorcycles and related products (“Motorcycles”) segment of the Parent.

The Company has one reportable segment that sells electric vehicles, parts and accessories, and apparel in the United States (US) and certain international markets. The Company introduced its first electric motorcycle in July 2019 as the Harley-Davidson LiveWire. In the second half of 2021, the Company established the LiveWire brand and introduced the rebranded LiveWire One electric motorcycle. The Company also sells electric balance bikes under the STACYC and H-D IRONe brands, as well as through private label arrangements. Electric motorcycles are sold at wholesale to a network of independent dealers and, beginning in the third quarter of 2021, also at retail through a Company-operated retail partner and through online sales. Electric balance bikes are sold at wholesale to independent dealers and an independent distributor, as well as, direct to consumers online.

Merger / Business Combination with AEA-Bridges Impact Corp.

On December 12, 2021, the Parent and AEA-Bridges Impact Corp (ABIC), a special purpose acquisition company (SPAC) sponsored by executives of AEA Investors and Bridges Fund Management, entered into a definitive business combination agreement (Business Combination Agreement) under which, at closing, ABIC (following its Domestication, as defined in the Business Combination Agreement) combined with the Company to create a new publicly traded company (Combined Company), listed on the New York Stock Exchange. Concurrently with the execution of the Business Combination Agreement, the Company entered into subscription agreements with its Parent and an independent strategic investor, Kwang Yang Motor Co., Ltd. (KYMCO), (collectively, the “PIPE Investors”) pursuant to which, on the terms and subject to the conditions therein, the PIPE Investors collectively subscribed for 20.0 million shares of common stock for an aggregate purchase price equal to $200.0 million (the “PIPE Investment”). In connection with this transaction, the Company received a $100 million cash deposit from KYMCO during the quarter ended September 25, 2022 in advance of the pending transaction close. The $100 million cash deposit was included in Restricted cash on the Combined balance sheet as of September 25, 2022. In addition, the Company also recorded a $100 million liability in Deferred business combination consideration on the Combined balance sheet as of September 25, 2022, representing the Company’s obligation to return the funds to KYMCO in the event the transaction did not close.

As a result of the Business Combination Agreement signed on December 12, 2021, the Parent and the Company entered into a separation agreement (the Separation Agreement) which sets forth the Company’s agreements with Harley-Davidson regarding the separation of the LiveWire business from Harley-Davidson into an independent company (the “Separation”). The business combination, the PIPE Investment and the Separation were each consummated on September 26, 2022 as more fully described in Note 13,Subsequent Events.

Basis of Presentation

In the opinion of the Company’s management, the accompanying unaudited Combined financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Combined balance sheet as of September 25, 2022, the Combined statements of operations and comprehensive loss and the Combined statements ofchanges in equity for the three and nine months ended September 25, 2022 and September 26, 2021, and the Combined statement of cash flows for the nine months ended September 25, 2022 and September 26, 2021.

Certain information and disclosures normally included in complete financial statements have been condensed or omitted pursuant to the rules and regulations of the United States Securities and Exchange Commission (SEC) and generally accepted accounting principles in the United States of America (U.S. GAAP) for interim financial reporting. These unaudited Combined financialstatements should be read in conjunction with the audited combined financial statements and accompanying notes for the years ended December 31, 2021, 2020 and 2019.

The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the amounts reported in the Combined financial statements and the accompanying notes. Actual results could differ from those estimates.

The Combined financial statements present the Company as it was historically managed and operated by the Parent. The accompanying Combined financial statements have been derived from the consolidated financial statements and accounting records of the Parent to reflect the operations of the Company for the periods presented and have been prepared in accordance with accounting

LiveWire EV

Notes to Combined financial statements

(Unaudited)

principles generally accepted in the US and pursuant to the rules and regulations of the US Securities and Exchange Commission (SEC). The Company’s financial information is presented as combined carve-out financial information using the historical results of operations and the historical bases of assets and liabilities of the Parent. Intercompany transactions within the Company have been eliminated in preparing the Combined financial statements.

Management of the Company believes assumptions underlying the Combined financial statements are reasonable. However, the Combined financial statements may not be indicative of the combined financial position, results of operations, and cash flows of the Company in the future or if it had operated independently of the Parent. Actual costs that would have been incurred if the Company had operated as a standalone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, primarily including, technology support, marketing, finance, engineering, usage of shared assets, and other general corporate and administrative costs, such as treasury, human resources, and others. The Company also may incur additional costs associated with being a standalone, publicly listed company that were not included in the expense allocations and, therefore, may result in additional costs that are not reflected in the historical results of operations, financial position, and cash flows. Principal assumptions underlying the Combined financial statements include:

•	The Combined statements of operations and comprehensive loss include all revenues and costs directly<br>attributable to the Company as well as an allocation of expenses from the Parent related to shared manufacturing costs; engineering expenses, selling expenses, general and administrative expenses, marketing expenses, employee-related expenses,<br>charges for use of shared assets, and other expenses related to Parent’s corporate functions that provide support to the Company. The Parent allocates these costs to the Company using methodologies that management believes are appropriate and<br>reasonable. Costs are generally attributed based on specific identification, legal obligation, or in another manner that best reflects the nature of how the expense is incurred, such as gross revenue, wholesale motorcycle shipments, standard cost,<br>production units, and other allocation methods as deemed appropriate.
•	The Combined balance sheets include the attribution of certain assets and liabilities that have<br>historically been held at the corporate level by the Parent, but which are specifically identifiable or attributable to the Company. The Parent’s cash management and financing activities are centralized. Accordingly, no cash has been attributed<br>to the Combined financial statements, except for certain legally held cash accounts held by entities included in the Combined financial statements.
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•	Net Parent investment in the Combined statements of changes in equity and the Combined balancesheets represents the accumulation of the Company’s net loss over time and the net effect of transactions with and allocations from the Parent.
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•	Transactions between the Parent and the Company are generally considered to be effectively settled in cash at the<br>time the transaction is recorded except for the note payable to related party and accounts receivable from related party (see disclosure in Note 12, Related Party Transactions). The net effect of the settlement of transactions with the Parent<br>is reflected in the combined statements of cash flows as a financing activity and in the Combined balance sheets as “Net Parent investment.”
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•	Within the Combined financial statements and tables presented, certain columns and rows may not add due to<br>the use of rounded numbers for disclosure purposes.
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•	Certain comparative amounts have been reclassified to conform to the current year presentation.<br>
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Liquidity and Going Concern

The Company historically managed liquidity risk by effectively managing its working capital, capital expenditures, and cash flows, making use of a central treasury function at the Parent to manage pooled cash investments and borrowing requirements. As an early-stage growth company, the Company does not expect to generate adequate liquidity from operations to fund its operations for the next twelve months. Prior to the business combination with ABIC, the Parent supported the operating, investing and financing activities of the Company. Upon consummation of the business combination with ABIC, the Company received net cash proceeds of approximately $293.7 million as more fully described in Note 13, Subsequent Events. Management believes that cash on hand and the proceeds received from the business combination will provide sufficient liquidity to meet the Company’s projected obligations for at least twelve months from November 9, 2022, the date these Combined financial statements were issued.

The Combined financial statements for the Company have been prepared on the basis of accounting policies applicable to a going concern. The going concern basis presumes that for the foreseeable future, funds will be available to finance future operations and that the realization of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

LiveWire EV

Notes to Combined financial statements

(Unaudited)

2)	New Accounting Standards

Other than the recent accounting pronouncements disclosed in the Company’s Combined financial statements for the fiscal year ended December 31, 2021, there have been no new accounting pronouncements or changes in accounting pronouncements during the nine months ended September 25, 2022 that are significant or potentially significant to the Company.

3)	Revenue

The Company **** recognizes revenue when it satisfies a performance obligation by transferring control of a good or service to a customer. Revenue is measured based on the consideration that the Company expects to be entitled to in exchange for the goods or services transferred. Taxes that are collected from a customer concurrent with revenue-producing activities are excluded from revenue.

Disaggregated Revenue, net by major source was as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 25,<br>2022		September 26,<br>2021		September 25,<br>2022		September 26,<br>2021
Electric motorcycles	$	4,638	$	1,165	$	11,620	$	5,357
Electric balance bikes, parts and accessories		7,017		5,572		25,214		16,914
Motorcycle parts and accessories		295		287		773		575
Apparel		3		3		8		87
Revenue, net	$	11,953	$	7,027	$	37,615	$	22,933

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

The Company offers sales incentive programs to independent dealers and retail customers designed to promote the sale of its products. The Company estimates its variable consideration related to its sales incentive programs using the expected value method. The Company accounts for consideration payable to a customer as part of its sales incentives as a reduction of revenue, which is accrued at the later of the date the related sale is recorded or the date the incentive program is both approved and communicated.

The Company offers the right to return eligible parts and accessories and apparel. When the Company offers a right to return, it estimates returns based on an analysis of historical trends and records revenue on the initial sale only in the amount that it expects to be entitled. The remaining consideration is deferred in a refund liability account. The refund liability is remeasured for changes in the estimate at each reporting date with a corresponding adjustment to revenue.

Variable consideration related to sales incentives and rights to return is adjusted at the earliest of when the amount of consideration the Company expects to receive changes, or the consideration becomes fixed. Adjustments for variable consideration related to previously recognized sales were not material during 2022 and 2021.

Shipping and handling costs associated with freight after control of a product has transferred to a customer are accounted for as fulfillment costs. The Company accrues for the shipping and handling in the same period that the related revenue is recognized.

The Company offers standard, limited warranties on its motorcycles, electric balance bikes, and parts and accessories. These warranties provide assurance that the product will function as expected and are not separate performance obligations. The Company accounts for estimated warranty costs as a liability upon transferring control to the customer.

Contract Liabilities

The Company maintains certain deferred revenue balances related to payments received at contract inception in advance of the Company’s performance under the contract and generally relates to customer deposits for electric balance bikes. Deferred revenue is recognized as revenue as the Company performs under the contract. Deferred revenue, included in Accrued liabilities on the Combined balance sheets, was as follows (in thousands):

	September 25,<br>2022		September 26,<br>2021
Balance, beginning of period	$	1,644	$	149
Balance, end of period		221		1,791

LiveWire EV

Notes to Combined financial statements

(Unaudited)

Previously deferred revenue recognized as revenue in the nine months ended September 25, 2022 and September 26, 2021 was $1,644 thousand and $149 thousand, respectively. The Company expects to recognize all of the remaining deferred revenue in 2022.

4)	Income Taxes

The Company’s effective income tax rate for the nine months ended September 25, 2022 was -0.28% compared to -0.11% for the nine months ended September 26, 2021.

The Company generated operating losses in each of the periods presented. The Company is not recognizing an income tax benefit related to these losses because the Company does not believe there is sufficient positive evidence regarding the ability to realize the benefit of these losses. Further, the operating results of the Company have historically been included in the consolidated federal and combined state tax returns of the Parent and the resulting tax attributes have been fully utilized by the Parent and are no longer available to the Company for future use. Certain separate state Net Operating Losses (NOLs) which belong to the Company are reflected in the financials presented. After an assessment of the positive and negative evidence regarding the realizability of the separate state NOLs and other deferred tax assets reflected in the financials, it was determined a valuation allowance was required.

5)	Additional Balance Sheet Information

Inventories consisted of the following (in thousands):

	September 25,<br>2022		December 31,2021
Raw materials and work in progress	$	6,924	$	5,233
Electric motorcycles and electric balance bikes		21,854		8,636
Parts and accessories and apparel		4,835		2,928
	$	33,613	$	16,797

Other current assets include prepaid supplier deposits of $176 thousand and $3,025 thousand as of September 25, 2022 and December 31, 2021 relating to future inventory purchases.

Property, plant and equipment, netconsisted of the following, (in thousands):

	September 25,<br>2022			December 31,2021
Construction in progress	$	21,030		$	9,746
Tooling		9,827			10,155
Machinery and equipment		2,844			3,317
Software		2,798			2,798
Leasehold improvements		1,635			1,266
		38,134			27,282
Accumulated depreciation		(12,023	)		(9,388	)
	$	26,111		$	17,894

Depreciation for the three months ended September 25, 2022 and September 26, 2021 was $796 thousand and $1,167 thousand, respectively, and $3,371 thousand and $3,008 thousand for the nine months ended September 25, 2022 and September 26, 2021, respectively. Software, net of accumulated amortization, included in Property, plant and equipment, net was $1,542 thousand and $2,242 thousand as of September 25, 2022 and December 31, 2021, respectively. The Company had $6,880 thousand and $3,651 thousand related to purchases of Property, plant and equipment included in Accounts payable as of September 25, 2022 and December 31, 2021, respectively.

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

LiveWire EV

Notes to Combined financial statements

(Unaudited)

Accrued liabilities consisted of the following, (in thousands):

	September 25,<br>2022		December 31,2021
Payroll and employee benefits	$	4,712	$	6,129
Engineering		3,608		2,680
Supplier commitment		1,634		—
Warranty and recalls		833		720
Deferred revenue		221		1,644
Sales incentives		88		795
Taxes		591		918
Other		3,851		2,688
	$	15,538	$	15,574

The Company has a liability related to an excess firm purchase commitment to a supplier. Based on contractual terms, beginning with calendar year 2022, the Company expects to pay, in January of each calendar year, any amounts due to the supplier from the preceding calendar year. The total obligation was $5,069 thousand and $5,330 thousand as of September 25, 2022 and December 31, 2021, respectively. The non-current portion, included in Long-term supplier liability on the combined balance sheets was $3,435 thousand and $5,330 thousand, as of September 25, 2022 and December 31, 2021, respectively. The current portion of the liability was recorded within Accrued liabilities and was $1,634 thousand as of September 25, 2022. There was no current portion as of December 31, 2021.

6)	Leases

The Company determines if an arrangement is or contains a lease at contract inception.

Right of Use (ROU) assets represent the Company’s right to use an underlying asset over the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of future lease payments over the lease term. The ROU asset also includes prepaid lease payments and initial direct costs and is reduced for lease incentives paid by the lessor. The discount rate used to determine the present value is generally the Parent’s incremental borrowing rate because the implicit rate in the lease is not readily determinable. The lease term used to calculate the ROU asset and lease liabilities includes periods covered by options to extend or terminate when the Company is reasonably certain the lease term will include these optional periods.

In accordance with Accounting Standards Codification (ASC) Topic 842, the Company elected the short-term lease practical expedient that allows entities to recognize lease payments on a straight-line basis over the lease term for leases with a term of 12 months or less. The Company has also elected the practical expedient under ASC Topic 842 allowing entities to not separate non-lease components from lease components, but instead account for such components as a single lease component for all leases except leases involving assets used in manufacturing and distribution processes.

The Company has operating real estate lease arrangements. The Company’s leases have a remaining lease term of 1 to 5 years. The Company’s leases do not contain any material residual value guarantees or material restrictive covenants.

Operating lease expense was $316 thousand and $498 thousand for the three months ended September 25, 2022 and September 26, 2021, respectively, and $940 thousand and $711 thousand for the nine months ended September 25, 2022 and September 26, 2021, respectively.

Balance sheet information related to the Company’s leases was as follows (in thousands):

	September 25,<br>2022		December 31,2021
Lease assets	$	2,495	$	3,471
Current portion of lease liability		1,093		1,146
Long-term portion of lease liabilities		1,504		2,423
	$	2,597	$	3,569

LiveWire EV

Notes to Combined financial statements

(Unaudited)

Future maturities of the Company’s operating lease liabilities as of September 25, 2022 were as follows (in thousands):

Future lease payments:
2022	$	296
2023		1,103
2024		886
2025		209
2026		150
Thereafter		—
		2,644
Present value discount		(47	)
Lease liabilities	$	2,597

Other lease information surrounding the Company’s operating leases was as follows (in thousands):

	Three Months Ended					Nine Months Ended
	September 25,<br>2022			September 26,<br>2021		September 25,<br>2022			September 26,<br>2021
Cash outflows for amounts included in the measurement of lease liabilities	$	315		$	418	$	935		$	623
ROU assets obtained in exchange for lease obligations		—			2,611		85			3,940
Lease modifications		(152	)		—		(152	)		—
	September 25,<br>2022			December 31,2021
---	---	---	---	---	---	---
Weighted-average remaining lease term (in years)		2.58			3.26
Weighted-average discount rate		1.32	%		1.29	%
7)	Fair Value Measurements
---	---

The Company assesses the inputs used to measure fair value using a three-tier hierarchy.

•	Level 1 inputs include quoted prices for identical instruments and are the most observable.<br>
•	Level 2 inputs include quoted prices for similar assets and observable inputs.
---	---
•	Level 3 inputs are not observable in the market and include the Company’s judgments about the<br>assumptions market participants would use in pricing the asset or liability.
---	---

As of December 31, 2021, the Company had a contingent consideration obligation related to an aggregate earnout payment associated with the Parent’s 2019 acquisition of STACYC, Inc. (STACYC). The contingent consideration related to an aggregate earnout payment with a potential payout ranging from $0 to $6,537 thousand based on the achievement of sales volume targets during the twelve-month performance periods beginning in June 2019, 2020, and 2021, respectively. Each annual period had its own milestone target and related potential earn-out payment. The earnout was payable in three installments during 2020, 2021, and 2022. The Company recorded a liability of $4,978 thousand at the acquisition-date for the fair value based on the likelihood of contingent earn-out payments as part of the total consideration. In 2021 and 2020, the Company made payments of $2,180 thousand during each period based on the full achievement of performance targets for the first two annual performance periods. On June 24, 2022, the Company made the final earnout payment of $2,180 thousand. The final payment settled the Company’s contingent consideration obligation related to acquisition of STACYC.

LiveWire EV

Notes to Combined financial statements

(Unaudited)

The fair value of the company’s contingent consideration liability for each remeasurement period was calculated using the following significant unobservable inputs:

	December 31,2021
Discount Rate per performance period [a]		2020: 0.6<br> <br>2021: 0.7	% <br> <br>%
Revenue Volatility [b]		25	%
Revenue Metric Risk Premium [c]		11	%
[a]	Discount rates applied in arriving at expected cash flow are based on the Company’s estimated cost of debt<br>over the appropriate time horizon as it relates to the annual contingent payments.
---	---
[b]	Revenue volatility is based on historical revenue volatility data observed for guideline public companies and<br>selected as the product volume volatility assumption for the Monte-Carlo Simulation.
---	---
[c]	The Revenue Metric Risk Premium was calculated based on the risk-free rate, revenue beta, equity risk premium,<br>size premium and company-specific risk premium
---	---

Below is a roll-forward of the contingent consideration liability measured at estimated fair value for the following periods (in thousands):

	Three Months Ended					Nine Months Ended
	September 25,<br>2022		September 26,<br>2021			September 25,<br>2022			September 26,<br>2021
Balance, beginning of period	$	—	$	4,335		$	2,180		$	4,311
Revaluation of contingent consideration liability		—		4			—			28
Cash paid		—		(2,180	)		(2,180	)		(2,180	)
Balance, end of period	$	—	$	2,159		$	—		$	2,159
8)	Product Warranty and Recall Campaigns
---	---

The Company provides a limited warranty on new electric motorcycles for a period of two years, except for the battery which is covered for five years. The Company also provides limited warranties on parts and accessories and electric balance bikes. The warranty coverage for the retail customer generally begins when the product is sold to the retail customer. The Company accrues for future warranty claims when the Company transfers control to its customer using an estimated cost based primarily on historical Company claim information. In the case of both warranty and recall costs, as actual experience becomes available it is used to update the accruals.

Additionally, the Company may from time-to-time initiate certain voluntary recall campaigns. The Company records estimated recall costs when the liability is both probable and estimable. This generally occurs when the Company’s management approves and commits to a recall. The warranty and recall liability are included in Accrued liabilities and Other long-term liabilities on the Combined balance sheets.

Changes in the Company’s warranty and recall liability were as follows (in thousands):

	Nine Months Ended
	September 25,<br>2022			September 26,<br>2021
Balance, beginning of period	$	1,095		$	778
Warranties issued during the period		638			413
Settlements made during the period		(588	)		(739	)
Currency translation adjustments		(77	)		(3	)
Recalls and changes to pre-existing warranty<br>liabilities		188			592
Balance, end of period	$	1,256		$	1,041

LiveWire EV

Notes to Combined financial statements

(Unaudited)

The liability for recall campaigns included in the balance above was $264 thousand, $269 thousand and $277 thousand as of September 25, 2022, December 31,2021 and September 26, 2021, respectively.

9)	Employee Retirement and Other Postretirement Benefits

Defined Benefit Plans and Other Postretirement Benefit Plans

The Parent sponsors a qualified pension plan and a postretirement healthcare plan which cover eligible Company employees and retirees. These defined benefit plans include both Company eligible employees and other employees of the Parent (“Shared” plans) and are accounted for as multiemployer benefit plans and the related net benefit plan assets and obligations are not included in the Company’s Combined balance sheets. A portion of the related net periodic benefit plan cost has been allocated to the Company based on an estimated cost per plan participant and allocations of corporate and other shared functional personnel. The Company recorded expense of $23 thousand and $70 thousand for the three months ended September 25, 2022 and September 26, 2021, respectively, and $45 thousand and $162 thousand for the nine months ended September 25, 2022 and September 26, 2021, respectively, for the Company’s allocation of net periodic pension and healthcare plan costs related to the Company’s employees. The Company is not required to make any contributions to the plans sponsored by the Parent.

Defined Contribution Plans

The Parent has various defined contribution benefit plans that in total cover substantially all full-time employees. Employees can make voluntary contributions in accordance with the provisions of their respective plan, which includes a 401(k)-tax deferral option.

On March 1, 2022, the Company established a LiveWire 401(k) plan for the benefit of the Company’s employees. In connection with the establishment of the LiveWire 401(k) plan, the Parent made all employer contributions to its 401(k) plan on behalf of the Company’s employees, prorated for the portion of the plan year ending March 1, 2022. Upon the establishment of the LiveWire 401(k) plan, each of the Company’s employees then-participating in the Parent’s 401(k) plan became fully vested in his or her account balance under the Parent’s 401(k) plan and their account balances under the Parent’s 401(k) plan were transferred to the LiveWire 401(k) plan.

The Company expensed $563 thousand and $276 thousand for the three months ended September 25, 2022 and September 26, 2021, respectively, and $1,396 thousand and $663 thousand for the nine months ended September 25, 2022 and September 26, 2021, respectively, related to defined contribution benefits plans contributions.

10)	Commitments and Contingencies

The Company is subject to claims related to product and other commercial matters. 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. 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. Refer to Note 5, Additional Balance Sheet Information for a discussion of a supplier liability and Note 8, Product Warranty and Recall Campaigns for a discussion of warranty and recall liabilities. The Company is self-insured for product liability claims, and the Parent maintains insurance for individual claim amounts in excess of the self-insured amounts.

11)	Share-Based Awards

Certain employees of the Company participated in the Parent’s share-based compensation plan under which the Parent’s Board of Directors may grant to employees share-based awards, including Restricted Stock Units (RSUs) and performance shares. As additional employees transferred from the Parent to the Company, any outstanding share-based awards previously granted have been retained by the employees and have been transferred to the Company. All awards granted under the plans are based on the Parent’s common shares and, as such, were reflected in the Combined balance sheets as Net Parent investment and Accrued liabilities for equity-classified awards and liability-classified awards, respectively. Share-based compensation included in the Combined statements of operations and comprehensive loss includes expense attributable to the Company based on the awards and terms previously granted to the Company’s employees. Total share-based award compensation expense recognized by the Company for the three months ended September 25, 2022 and September 26, 2021 was $537 thousand and $279 thousand, respectively, and $1,129 thousand and $511 thousand for the nine months ended September 25, 2022 and September 26, 2021, respectively. The cost of each equity-classified award is based on the fair value as of the grant date. The cost of each liability-classified award is based on the fair value at the grant date, subsequently remeasured at each reporting date until the date of settlement. Forfeitures for share-based awards are estimated at the grant date and adjusted when it is likely to change. Share-based award expense is recognized on a straight-line basis over the service periods. The expense recognized reflects the number of awards that are ultimately expected to vest based on service. At settlement of equity classified awards, the Parent delivers common stock to participants from its authorized but unissued common stock.

LiveWire EV

Notes to Combined financial statements

(Unaudited)

During the three months ended March 27, 2022, the Company elected to cancel and convert outstanding RSUs held by 91 of the Company’s employees into the right to receive cash payments (each, an “RSU Payment”) on the date which the RSU award would otherwise become vested in accordance with the vesting schedule applied to such award immediately prior to cancellation of the award. The cancellation of equity-classified awards resulted in a reduction to Net Parent investment and share-based award expense of $171 thousand. The conversion to RSU Payments, which are liability-classified awards, resulted in an increase to Accrued liabilities and share-based award expense of $474 thousand. The incremental compensation cost resulting from the modification of the RSUs was immaterial. As of September 25, 2022, the accrued liability for the cash awards was $1,120 thousand.

Each RSU Payment is a liability-classified award, which will (i) be in amount equal to (x) the number of shares of the Parent’s common stock subject to such RSU award that would have otherwise become vested on the applicable RSU vesting date in accordance with the applicable RSU vesting schedule, multiplied by (y) the closing trading price of a share of the Parent’s common stock on such RSU vesting date and (ii) be paid to the applicable employee of the Company on or within 30 days following the applicable RSU vesting date, subject to and conditioned upon such employee’s continued employment or service, as applicable, to the Company through the applicable vesting date.

As of September 25, 2022, there was $2,040 thousand of unrecognized compensation cost related to liability-classified awards, net of estimated forfeitures, that is expected to be recognized over a weighted-average period of 1.30 years.

12)	Related Party Transactions

Historically, the Company has been managed and operated in the normal course of business by various Parent entities. Accordingly, certain costs have been allocated to the Company and are reflected as expenses in the Combined statements of operations and comprehensive loss. The Company considers the allocation methodologies used to be reasonable, such that the allocations appropriately reflect the various Parent entities’ historical expenses attributable to the Company for purposes of the Combined financial statements. However, the expenses reflected in the Combined financial statements may not be indicative of the actual expenses that would have been incurred during the periods presented if the Company had historically operated as a stand-alone independent entity. It is not practicable to estimate actual costs that would have been incurred had the Company been a standalone company during the periods presented. In addition, the expenses reflected in the Combined financial statements may not be indicative of expenses that the Company will incur in the future.

Manufacturing cost of sales

The Company produces electric motorcycles in manufacturing facilities shared with the Parent. Certain costs of goods sold for shared facilities and shared manufacturing of $594 thousand and $1,298 thousand for the three months ended September 25, 2022 and September 26, 2021, respectively, and $3,402 thousand and $3,040 thousand for the nine months ended September 25, 2022 and September 26, 2021, respectively, were specifically identified or allocated, mainly based on standard cost of production.

Operating expense allocation

The Parent provides technology support, marketing, engineering, shared assets, finance, and other corporate and administrative services such as treasury, human resources, and legal, to the Company. These expenses of $995 thousand and $370 thousand for the three months ended September 25, 2022 and September 26, 2021, respectively, and $2,702 thousand and $1,056 thousand for the nine months ended September 25, 2022 and September 26, 2021, respectively, have been allocated to the Company and are included in Selling, administrative and engineering expense in the Combinedstatements of operations and comprehensive loss, where direct assignment of costs incurred by the Parent was not possible or practical. These costs were allocated using related drivers associated with the nature of the business, such as gross revenue and wholesale motorcycle shipments. Other cost allocation metrics, such as headcount and square footage, were not deemed appropriate given the Company’s reliance on facilities and personnel that are shared with the Parent.

Cash management and financing

The Company’s Treasury function is maintained by the Parent. Accordingly, no cash, cash equivalents, or marketable securities have been attributed to the Combined financial statements, except for certain cash accounts. Certain cash accounts and the notes payable to related party are retained by the Company because they were legally held by the Company. The Parent utilizes a centralized approach to cash management and the financing of its operations. Under this centralized cash management approach, the Parent provides funds to the Company.

Cash transfers from Parent related to services and funding for operations provided by the Parent were $59,051 thousand and $61,404 thousand for the periods ended September 25, 2022 and September 26, 2021, respectively. Net contributions from the Parent are included within Net Parent investment in the Combined statements of changes in equity.

LiveWire EV

Notes to Combined financial statements

(Unaudited)

	Nine Months Ended (in thousands)
	September 25,2022			September 26,<br>2021
Net contribution from Parent	$	79,922		$	61,915
Settlement of notes payable to related party and accrued interest		(21,610	)		—
Transfer of assets to Parent		568			—
Stock compensation		171			(511	)
Transfers from Parent per cash flow statement	$	59,051		$	61,404

Other transactions

All sales of electric motorcycles and related products to independent dealers in the US and Canada are financed by the purchasing independent dealers through HDFS, a wholly owned subsidiary of the Parent; therefore, accounts receivable related to these sales to independent dealers are recorded in Accounts receivable from related party on the Combined balance sheets. Amounts financed by independent dealers through HDFS, not yet remitted to the Company by HDFS on the dealers’ behalf are generally settled within 30 days.

Notes payable to related party on the Combined balance sheets related to three lines of credit agreements with the Parent, two of which were entered into on December 23, 2020 and the third was entered into on July 6, 2021. There were no financial covenants associated with these lines of credit. Each of these agreements allowed for earlier payment on demand of Parent in the event of default.

The Company’s first line of credit agreement had a maximum borrowing limit of $5,000 thousand with an interest rate of 6.6%. This line of credit was amended and restated on December 22, 2021 with a maturity date of December 31, 2022. The Company had no outstanding amounts at September 25, 2022 and December 31, 2021.

The Company’s second line of credit agreement with the Parent had a maximum borrowing limit of $10,000 thousand with an interest rate of 6.6% and a maturity date of December 31, 2023. This line of credit agreement limited the use of proceeds to the payment of contingent consideration related to the Company’s purchase agreement for the acquisition of STACYC on March 4, 2019. The Company had no outstanding amount under this line of credit at September 25, 2022 and $5,333 thousand outstanding at December 31, 2021.

The Company’s third line of credit agreement had a maximum borrowing limit of $60,000 thousand with an interest rate of 6.6%. This line of credit was amended and restated on December 22, 2021 with a maturity date December 22, 2022. The Company had no outstanding amount under this line of credit at September 25, 2022 and $100 thousand outstanding at December 31, 2021.

The notes payable to related party presented on the Combined balance sheets included the following accrued interest amounts as of (in thousands):

	September 25,<br>2022		December 31,2021
Current portion of notes payable to related party	$	—	$	3
Long-term portion of notes payable to related party		—		366
	$	—	$	369

Interest paid on the notes payable to related party was $0 for the three months ended September 25, 2022 and September 26, 2021, respectively, and $0 and $59 thousand for the nine months ended September 25, 2022 and September 26, 2021, respectively.

During the year to date period ended September 25, 2022, the Company borrowed $15,333 thousand under the line of credit agreements prior to their final settlement on June 24, 2022. Pursuant to the Separation Agreement, the Parent elected to settle all notes payable to related party outstanding as of June 24, 2022, including accrued interest, through a capital contribution and without any cash being exchanged between the Company and the Parent. The settlement included the principal amount and accrued interest of $20,766 thousand and $844 thousand, respectively. The capital contribution to settle the notes payable and accrued interest increased the Net Parent investment on the Combined balance sheets.

During the three months ended September 25, 2022, the Parent provided a capital contribution of $14,000 thousand to fund the Company’s working capital and operations. This capital contribution increased theNet Parentinvestment on theCombined balance sheets andTransfers from Parent on theCombined statements of cash flows.

LiveWire EV

Notes to Combined financial statements

(Unaudited)

13)	Subsequent Events

The Company evaluated subsequent events through November 9, 2022, the date that the financial statements were issued.

On September 26, 2022, prior to the consummation of the business combination (described below), the Company consummated the Separation subject to the terms of the Separation Agreement. As a result, certain assets and liabilities were retained and settled by the Parent and did not transfer to the Company. As of September 25, 2022, the value of assets and liabilities and related tax effects to be retained by the Parent at Separation was $8,121 thousand and $11,259 thousand, respectively. The most significant assets retained by the Parent included materials that relate to the manufacture of LiveWire One electric motorcycles. The most significant liabilities retained and settled by the Parent included employee liabilities related to service rendered prior to the closing of the business combination, accounts payable outstanding for amounts owed to suppliers to manufacture electric motorcycles, a supplier liability for an excess firm purchase commitment, and certain warranty liabilities associated with the Harley-Davidson branded LiveWire motorcycle (see disclosure in Note 8, Product Warranty andRecall Campaigns).

On September 26, 2022, the Company consummated the merger with ABIC (following its Domestication, as defined in the Business Combination Agreement) resulting in net proceeds of approximately $293.7 million, including $100 million investment from the Parent and $100 million investment from KYMCO through a PIPE. Additionally LiveWire received ABIC’s cash held in trust account of $13.6 million (net of the SPAC share redemption amount of $368.1 million and payment of transaction costs incurred by ABIC of $20.6 million) and the $100 million equity backstop (the “H-D Backstop Amount”) provided by the Parent in exchange for 10,000,000 of common stock (the “H-D Backstop Shares”) for a purchase price of $10.00 per share pursuant to the terms of the Business Combination Agreement and as a result of public shareholders exercising their redemption rights with respect to 36,597,112 shares of ABIC Class A common stock for $368.1 million in the aggregate, at a redemption price of approximately $10.06 per share. After giving effect to the business combination, the redemption of ABIC Class A common stock as described above, the issuance of the H-D Backstop Shares and the consummation of the PIPE Investments, there are 202,402,888 shares of LiveWire common stock issued and outstanding as of the closing date. Upon closing, the Parent retained an equity interest in the Combined Company of 89.4%, ABIC’s shareholders have an equity interest in the Combined Company of approximately 1.7%, ABIC’s founders have an equity interest in the Combined Company of approximately 4.0% and KYMCO has an equity interest in the Combined Company of approximately 4.9%. The Merger will be accounted for as a reverse recapitalization, with LiveWire being identified as the accounting acquirer.

EX-99.6

Exhibit 99.6

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF LIVEWIRE

The following discussion and analysis should be read together with the historical audited annual combined financial statements and unaudited interimcombined financial statements, and the related notes that are included in the final proxy statement/prospectus (the “Proxy Statement/Prospectus”) relating to our business combination with ABIC, dated July 27, 2022 and filed with theSecurities and Exchange Commission. The discussion and analysis should also be read together with the pro forma financial information as of September 25, 2022 and for the nine months ended September 25, 2022 and the year endedDecember 31, 2021 that is attached to this Current Report on the Form 8-K/A as exhibit 99.7. The following discussion may contain forward-looking statements. Actual results could differ materially fromthose discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those factors discussed below and elsewhere in this information statement, particularly in “Cautionary Note ConcerningForward Looking Statements” and “Risk Factors.” References to “LiveWire” throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations section refers to “LegacyLiveWire”.

Overview

LiveWire sells electric vehicles and related parts and accessories and apparel in the United States and certain international markets. 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. 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. Electric motorcycles are sold at wholesale to a network of independent retail partners and, beginning in the third quarter of 2021, at retail through a Company-operated retail partner and through online sales. Electric balance bikes are sold at wholesale to independent dealers and independent distributors. 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.

In 2021, LiveWire generated revenue, net of $35.8 million compared to $30.9 million and $20.2 million in 2020 and 2019, respectively. LiveWire generated revenue, net of $12.0 million for the three months ended September 25, 2022, compared to $7.0 million for the three months ended September 26, 2021. For the nine months ended September 25, 2022, the Company generated revenue, net of $37.6 million compared to $22.9 million in the nine months ended September 26, 2021.

LiveWire’s net loss for 2021 was $68.3 million compared to $77.6 million and $56.5 million in 2020 and 2019, respectively. For the three months ended September 25, 2022, the Company’s net loss was $21.9 million compared to $17.2 million for the three months ended September 26, 2021 and was $57.2 million for the nine months ended September 25, 2022 compared to $48.5 million for the nine months ended September 26, 2021. LiveWire’s net losses reflect the start-up nature of LiveWire’s business including low shipment volumes associated with the introduction of a new electric motorcycle combined with investments in product development as LiveWire continues to focus on technological innovation that will support future products and growth.

Recent Developments

Business Combination

On December 12, 2021, H-D (the “Parent”) entered into the Business Combination Agreement with ABIC, a special purpose acquisition company, to effect the separation of its electric vehicle business. On September 16, 2022, the Business Combination was approved in a ABIC shareholder vote and closed September 26, 2022.

The merger will be accounted for as a reverse recapitalization, in accordance with GAAP. Under this method of accounting, ABIC will be treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination will be treated as the equivalent of LiveWire issuing stock for the net assets of ABIC, accompanied by a recapitalization. The net assets of ABIC will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be those of LiveWire.

Upon closing of the merger and PIPE investments, the most significant change in the successor’s future reported financial position and results was an increase in cash due to net proceeds received of approximately $293.7 million, including a $100 million investment from the LiveWire Equityholder, and a $100 million investment from certain members of the KYMCO Group, through a PIPE. Additionally, the increase in cash reflects the amount of cash released from the Trust Account (net of the SPAC Share Redemption Amount) and the $100 million equity backstop provided by the Parent in exchange for 10,000,000 of LiveWire Common Stock for a purchase price of $10.00 per share pursuant to the terms of the Business Combination Agreement and as a result of Public Shareholders exercising their redemption rights with respect to 36,597,112 Class A Ordinary Shares for $368.1 million, at a redemption price of approximately $10.06 per share.

As a consequence of the merger, LiveWire is the successor to an SEC-registered company, which will require LiveWire to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. LiveWire expects to incur additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees and additional internal and external accounting and legal and administrative resources, including increased audit and legal fees. In addition, LiveWire expects to incur additional costs as a result of entering into agreements with H-D, including a Transition Services Agreement, Master Services Agreement, and Contract Manufacturing Agreement with H-D whereby H-D will provide manufacturing, support functions, and other administrative services. For additional information, refer to LiveWire’s unaudited pro forma financial information included as Exhibit 99.7 to the Form 8-K/A.

Key Factors Affecting the LiveWire’s Operating Results

LiveWire believes that its future success and financial performance depend on a number of factors that present significant opportunities for its business, but also pose risks and challenges, including those discussed below and in the Section in the Proxy titled “Risk Factors.”

Technology Innovation

LiveWire is committed to and passionate about leading the electric motorcycle market. The focus will be on technology development, with an approach to product and go-to-market actions that reflect the expectations of the targeted customer to deliver the most desirable electric motorcycles in the world through pioneering the future of motorcycling by means of design, software and experience for the pursuit of urban adventure and beyond.

The electric vehicle market is highly competitive and includes both established automotive manufacturers and new entrants. LiveWire is well positioned to become a premier electric motorcycle brand as the first publicly traded electric motorcycle company in the U.S. and as a leader in the transformation of the motorcycling market. To establish market share and scale and expand our business, LiveWire plans to continue to enhance global manufacturing and distribution capabilities and make substantial investments in research and development for the commercialization and continued enhancements of future generations of LiveWire’s electric motorcycles, related technologies and other products.

Establishing Contract Manufacturing Capacity

Achieving growth for LiveWire’s electric motorcycles requires LiveWire to increase its material purchases and contract manufacturing capacity and improve its supply chain processes in the US and internationally. The amount and timing of LiveWire’s future contract manufacturing capacity requirements, and resulting capital expenditures, will depend on many factors, including the pace and results of LiveWire’s research and development efforts to meet technological development milestones, LiveWire’s ability to develop and launch new electric vehicles, LiveWire’s

ability to achieve sales and experience customer demand for LiveWire’s vehicles at the levels LiveWire anticipates, LiveWire’s ability to utilize planned capacity in its existing contract manufacturers’ facilities, LiveWire’s ability to retain contract manufacturing relationships and LiveWire’s ability to enter new international markets. LiveWire will benefit from industry-leading strategic partners – H-D and the KYMCO Group, a globally recognized brand of scooters, motorcycles, and side-by-side ATVs headquartered in Taiwan, by leveraging their engineering expertise, manufacturing footprint, distribution, supply chain infrastructure and global logistics capabilities. Additionally, LiveWire will have access to H-D’s established distribution and dealership network.

Partnering with Industry-Leading Original Equipment Manufacturers and/orTier-One Vehicle Suppliers

LiveWire entered into a long-term collaboration agreement with the KYMCO Group to explore further business opportunities in the electric vehicle market by leveraging LiveWire and the original equipment manufacturer’s capability in the design, development, and manufacturing of electric vehicles. This will allow LiveWire to focus on vehicle design, strong brand affiliation and a differentiated customer experience. LiveWire’s partnership with the KYMCO Group will create rapid scale for LiveWire without asset-intense investments.

LiveWire believes that its business model and established experience in delivering new products will reduce the considerable execution risk typically associated with new vehicle companies. Through such platform sharing, component sourcing and manufacturing partnerships, LiveWire believes it will be able to accelerate its time to market and reduce vehicle development costs. LiveWire intends to meet timing, cost and quality expectations while optimally matching its cost structure with its projected production ramp by leveraging such partnerships and trained workforces. Remaining hardware agnostic allows for selection of partners, components and manufacturing decisions to be based on both timeline and cost advantages and enables LiveWire to focus on delivering truly innovative design features, a superior customer experience, and a leading user interface that leverages sophisticated software and other technology advancements.

Market Trends and Competition

LiveWire offers innovative and proprietary electric vehicle technology and intends to expand its market share over time in product categories that LiveWire believes will grow as electric vehicle adoption occurs in the segment. Existing competitors may expand their product offerings and sales strategies, and new competitors may enter the market. Furthermore, LiveWire’s competition includes other types of alternative fuel vehicles, plug-in hybrid electric vehicles and high fuel-economy internal combustion engine vehicles. If LiveWire’s market share does not grow due to increased competition, or the market fails to expand as LiveWire has projected, its revenue and ability to generate profits in the future may be impacted.

Regulatory Landscape

LiveWire operates in an industry that is subject to and benefits from environmental regulations, which have generally become more stringent over time, particularly across developed markets. Regulations in LiveWire’s target markets include economic incentives to purchasers of electric vehicles and tax credits for electric vehicle manufacturers. While LiveWire expects environmental regulations to provide a tailwind to its growth, it is possible for certain regulations to result in margin pressures.

Supply Chain and Inflation

The global supply chain and logistics challenges continue to impact LiveWire and the industry. As a result of these challenges, LiveWire has experienced cost inflation for logistics, raw materials and purchased components as well as increased manufacturing conversion costs; however, given LiveWire’s production volumes these impacts have not been material to date. The Company has also experienced some disruption related to supply constraints for certain components including those impacted by the continued global semiconductor chip shortages although these disruptions have not materially impacted production volumes to date.

COVID-19 Pandemic and Macroeconomic Uncertainties on FutureOperations

LiveWire continues to manage through the impacts of the COVID-19 pandemic keeping safety and community well-being a priority. The full impact of the COVID-19 pandemic on future results depends on future developments, such as the ultimate duration and scope of the pandemic including associated variants, the success of vaccination programs, the consequences of vaccine requirements, and its impact on Livewire’s employees, customers, independent retail partners, distributors and suppliers. Future impacts and disruptions could have an adverse effect on production, supply chains, distribution and demand for Livewire’s products. Additionally, ongoing global issues may affect our business and operating results and the global economy, including the geopolitical impact of the conflict in Ukraine and any related economic or other sanctions.

Basis of Presentation

Refer to Note 1 of the Notes to Annual Combined Financial Statements for a discussion of the underlying basis used to prepare the combined financial statements.

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 shipments – LiveWire defines wholesale motorcycle unit shipments as the<br>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<br>number of new electric motorcycles sold at retail by LiveWire through its Company-operated retail partner or through online sales for which LiveWire recognized revenue during the period. LiveWire began selling electric motorcycles direct to retail<br>consumers in the third quarter of 2021.
---	---
•	Independent retail motorcycle unit sales – LiveWire defines independent retail motorcycle unit sales<br>as the number of new electric motorcycles sold at retail by independent retail partners. These unit sales are not revenues for LiveWire but represent revenues for individual retail partners. The data source for electric motorcycle retail sales<br>figures is new sales warranty and registration information provided by independent retail partners and compiled by LiveWire. LiveWire must rely on information that its independent retail partners supply concerning new retail sales, and LiveWire does<br>not regularly verify the information that its independent retail partners supply. This information is subject to revision.
---	---
•	Company-operated retail partner – Retail partner operated by LiveWire.
---	---
•	Independent retail partners – Retail partners owned and operated by independent entities under<br>contract with LiveWire to sell LiveWire electric motorcycles, related products and services.
---	---

The following tables detail the key business metric amounts for the periods indicated:

	Three Months Ended				Nine Months Ended
	September2022		September2021		September2022		September2021
Wholesale motorcycle unit shipments:
US		141		26		347		104
International		4		53		50		160
		145		79		397		264
Company retail motorcycle unit sales – US		61		11		131		11
		206		90		528		275
Retail motorcycle unit sales:
Company (a)		61		11		131		11
Independent retail partners (b)		155		354		454		761
		216		365		585		772
Retail motorcycle unit sales:
US		161		216		399		465
International		55		149		186		307
		216		365		585		772
	Year Ended
---	---	---	---	---	---	---
	December 2021		December 2020		December 2019
Wholesale motorcycle unit shipments:
US		119		717		385
International		313		481		95
		432		1,198		480
Company retail motorcycle unit sales – US		29		—		—
		461		1,198		480
Retail motorcycle unit sales:
Company (a)		29		—		—
Independent retail partners (b)		933		719		157
		962		719		157
Retail motorcycle unit sales:
US		566		451		141
International		396		268		16
		962		719		157
(a)	Data source for Company retail sales figures shown above is LiveWire’s records.
---	---
(b)	Data source for independent retail sales figures shown above is new sales warranty and registration information<br>provided by retail partners and compiled by LiveWire. 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<br>partners supply. This information is subject to revision.
---	---

The following table details the number of retail partners:

	As of		As of
	September 25, 2022		December 31, 2021
Company-operated retail partner		1		1
Independent retail partners:
U.S.		71		44
International		—		—
		71		44
Total		72		45

Retail partners shown above include those that have been contracted by LiveWire to sell LiveWire motorcycles. As of September 25, 2022 and December 31, 2021, this total includes 14 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. 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.

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. Retail motorcycle unit sales made through both Company-operated and independent retail partners is a key measure of consumer demand and market share for LiveWire’s electric motorcycles.

Components of Results of Operations

Revenue

LiveWire generates revenue from the sale of electric motorcycles, electric balance bikes, related parts and accessories, and apparel. Electric motorcycles are sold at wholesale to a network of independent retail partners and, beginning in the third quarter of 2021, at retail through a Company-operated retail partner and direct to consumers through online sales. Electric balance bikes are sold at wholesale to independent dealers and independent distributors, as well as, direct to consumers online. LiveWire expects revenue to increase sequentially in future periods as it expects shipments to continue to grow.

Cost of Goods Sold

Cost of goods sold primarily consists of direct materials, components, freight, customs and duties, supplies and labor-related costs, including salaries, benefits and share-based compensation. Cost of goods sold also includes allocated overhead costs, including facilities costs, depreciation of manufacturing-related equipment and facilities and other direct costs. LiveWire expects cost of goods sold to increase in absolute dollars in future periods as it expects shipments to continue to grow and expects cost of goods sold per unit to decrease as leverage improves behind expected growth.

Selling, Administrative and Engineering Expense

Selling, administrative and engineering expenses consist of personnel related expenses for LiveWire’s corporate, executive, finance, engineering, product development and other administrative functions, expenses for outside professional services, including legal, audit and advisory services as well as expenses for facilities, depreciation, amortization, and marketing and advertising costs. Personnel-related expenses consist of salaries, benefits and share-based compensation. It also includes other engineering expenses, which consist of expenditures for research and development activities relating to product development and improvements.

LiveWire expects selling, administrative and engineering expenses to increase for the foreseeable future as it scales headcount, expands hiring of engineers and designers, continues to invest in new vehicle model design and development of technology in order to drive the growth of the business, and as a result of operating as a public company, including compliance with the rules and regulations of the SEC, legal, audit, additional insurance expenses, investor relations activities and other administrative and professional services.

Other Income (Expense), Net

Other income (expense) consists of the allocated non-service components of net periodic defined benefit plan (costs) benefits. The Parent sponsors a qualified pension plan and a postretirement healthcare plan which cover eligible LiveWire employees and retirees. A portion of the related net periodic benefit plan cost or income has been allocated to LiveWire based on an estimated amount per plan participant and allocations of corporate and other shared functional personnel.

Interest Expense Related Party

Interest expense consists primarily of interest expense associated with notes payable to H-D. Refer to Note 15 of the Notes to Annual Combined Financial Statements for further discussion regarding LiveWire’s related party transactions.

As contemplated by the Separation Agreement, all notes payable to related party outstanding as of June 24, 2022, including accrued interest, were settled with the Parent as of June 24, 2022, through a capital contribution and without any cash being exchanged between the Company and the Parent. The settlement included the principal and accrued interest of $20.8 million and $0.8 million, respectively.

Interest Income (Expense)

Interest income (expense) primarily consists of investment income on investments related to deferred compensation plan liabilities.

Income Tax Provision

LiveWire’s income taxes as presented are calculated on a separate tax return basis. LiveWire’s operations have historically been included in the Parent’s U.S. federal and state tax returns or non-U.S. jurisdictions tax returns. The income tax provision (benefit) consists of an estimate for U.S. federal, state and foreign income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities and changes in the tax law. LiveWire has generated operating losses in each of the years presented; however, any hypothetical net operating loss attributes generated and related valuation allowances are deemed to have been distributed to the Parent through net parent investment and are not presented on the balance sheet.

Results of Operations

Comparison of the ThreeMonths Ended September 25, 2022 and September 26, 2021

	Three Months Ended
(in thousands, except percentages)	September 25,2022			September 26,2021
Revenue, net	$	11,953		$	7,027			70.1	%
Costs and expenses:
Cost of goods sold		11,800			8,795			34.2	%
Selling, administrative and engineering expense		22,111			15,345			44.1	%
Operating expense		33,911			24,140			40.5	%
Operating loss		(21,958	)		(17,113	)	)	28.3	%
Other income (expense), net		79			(8	)		*nm
Interest expense related party		—			(74	)		(100.0	)%
Interest (expense) income		(3	)		1		)	(400.0	)%
Loss before income taxes		(21,882	)		(17,194	)	)	27.3	%
Income tax (benefit) provision		(4	)		8		)	(150.0	)%
Net loss		(21,878	)		(17,202	)	)	27.2	%
Other comprehensive loss:
Foreign currency translation adjustments		(60	)		(40	)	)	50.0	%
Comprehensive loss	$	(21,938	)	$	(17,242	)	)	27.2	%

All values are in US Dollars.

*	nm – not meaningful

Revenue

The following table presents net revenue by major source for the three months ended September 25, 2022 and September 26, 2021:

(in thousands, except percentages)	Three Months Ended
	September 25,2022		September 26,2021
Electric motorcycles	$	4,638	$	1,165	298.1	%
Electric balance bikes, parts and accessories		7,017		5,572	25.9	%
Motorcycle parts and accessories		295		287	2.8	%
Apparel		3		3	—	%
	$	11,953	$	7,027	70.1	%

All values are in US Dollars.

Revenue for the three months ended September 25, 2022 increased by $4.9 million, or 70.1%, to $12.0 million from $7.0 million for the three months ended September 26, 2021. The increase was primarily due to higher revenue from electric motorcycles of $3.5 million and higher revenue from electric balance bikes, parts and accessories of $1.4 million. The increase in revenue from electric motorcycles was primarily driven by higher shipment volumes of $2.2 million and a decrease in sales promotions of $1.1 million. The increase in revenue from electric balance bikes, parts and accessories was driven by a shift in product mix and pricing of $2.0 million. The increase was partially offset by lower shipment volumes of electric balance bikes of $0.6 million.

Cost of Goods Sold

Cost of goods sold for the three months ended September 25, 2022 increased by $3.0 million, or 34.2%, to $11.8 million from $8.8 million for the three months ended September 26, 2021. The increase was primarily due to increased shipments of electric motorcycles and a shift in product mix of electric balance bikes, parts and accessories. Increased shipments of electric motorcycles increased cost of goods sold by $2.4 million, in alignment with the increased revenue described above. Separately, a shift in product mix of electric balance bikes, parts and accessories during the three months ended September 25, 2022 resulted in an increase of cost of goods sold of $1.6 million, and was partially offset by decreased shipments of $0.6 million.

Selling, Administrative and Engineering Expense

Selling, administrative and engineering expense for the three months ended September 25, 2022 increased by $6.8 million, or 44.1%, to $22.1 million from $15.3 million for the three months ended September 26, 2021. The increase was primarily due to increases in personnel costs of $2.9 million related to higher headcount, increases in product development costs of $1.2 million, increases in professional service costs of $0.8 million related primarily to marketing and increases in other costs of $1.6 million related to depreciation and other administrative expenses.

Other Income (Expense), Net

Other income (expense), net for the three months ended September 25, 2022 was $0.1 million of income compared to $8 thousand of expense for the three months ended September 26, 2021. The change was primarily driven by a reduction in qualified pension plan costs.

Interest Expense Related Party

Interest expense related party for the three months ended September 25, 2022 decreased by $0.1 million, to $0 from $0.1 million for the three months ended September 26, 2021 due to the settlement of related party notes payable on June 24, 2022.

Interest (Expense) Income

Interest (expense) income for the three months ended September 25, 2022 was $3 thousand of expense compared to $1 thousand of income for the three months ended September 26, 2021.

Income Tax (Benefit) Provision

Income tax (benefit) expense for the three months ended September 25, 2022 was $4 thousand of benefit compared to $8 thousand of expense for the three months ended September 26, 2021.

Comparison of the Nine Months Ended September 25, 2022 and September 26, 2021

	Nine Months Ended
(in thousands, except percentages)	September 25,<br>2022			September 26,2021
Revenue, net	$	37,615		$	22,933			64.0	%
Costs and expenses:
Cost of goods sold		36,987			26,050			42.0	%
Selling, administrative and engineering expense		57,392			45,128			27.2	%
Operating expense		94,379			71,178			32.6	%
Operating loss		(56,764	)		(48,245	)	)	17.7	%
Other income (expense), net		235			(19	)		*nm
Interest expense related party		(475	)		(198	)	)	139.9	%
Interest (expense) income		(23	)		11		)	(309.1	)%
Loss before income taxes		(57,027	)		(48,451	)	)	17.7	%
Income tax provision		159			55			189.1	%
Net loss		(57,186	)		(48,506	)	)	17.9	%
Other comprehensive loss:
Foreign currency translation adjustments		(154	)		(68	)	)	126.5	%
Comprehensive loss	$	(57,340	)	$	(48,574	)	)	18.0	%

All values are in US Dollars.

*	nm – not meaningful

Revenue

The following table presents net revenue by major source for the nine months ended September 25, 2022 and September 26, 2021:

(in thousands, except percentages)	Nine Months Ended
	September 25,2022		September 26,<br>2021		Change		% Change
Electric motorcycles	$	11,620	$	5,357				116.9	%
Electric balance bikes, parts and accessories		25,214		16,914				49.1	%
Motorcycle parts and accessories		773		575				34.4	%
Apparel		8		87		)		(90.8	)%
	$	37,615	$	22,933				64.0	%

All values are in US Dollars.

Revenue for the nine months ended September 25, 2022 increased by $14.7 million, or 64.0%, to $37.6 million from $22.9 million for the nine months ended September 26, 2021. The increase was primarily due to higher revenue from electric balance bikes, parts and accessories of $8.3 million and higher revenue from electric motorcycles of $6.3 million. The increase in revenue from electric balance bikes, parts and accessories was primarily driven by shipment volumes of $3.8 million and a shift in product mix and pricing of $4.5 million. The increase in revenue from electric motorcycles was primarily driven by higher shipment volumes of $4.5 million and a decrease in sales promotions of $1.6 million.

Motorcycle parts and accessories revenue represented an increase of $0.2 million, up 34.4% compared to the prior period. Apparel revenue represented a decrease of $79 thousand, down 90.8%, compared to the prior period.

Cost of Goods Sold

Cost of goods sold for the nine months ended September 25, 2022 increased by $10.9 million, or 42.0%, to $37.0 million from $26.1 million for the nine months ended September 26, 2021. The increase was primarily due to increased shipments of both electric balance bikes, parts and accessories and electric motorcycles. Increased shipments of electric motorcycles increased cost of goods sold by $5.6 million, in alignment with the increased revenue described above. Separately, increased shipments of electric balance bikes, parts and accessories during the nine months ended September 25, 2022 resulted in an increase of cost of goods sold of $2.4 million, and product mix further increased cost of goods sold by $3.0 million, in alignment with the increased revenue described above.

Selling, Administrative and Engineering Expense

Selling, administrative and engineering expense for the nine months ended September 25, 2022 increased by $12.3 million, or 27.2%, to $57.4 million from $45.1 million for the nine months ended September 26, 2021. The increase was primarily due to increases in personnel costs of $7.2 million related to higher headcount, increases in professional service costs of $4.7 million related primarily to marketing and increases in other costs of $3.1 million related primarily to depreciation and other administrative expenses. The increase was partially offset by a decrease in product development costs of $3.2 million due to higher expenditures incurred in the nine months ended September 26, 2021 related to the timing of product development activities.

Other Income (Expense), Net

Other income (expense), net for the nine months ended September 25, 2022 was $0.2 million of income compared to $19 thousand of expense for the nine months ended September 26, 2021. The change was primarily driven by a reduction in qualified pension plan costs.

Interest Expense Related Party

Interest expense related party for the nine months ended September 25, 2022 increased by $0.3 million, to $0.5 million from $0.2 million for the nine months ended September 26, 2021 due to an increase in related party notes payable prior to their settlement on June 24, 2022.

Interest (Expense) Income

Interest (expense) income for the nine months ended September 25, 2022 was $23 thousand of expense compared to $11 thousand of income for the nine months ended September 26, 2021.

Income Tax Provision

Income tax expense for the nine months ended September 25, 2022 increased by $104 thousand, or 189.1%, to $159 thousand from $55 thousand for the nine months ended September 26, 2021.

Comparison of the Years Ended December 31, 2021 and 2020

	Year Ended December 31,
(in thousands, except percentages)	2021			2020
Revenue, net	$	35,806		$	30,863			16.0	%
Costs and expenses:
Cost of goods sold		38,380			55,819		)	(31.2	)%
Selling, administrative and engineering expense		65,608			52,099			25.9	%
Operating expense		103,988			107,918		)	(3.6	)%
Operating loss		(68,182	)		(77,055	)		(11.5	)%
Other income (expense), net		302			(30	)		*nm
Interest expense related party		(293	)		(186	)	)	57.5	%
Interest income		19			56		)	(66.1	)%
Loss before income taxes		(68,154	)		(77,215	)		(11.7	)%
Income tax provision		138			357		)	(61.3	)%
Net loss		(68,292	)		(77,572	)		(12.0	)%
Other comprehensive (loss) income:
Foreign currency translation adjustments		(85	)		236		)	(136.0	)%
Comprehensive loss	$	(68,377	)	$	(77,336	)		(11.6	)%

All values are in US Dollars.

*	nm – not meaningful

Revenue

The following table presents net revenue by major source for the years ended December 31, 2021 and 2020:

(in thousands, except percentages)	Year Ended December 31,
	2021		2020
Electric motorcycles	$	8,706	$	12,846	)	(32.2	)%
Electric balance bikes		26,101		16,544		57.8	%
Parts & accessories		904		1,422	)	(36.4	)%
Apparel		95		51		86.3	%
	$	35,806	$	30,863		16.0	%

All values are in US Dollars.

Revenue for the year ended December 31, 2021 increased by $4.9 million, or 16.0%, to $35.8 million from $30.9 million for the year ended December 31, 2020. The increase was primarily due to an increase in shipments of electric balance bikes, which resulted in an increase of revenues of $9.6 million, partially offset by a $4.1 million decrease in electric motorcycle revenue. The decrease in electric motorcycle revenue was primarily driven by a decrease in shipments of electric motorcycles, which decreased revenue by $17.9 million, partially offset by a decrease in sales promotions, which increased revenue by $13.8 million. The decrease in sales promotions was driven by a sales concession of $15.3 million made in 2020 to LiveWire’s independent dealers related to retail store investments they

had made for the sale and service of H-D branded electric motorcycles. Refer to Note 3 of the Notes to Annual Combined Financial Statements for further discussion on this sales concession. This decrease was partially offset by increases in other sales incentives of $1.5 million in 2021 which were implemented to clear the network of H-D branded LiveWire motorcycles to support the launch of LiveWire ONE.

The lower shipments of electric motorcycles in 2021 reflects LiveWire’s decision to temporarily pause production while it implemented its updated strategy, including the decision to discontinue the H-D branded LiveWire model and introduce the new LiveWire branded LiveWire ONE model. Production of the new LiveWire ONE motorcycles began in the second quarter of 2021 with limited shipments during the year ended December 31, 2021.

Parts & accessories revenue represented a decrease of $0.5 million, down 36.4% compared to the prior period, in line with the decrease in the electric motorcycle units sold. Apparel revenue represented an increase of $44 thousand, up 86.3%, compared to the prior period.

Cost of GoodsSold

Cost of goods sold for the year ended December 31, 2021 decreased by $17.4 million, or 31.2%, to $38.4 million from $55.8 million for the year ended December 31, 2020. The decrease was primarily due to decreased shipments of electric motorcycles, which resulted in lower cost of goods sold of $14.3 million, partially offset by increased shipments of electric balance bikes, which resulted in higher cost of goods sold of $6.3 million, for a net decrease in cost of goods sold related to electric motorcycle and balance bike shipments of $8.0 million. The remaining decrease of $9.4 million related primarily to lower costs associated with liabilities for excess firm purchase commitments.

Selling, Administrative andEngineering Expense

Selling, administrative and engineering expense for the year ended December 31, 2021 increased by $13.5 million, or 25.9%, to $65.6 million from $52.1 million for the year ended December 31, 2020. The increase was primarily due to increases in personnel costs of $9.7 million related to higher headcount, increases in professional service costs of $3.6 million related primarily to audit, legal and other professional services and increases in other costs of $3.2 million related primarily to depreciation, technology and other administrative expenses. The increase was partially offset by decreases in expense allocations from the Parent of $4.2 million due to the decrease in revenue and wholesale units sold which are primary drivers of the allocations.

Other Income (Expense), Net

Other income (expense), net for the year ended December 31, 2021 was $0.3 million of income compared to $30 thousand of expense for the year ended December 31, 2020. The change was primarily driven by a reduction in qualified pension plan costs which was primarily attributable to a curtailment gain recorded in connection with the Parent’s decision to cease benefit accruals for salaried employees after December 31, 2022.

Interest Expense Related Party

Interest expense related party for the year ended December 31, 2021 increased by $0.1 million, to $0.3 million from $0.2 million for the year ended December 31, 2020 due to an increase in related party notes payable.

Interest Income

Interest income for the year ended December 31, 2021 decreased by $37 thousand, or 66.1%, to $19 thousand from $56 thousand for the year ended December 31, 2020.

Income Tax Provision

Income tax expense for the year ended December 31, 2021 decreased by $0.2 million, or 61.3%, to $0.2 million from $0.4 million for the year ended December 31, 2020.

Comparison of the Years Ended December 31, 2020 and 2019

	Year Ended December 31,
(in thousands, except percentages)	2020			2019			Change		% Change
Revenue, net	$	30,863		$	20,188					52.9	%
Costs and expenses:
Cost of goods sold		55,819			21,298					162.1	%
Selling, administrative and engineering expense		52,099			56,997			)		(8.6	)%
Operating expense		107,918			78,295					37.8	%
Operating loss		(77,055	)		(58,107	)		)		32.6	%
Other (expense) / income, net		(30	)		75			)		(140.0	)%
Interest expense related party		(186	)		(1	)		)		*nm
Interest income		56			41					36.6	%
Loss before income taxes		(77,215	)		(57,992	)		)		33.1	%
Income tax provision (benefit)		357			(1,475	)				(124.2	)%
Net loss		(77,572	)		(56,517	)		)		37.3	%
Other comprehensive income (loss):
Foreign currency translation adjustments		236			(6	)				*nm
Comprehensive loss	$	(77,336	)	$	(56,523	)		)		36.8	%

All values are in US Dollars.

*	nm – not meaningful

Revenue

The following table presents net revenue by major source for the years ended December 31, 2020 and 2019:

(in thousands, except percentages)	Year Ended December 31,
	2020		2019		Change		% Change
Electric motorcycles	$	12,846	$	11,712				9.7	%
Electric balance bikes		16,544		7,882				109.9
Parts & accessories		1,422		416				241.8
Apparel		51		178		)		(71.3	)
	$	30,863	$	20,188				52.9	%

All values are in US Dollars.

Revenue for the year ended December 31, 2020 increased by $10.7 million, or 52.9%, to $30.9 million from $20.2 million for the year ended December 31, 2019. The increase was primarily due to increased shipments of electric motorcycles, which resulted in an increase of revenues of $18.0 million, and an increase in shipments of electric balance bikes, which resulted in an increase of revenues of $8.7 million. The increase in revenue from higher shipments was partially offset by a sales concession the Company made to its independent dealers in the fourth quarter of 2020. The sales concession was offered to LiveWire’s independent dealers related to retail store investments they had made for the sale and service of H-D branded electric motorcycles and resulted in a $15.3 million reduction in revenue from electric motorcycles in 2020. Refer to Note 3 of the Notes to Annual Combined Financial Statements for further discussion of this sales concession.

Parts & accessories revenue represented an increase of $1.0 million, up 241.8% compared to the prior period, in line with the increase in the shipments of electric motorcycles and electric balance bikes. Apparel revenue represented a decrease of $0.1 million, down 71.3% compared to the prior period.

Cost of Goods Sold

Cost of goods sold for the year ended December 31, 2020 increased by $34.5 million, or 162.1%, to $55.8 million from $21.3 million for the year ended December 31, 2019. The increase was primarily due to increased shipments for both electric motorcycles, which resulted in an increase of cost of goods sold of $14.2 million, and electric balance bikes, which resulted in an increase of cost of goods sold of $5.0 million. In addition, during 2020 the Company recorded a $7.8 million expense to record a long-term supplier liability for excess firm purchase commitments. There was no comparable expense in 2019.

Selling, Administrative and Engineering Expense

Selling, administrative and engineering expense for the year ended December 31, 2020 decreased by $4.9 million, or 8.6%, to $52.1 million from $57.0 million for the year ended December 31, 2019. The decrease was primarily due to a reduction in marketing costs of $13.0 million, primarily due to uncertainty related to COVID-19 and a strategic shift in model to LiveWire ONE towards the end of the fourth quarter of 2020. The overall decrease was partially offset by increases in allocated cost from the Parent of $3.9 million in line with the increase in revenue from 2019 to 2020, increases in salaries and other people cost of $2.1 million, and other increases primarily related to higher depreciation expense and warranty costs.

Other (Expense) / Income, Net

Other (expense) income, net for the year ended December 31, 2020 was $30 thousand of expense compared to $75 thousand of income for the year ended December 31, 2019. The change was primarily due to an increase in defined benefit plan expenses allocated from H-D in 2020 compared to 2019.

Interest Expense Related Party

Interest expense related party for the year ended December 31, 2020 increased by $0.2 million, to $0.2 million from $1 thousand for the year ended December 31, 2019. The increase was primarily due to borrowings from Parent with interest starting in December 2019 resulting in a full year of interest expense in 2020 compared to less than one month of interest expense in 2019.

Interest Income

Interest income for the year ended December 31, 2020 increased by $15 thousand, or 36.6%, to $56 thousand from $41 thousand for the year ended December 31, 2019.

Income Tax Provision (Benefit)

Income tax expense for the year ended December 31, 2020 increased by $1.8 million to an expense of $0.4 million from a benefit of $1.5 million for the year ended December 31, 2019. The increase was primarily due to the lower tax benefit that the Company expects would be more likely than not to be realized. Operating results of the Company have historically been included in the consolidated federal and combined state tax returns of the Parent and the resulting tax attributes are deemed to have been fully distributed to and utilized by Parent as of 2019 and are not available to the Company for future use.

Liquidity and Capital Resources

As of September 25, 2022 and December 31, 2021, LiveWire’s cash and cash equivalents were $2.2 million and $2.7 million, respectively. LiveWire’s restricted cash as of September 25, 2022 was $100 million, which relates to a cash deposit from KYMCO Group during the quarter ended September 25, 2022 in advance of the transaction close. LiveWire did not have any restricted cash as of December 31, 2021.

LiveWire historically managed liquidity risk by effectively managing its working capital, capital expenditures and cash flows, making use of a central treasury function at the Parent to manage pooled cash investments and borrowing requirements. As an early-stage growth company, LiveWire does not expect to generate from operations, adequate liquidity to fund its operations for the next twelve months. Prior to the Business Combination the Parent supported LiveWire’s operating, investing and financing activities. 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 (following its Domestication, as defined in the Business Combination Agreement) resulting in net proceeds of approximately $293.7 million, including $100 million investment from the Parent and $100 million investment from KYMCO through a PIPE. Additionally LiveWire received ABIC’s cash held in trust account of $13.6 million (net of the SPAC share redemption amount of $368.1 million and payment of transaction costs incurred by ABIC of $20.6 million) and the $100 million equity backstop provided by the Parent in exchange for 10,000,000 of common stock for a purchase price of $10.00 per share pursuant to the terms of the Business Combination Agreement and as a result of public shareholders exercising their redemption rights with respect to 36,597,112 shares of ABIC Class A common stock for $368.1 million in the aggregate, at a redemption price of approximately $10.06 per share.

Management believes that cash on hand and 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.

LiveWire plans to use its current cash on hand and additional financing raised through the Business Combination and PIPE Financing, to support its core business operations and strategic plan to accelerate its go-to-market strategy, invest in new product development, and enhance its global manufacturing and distribution capabilities. 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 development efforts.

LiveWire’s material contractual operating cash commitments at September 25, 2022 relate to leases as discussed further in Note 8 of the Notes to Annual Combined Financial Statements and excess firm commitments as discussed further in Note 6 of the Notes to Annual Combined Financial Statements. 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 are not met.

Cash Flows

The following table summarizes LiveWire’s cash flow activities for the periods presented:

	Nine Months Ended						Year Ended
(in thousands)	September 25,<br>2022			September 26,<br>2021			December 31,2021			December 31,2020			December 31,2019
Net cash used by operating activities	$	(64,190	)	$	(51,728	)	$	(74,539	)	$	(53,714	)	$	(69,216	)
Net cash used by investing activities		(8,927	)		(7,747	)		(9,951	)		(3,243	)		(14,177	)
Net cash provided by financing activities		172,617			60,668			84,757			58,304			84,447
Net increase in cash and restricted cash	$	99,500		$	1,193		$	267		$	1,347		$	1,054

The overall increase in cash and restricted cash during the nine months ended September 25, 2022 was due primarily to an increase in restricted cash resulting from a $100 million cash deposit from KYMCO Group during the quarter ended September 25, 2022 in advance of the transaction close.

Net Cash Used by Operating Activities

LiveWire had negative cash flow from operating activities during 2019, 2020, 2021, and through the first nine months of 2021 and 2022. The negative cash flow from operating activities reflects the low volume of electric motorcycle shipments and ongoing product development investments given the start-up nature of the electric motorcycle business.

Net cash used in operating activities increased by $12.5 million to $64.2 million for the nine months ended September 25, 2022 compared to $51.7 million for the nine months ended September 26, 2021. The increase in cash used in operating activities was primarily due to a higher net loss and unfavorable changes in working capital. Cash flow related to changes in working capital was unfavorably impacted by an increase in inventory partially offset by favorable changes in accounts receivable and accounts payable and accrued liabilities. The unfavorable change in inventories was primarily due to increased inventory of electric balance bikes and related parts and accessories. The change in accounts receivable was favorable due to receipt of payment for units sold related to an international sales promotion which occurred during Q4 2021. The changes in accounts payable and accrued liabilities were favorable primarily due to the payout of a sales concession in the first quarter of 2021.

Net cash used in operating activities increased by $20.8 million to $74.5 million for the year ended December 31, 2021 compared to $53.7 million for the year ended December 31, 2020. The increase in cash used in operating activities was primarily driven by higher cash outflows related to unfavorable changes in working capital. Working capital was adversely impacted by a decrease in accrued liabilities, primarily due to the payout of a sales concession in the first quarter of 2021 as well as unfavorable cash flows related to changes in accounts receivable from related party during the year ended December 31, 2021 compared to year ended December 31, 2020. These negative impacts on working capital were partially offset by favorable changes in inventories during the year ended December 31, 2021 compared to year ended December 31, 2020.

Net cash used in operating activities decreased by $15.5 million to $53.7 million for the year ended December 31, 2020 compared to $69.2 million for the year ended December 31, 2019. The decrease in cash used in operating activities was primarily driven by favorable changes in working capital. Working capital was impacted by an increase in accrued liabilities, related to a sales concession offered in 2020, as well as favorable changes in accounts receivable from related party and inventory during 2020 as compared to 2019.

Net Cash Used by Investing Activities

Net cash used in investing activities increased by $1.2 million to $8.9 million for the nine months ended September 25, 2022 compared to $7.7 million for the nine months ended September 26, 2021. The increase was due to higher capital expenditures related to investments to support the production of future products.

Net cash used in investing activities increased by $6.8 million to $10.0 million for the year ended December 31, 2021 compared to $3.2 million for the year ended December 31, 2020. The increase was primarily due to increased capital expenditures related to investments to support the production of future products.

Net cash used in investing activities decreased by $11.0 million to $3.2 million for the year ended December 31, 2020 compared to $14.2 million for the year ended December 31, 2019. The decrease in cash flows used in investing activities was primarily attributable to a $7.0 million decrease in cash used for business acquisitions and a $3.9 million decrease in capital expenditures. The cash used in business acquisitions relates to the acquisition of STACYC during the year ended December 31, 2019. There were no business acquisitions during the year ended December 31, 2020.

LiveWire expects to fund future cash flows used in investing activities primarily with additional financing raised through the Business Combination and PIPE Financing.

Net Cash Provided by Financing Activities

Net cash provided by financing activities increased by $111.9 million to $172.6 million for the nine months ended September 25, 2022 compared to $60.7 million for the nine months ended September 26, 2021. The increase was primarily due to an increase in deposit in advance of business combination resulting from a $100 million cash deposit from KYMCO Group during the quarter ended September 25, 2022 in advance of the transaction close as well as increased proceeds from borrowing on notes payable to related party of $13.2 million.

Net cash provided by financing activities increased by $26.5 million to $84.8 million for the year ended December 31, 2021 compared to $58.3 million for the year ended December 31, 2020. The increase was primarily due to increases in the cash transfers from Parent of $29.3 million. This was partially offset by a reduction in proceeds from borrowing on notes payable to related party of $3.4 million.

Net cash provided by financing activities decreased by $26.1 million to $58.3 million for the year ended December 31, 2020 compared to $84.4 million for the year ended December 31, 2019. The decrease in cash provided by financing activities was driven by a decrease of $28.0 million in cash transfers from Parent, payment of $1.9 million of contingent consideration related to the STACYC acquisition and repayment of $1.5 million of related party notes payable. This was partially offset by an increase of $5.2 million in receipts from borrowings on related party notes payable.

Critical Accounting Policies and Estimates

LiveWire’s financial statements are based on the selection and application of significant accounting policies, which require management to make significant estimates and assumptions. 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. LiveWire also provides limited warranties on parts and accessories and electric balance bikes. Estimated warranty costs are recorded at the time of sale and are based primarily on historical LiveWire claim information. In the case of both warranty and recall costs, as actual experience becomes available it is used to update the accruals.

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. 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. 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. LiveWire’s warranty and recall liabilities are discussed further in Note 10 of the Notes to Annual Combined Financial Statements.

Income Taxes - LiveWire’s income taxes as presented are calculated on a separate tax return basis. LiveWire’s operations have historically been included in the Parent’s U.S. federal and state tax returns or non-U.S. jurisdictions tax returns. LiveWire accounts for income taxes in accordance with Accounting Standards Codification Topic 740, Income Taxes (Topic 740). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and other loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. LiveWire reviews its deferred income tax asset valuation allowances on a quarterly basis or whenever events or changes in circumstances indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results of the legal entity or combined group recording the net deferred income tax asset is considered, along with any positive or negative evidence including tax law changes. Since future financial results and tax law may differ from previous estimates, periodic adjustments to LiveWire’s valuation allowances may be necessary. LiveWire has generated operating

losses in each of the years presented, however, any hypothetical net operating loss attributes generated and related valuation allowances are deemed to have been distributed to the Parent through net parent investment and are not presented on the balance sheet.

LiveWire is subject to income taxes in the U.S. and numerous foreign jurisdictions. These tax laws and regulations are complex and significant judgment is required in determining LiveWire’s worldwide provision for income taxes and recording the related deferred tax assets and liabilities.

In the ordinary course of LiveWire’s business, there are transactions and calculations where the ultimate tax determination is uncertain. Accruals for unrecognized tax benefits are provided for in accordance with the requirements of Topic 740. An unrecognized tax benefit represents the difference between the recognition of benefits related to items for income tax reporting purposes and financial reporting purposes. Any unrecognized tax benefit is not included within the combined balance sheets as any benefit would reside with Parent. Parent is regularly audited by tax authorities as a normal course of business. Although the outcome of tax audits is always uncertain, LiveWire believes that it has appropriate support for the positions taken had LiveWire filed its own tax returns and that its annual tax provision includes amounts sufficient to pay any assessments. Nonetheless, the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year and would be the obligation of Parent.

Refer to Note 5 of the Notes to Annual Combined Financial Statements for further discussion regarding LiveWire’s income taxes.

Business Combinations - The Company accounts for business combinations using the acquisition method of accounting. The acquisition method of accounting requires that purchase price, including the fair value of contingent consideration, of the acquisition be allocated to the assets acquired and liabilities assumed using the estimated fair values determined by management as of the acquisition date. The excess of the purchase price over the fair value of assets acquired and liabilities assumed is recognized as goodwill.

The Company performs valuations of assets acquired and liabilities assumed and allocates the purchase price to the respective assets and liabilities. Determining the fair value of assets acquired and liabilities assumed requires significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue, costs and cash flows, discount rates, royalty rates, and selection of comparable companies. The Company engages the assistance of third-party valuation specialists in concluding on fair value measurements in connection with determining fair values of assets acquired and liabilities assumed in a business combination. The resulting fair values and useful lives assigned to acquisition-related intangible assets impact the amount and timing of future amortization expense.

These estimates are inherently uncertain and unpredictable, and if different estimates were used the purchase price for the acquisition could be allocated to the acquired assets and liabilities differently from the allocation that the Company has made. In addition, unanticipated events and circumstances may occur which may affect the accuracy or validity of such estimates, and if such events occur, the Company may be required to record a charge against the value ascribed to an acquired asset, an increase in the amounts recorded for assumed liabilities, or an impairment of some or all of the goodwill.

In relation to the Company’s acquisition of STACYC, Inc., the purchase price contained contingent consideration. The contingent consideration related to an aggregate earn-out payment with total payout of $6.5 million based on the achievement of sales volume targets during the twelve-month performance periods beginning in June 2019, 2020 and 2021, respectively. Each annual period had its own milestone target and related potential earn-out payment. The fair value was estimated using a Monte-Carlo simulation that utilized key assumptions defined in the earn-out agreement including sales volume performance periods, caps and floors.

On June 24, 2022, the Company made the final earnout payment of $2.2 million. The final payment settled the Company’s contingent consideration obligation related to acquisition of STACYC.

Goodwill and Intangible Assets - Goodwill represents the excess of acquisition cost over the fair value of the net assets purchased. Goodwill is tested for impairment, based on financial data related to the reporting unit to which it has been assigned, at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If the carrying amount of the reporting unit exceeds its fair value, goodwill is considered impaired and an impairment loss is recognized for the amount by which the carrying amount exceeds the fair value, limited to the total goodwill allocated to the reporting unit. When evaluating goodwill for impairment, LiveWire first performs a qualitative assessment to determine whether it is more likely than not that the reporting unit is impaired. If LiveWire determines that it is not more likely than not that the fair value of the reporting unit exceeds its carrying amount, LiveWire calculates the estimated fair value of the reporting unit using income and market approaches. Significant assumptions are incorporated into the income approach, such as estimated growth rates and a risk-adjusted discount rate. Fair value under the market approach utilized the guideline public company methodology, which uses valuation indicators determined from other businesses that are similar to our reporting unit.

Intangible assets consist of trademarks, non-compete agreements and others and are stated at cost less accumulated amortization. The intangible assets have been determined to have finite lives and are amortized on a straight-line basis over their estimated useful lives.

Significant judgments are required in assessing impairment of intangible assets and include identifying whether events or changes in circumstances require an impairment assessment, estimating future cash flows, determining appropriate discount and growth rates and other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value whether an impairment exists and if so the amount of that impairment.

The intangible assets are tested for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. The events and circumstances LiveWire monitors and considers include significant decreases in the market price for similar assets, significant adverse changes to the extent and manner in which the asset is used, an adverse change in legal factors or business climate, an accumulation of costs that exceed the estimated cost to acquire or develop a similar asset, and continuing losses that exceed forecasted costs. When the carrying value of an intangible asset is not recoverable based on the existence of one or more of the above indicators, recoverability is determined by comparing the carrying amount of the asset to net future undiscounted cash flows that the asset is expected to generate. An impairment charge would then be recognized equal to the amount by which the carrying amount exceeds the fair value of the asset.

CorporateAllocations **** - Historically, LiveWire has been managed and operated in the normal course of business by the Parent. Accordingly, certain shared costs have been allocated to LiveWire and are reflected as expenses in the accompanying Combined statements of operations and comprehensive loss. Management considers the expense methodology and resulting allocation to be reasonable for all periods presented; however, the allocations may not be indicative of actual expenses that would have been incurred had LiveWire operated as an independent, publicly traded company for the periods presented. Actual costs that LiveWire may have incurred had it been a standalone company would depend on a number of factors, including the chosen organizational structure, whether functions were outsourced or performed by LiveWire’s employees and strategic decisions made in areas such as manufacturing, selling and marketing, research and development, information technology and infrastructure.

Emerging Growth Company Status

Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable.

ABIC is an “emerging growth company” as defined in Section 2(a) of the Securities Act and has elected to take advantage of the benefits of the extended transition period for new or revised financial accounting standards. Following the consummation of the Business Combination, LiveWire expects to remain an emerging growth company at least through the end of the 2022 fiscal year and LiveWire expects to continue to take advantage of the benefits of the extended transition period, although it may decide to early adopt such new or revised accounting standards to the extent permitted by such standards. This may make it difficult or impossible to compare LiveWire’s financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used.

New Accounting Standards Not Yet Adopted

Other than the recent accounting pronouncements disclosed in LiveWire’s Annual Combined Financial Statements, there have been no new accounting pronouncements or changes in accounting pronouncements during the first nine months ended September 25, 2022 that are significant or potentially significant to LiveWire.

Quantitative and Qualitative Disclosures About Market Risk

As of December 31, 2021, LiveWire’s cash and cash equivalents amounted to $2.7 million. LiveWire historically managed liquidity risk by effectively managing its working capital, capital expenditures and cash flows, making use of a central treasury function at the Parent to manage pooled cash investments and borrowing requirements.

Financial instruments that potentially subject LiveWire to concentrations of credit risk principally consist of accounts receivable. LiveWire limits its credit risk with respect to accounts receivable by performing credit evaluations and requiring collateral to secure amounts owed to LiveWire by its customers, each when deemed necessary.

Inflationary factors, such as cost increases for logistics, manufacturing, raw materials and purchased components, may adversely affect LiveWire’s operating results. Although 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 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.

At December 31, 2021, LiveWire’s notes payable to related party of $5.8 million are with its Parent and had fully fixed interest rates for the life of the underlying lines of credit agreements with H-D, and hence LiveWire is not subject to interest rate risk. Furthermore, all notes payable to related party outstanding as of June 24, 2022, including accrued interest, were settled with the Parent as of June 24, 2022, through capital contribution and without any cash being exchanged between the Company and the Parent.

LiveWire sells its electric motorcycles, electric balance bikes and related products internationally and, in most markets, those sales are made in the foreign country’s local currency. As a result, LiveWire’s operating results are affected by fluctuations in the values of the U.S. dollar relative to foreign currencies, however, the impact of such fluctuations on LiveWire’s operations to date are not material given the majority of LiveWire’s sales are currently in the U.S. 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.

There have been no material changes to the market risk information since December 31, 2021, other than those discussed above.

EX-99.7

Exhibit 99.7

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Defined terms included below have the same meaning as terms defined and included elsewhere in this Current Report on Form8-K/A and, if not defined in the Form 8-K/A, the Registration Statement on Form S-4 (File Nos.333-262573 and 333-262573-01) (the “Registration Statement”). Unless the context otherwise requires,“LiveWire” refers to LiveWire Group, Inc. and its subsidiaries after the Closing, “ABIC” refers to AEA-Bridges Impact Corp. prior to the Domestication, “Domesticated ABIC” refersto AEA-Bridges Impact Corp. prior to Closing, and “Legacy LiveWire” refers to LiveWire EV, LLC prior to the Closing.

The following unaudited pro forma condensed combined financial information present the combination of the financial information of ABIC and Legacy LiveWire adjusted to give effect to the separation of the Legacy LiveWire business from H-D into an independent company (the “Separation”), the Business Combination and related transactions (collectively, the “Transactions”). In May 2020, the SEC adopted Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses,” or the “Final Rule.” The Final Rule became effective on January 1, 2021 and the unaudited pro forma condensed financial information herein is presented in accordance therewith.

ABIC was a blank check company incorporated as a Cayman Islands exempted company on July 29, 2020. ABIC was incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities. The registration statement for ABIC’s IPO was declared effective on October 1, 2020. On October 5, 2020 ABIC consummated the IPO of 40,000,000 ABIC Units, generating gross proceeds of $400 million. Simultaneously with the closing of the IPO, ABIC consummated the sale of 10,500,000 warrants (the “Private PlacementWarrants”) at a price of $1.00 per Private Placement Warrant in a private placement to the Sponsor, generating gross proceeds of $10.5 million. Following the closing of the IPO on October 5, 2020, an amount of $400 million ($10.00 per ABIC Unit) from the net proceeds of the sale of the ABIC Units in the IPO and the sale of the Private Placement Warrants was placed in the Trust Account and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less, or in any open-ended investment company that holds itself out as a money market fund investing solely in U.S. Treasuries and meeting certain conditions under Rule 2a-7 of the Investment Company Act, as determined by ABIC, until the earliest of (i) the completion of a business combination; and (ii) the distribution of the funds in the Trust Account to ABIC’s shareholders.

Legacy LiveWire sells electric vehicles and related parts and accessories (“P&A”) and apparel in the United States and certain international markets.

The unaudited pro forma condensed combined balance sheet as of September 25, 2022 combines the historical balance sheet of ABIC as of September 25, 2022 and the historical balance sheet of Legacy LiveWire as of September 25, 2022, on a pro forma basis as if the Transactions, summarized below, had been consummated on September 25, 2022. The unaudited pro forma condensed combined statements of operations for the nine months ended September 25, 2022 combines the historical statements of operations of ABIC and Legacy LiveWire for such period and the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2021 combines the historical statements of operations of ABIC and Legacy LiveWire for such period, both on a pro forma basis as if the Transactions, summarized below, had been consummated on January 1, 2021, the beginning of the earliest period presented, giving effect to:

•	The Separation transaction accounting and autonomous entity adjustments
•	the impact of the Separation Agreement, Master Services Agreement, Transition Services Agreement, Contract<br>Manufacturing Agreement, Employee Matters Agreement, Tax Matters Agreement and other commercial agreements between Legacy LiveWire and H-D and the provisions contained therein.
---	---
•	The Business Combination and related transactions transaction accounting adjustments
---	---
•	the reverse recapitalization (as described in Note 1) between ABIC and Legacy LiveWire;
---	---
•	the redemption of 36,597,112 Class A Ordinary Shares for $368.1 million out of the Trust Account, at a<br>redemption price of approximately $10.06 per share;
---	---
•	the $100 million investment from Harley-Davidson and the $100 million investment from KYMCO Group, a<br>leading global powersports company headquartered in Taiwan, through a PIPE (private investment in public equity);
---	---
•	the $100 million Backstop amount from the Legacy LiveWire Equityholder; and
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•	the one-time expenses associated with the Business Combination.<br>
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The unaudited pro forma condensed combined financial statements should be read in conjunction with Legacy LiveWire’s and ABIC’s unaudited and audited financial statements and related notes; the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of ABIC” and“Management’s Discussion and Analysis of Financial Condition and Results of Operations of LiveWire,” and other financial information included elsewhere or incorporated by reference in this Current Report on Form 8-K/A, including the Business Combination Agreement.

Description of the Business Combination

On December 12, 2021, ABIC, LiveWire, Merger Sub, H-D and Legacy LiveWire entered into the Business Combination Agreement. On September 16, 2022, the Business Combination was approved in an ABIC shareholder vote and closed September 26, 2022.

The Business Combination consisted of a series of transactions, pursuant to which (i) on September 23, 2022, ABIC completed the Domestication, in connection with which all of the outstanding ABIC Shares converted into shares of Domesticated ABIC Common Stock, par value $0.0001 per share, and each outstanding ABIC Warrant converted into a Domesticated ABIC Warrant and 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; (ii) 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; (iii) following the Domestication and immediately following the Separation, the Merger occurred, in which Merger Sub was merged with and into Domesticated ABIC, with Domesticated ABIC surviving the merger as a wholly owned direct subsidiary of LiveWire, and LiveWire continued as the public company, with each share of Domesticated ABIC Common Stock converted into the right of the holder thereof to receive one share of LiveWire Common Stock; (iv) the Legacy LiveWire Equityholder consummated the Exchange, pursuant to which LiveWire acquired from the Legacy LiveWire Equityholder, and the Legacy LiveWire Equityholder transferred, conveyed and delivered to LiveWire, all of the Legacy LiveWire Equity and the Legacy LiveWire Equityholder received, in consideration for the transfer, conveyance and delivery of the Legacy LiveWire Equity, 161,000,000 shares of LiveWire Common Stock and the right to receive up to an additional 12,500,000 shares of LiveWire Common Stock in the future (as described in more detail below), and, as a result of the Exchange, Legacy LiveWire became a direct, wholly owned subsidiary of LiveWire; and (v) immediately following the consummation of the Exchange, LiveWire contributed 100% of the outstanding equity interests of Legacy LiveWire to Domesticated ABIC.

Pursuant to investment agreements entered into in connection with the Business Combination Agreement, the KYMCO Group agreed to subscribe for an aggregate 10,000,000 newly-issued shares of LiveWire Common Stock for a purchase price of $10.00 per share for an aggregate gross purchase price equal to $100 million. Additionally, pursuant to the Business Combination Agreement, and an investment agreement entered into prior to the Closing, the Legacy LiveWire Equityholder agreed to subscribe for an aggregate of 10,000,000 newly-issued shares of LiveWire Common Stock at a purchase price of $10.00 per share for an aggregate purchase price of $100 million. At the Closing, LiveWire consummated the PIPE Investments.

H-D also caused the Legacy LiveWire Equityholder to pay and deliver to LiveWire an amount in cash equal to $100 million (the “H-D Backstop Amount”) in exchange for 10,000,000 of LiveWire Common Stock for a purchase price of $10.00 per share pursuant to the terms of the Business Combination Agreement and as a result of Public Shareholders exercising their redemption rights with respect to 36,597,112 Class A Ordinary Shares for $368.1 million, at a redemption price of approximately $10.06 per share.

The Legacy LiveWire Equityholder has the contingent right to earn up to an additional 12,500,000 shares of LiveWire Common Stock (the “Earn Out Shares”), subject to the following conditions:

•	6,250,000 of the Earn Out Shares will vest if and at such time as a $14.00 LiveWire Common Stock Price is<br>achieved during the Earn Out Period (as defined below); and
•	6,250,000 of the Earn Out Shares will vest if and at such time as a $18.00 LiveWire Common Stock Price is<br>achieved during the Earn Out Period.
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The “LiveWire Common Stock Price” will be considered achieved only (a) when the volume-weighted average price of the shares of common stock of LiveWire is greater than or equal to the applicable threshold for any 20 trading days within a 30-trading day period or (b) the per-share price (based on a fully diluted basis, inclusive of issues of the Earn Out Shares, which are expected to be classified as equity) implied in a change of control transaction is greater than or equal to the applicable threshold.

“Earn Out Period” means the period beginning 18 months post-Closing and ending on the fifth (5th) anniversary date of the beginning of the Earn Out Period.

In connection with the Business Combination, the Sponsor agreed at the Closing to forfeit 2,000,000 Class B Ordinary Shares (“Founder Shares”) owned by the Sponsor (“Sponsor Shares”) in accordance with the Investor Support Agreement. The Sponsor agreed to waive the right to redeem 2,500,000 shares of Class A Ordinary Shares held.

The following summarizes the shares of common stock of LiveWire outstanding at the Closing:

	Shares
Existing Legacy LiveWire equityholders<br>^(1)^		181,000,000	89.4	%
AEA-Bridges Impact public stockholders		3,402,888	1.7
AEA-Bridges Impact sponsor stockholders		8,000,000	4.0
KYMCO stockholder		10,000,000	4.9
Total shares outstanding at close		202,402,888	100.0	%
(1)	Excludes 12,500,000 LiveWire Common Stock in estimated potential earn out shares as the price threshold for<br>each tranche has not yet been triggered.
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UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

AS OF SEPTEMBER 25, 2022

(in thousands)

			Separation									Business Combination
	LegacyLiveWire(Historical)		TransactionAccountingAdjustments					Pro FormaSeparation ofLegacy LiveWire		AEA-BridgesImpact Corp.(Historical)		TransactionAccountingAdjustments					Pro FormaCombined
ASSETS
Current assets
Cash	$	2,168	$	—				$	2,168	$	240	$	402,367<br> <br>200,000<br><br><br>100,000<br> <br>(20,132<br><br><br>(20,621<br> <br>(368,137	)<br> <br>)<br><br><br>)	(b<br> <br>(c<br><br><br>(d<br> <br>(e<br><br><br>(f<br> <br>(i	) <br> <br>)<br> <br>)<br><br><br>)<br> <br>)<br><br><br>)	$	295,885
Restricted cash		100,000		—					100,000		402,367		(100,000<br> <br>(402,367	) <br> <br>)	(c<br> <br>(b	) <br> <br>)		—
Accounts receivables, net		3,208		(146	)	(a	)		3,062		—		—					3,062
Account receivable from related party		590		(37	)	(a	)		553		—		—					553
Inventories, net		33,613		(7,639	)	(a	)		25,974		—		—					25,974
Other current assets		931		(227	)	(a	)		704		23		—					727
Total current assets		140,510		(8,049	)				132,461		402,630		(208,890	)				326,201
Property, plant and equipment, net		26,111		—					26,111		—		—					26,111
Goodwill		8,327		—					8,327		—		—					8,327
Deferred tax assets		72		(72	)	(k	)		—		—		—					—
Lease assets		2,495		—					2,495		—		—					2,495
Intangible assets, net		1,925		—					1,925		—		—					1,925
Other long-term assets		2,939		—					2,939		—		—					2,939
Total assets		182,379		(8,121	)				174,258		402,630		(208,890	)				367,998
LIABILITIES AND EQUITY
Current liabilities
Accounts payable		17,624		(3,892	)	(a	)		13,732		—		—					13,732
Accounts payable and accrued liabilities		—		—					—		11,245		(11,245	)	(f	)		—
Mandatorily redeemable Class A Ordinary Shares		—		—					—		368,137		(368,137	)	(i	)		—
Accrued liabilities		15,538		(5,184	)	(a	)		10,354		—		—					10,354
Deferred business combination consideration		100,000		—					100,000		—		(100,000	)	(c	)		—
Derivative warrant liabilities		—		—					—		13,420		—					13,420
			Separation										Business Combination
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			TransactionAccountingAdjustments					Pro FormaSeparation ofLegacy LiveWire		AEA-BridgesImpact Corp.(Historical)			TransactionAccountingAdjustments					Pro FormaCombined
Deferred underwriting fee payable	—			—					—		9,376			(9,376	)	(f	)		—
Current portion of lease liabilities	1,093			—					1,093		—			—					1,093
Total current liabilities	134,255			(9,076	)				125,179		402,178			(488,758	)				38,599
Long-term supplier liability	3,435			(3,435	)	(a	)		—		—			—					—
Long-term portion of lease liabilities	1,504			—					1,504		—			—					1,504
Deferred tax liabilities	254			1,535		(k	)		1,789		—			—					1,789
Other long-term liabilities	424			(283	)	(a	)		141		—			—					141
Total liabilities	139,872			(11,259	)				128,613		402,178			(488,758	)				42,033
Commitments and contingencies
Stockholders’ equity
LiveWire Common Stock, 0.0001 par value	—			16		(j	)		16		—			2<br> <br>1<br><br><br>1		(c<br> <br>(d<br><br><br>(g	) <br> <br>)<br> <br>)		20
Preference shares, 0.0001 par value; 5,000,000 shares authorized; no shares issued or<br>outstanding	—			—					—		—			—					—
Class A ordinary shares, 0.0001 par value, 500,000,000 shares authorized; no shares issued<br>or outstanding	—			—					—		—			—					—
Class B ordinary shares, 0.0001 par value; 50,000,000 shares authorized; no shares issued or<br>outstanding	—			—					—		—			—					—
Preferred Stock, 0.0001 par value; 20,000,000 shares authorized, no shares issued or<br>outstanding	—			—					—		—			—					—
Domesticated ABIC Common Stock, 0.0001 par value; 800,000,000 shares authorized; 11,402,888<br>shares issued and outstanding as of September 25, 2022	—			—					—		1			(1	)	(g	)		—
Additional paid-in capital	—			45,629		(j	)		45,629		30,906			199,998<br> <br>99,999<br><br><br>(20,132<br> <br>(30,455	)<br><br><br>)	(c<br> <br>(d<br><br><br>(e<br> <br>(h	) <br> <br>)<br> <br>)<br><br><br>)		325,945
Accumulated deficit	—			—					—		(30,455	)		30,455		(h	)		—
Net Parent investment	42,516			3,129<br> <br>(44,038<br><br><br>(1,607	)<br> <br>)	(a<br> <br>(j<br><br><br>(k	) <br> <br>)<br> <br>)		—		—			—					—
Accumulated other comprehensive income	(9	)		9		(a	)		—		—			—					—
Total equity	42,507			3,138					45,645		452			279,868					325,965
Total liabilities and equity	182,379		$	(8,121	)			$	174,258	$	402,630		$	(208,890	)			$	367,998

All values are in US Dollars.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 25, 2022

(in thousands, except share and per share data)

				Separation											Business Combination
	Legacy LiveWire(Historical)			Autonomous EntityAdjustments					Pro FormaSeparation ofLegacy LiveWire			AEA-BridgesImpact Corp.(Historical)			TransactionAccountingAdjustments		Pro FormaCombined
Revenue, net	$	37,615		$	—				$	37,615		$	—		$	—	$	37,615
Costs and expenses:
Cost of goods sold		36,987			1,120<br> <br>4		(aa<br> <br>(bb	) <br> <br>)		38,111			—			—		38,111
Selling, administrative and engineering expense		57,392			2,257		(bb	)		59,649			—			—		59,649
Formation and operating costs		—			—					—			5,633			—		5,633
Operating expense		94,379			3,381					97,760			5,633			—		103,393
Operating loss		(56,764	)		(3,381	)				(60,145	)		(5,633	)		—		(65,778	)
Other income, net		235			—					235			224			—		459
Interest expense related party		(475	)		—					(475	)		—			—		(475	)
Interest (expense) income		(23	)		—					(23	)		2,118			—		2,095
Forgiveness of deferred underwriting fee payable		—			—					—			3,748			—		3,748
Interest on mandatorily redeemable Class A ordinary shares		—			—					—			3,324			—		3,324
Change in fair value of derivative warrant liabilities		—			—					—			21,198			—		21,198
(Loss) income before income taxes		(57,027	)		(3,381	)				(60,408	)		24,979			—		(35,429	)
Income tax provision		159			—		(cc	)		159			—			—		159
Net (loss) income	$	(57,186	)	$	(3,381	)			$	(60,567	)	$	24,979		$	—	$	(35,588	)
Weighted average shares outstanding of Class A ordinary shares													—					n/a
Basic and diluted net income per ordinary share, Class A ordinary shares													—					n/a
Weighted average shares outstanding of Class B ordinary shares													—					n/a
Basic and diluted net income per ordinary share, Class B ordinary shares													—					n/a
Weighted average shares outstanding of Domesticated ABIC Common Stock													48,612,048					n/a
Basic and diluted net income per ordinary share, Domesticated ABIC Common Stock												$	0.45					n/a
Net loss per share:
Weighted average LiveWire Common Stock outstanding													n/a					202,402,888
Net loss per LiveWire Common Stock - basic and diluted													n/a				$	(0.19	)

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2021

(in thousands, except share and per share data)

				Separation											Business Combination
	Legacy<br>LiveWire(Historical)			Autonomous EntityAdjustments					Pro FormaSeparation ofLegacy LiveWire			AEA-Bridges ImpactCorp. (Historical)			TransactionAccountingAdjustments				Pro Forma Combined
Revenue, net	$	35,806		$	—				$	35,806		$	—		$	—			$	35,806
Costs and expenses:
Cost of goods sold		38,380			1,061<br> <br>5		(aa<br> <br>(bb	) <br> <br>)		39,446			—			—				39,446
Selling, administrative and engineering expense		65,608			3,120		(bb	)		68,728			—			—				68,728
Formation and operating costs		—			—					—			7,695			—				7,695
Operating expense		103,988			4,186					108,174			7,695			—				115,869
Operating loss		(68,182	)		(4,186	)				(72,368	)		(7,695	)		—				(80,063	)
Other income, net		302			—					302			—			—				302
Interest expense related party		(293	)		—					(293	)		—			—				(293	)
Interest income		19			—					19			164			—				183
Change in fair value of derivative warrant liabilities		—			—					—			12,353			—				12,353
(Loss) income before income taxes		(68,154	)		(4,186	)				(72,340	)		4,822			—				(67,518	)
Income tax provision		138			—		(cc	)		138			—			—	(cc	)		138
Net (loss) income per share:	$	(68,292	)	$	(4,186	)			$	(72,478	)	$	4,822		$	—			$	(67,656	)
Weighted average shares outstanding of Class A ordinary shares													40,000,000							n/a
Basic and diluted net income per ordinary share, Class A ordinary shares												$	0.10							n/a
Weighted average shares outstanding of Class B ordinary shares													10,000,000							n/a
Basic and diluted net income per ordinary share, Class B ordinary shares												$	0.10							n/a
Net loss per share:
Weighted average LiveWire Common Stock outstanding													n/a							202,402,888
Net loss per LiveWire Common Stock - basic and diluted													n/a						$	(0.33	)

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

1. Basis of Presentation

The Business Combination will be accounted for as a reverse recapitalization, in accordance with GAAP. Under this method of accounting, ABIC will be treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination will be treated as the equivalent of Legacy LiveWire issuing stock for the net assets of ABIC, accompanied by a recapitalization. The net assets of ABIC will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be those of Legacy LiveWire.

Legacy LiveWire has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances:

•	Legacy LiveWire’s majority shareholder, the Legacy LiveWire Equityholder, will have the largest voting<br>interest in the combined company
•	Legacy LiveWire’s executive management will make up the majority of the management of the combined company;<br>
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•	Legacy LiveWire’s majority shareholder, the Legacy LiveWire Equityholder, will have the ability to designate<br>the majority of the initial LiveWire Board and subsequent decisions on the LiveWire Board will be based on shareholder vote, of which the Legacy LiveWire Equityholder has the largest voting interest
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•	the combined company assumed the name “LiveWire Group Inc.”; and
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•	Legacy LiveWire is the larger entity based on revenue. Additionally, Legacy LiveWire has a larger employee base<br>and substantive operations.
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The unaudited pro forma condensed combined balance sheet as of September 25, 2022 assumes that the Transactions occurred on September 25, 2022. The unaudited pro forma condensed combined statement of operations for the nine months ended September 25, 2022 and the year ended December 31, 2021 give pro forma effect to the Transactions as if they had been completed on January 1, 2021. All periods are presented on the basis of Legacy LiveWire as the accounting acquirer in the Business Combination.

The unaudited pro forma condensed combined financial information is for illustrative and informational purposes only and is not intended to represent or be indicative of what LiveWire’s financial condition or results of operations would have been had Legacy LiveWire operated historically as a company independent of H-D or if the Transactions had occurred on the dates indicated. The unaudited pro forma combined financial information also should not be considered representative of LiveWire’s future combined financial condition or combined results of operations. The audited annual combined financial statements of Legacy LiveWire have been derived from H-D’s historical accounting records and reflect certain allocation of expenses. All of the allocations and estimates in such financial statements are based on assumptions that H-D’s management believes are reasonable. The historical combined financial statements do not necessarily represent the financial position or results of operations of the Legacy LiveWire business had they been operated as a standalone company during the periods or at the dates presented. As a result, autonomous entity adjustments, based on contractual agreements related to the Separation, have been reflected in the pro forma combined financial information.

The unaudited pro forma condensed combined financial information does not reflect any anticipated synergies, operating efficiencies, tax savings or cost savings that may be associated with LiveWire.

The pro forma condensed combined provision for income taxes does not necessarily reflect the amounts that would have resulted had ABIC and Legacy LiveWire filed consolidated income tax returns during the periods presented.

The historical statement of operations of ABIC include transaction related costs of $4.6 million and $6.6 million for the nine months ended September 25, 2022 and the year ended December 31, 2021, respectively. The transaction costs are nonrecurring.

2. AccountingPolicies

Management will perform a comprehensive review of the two entities’ accounting policies. As a result of that review, management may identify differences between the accounting policies of the two entities which, when conformed, could have a material impact on the financial statements of LiveWire. Based on its initial analysis, management did not identify any significant differences that would have a material impact on the unaudited pro forma condensed combined financial information. As a result, the unaudited pro forma condensed combined financial information does not assume any differences in accounting policies.

3. Adjustments to Unaudited Pro Forma Condensed Combined Financial Information

Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet

Adjustments a), j), and k) relate to the Separation, all other adjustments relate to the Business Combination.

a)	Reflects the adjustment for assets and liabilities, and the related currency translation adjustments, which<br>will remain with H-D in accordance with the separation agreement. These amounts were included in the historical combined balance sheet as they related to the Legacy LiveWire historical operations. Legacy<br>LiveWire’s historical financial statements reflect the net assets in accordance with the manner in which H-D’s management operated the business.
b)	Reflects the reclassification of $402.4 million of cash and marketable securities in restricted cash as of<br>the balance sheet date that becomes available to fund expenses in connection with the Business Combination or future cash needs of the combined company prior to the redemptions described in adjustment i below.
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c)	Reflects the gross proceeds of $200.0 million from the private placement of 20,000,000 shares of LiveWire<br>Common Stock, par value $0.0001, at $10.00 per share pursuant to the PIPE Investments, inclusive of $100.0 million from an investment from Legacy LiveWire Equityholder and $100.0 million from the KYMCO Group. As it relates to the KYMCO<br>Group investment, Legacy LiveWire received a $100 million cash deposit from KYMCO Group during the quarter ended September 25, 2022 in advance of the pending LiveWire transaction close. The $100 million cash deposit was included in<br>Restricted cash on the historical combined balance sheet as of September 25, 2022. In addition, Legacy LiveWire also recorded a $100 million liability in Deferred business combination consideration on the historical combined balance sheet<br>as of September 25, 2022, representing the Company’s obligation to return the funds to KYMCO in the event the transaction did not close. The Business Combination transaction accounting adjustments reflect the reclassification of the<br>$100 million of restricted cash to cash and cash equivalents and the elimination of the accrued liability in order to demonstrate KYMCO Group’s investment in Legacy LiveWire in exchange for LiveWire Common Stock upon consummation of the<br>Business Combination.
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d)	Reflects the H-D Backstop Amount of $100 million received from the<br>Legacy LiveWire Equityholder in exchange for 10,000,000 shares of LiveWire Common Stock, par value $0.0001, at $10.00 per share. Based on the Business Combination Agreement, the Legacy LiveWire Equityholder agreed to purchase the number of shares of<br>LiveWire Common Stock with a dollar value equal to the number of Class A Ordinary Shares that Public Shareholders have elected to redeem, up to 10,000,000 shares.
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e)	Reflects the capital contribution of $20.1 million to H-D pursuant<br>to the Business Combination Agreement to reimburse H-D for transaction costs. In accordance with the terms of the Business Combination Agreement, on the Closing Date, LiveWire paid upon release of proceeds<br>from the Trust Account all of H-D’s Transaction Expenses (up to $27 million) that were accrued and unpaid as of Closing. As these transaction costs are the legal obligation of H-D, the offset of the cash payment is reflected in additional paid-in capital as a capital contribution of $20.1 million to Parent.
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f)	Reflects the payment of $20.6 million of transaction costs incurred and accrued by ABIC. Of that amount,<br>$9.4 million relates to deferred underwriters’ fees incurred as part of the IPO, which were cash settled upon the consummation of the Business Combination. The remaining $11.2 million relates to the payments of transaction-related<br>costs accrued on the historical balance sheet of ABIC as of September 25, 2022.
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g)	Reflects the reclassification of Domesticated ABIC Common Stock to LiveWire Common Stock at close.<br>
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h)	Reflects the elimination of ABIC historical accumulated deficit.
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i)	Represents the redemption of 36,597,112 Class A Ordinary Shares for $368.1 million at a redemption<br>price of approximately $10.06 per share. As noted in introduction to the pro forma financial information, Public Shareholders of 36,597,112 Class A ordinary shares properly exercised their right to have such shares redeemed and were recorded as<br>a mandatorily redeemable Class A ordinary shares liability in ABIC’s condensed consolidated balance sheet as of September 25, 2022. The redemption cash payment was paid to shareholders on September 26, 2022.<br>
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j)	Represents the reclassification of the parent’s net investment in Legacy LiveWire, including other pro<br>forma adjustments, into Additional paid-in capital and LiveWire Common Stock, par value $0.0001, based on the number of shares of LiveWire Common Stock outstanding as of the Closing.
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k)	Reflects the adjustment to deferred tax assets of $0.1 million, and to deferred tax liabilities of<br>$1.5 million, both primarily associated with inventory and warranty related accruals which will remain with H-D in accordance with the separation agreement, using a blended statutory rate of 22.7% and<br>related adjustments to the valuation allowance for deferred tax assets that are not more- likely-than-not to be realized.
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Adjustments to Unaudited Pro Forma Condensed Combined Statements of Operations

Adjustments aa) and bb) relate to the Separation and cc) relates to both the Separation and the Business Combination.

aa)	Reflects the effect of Contract Manufacturing Agreement that Legacy LiveWire and<br>H-D entered into at Separation. The cost of products sold adjustment reflects the price adjustments related to historical transfers from H-D to Legacy LiveWire under the<br>pricing terms of the Contract Manufacturing Agreement. Historically, inventory was recorded at actual cost.
bb)	These incremental costs include the effect of Transition Services Agreement and a Master Services Agreement<br>between LiveWire and H-D that will be entered into concurrent with the Closing. Under the Transition Services Agreement, H-D will continue to provide LiveWire support<br>function services at a cost to LiveWire, including finance, information technology and infrastructure. Under the Master Services Agreement, H-D will continue to provide LiveWire with certain services that<br>LiveWire does not yet have the capability to perform for itself, including testing and development, product regulatory support and color materials, finishes and graphics services, as LiveWire may request from time to time. As disclosed in the<br>footnotes to the historical audited financial statements of Legacy LiveWire included elsewhere in this Current Report on Form 8-K/A, certain costs incurred by the Parent to support the Legacy LiveWire<br>operations had been allocated based on various metrics deemed reasonable by management. Accordingly, the pro forma combined financial statements have been adjusted to depict LiveWire’s costs under the Transition Services Agreement and Master<br>Services Agreement that will be entered into between LiveWire, as an autonomous entity, and H-D.
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cc)	A tax benefit for the pre-tax pro forma adjustments has not been<br>recorded. Legacy LiveWire determined that it is not more likely than not that it would be able to realize the tax benefits from such losses due to the negative evidence of historical losses.
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4. Net Loss per Share

Represents the net loss per share calculated using outstanding shares that resulted from the Transactions, assuming the shares were outstanding since January 1, 2021. As the Transactions are being reflected as if they had occurred at the beginning of the periods presented, the calculation of weighted-average shares outstanding for basic and diluted net loss per share assumes that the shares issuable relating to the Transactions have been outstanding for the entire periods presented.

The unaudited pro forma condensed combined financial information has been prepared for the nine months ended September 25, 2022 and the year ended December 31, 2021:

	Nine months ended<br>September 25, 2022			Year endedDecember 31, 2021
(in thousands, except share and per share data)	Pro FormaCombined			Pro FormaCombined
Pro forma net loss ^(1)^	$	(38,912	)	$	(67,656	)
Weighted average LiveWire Common Stock outstanding		202,402,888			202,402,888
Net loss per LiveWire Common Stock—basic and diluted ^(2)^	$	(0.19	)	$	(0.33	)
(1)	Pro forma net loss of $35,588 for the nine months ended September 25, 2022 was increased by the removal of<br>interest income on mandatorily redeemable Class A ordinary shares of $3,324 for earnings per share purposes.
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(2)	For the purposes of applying the if converted method for calculating diluted earnings per share, it was assumed<br>that all outstanding warrants sold in the IPO and the private placement are exchanged for LiveWire Common Stock. However, since this results in anti-dilution, the effect of such exchange was not included in calculation of diluted loss per share.<br>
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