[10-Q] Phoenix Motor Inc. Quarterly Earnings Report
Phoenix Motor (OTC:PEVM, formerly Nasdaq:PEV) filed its Q1 2025 10-Q for the period ended March 31 2025. The cover notes that trading on Nasdaq was suspended on April 15 2025; the stock now trades on the OTC Pink Market. The company remains a smaller reporting company and emerging growth company, and confirms timely filing compliance for the past 12 months. A total of 49,280,432 shares were outstanding as of June 20 2025.
The filing provides unaudited condensed financial statements (F-1–F-4), MD&A, risk factor updates and extensive note disclosures covering customer concentration, multiple convertible note financings, private placements and subsequent events. Investors should scrutinize liquidity sections for details on outstanding convertible promissory notes, supplier dependencies and the impact of the recent Nasdaq delisting on capital-raising options.
Phoenix Motor (OTC:PEVM, precedentemente Nasdaq:PEV) ha presentato il suo modulo 10-Q per il primo trimestre 2025 relativo al periodo terminato il 31 marzo 2025. La copertina segnala che la negoziazione su Nasdaq è stata sospesa il 15 aprile 2025; ora il titolo è quotato sul mercato OTC Pink. L'azienda mantiene lo status di smaller reporting company e emerging growth company, confermando la conformità alle scadenze di deposito negli ultimi 12 mesi. Al 20 giugno 2025 risultavano in circolazione un totale di 49.280.432 azioni.
Il documento include bilanci finanziari condensati non revisionati (F-1–F-4), la sezione MD&A, aggiornamenti sui fattori di rischio e dettagliate note esplicative riguardanti la concentrazione dei clienti, diverse emissioni di note convertibili, collocamenti privati e eventi successivi. Gli investitori dovrebbero esaminare attentamente le sezioni sulla liquidità per approfondire le note convertibili in essere, le dipendenze dai fornitori e l'impatto della recente delisting da Nasdaq sulle opzioni di raccolta capitale.
Phoenix Motor (OTC:PEVM, anteriormente Nasdaq:PEV) presentó su formulario 10-Q del primer trimestre de 2025 correspondiente al período finalizado el 31 de marzo de 2025. La portada indica que la negociación en Nasdaq fue suspendida el 15 de abril de 2025; ahora la acción cotiza en el mercado OTC Pink. La compañía sigue siendo una smaller reporting company y una emerging growth company, y confirma el cumplimiento oportuno de presentación durante los últimos 12 meses. Al 20 de junio de 2025 había un total de 49,280,432 acciones en circulación.
El informe incluye estados financieros condensados no auditados (F-1–F-4), MD&A, actualizaciones de factores de riesgo y extensas notas explicativas que cubren la concentración de clientes, múltiples financiamientos mediante pagarés convertibles, colocaciones privadas y eventos posteriores. Los inversores deben examinar detenidamente las secciones de liquidez para obtener detalles sobre los pagarés convertibles pendientes, dependencias con proveedores y el impacto de la reciente exclusión de Nasdaq en las opciones para recaudar capital.
Phoenix Motor (OTC:PEVM, 이전 Nasdaq:PEV)는 2025년 1분기 10-Q 보고서를 2025년 3월 31일 종료된 기간에 대해 제출했습니다. 표지에는 나스닥 거래가 2025년 4월 15일에 중단되었다고 명시되어 있으며, 현재 주식은 OTC 핑크 마켓에서 거래되고 있습니다. 회사는 여전히 소규모 보고 회사 및 신흥 성장 회사로 분류되며, 지난 12개월 동안 적시 제출을 준수했음을 확인했습니다. 2025년 6월 20일 기준으로 총 49,280,432주가 발행되었습니다.
보고서에는 미감사 요약 재무제표(F-1~F-4), 경영진 논의 및 분석(MD&A), 위험 요소 업데이트 및 고객 집중도, 다수의 전환 사채 금융, 사모 발행 및 이후 사건에 관한 광범위한 주석 공시가 포함되어 있습니다. 투자자들은 유동성 섹션을 자세히 검토하여 미결제 전환 약속어음, 공급업체 의존도 및 최근 나스닥 상장폐지가 자본 조달 옵션에 미치는 영향을 확인해야 합니다.
Phoenix Motor (OTC:PEVM, anciennement Nasdaq:PEV) a déposé son formulaire 10-Q pour le premier trimestre 2025 couvrant la période close au 31 mars 2025. La couverture indique que la cotation sur Nasdaq a été suspendue le 15 avril 2025 ; l'action est désormais négociée sur le marché OTC Pink. La société reste une smaller reporting company et une emerging growth company, et confirme le respect des délais de dépôt au cours des 12 derniers mois. Un total de 49 280 432 actions étaient en circulation au 20 juin 2025.
Le dépôt comprend des états financiers condensés non audités (F-1–F-4), la section MD&A, des mises à jour des facteurs de risque et des notes explicatives détaillées portant sur la concentration des clients, plusieurs financements par billets convertibles, des placements privés et des événements postérieurs. Les investisseurs sont invités à examiner attentivement les sections relatives à la liquidité pour obtenir des détails sur les billets à ordre convertibles en circulation, les dépendances fournisseurs et l’impact de la récente radiation du Nasdaq sur les options de levée de capitaux.
Phoenix Motor (OTC:PEVM, ehemals Nasdaq:PEV) hat seinen 10-Q-Bericht für das erste Quartal 2025 für den Zeitraum bis zum 31. März 2025 eingereicht. Auf dem Deckblatt wird vermerkt, dass der Handel an der Nasdaq am 15. April 2025 ausgesetzt wurde; die Aktie wird nun am OTC Pink Markt gehandelt. Das Unternehmen bleibt ein smaller reporting company und emerging growth company und bestätigt die fristgerechte Einreichung in den letzten 12 Monaten. Zum 20. Juni 2025 waren insgesamt 49.280.432 Aktien ausstehend.
Die Einreichung enthält ungeprüfte, kondensierte Finanzberichte (F-1–F-4), MD&A, Aktualisierungen der Risikofaktoren sowie umfangreiche Anmerkungen zu Kundenkonzentrationen, mehreren Wandelanleihen-Finanzierungen, Privatplatzierungen und nachfolgenden Ereignissen. Investoren sollten die Liquiditätsabschnitte genau prüfen, um Details zu ausstehenden wandlungsfähigen Schuldscheinen, Lieferantenabhängigkeiten und den Auswirkungen der jüngsten Nasdaq-Delistung auf Kapitalbeschaffungsoptionen zu erhalten.
- None.
- Trading of common stock suspended from Nasdaq on April 15 2025; shares relegated to OTC Pink, reflecting listing-rule non-compliance and increasing liquidity and financing risk
Insights
TL;DR: Nasdaq suspension overshadows Q1 filing; liquidity and funding risks intensify.
The quarter’s core takeaway is not income-statement performance but the loss of Nasdaq listing, which materially restricts institutional ownership and raises the cost of capital. Numerous references to convertible notes and private placements point to ongoing cash needs that will likely be financed through additional dilution. Management discloses sizeable customer and supplier concentration, heightening revenue volatility. While the company met SEC filing deadlines, the combination of market-tier downgrade and funding reliance signals elevated going-concern and dilution risk. Without clear operating improvements in the unaudited statements, the balance of evidence skews negative for shareholders.
TL;DR: Compliance intact, listing compliance failed—governance picture deteriorates.
The registrant satisfies SEC reporting obligations, yet the April 15 Nasdaq trading suspension exposes serious governance and compliance weaknesses. OTC Pink relegation reduces transparency standards and shareholder protections, often triggering heightened regulatory scrutiny and proxy challenges. The filing lists several unregistered equity sales and convertible instruments, suggesting the board is relying on dilutive financing rather than sustainable strategic initiatives. Risk-factor sections expand on supplier concentration and dependence on related parties, further eroding governance quality. Overall, adherence to basic reporting rules cannot offset the strategic setback of losing a national exchange listing.
Phoenix Motor (OTC:PEVM, precedentemente Nasdaq:PEV) ha presentato il suo modulo 10-Q per il primo trimestre 2025 relativo al periodo terminato il 31 marzo 2025. La copertina segnala che la negoziazione su Nasdaq è stata sospesa il 15 aprile 2025; ora il titolo è quotato sul mercato OTC Pink. L'azienda mantiene lo status di smaller reporting company e emerging growth company, confermando la conformità alle scadenze di deposito negli ultimi 12 mesi. Al 20 giugno 2025 risultavano in circolazione un totale di 49.280.432 azioni.
Il documento include bilanci finanziari condensati non revisionati (F-1–F-4), la sezione MD&A, aggiornamenti sui fattori di rischio e dettagliate note esplicative riguardanti la concentrazione dei clienti, diverse emissioni di note convertibili, collocamenti privati e eventi successivi. Gli investitori dovrebbero esaminare attentamente le sezioni sulla liquidità per approfondire le note convertibili in essere, le dipendenze dai fornitori e l'impatto della recente delisting da Nasdaq sulle opzioni di raccolta capitale.
Phoenix Motor (OTC:PEVM, anteriormente Nasdaq:PEV) presentó su formulario 10-Q del primer trimestre de 2025 correspondiente al período finalizado el 31 de marzo de 2025. La portada indica que la negociación en Nasdaq fue suspendida el 15 de abril de 2025; ahora la acción cotiza en el mercado OTC Pink. La compañía sigue siendo una smaller reporting company y una emerging growth company, y confirma el cumplimiento oportuno de presentación durante los últimos 12 meses. Al 20 de junio de 2025 había un total de 49,280,432 acciones en circulación.
El informe incluye estados financieros condensados no auditados (F-1–F-4), MD&A, actualizaciones de factores de riesgo y extensas notas explicativas que cubren la concentración de clientes, múltiples financiamientos mediante pagarés convertibles, colocaciones privadas y eventos posteriores. Los inversores deben examinar detenidamente las secciones de liquidez para obtener detalles sobre los pagarés convertibles pendientes, dependencias con proveedores y el impacto de la reciente exclusión de Nasdaq en las opciones para recaudar capital.
Phoenix Motor (OTC:PEVM, 이전 Nasdaq:PEV)는 2025년 1분기 10-Q 보고서를 2025년 3월 31일 종료된 기간에 대해 제출했습니다. 표지에는 나스닥 거래가 2025년 4월 15일에 중단되었다고 명시되어 있으며, 현재 주식은 OTC 핑크 마켓에서 거래되고 있습니다. 회사는 여전히 소규모 보고 회사 및 신흥 성장 회사로 분류되며, 지난 12개월 동안 적시 제출을 준수했음을 확인했습니다. 2025년 6월 20일 기준으로 총 49,280,432주가 발행되었습니다.
보고서에는 미감사 요약 재무제표(F-1~F-4), 경영진 논의 및 분석(MD&A), 위험 요소 업데이트 및 고객 집중도, 다수의 전환 사채 금융, 사모 발행 및 이후 사건에 관한 광범위한 주석 공시가 포함되어 있습니다. 투자자들은 유동성 섹션을 자세히 검토하여 미결제 전환 약속어음, 공급업체 의존도 및 최근 나스닥 상장폐지가 자본 조달 옵션에 미치는 영향을 확인해야 합니다.
Phoenix Motor (OTC:PEVM, anciennement Nasdaq:PEV) a déposé son formulaire 10-Q pour le premier trimestre 2025 couvrant la période close au 31 mars 2025. La couverture indique que la cotation sur Nasdaq a été suspendue le 15 avril 2025 ; l'action est désormais négociée sur le marché OTC Pink. La société reste une smaller reporting company et une emerging growth company, et confirme le respect des délais de dépôt au cours des 12 derniers mois. Un total de 49 280 432 actions étaient en circulation au 20 juin 2025.
Le dépôt comprend des états financiers condensés non audités (F-1–F-4), la section MD&A, des mises à jour des facteurs de risque et des notes explicatives détaillées portant sur la concentration des clients, plusieurs financements par billets convertibles, des placements privés et des événements postérieurs. Les investisseurs sont invités à examiner attentivement les sections relatives à la liquidité pour obtenir des détails sur les billets à ordre convertibles en circulation, les dépendances fournisseurs et l’impact de la récente radiation du Nasdaq sur les options de levée de capitaux.
Phoenix Motor (OTC:PEVM, ehemals Nasdaq:PEV) hat seinen 10-Q-Bericht für das erste Quartal 2025 für den Zeitraum bis zum 31. März 2025 eingereicht. Auf dem Deckblatt wird vermerkt, dass der Handel an der Nasdaq am 15. April 2025 ausgesetzt wurde; die Aktie wird nun am OTC Pink Markt gehandelt. Das Unternehmen bleibt ein smaller reporting company und emerging growth company und bestätigt die fristgerechte Einreichung in den letzten 12 Monaten. Zum 20. Juni 2025 waren insgesamt 49.280.432 Aktien ausstehend.
Die Einreichung enthält ungeprüfte, kondensierte Finanzberichte (F-1–F-4), MD&A, Aktualisierungen der Risikofaktoren sowie umfangreiche Anmerkungen zu Kundenkonzentrationen, mehreren Wandelanleihen-Finanzierungen, Privatplatzierungen und nachfolgenden Ereignissen. Investoren sollten die Liquiditätsabschnitte genau prüfen, um Details zu ausstehenden wandlungsfähigen Schuldscheinen, Lieferantenabhängigkeiten und den Auswirkungen der jüngsten Nasdaq-Delistung auf Kapitalbeschaffungsoptionen zu erhalten.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ___________ to ___________
Commission
file number:
(Exact Name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
| (Address of Principal Executive Offices) | (Zip Code) |
(Registrant’s Telephone Number, Including Area Code)
(Former name or former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||
| The
|
*Trading of the registrant’s common stock on Nasdaq was suspended on April 15, 2025. The registrant’s common stock is currently quoted on the OTC Pink Market under the symbol “PEVM”.
Indicate
by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer ☐ | Accelerated Filer ☐ |
| Smaller
Reporting Company | |
| 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.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The
registrant had
TABLE OF CONTENTS
| Page | ||
| Part I. | Financial Information | |
| Item 1. Interim Financial Statements | ||
| Condensed Consolidated Balance Sheets as of March 31, 2025 (Unaudited) and December 31, 2024 | F-1 | |
| Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2025, and 2024 | F-2 | |
| Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2025, and 2024 | F-3 | |
| Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025, and 2024 | F-4 | |
| Notes to Unaudited Condensed Consolidated Financial Statements | F-5 | |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 3 | |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk | 11 | |
| Item 4. Controls and Procedures | 11 | |
| Part II. | Other Information | |
| Item 1. Legal Proceedings | 12 | |
| Item 1A. Risk Factors | 12 | |
| Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities | 14 | |
| Item 3. Defaults Upon Senior Securities | 14 | |
| Item 4. Mine Safety Disclosures | 14 | |
| Item 5. Other Information. | 14 | |
| Item 6. Exhibits | 14 | |
| Signatures | 15 | |
| 2 |
PART I - FINANCIAL INFORMATION
Item 1. Interim Financial Statements
PHOENIX MOTOR INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except for share and per share data)
| March 31, 2025 | December 31, 2024 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Inventories | ||||||||
| Prepaid expenses and other current assets, net | ||||||||
| Battery lease receivables | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Net investment in leases | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Advance from customers, current | ||||||||
| Deferred income | ||||||||
| Warranty reserve, current | ||||||||
| Lease liabilities, current | ||||||||
| Amounts due to a related party | ||||||||
| Short-term borrowing | — | |||||||
| Derivative liability | — | |||||||
| Warrant liability | ||||||||
| Convertible note, current | ||||||||
| Long-term borrowing, current | ||||||||
| Total current liabilities | ||||||||
| Lease liabilities, noncurrent | ||||||||
| Warranty reserve, noncurrent | ||||||||
| Advance from customers, noncurrent | — | |||||||
| Long-term borrowings | ||||||||
| Deferred tax liabilities | ||||||||
| Total liabilities | $ | |||||||
| Commitments and contingencies (Note 17) | - | - | ||||||
| Equity: | ||||||||
| Common stock, par $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-1 |
PHOENIX MOTOR INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except for share and per share data)
| March 31, 2025 | March 31, 2024 | |||||||
| Three Months Ended | ||||||||
| March 31, 2025 | March 31, 2024 | |||||||
| Revenues | $ | $ | ||||||
| Cost of revenues | ||||||||
| Gross profit | ||||||||
| Operating expenses: | ||||||||
| Selling, general and administrative | ||||||||
| Impairment of goodwill | — | |||||||
| Operating loss | ( | ) | ( | ) | ||||
| Other income (expense): | ||||||||
| Interest expense, net | ( | ) | ( | ) | ||||
| Loss on change in fair value of derivative liability | — | ( | ) | |||||
| Loss on warrants issued during private placements | — | ( | ) | |||||
| (Loss) gain on change in fair value of warrant liability | ( | ) | ||||||
| Others | ||||||||
| Bargain purchase gain | — | |||||||
| Total other (expense) / income | ( | ) | ||||||
| (Loss) income before income taxes | ( | ) | ||||||
| Income tax expense | — | ( | ) | |||||
| Net (loss) income | $ | ( | ) | $ | ||||
| Net (loss) income per share of common stock: | ||||||||
| Basic | $ | ( | ) | $ | ||||
| Diluted | $ | ( | ) | $ | ||||
| Weighted average shares outstanding | ||||||||
| Basic | ||||||||
| Diluted | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-2 |
PHOENIX MOTOR INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(In thousands, except for share and per share data)
| Shares* | Amount | Capital | Deficit | Equity | ||||||||||||||||
| Additional | Total | |||||||||||||||||||
| Common Stock | Paid-In | Accumulated | Stockholders’ | |||||||||||||||||
| Shares* | Amount | Capital | Deficit | Equity (deficit) | ||||||||||||||||
| Balance as of January 1, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Net income | — | — | — | |||||||||||||||||
| Stock-based compensation | — | — | — | |||||||||||||||||
| Reclass of derivative liability upon conversion of related convertible notes | — | — | — | |||||||||||||||||
| Issuance of common stock for convertible note conversion | — | — | ||||||||||||||||||
| Issuance of common stock for settlement with vendors | — | |||||||||||||||||||
| Issuance of restricted shares to Wisdom Financial to repay loan interest | — | — | ||||||||||||||||||
| Issuance of common stock for private placements | — | |||||||||||||||||||
| Balance as of March 31, 2024 | ( | ) | ||||||||||||||||||
| Balance as of January 1, 2025 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Balance | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Net loss | — | — | — | ( | ) | ( | ) | |||||||||||||
| Net loss (Income) | — | — | — | ( | ) | ( | ) | |||||||||||||
| Stock-based compensation | — | — | ( | ) | — | ( | ) | |||||||||||||
| Reclass of derivative liability upon conversion of related convertible notes | — | — | — | |||||||||||||||||
| Issuance of common stock per warrant exercise | — | |||||||||||||||||||
| Issuance of senior convertible note | — | — | — | |||||||||||||||||
| Issuance of common stock for convertible note conversion | — | |||||||||||||||||||
| Balance as of March 31, 2025 | ( | ) | ||||||||||||||||||
| Balance | ( | ) | ||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-3 |
PHOENIX MOTOR INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| 2025 | 2024 | |||||||
| Three Month ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net (loss) income | ( | ) | ||||||
| Adjustments to reconcile net (loss) income to cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of convertible notes | — | |||||||
| Loss on Change in fair value of derivative liability | — | |||||||
| Loss on warrant exercise | — | |||||||
| Share-based compensation | ( | ) | ||||||
| Impairment loss on goodwill | — | |||||||
| Warranty reserve | ( | ) | ( | ) | ||||
| Amortization of right-of-use assets | ||||||||
| Loss on warrants issued during private placements | — | |||||||
| Loss on change in fair value of warrant liability | ( | ) | ||||||
| Bargain purchase gain | — | ( | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Inventories | ||||||||
| Prepaid expenses and other assets | ( | ) | ( | ) | ||||
| Accounts payable | ( | ) | ||||||
| Accrued liabilities | ||||||||
| Deferred revenue | ( | ) | ( | ) | ||||
| Advance from customers | ||||||||
| Lease liabilities | ( | ) | ( | ) | ||||
| Net investment in leases | ||||||||
| Amount due to related party | ||||||||
| Amount due from related party | — | |||||||
| Income tax payable | — | |||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | — | ( | ) | |||||
| Acquisition of Proterra | — | ( | ) | |||||
| Net cash used in investing activities | — | ( | ) | |||||
| Cash flows from financing activities: | ||||||||
| Repayment of borrowings | ( | ) | ( | ) | ||||
| Proceeds from borrowings | ||||||||
| Repayment of related party borrowings | — | ( | ) | |||||
| Proceeds from related party borrowings | — | |||||||
| Proceeds received from private placements | — | |||||||
| Net cash generated from financing activities | ||||||||
| Increase/ (Decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at beginning of the period | ||||||||
| Cash and cash equivalents at end of the period | ||||||||
| Supplemental cash flow information: | ||||||||
| Interest paid | ||||||||
| Income tax paid | — | — | ||||||
| Non-cash activities: | ||||||||
| Issuance of common stock for settlement with vendors | — | |||||||
| Issuance of common stock for convertible note conversion | ||||||||
| Reclass of derivative liability upon conversion of related convertible debentures | ||||||||
| Issuance of restricted shares to Wisdom Financial to repay the consulting fee | — | |||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-4 |
PHOENIX MOTOR INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US$ thousands except for shares and share prices)
1. Description of Business and Organization
Phoenix Motor Inc. (“Phoenix Motor” or the “Company”) and its subsidiaries (collectively, the “Group”) is engaged in design, assembly, and integration of electric drive systems for medium duty electric vehicles (“EVs”) and electric transit buses.
Phoenix Cars, LLC (“PCL”), a subsidiary of Phoenix Motor, designs and manufactures zero- emission electric drivetrain systems for integration in medium to heavy-duty commercial fleet vehicles in United States. PCL also sells a range of material handling products including all-electric lithium-ion forklifts and pallet jacks. Phoenix Motorcars Leasing, LLC (“PML”), a subsidiary of Phoenix Motor, serves as a sales and leasing dealership for PCL in United States.
Phoenix
Motor was incorporated in the state of Delaware on October 20, 2020. EdisonFuture, Inc. (“EdisonFuture”), a subsidiary
of SPI Energy Co., Ltd (“SPI”), was the parent company of Phoenix Motor. On November 12, 2020, EdisonFuture
acquired
The Company’s third operating subsidiary, EdisonFuture Motor, Inc., was established in July 2021 to focus on development of its pickup trucks and last mile utility vans business.
On September 26, 2023, EdisonFuture sold shares of the Company’s common stock owned by it, representing
On January 11, 2024, the Group completed the acquisition of the Proterra transit business unit and on February 7, 2024, the Group completed the acquisition of Proterra battery lease contracts. After the acquisition, the Group engages in the business that designs, develops and sells electric transit buses as an original equipment manufacturer for North American public transit agencies, airports, universities and other commercial transit fleets and the Group was assigned with the right to collect certain leasing receivables which Proterra was a party as the lessor thereunder, used in connection with deployed Proterra electric transit buses. On June 24, 2024, the Group entered into an asset purchase agreement with Zenobe Americas EV Assotco LLC (“Zenobe”). In the agreement, the Group sold the battery lease receivables to Zenobe in two batches while retaining the warranty liability associated with leased batteries. As of March 31, 2025, the Group has closed both batches of sale.
2. Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompany unaudited condensed consolidated financial statements of the Group are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The unaudited condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group’s consolidated financial statements as of December 31, 2024 and accompanying notes in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
In the opinion of the management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments, which are necessary for a fair presentation of financial results for the quarterly periods presented. The Company believes that the disclosures are adequate to make the information presented not misleading. The accompanying unaudited condensed consolidated financial statements have been prepared using the same accounting policies as used in the preparation of the Group’s consolidated financial statements for the year ended December 31, 2024. The results of operations for the three months ended March 31, 2025 and 2024 are not necessarily indicative of the results for the full years or any future periods.
| F-5 |
(b) Revenue Recognition
The Group’s accounting practices under Accounting Standards Codification (“ASC”) No. 606, “Revenue from Contracts with Customers” (“ASC 606” or “Topic 606”) are as followings:
Sales of transit buses
The Group recognizes revenue on sales of transit buses at a point in time following the transfer of control of such products to the customer, which typically occurs upon the delivery to the customer when the Company can objectively demonstrate that the criteria specified in the contractual acceptance provisions are achieved prior to delivery. In cases where the Company cannot objectively demonstrate that the criteria specified in the contractual acceptance provisions have been achieved prior to delivery, revenue is recognized upon acceptance by the customer. The Group determined that the government grants should be considered as part of the transaction price because it is granted to the transit buses buyer and the buyer remains liable for such amount in the event the grants were not received by the Group or returned due to the buyer violates the government grant terms and conditions.
Sales of EVs and kits
The Group generates revenue from sales of EVs and kits, which are electric drive system kits that are integrated into shuttle buses sold to the customers. EV buyers in California are entitled to government grants when they purchase EVs that qualify for certain government grant project. The Group applies for and collects such government grants on behalf of the customers. Accordingly, customers only pay the amount after deducting government grants.
The Group recognizes revenue on sales of EVs and kits at a point in time following the transfer of control of such products to the customer, which typically occurs upon the delivery to the customer. The Group determined that the government grants should be considered as part of the transaction price because it is granted to the EV buyer and the buyer remains liable for such amount in the event the grants were not received by the Group or returned due to the buyer violating the government grant terms and conditions.
Lease of EVs
EV leasing revenue includes revenue recognized under lease accounting guidance for direct leasing programs. The Group accounts for most of the leasing transactions as operating leases under ASC 842 Leases, and revenues are recognized on a straight-line basis over the contractual term.
| F-6 |
Sales of forklifts
Revenue on sale of forklifts is recognized at a point in time following the transfer of control of such products to the customer, which typically occurs upon delivery or acceptance of the customer depending on the terms of the underlying contracts.
Sales of parts
Revenue on sale of parts for transit buses or EVs is recognized at a point in time following the transfer of control of such products to the customer, which typically occurs upon delivery or acceptance of the customer depending on the terms of the underlying contracts.
Service revenue
Service revenue consists of maintenance, warranty, training and other services. For maintenance and warranty services, revenues are recognized on a straight-line basis over the contractual term. For training and other service revenue, the Group recognizes revenue at a point in time following the transfer of control of such services to the customer, which typically occurs upon delivery of service to the customer.
Other revenue
Other revenue consists of shipping and delivery fees and others. For shipping and delivery fees and others, the Group recognizes revenue at a point in time following the transfer of control of such products or services to the customer, which typically occurs upon the delivery to the customer.
Disaggregation of revenues
The Group disaggregates its revenue by seven primary categories: sales of transit buses, sales of EVs, lease of EVs, sales of forklifts, sales of parts, service revenue and others.
The following is a summary of the Group’s disaggregated revenues:
Schedule of Disaggregated Revenues
| March 31, 2025 | March 31, 2024 | |||||||
| Three Months Ended | ||||||||
| March 31, 2025 | March 31, 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Sales of transit buses | $ | $ | ||||||
| Sales of EVs | ||||||||
| Sales of parts | - | |||||||
| Service revenue | - | |||||||
| Lease of EVs | ||||||||
| Sales of forklifts | - | |||||||
| Others | ||||||||
| Revenues | $ | $ | ||||||
The following is a summary of the Group’s disaggregated revenues by timing of revenue recognition:
| March 31, 2025 | March 31, 2024 | |||||||
| Three Months Ended | ||||||||
| March 31, 2025 | March 31, 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Over time | $ | $ | ||||||
| Point in time | ||||||||
| Revenues | $ | $ | ||||||
| F-7 |
A
contract liability is the Group’s obligation to transfer goods or services to a customer for which the Group has received consideration
(or an amount of consideration is due) from the customer. The Group records contract liabilities as advance from customers. As of March
31, 2025 and December 31, 2024, the balances of contract liabilities were $
(d) Leases
Lessor Accounting
During the year ended December 31, 2023, the Group amended agreements with certain customers related to the leased EVs to renew the lease term. Since there was no grant of additional right-of-use assets, the Group did not account for the modified lease agreements as new leases but accounted for the original lease and the modified lease agreements as a combined lease. The Group reviewed the combined lease agreements and considered that (i) the lease term represents for the major part (greater than 75%) of the economic life of the underlying equipment; and (ii) the present value of the sum of lease payments and any residual value guaranteed by the lessee that has not already been included in lease payments equals or exceeds substantially (greater than 90%) all of the fair value of the underlying asset.
The modified EV lease agreements are thus accounted for as sales-type leases. Under sales-type lease accounting, at the commencement date, the lessor recognizes a net investment in the lease, based on the estimated fair value of the underlying leased assets at contract inception, and derecognizes the underlying assets with the difference recorded as selling profit or loss arising from the lease, and interest income from the lease is recognized over the lease term.
The
net investment in leases was $
(e) Business Combination
Business combinations are recorded using the acquisition method of accounting and, accordingly, the acquired assets and liabilities are recorded at their fair market value at the date of acquisition. Any excess of acquisition cost over the fair value of the acquired assets and liabilities, including identifiable intangible assets, is recorded as goodwill. The Group charges acquisition-related costs that are not part of the purchase price consideration to general and administrative expenses as they are incurred. Those costs typically include transaction and integration costs, such as legal, accounting, and other professional fees.
According to Business Combination (Topic 805) the Group performs a screen test to evaluate whether a transaction should be accounted for as an acquisition and/or disposal of a business versus assets. In order for a purchase to be considered an acquisition of a business, and receive business combination accounting treatment, the set of transferred assets and activities must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. If substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, then the set of transferred assets and activities is not a business.
| F-8 |
(f) Fair Value Measurement
The Group measures at fair value certain of its financial and non-financial assets and liabilities by using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price, based on the highest and best use of the asset or liability. The levels of the fair value hierarchy are:
| ● | Level 1 — Quoted market prices in active markets for identical assets or liabilities. |
| ● | Level 2 — Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable, such as interest rate and yield curves, and market-corroborated inputs). |
| ● | Level 3 — Unobservable inputs in which there is little or no market data, which require the reporting unit to develop its own assumptions. |
The Group uses quoted market prices to determine the fair value when available. If quoted market prices are not available, the Group measures fair value using valuation techniques that use, when possible, current market-based or independently-sourced market parameters, such as interest rates.
The carrying values of the Group’s financial instruments, including cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payables, accrued liabilities and advance from customers, approximate their fair values due to the short-term nature of these instruments.
(g) Product Warranties
Products Warranties on EVs and Kits
The Group provides warranties on all vehicles or components sold in addition to pass through warranties from third party component suppliers. The Group accrues a warranty reserve for the products sold by the Group, which includes the Group’s best estimate of the projected costs to repair or replace items under warranties. These estimates are based on actual claims incurred to date and an estimate of the nature, frequency and costs of future claims. These estimates are inherently uncertain given the Group’s relatively short history of sales, and changes to the Group’s historical or projected warranty experience may cause material changes to the warranty reserve in the future. The Group considers the warranty provided is not an incremental service to customers rather an assurance to the quality of the vehicle, and therefore is not a separate performance obligation and should be accounted for in accordance with ASC 460, Guarantees.
Products Warranties on transit buses and batteries
The Group provides a limited warranty to customers on vehicles, battery systems and components. The limited warranty ranges from one to 12 years depending on the components. Pursuant to these warranties, the Group will repair, replace, or adjust the parts on the products that are defective in factory supplied materials or workmanship. The Group records a warranty reserve for the products sold at the point of revenue recognition, which includes the best estimate of the projected costs to repair or replace items under the limited warranty. These estimates are based on actual claims incurred to date and an estimate of the nature, frequency and costs of future claims. These estimates are inherently uncertain given the relatively short history of sales. Changes to the historical or projected warranty experience may cause material changes to the warranty reserve in the future. The portion of the warranty reserve expected to be incurred within the next 12 months is included within warranty reserve - short term liabilities while the remaining balance is included within warranty reservice - long term liabilities on the balance sheets.
| F-9 |
Warranty
expense is recorded as a component of cost of sales in the condensed consolidated statements of operations. The balance of warranty reserves
was $
(h) Goodwill
The Group assess goodwill for impairment on annual basis in accordance with ASC 350-20, Intangibles – Goodwill and Other: Goodwill, which permits the Group to first assess qualitative factors to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the quantitative impairment test. If this is the case, the quantitative goodwill impairment test is required. If it is more likely-than-not that the fair value of a reporting unit is greater than its carrying amount, the quantitative goodwill impairment test is not required.
Quantitative goodwill impairment test is used to identify both the existence of impairment and the amount of impairment loss, compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit is greater than its carrying amount, goodwill is not considered impaired. If the fair value of the reporting unit is less than its carrying amount, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.
During
the three months ended March 31, 2024, the Group identified impairment indicator resulted from the Company’s continuous decreasing
stock price since January 2024 and performed interim goodwill impairment testing. The Group recorded an impairment on goodwill of $
3. Going Concern
The
Group has net loss of $
For the next 12 months from the issuance date of the condensed consolidated quarterly financial statements, the Group plans to continue pursuing strategies to improve liquidity and raise additional funds while implementing various measures to control costs and improve efficiency. Such strategies and measures include the following: 1) continue to drive for operation integration and efficiency under ONE Phoenix, re-alignment operating units under ONE Goal, right sizing workforce under ONE Team; 2) re-establish the cost structure and cost base to increase operation efficiency with the new integrated ERP and other operating systems; 3) expand and strengthen strategic partnership to outsource a significant portion of design and engineering work for the next generation product to third party vendors and suppliers to control overall development and supply chain costs; 4) implement working capital initiatives and negotiate better payment terms with customers and for some of the new orders, require down payments; 5) implement cash saving initiatives and tighter cash control, and calibrate capital allocation to manage liquidity; and 6) continue to proactively implement a robust capital market strategy to provide financing for the Group’s operations through proceeds from private stock offering, debt financings including but not limited to term loans, revolving line of credit and equity linked instruments, and potentially federal and state incentive funding programs.
| F-10 |
There is no assurance that the plans will be successfully implemented. If the Group fails to achieve these goals, the Group may need additional financing to repay debt obligations and execute its business plan, and the Group may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. In the event that financing sources are not available, or that the Group is unsuccessful in increasing its gross profit margin and reducing operating losses, the Group may be unable to implement its current plans for expansion, repay debt obligations or respond to competitive pressures, any of which would have a material adverse effect on the Group’s business, financial condition and results of operations and may materially adversely affect its ability to continue as a going concern.
The unaudited condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded assets or the amounts and classification of liabilities or any other adjustments that might be necessary should the Group be unable to continue as a going concern.
4. Business Combination
In
November 2023, the Group participated in two auctions conducted by the United States Bankruptcy Court and emerged as the highest bidder
for two asset packages, one for Proterra transit business unit and one for the Proterra battery lease contracts, with total consideration
of $
The acquisition was accounted for as a business combination. Accordingly, the acquired assets and liabilities were recorded at their fair value at the date of acquisition. The purchase price allocation was based on a valuation analysis that utilized and considered generally accepted valuation methodologies such as the market and cost approach. The Group determines the fair value of the assets acquired and the liabilities assumed in this business combination with the assistance of a third-party valuation firm. The determination and allocation of fair values to the identifiable assets acquired and liabilities assumed are based on various assumptions and valuation methodologies requiring considerable judgment from management. The amount of the identifiable net assets acquired exceeds the fair value of the consideration transferred and the allocation of negative goodwill to reduce the tax bases of acquired net assets causes the book bases to exceed their respective tax bases, resulting in the recognition of deferred tax liabilities. The Group measures the bargain purchase gain from Proterra acquisition as follows:
Schedule of Bargain Purchase Gain From Proterra Acquisition
| Inventories. | $ | |||
| Right-of-use assets | ||||
| Property and equipment | ||||
| Battery lease receivable | ||||
| Lease liabilities | ( | ) | ||
| Warranty liabilities | ( | ) | ||
| Deferred tax liabilities | ( | ) | ||
| Identifiable net assets acquired (a) | ||||
| Less: Fair value of the consideration transferred (b) | ||||
| Gain on bargain purchase (b-a) | $ |
During
the year ended December 31, 2024 measurement period since the acquisition date, the Group adjusted the fair value of the inventories
acquired for an amount of $
The gain on bargain purchase from the Proterra acquisition was generated from the acquisition of a bankrupt company and the Group was the only bidder who would continue to run the transit business and keep all transit business employees for at least a one-year period. Other bidders would liquidate the transit assets and terminate the transit business employees. The Group’s bidding was accepted by the Bankruptcy Court.
As of March 31, 2025, the Group had finalized the determination of fair values allocated to various assets and liabilities, including, but not limited to, property and equipment, inventories, tax uncertainties and liabilities assumed.
5. Accounts Receivable, Net
The accounts receivable, net as of March 31, 2025 and December 31, 2024 consisted of the following:
Schedule of Accounts Receivable
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (unaudited) | ||||||||
| Accounts receivable, customers | $ | |||||||
| Accounts receivable, governmental incentive | ||||||||
| Accounts receivable | ||||||||
| Less: Allowance for doubtful accounts | ( | ) | ( | ) | ||||
| Accounts receivable, net | $ | $ | ||||||
For
the three months ended March 31, 2025, there was
| F-11 |
6. Inventories
Inventories as of March 31, 2025 and December 31, 2024 consisted of the following:
Schedule of Inventories
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (unaudited) | ||||||||
| Raw materials | $ | $ | ||||||
| Work in process | ||||||||
| Finished goods | ||||||||
| Total inventories | $ | $ | ||||||
During
the three months ended March 31, 2025, there was no write down to reflect the lower of cost or net realizable value. During the three
months ended March 31, 2024, $
7. Battery Lease Receivables
On
January 11, 2024, the Group completed the acquisition of the Proterra battery lease contracts, by which the Group was assigned with the
right to collect certain leasing receivables which Proterra was a party as the lessor thereunder, used in connection with deployed Proterra
electric transit buses. The fair value of the lease receivables as of the acquisitions date was determined to be $
On
June 24, 2024, the Group entered into an asset purchase agreement with Zenobe. In the agreement, the
Group sells the battery lease receivables to Zenobe in two batches while retains the warranty liability associated with leased batteries.
During
the three months ended March 31, 2025, the Group received a total of $
8. Prepaid Expenses and Other Current Assets, Net
Prepaid expenses and other current assets, net as of March 31, 2025 and December 31, 2024 consist of the following:
Schedule of Prepaid Expenses and Other Current Assets
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (unaudited) | ||||||||
| Prepaid expenses | $ | $ | ||||||
| Sales-type lease receivable | ||||||||
| Vendor deposits | ||||||||
| Others | ||||||||
| Total prepaid and other current assets, net | $ | $ | ||||||
9. Sales-type Lease Receivable
The
Group entered into a total of
Sales-type
lease receivables-short term as of March 31, 2025 and December 31, 2024 was $
Interest
income recognized for sales-type leases for the three months ended March 31, 2025 was $
Schedule of Net Investment in Sales-type Leases
| As of March 31, | ||||
| 2025 | ||||
| Lease receivables-long term | ||||
| Lease receivables-short term | ||||
| Total lease receivables | ||||
| Unguaranteed residual assets | — | |||
| Net investment in leases | ||||
| Recorded in Prepaid expenses and other current assets | ||||
| Recorded in Net investment in leases- non-current | ||||
| F-12 |
Annual minimum undiscounted lease payments under the Group’s leases were as follows as of March 31, 2025:
Summary of Annual Minimum Undiscounted Lease Payments
| Sales-type | ||||
| Remaining of 2025 | ||||
| Years Ending December 31, | ||||
| 2026 | ||||
| 2027 | ||||
| 2028 and thereafter | — | |||
| Total lease receipt payments | ||||
| Less: Imputed interest | ( | ) | ||
| Total lease receivables (1) | ||||
| Unguaranteed residual assets | — | |||
| Net investment in leases (1) | ||||
| (1) |
10. Short-term Borrowings
Financing with Agile Capital
On March 12, 2024, the Group entered into a Subordinated Business Loan and Security Agreement (“Term Loan”) with Agile Capital Funding, LLC (“Agile Capital”) as collateral agent, and Agile Lending, LLC, a Virginia limited liability company (“Lead Lender”) and each assignee that becomes a party to this agreement (each individually with the Lead Lender, a “Lender” and collectively with the Lead Lender, the “Lenders”).
The
total principal amount of the Term Loan is $
The collateral of the Term Loan consists of all of the Group’s right, title and interest in and to the following property:
All of the Group’s goods, accounts, equipment, inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, general intangibles (including Intellectual Property), commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts and other collateral accounts, all certificates of deposit, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and all of the Group’s books and records relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing.
| F-13 |
If changes in business or management, ownership occur, or the Term Loan is accelerated following the occurrence of an Event of Default (as defined in the Term Loan), the Group shall immediately pay to Lenders, payable to each Lender in accordance with its respective pro rata share, an amount equal to the sum of: (i) all outstanding principal of the Term Loans plus accrued and unpaid interest thereon accrued through the prepayment date, (ii) the prepayment fee (equal to the aggregate and actual amount of interest that would be paid through the maturity date), plus (iii) all other obligations that are due and payable, including, without limitation, interest at the default rate with respect to any past due amounts.
As
of December 31, 2024, the loan principal balance to Agile Capital was $
Financing with Dynasty Capital 26, LLC
On July 25, 2024, the Group entered into a Future Receivables Sale and Purchase Agreement with Dynasty Capital 26, LLC (“Dynasty”). In the agreement, the Group irrevocably assigns, transfers and conveys onto Dynasty all of the Group’s right, title and interest in the specified percentage of the future receipts until the purchased amount shall have been delivered by the Group to Dynasty (“Dynasty Purchased Future Receipts”). This sale of the Dynasty Purchased Future Receipts is made without express or implied warranty to Dynasty of collectability of the Dynasty Purchased Future Receipts and without recourse against the Group and/or guarantor, except as specifically set forth in the agreement. By virtue of the agreement, the Group transfers to Dynasty full and complete ownership of the Dynasty Purchased Future Receipts and the Group retains no legal or equitable interest therein.
The
total purchase price is $
As
of December 31, 2024, the loan principal balance to Dynasty was $
Financing with Parkview Advance LLC
On July 31, 2024, the Group entered into a Future Receivables Sale and Purchase Agreement with Parkview Advance LLC (“Parkview”). In the agreement, the Group irrevocably assigns, transfers and conveys onto Parkview all of the Group’s right, title and interest in the specified percentage of the future receipts until the purchased amount shall have been delivered by the Group to Parkview (“Parkview Purchased Future Receipts”). This sale of the Parkview Purchased Future Receipts is made without express or implied warranty to Parkview of collectability of the Parkview Purchased Future Receipts and without recourse against the Group and/or guarantor, except as specifically set forth in the agreement. By virtue of the agreement, the Group transfers to Parkview full and complete ownership of the Parkview Purchased Future Receipts and the Group retains no legal or equitable interest therein.
The
total purchase price is $
As
of December 31, 2024, the loan principal balance to Parkview was $
Financing with Nations Bus
On
February 27, 2024, the Group entered into a financing agreement with Nations Bus Corp. (“Nations Bus”). In the agreement,
it stated that the Group had purchased certain assets of Proterra Transit, including 6 buses in inventory. Raleigh-Durham International
Airport (“RDU”) has inspected the buses and has executed a contract to purchase them for $
| F-14 |
Financing with Wisdom
The
Group entered into a short-term loan agreement with total principal amount of $
11. Private Placements
On
January 4, 2024, the Company entered into a Securities Purchase Agreement with an accredited investor, relating to a private
placement by the Company pursuant to which the Company issued
On
January 11, 2024, the Company entered into separate Securities Purchase Agreements with four accredited investors, relating to a private
placement by the Company of an aggregate of
On
January 29, 2024, the Company entered into a Securities Purchase Agreement with certain accredited investors, to issue and sell in a
registered direct offering an aggregate of
On
February 7, 2024, the Company entered into another Securities Purchase Agreement with certain accredited investors, to issue and sell
in a registered direct offering an aggregate of
The
Group recorded a loss on change in fair value of warrant liability of $
| F-15 |
12. Equity
Share Issued for convertible note conversion and warrant exercise
During
the three months ended March 31, 2025, the Group issued a total of
Share Issued to Settle Vendor Payable
During the three months ended
March 31, 2024, the Group issued
13. Stock-based Compensation
During
the three months ended March 31, 2025 and 2024, there were no stock options granted to management and employees of the Group. A reversal
of the stock-based compensation expense of $
There
were no changes to the contractual life of any fully vested options during the three months ended March 31, 2025 and 2024. As of March
31, 2025, unrecognized share-based compensation expenses related to the share options granted were $
14. Related Party Transactions
During
the three months ended March 31, 2025, SPI billed the Group $
15. Convertible Notes Payable
On
June 23, 2023, the Company entered into a Securities Purchase Agreement (the “Original SPA”) with an accredited investor
named therein, to issue and sell, subject to the satisfaction of certain closing conditions, up to $
The
June 2023 Notes are convertible into shares of common stock of the Company, at a conversion price equal to the greater of (x) $
Thus,
the Group determined that the conversion feature and the alternative conversion features embedded within the June 2023 Notes met the
definition of embedded derivatives and the Group estimated a fair value of the derivative liability using the Monte Carlo Simulation
Model at the date of issuance. As the fair value of the derivative liability is less than the face value of the June 2023 Notes, the
fair value of the derivative liability of $
| F-16 |
On
October 26, 2023, the Company entered into the First Amendment (the “Amendment”) to the Original SPA, with the same accredited
investor. Pursuant to the Amendment, the “Funding Amount” under the Original SPA was increased to an aggregate principal
amount equal to no greater than $
In
connection with the Amendment, the Company issued a warrant (the “October Warrant”) to the investor to purchase up to
The
October 2023 Notes are convertible into shares of common stock of the Company, at a conversion price equal to the greater of (x) $
The Group determined that the conversion feature and alternate conversion feature within the October 2023 Notes met the definition of embedded derivatives and the Group estimated a fair value of the derivative liability using the Binominal Tree Model at the date of issuance. In addition, the Group considered that the October Warrants were issued in a bundled transaction with the October 2023 Notes, and the proceeds received from the transaction should be first allocated to the warrants as debt discounts based on the fair value of the warrants on the issuance date.
On
November 10, 2023, the Company entered into Second Securities Purchase Agreement (the “Second SPA”) with the same accredited
investor, which the Company agreed to issue and sell, in a private placement, subject to the satisfaction of certain closing conditions,
a $
| F-17 |
The
Group determined that the Execution Warrant met the definition of liability instrument, and the Group estimated a fair value of Execution
Warrant using the Black Scholes pricing model at the date of issuance. The Group considered that the Execution Warrant was issued in
a bundled transaction with a future convertible note offering, and the Execution Warrant was considered as issuance costs associated
with the future convertible note offering and should be deferred and charged against the gross proceeds of the future offering as debt
discount based on the fair value of the warrants. However, this future convertible note offering (Second SPA) is to be closed subject
to certain closing conditions. On April 5, 2024, the Group entered into a waiver letter by and between the Company and the above investor
to which the investor waived its right to require the Company to sell $
During
the three months ended March 31, 2025, the Group issued a total of
On
March 14, 2025, the Company entered into a loan agreement with J.J. Astor & Co. (the “J.J. Astor”) pursuant to which
J.J. Astor agreed to loan the Company the sum of up to $
The
Initial Note is payable in 26 bi-weekly installments of $
The
conversion price of the Notes is the lower of
| F-18 |
The Group has determined that the Initial Note does not contain a separated conversion option liability and allows the Group to
fully or partially settle a conversion in cash. The Group elected the fair value option for the convertible notes liability, and estimated
a fair value of the Initial Note of $
On
April 15, 2025, the Group noted that an event of default occurred under the Initial Note, when the common stock ceased trading on
Nasdaq. As a result, the outstanding principal amount will increase to 120% of the outstanding principal amount, plus interest
thereon at the rate of 19% per annum. As of the date of issuance of the condensed consolidated financial statements, the noteholder
has not declared that the entire default amount is due and payable. As a result of the default, an additional $
The
Group recorded interest expenses from debt discount amortization in interest expense, net in the statements of operations of nil and
$
The
Group recorded accrued interest of convertible notes in interest expense, net in the statements of operations of $
As
of March 31, 2025 and December 31, 2024, the carrying amounts of the Group’s convertible bonds are $
16. Earnings (Loss) Per Share
The following is a reconciliation of the numerator and denominator used to calculate basic earnings (loss) per share and diluted earnings (loss) per share for the three months ended March 31, 2025 and 2024:
Schedule of Earnings (Loss) Per Share
| March 31, 2025 | March 31, 2024 | |||||||
| Basic earnings (loss): | ||||||||
| Basic (loss) earnings | $ | ( | ) | $ | ||||
| Diluted earnings (loss): | ||||||||
| Net (loss) income | $ | ( | ) | $ | ||||
| Chang in fair value of derivative liability | - | |||||||
| Interest expense from Convertible Notes | - | |||||||
| Diluted (loss) earnings | $ | ( | ) | $ | ||||
| Basic weighted average shares | ||||||||
| Potentially diluted shares | - | |||||||
| Diluted shares | ||||||||
| (Loss) / Earnings per share | ||||||||
| Basic | $ | ( | ) | $ | ||||
| Diluted | $ | ( | ) | $ | ||||
During
the three months ended March 31, 2025 and 2024, stock options to purchase
17. Commitments and Contingencies
Commitments
— As of March 31, 2025, the Group had other commitments of approximately $
Contingency
— In the ordinary course of business, the Group may be subject to legal proceedings regarding contractual and employment
relationships and a variety of other matters. The Group records contingent liabilities resulting from such claims, when a loss is
assessed to be probable and the amount of the loss is reasonably estimable. In April 2024, there was a dispute with the landlord of
Folsom warehouse in which the landlord seeks to recover damages in excess of $
In the opinion of management, there were no other material pending or threatened claims and litigation as of March 31, 2025 and through the issuance date of these condensed consolidated financial statements.
| F-19 |
18. Concentration Risk
Concentration of Credit Risk
Assets
that potentially subject the Group to significant concentrations of credit risk primarily consist of cash and cash equivalents, and accounts
receivable. As of March 31, 2025 and December 31, 2024, the cash and cash equivalents are deposited within federally insured banks, which
are typically below the insured limits. There were two customers representing
Concentration of Customers and Suppliers
For
the three months ended March 31, 2025, there were two customers representing
19. Subsequent Events
Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing
On April 8, 2025, the Company received a notice from the staff of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, based upon the Company’s continued non-compliance with Listing Rule 5550(a)(2), which requires the Company to maintain a minimum bid price of its listed securities of at least $1 per share, and Listing Rule 5620(a), which requires listed companies to hold an annual meeting of shareholders within one year of the end of the fiscal year, the staff has determined to delist the Company’s common stock from The Nasdaq Capital Market. Trading of the Company’s common stock on Nasdaq was suspended at the opening of business on April 15, 2025. The Company’s common stock is currently quoted on the OTC Pink Market under the symbol “PEVM”.
In addition, on April 30, 2025, the Company received a notice from the staff indicating that the Company was no longer in compliance with Listing Rule 5250(c)(1) due to its failure to file its Annual Report on Form 10-K for the year ended December 31, 2024. This matter serves as an additional basis for delisting.
The Company appealed the delisting determination to a Nasdaq Hearings Panel (the “Panel”) on May 20, 2025. On June 9, 2025, the Company received a written decision from Nasdaq stating that the Panel had denied the Company’s request for continued listing. Accordingly, the Company’s common stock will remain delisted and continue to trade on the OTC Pink Market.
The Company has the right to request a review of the Panel’s decision by the Nasdaq Listing and Hearing Review Council (the “Council”) within 15 calendar days. The Council may also, on its own motion, initiate a review within 45 calendar days of the decision’s issuance. On June 24, 2025, the Company submitted a request for a review of the Panel’s decision by the Council.
Notwithstanding the Panel’s decision, the Company has taken steps to address the identified deficiencies. On April 18, 2025, the Company held its 2024 annual meeting of stockholders and believes it has regained compliance with Listing Rule 5620(a). On May 30, 2025, the Company filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and believes it has regained compliance with Listing Rule 5250(c)(1).
The
Company is continuing to take actions to regain full compliance with Nasdaq’s listing requirements. In particular, the
Company’s board of directors has approved a
While there can be no assurance that these actions will result in relisting on Nasdaq or that the review by the Council will be successful, the Company remains committed to pursuing all reasonable and strategic options to regain compliance and restore its listing on a national securities exchange.
| F-20 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-Looking Statements
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our condensed consolidated financial statements and the related notes included elsewhere in this quarterly report. The following discussion and analysis contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements regarding our expectations, beliefs, intentions or future strategies that are signified by the words “expect,” “anticipate,” “intend,” “believe,” or similar language. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Our business and financial performance are subject to substantial risks and uncertainties. Actual results could differ materially from those projected in the forward-looking statements. In evaluating our business, you should carefully consider the information set forth under the heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on May 30, 2025 and in our subsequent filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements.
Overview
Phoenix Motor Inc., doing business as “Phoenix Motorcars” through its wholly owned subsidiaries, Phoenix Cars LLC, Phoenix Motorcars Leasing LLC, and EdisonFuture Motor, Inc., is a leading electrification solutions provider for the commercial vehicle industry as well as other industries. Phoenix designs, develops, manufactures, assembles, and integrates electric drive systems and light and medium duty electric vehicles (“EVs”), with an aim to reduce carbon intensity and greenhouse gas (“GHG”) emissions. The Company operates two primary brands, “Phoenix Motorcars” which is focused on commercial products including medium duty electric vehicles, chargers and electric forklifts, and “EdisonFuture” which intends to offer light-duty electric vehicles.
As an EV pioneer, we launched our first medium-duty electric drivetrain in 2009 and delivered our first commercial EV in 2014. In 2019, we launched our second generation (“Gen 2”) High Power Drive System for the Ford E450 chassis, the E-200. Since April 2021, we have been in production of our third generation (“Gen 3”) drivetrain (E-300). We released our fourth generation (“Gen 4”) drivetrain in 2024, which has allowed for substantially higher production volumes and achieve significant cost reduction.
Over the last six years we have developed and deployed for our customers all-electric shuttle buses, utility trucks, service trucks, cargo trucks and flatbed trucks. This differentiates us in the market where most commercial EV manufacturers are still in the prototype phase. As of March 31, 2025, we have delivered a total of 140 EVs to more than 48 customers, representing what we believe is the largest number of Class 4 cutaway medium duty electric shuttle bus deployments in the U.S. and the most electric vehicles deployed on the Ford E-Series chassis. With over four million zero-emission miles accumulatively driven by the vehicles we delivered, we have gained significant industry experience, distinct expertise and extensive knowledge in R&D, production, commercialization, customer engagement and validation of light and medium duty EVs, enabling us to drive continued design enhancements and innovations in our current and future generations drivetrain systems and other products.
On January 11, 2024, we completed the acquisition of the Proterra transit business unit, which is the business unit of Proterra that designs, develops and sells electric transit buses as an original equipment manufacturer for North American public transit agencies, airports, universities and other commercial transit fleets, and on February 7, 2024, we completed the acquisition of Proterra battery lease contracts. After the acquisition, we engage in the business that designs, develops and sells electric transit buses as an original equipment manufacturer for North American public transit agencies, airports, universities and other commercial transit fleets and we were assigned with the right to collect certain leasing receivables which Proterra was a party as the lessor thereunder, used in connection with deployed Proterra electric transit buses. As of March 31, 2025, we delivered a total of 34 transit buses to various customers,
| 3 |
Our unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and include the accounts of our company, and all of our subsidiaries. We prepare financial statements in conformity with U.S. GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the financial reporting period. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. In order to understand the significant accounting policies that we adopted for the preparation of our condensed consolidated financial statements, readers should refer to the information set forth in Note 3 “Summary of Significant Accounting Policies” to our audited financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on May 30, 2025.
Principal Factors Affecting Our Results of Operations
We believe that the following factors have had, and we expect that they will continue to have, a significant effect on the development of our business, financial condition and results of operations.
| ● | BOM and Supply Chain Challenges. Purchased materials represent the largest component of cost of goods sold in our products and we continue to explore ways to improve cost structure of our products through better design, strategic alliances for sourcing, supply chain optimization, and, in some cases vertical integration. We believe that an increase in volume and additional experience as well as long term and strengthened supply chain partnerships will allow us to continue to reduce our Bill of Materials (“BOM”), labor and overhead costs, as a percentage of total revenue. By reducing material costs, driving improvement in battery performance, increasing facility utilization rates and achieving better economies of scale, we can reduce prices while maintaining or growing gross margins of our products to further lower customers’ total cost of ownership (“TCO”) and help accelerate commercial electric vehicle adoption. Because we rely on third party suppliers for the development, manufacture, and development of many of the key components and materials used in our vehicles, we have been affected by industry-wide challenges such as significant delivery delays and supply shortages of certain BOM components. While we continue to focus on mitigating risks to our operations and supply chain in the current industry environment, we expect that these industry-wide trends will continue to affect our ability and the ability of our suppliers to obtain parts and components on a timely basis for the foreseeable future, having a significant impact on our business and results of operations in 2024 and possibly thereafter. | |
| ● | Availability of Funding to Develop Products and Scale Production. Our results are impacted by our ability to sell our electrification solutions and services to new and existing customers. We have had initial success with selling to our fleet customers. In order to sell additional products to new and existing customers, we will require substantial additional capital to develop our products and services, ramp up production and support expansion. Although we pursue an asset light strategy, we expect that both our capital and operating expenditures will increase significantly in connection with our ongoing activities, as we continue to invest in our technology, research and development efforts, obtain, maintain and improve our operational, financial and management information systems, hire additional personnel, obtain, maintain, expand and protect our intellectual property portfolio. Until we can generate sufficient revenue from vehicle sales, we expect to primarily finance our operations through proceeds from public or private stock offering, debt financings including but not limited to term loans, revolving line of credit and equity linked instruments, and potentially federal and state incentive funding programs. The amount and timing of our future funding requirements, will depend on many factors, including the pace and results of our research and development efforts, the lead time for various components in our supply chain, and our ability to successfully manage and control costs and scale our operations. | |
| ● | Government Subsidies and Incentive Policies. With growing emphasis on improving air quality around our communities, large states like California are mandating key end user segments to switch to zero emission transportation options. Some of the key regulations driving growth in our addressable market include: |
| ● | requiring all transit buses in California to be zero emissions by 2040; | |
| ● | requiring all airport shuttles in California to be all electric by 2035; | |
| ● | requiring at least 50% of all medium-duty trucks sold in California to electric by 2030; | |
| ● | requiring specific end user segments like drayage and yard trucks to go electric. |
| 4 |
Other states like New York, New Jersey and Massachusetts are also expected to bring in regulatory requirements for key end user segments, such as transit agencies and school buses to switch to all electric transportation options. Fifteen other states including Connecticut, Colorado, Hawaii, Maine, Maryland, Massachusetts, New Jersey, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington have committed to follow California’s Advanced Clean Trucks Regulation. Primarily driven by the urgent need to meet carbon and greenhouse gas emission reduction targets, various state and federal agencies are also supporting the switch to zero emission transportation, providing a host of funding and incentive support to develop, demonstrate and deploy zero emission transportation solutions. Some of the key funding/ incentives driving adoption of electric medium duty vehicles include:
| ● | the California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project, which offers a minimum of $60,000 per vehicle as incentive for Class 4 electric vehicles registered and operating in the state; | |
| ● | the New York Truck Voucher Incentive Program offering up to $100,000 per Class 4 electric vehicle; | |
| ● | funding from federal agencies like the Federal Transit Administration, covering up to 80% of the cost of procuring electric transit buses and various funding options covering up to 100% of the cost of procuring all electric school buses across key states; | |
| ● | Federal and various state agencies have established incentives for setting up both public and private charging infrastructure. Notably, the California Energy Commission and the California Public Utilities Commission have approved funding up to 100% of the cost of setting up chargers and related infrastructure. Large utilities like Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric have ‘Charge Ready’ programs that cover the entire cost of setting up charging infrastructure. Other states like New York, Chicago, North Carolina, Tennessee, Texas and Ohio have also introduced programs to support fleets with their charging infrastructure requirements. |
| 5 |
Results of Operations
| Three Months Ended | ||||||||
| March 31, 2025 | March 31, 2024 | |||||||
| (In US$ thousands, except for share and per share data) | (Unaudited) | (Unaudited) | ||||||
| Revenues | $ | 4,411 | $ | 9,420 | ||||
| Cost of revenues | 3,046 | 6,915 | ||||||
| Gross profit | 1,365 | 2,505 | ||||||
| Operating expenses: | ||||||||
| Selling, general and administrative | 3,301 | 8,649 | ||||||
| Impairment of goodwill | — | 4,271 | ||||||
| Operating loss | (1,936 | ) | (10,415 | ) | ||||
| Other income (expense): | ||||||||
| Interest expense, net | (1,423 | ) | (2,695 | ) | ||||
| Change in fair value of derivative liability | — | (58 | ) | |||||
| Loss on warrants issued during private placements | — | (7,432 | ) | |||||
| (Loss) gain on change in fair value of warrant liability | (236 | ) | 9,407 | |||||
| Others | 9 | 2 | ||||||
| Bargain purchase gain | — | 32,908 | ||||||
| Total other income, net | (1,650 | ) | 32,132 | |||||
| (Loss) income before income taxes | (3,586 | ) | 21,717 | |||||
| Income tax expense | — | (4,943 | ) | |||||
| Net (loss) income | $ | (3,586 | ) | $ | 16,774 | |||
| Net (loss) income per share of common stock: | ||||||||
| Basic | $ | (0.09 | ) | $ | 0.55 | |||
| Diluted | $ | (0.09 | ) | $ | 0.49 | |||
| Weighted average shares outstanding | ||||||||
| Basic | 38,301,205 | 30,456,235 | ||||||
| Diluted | 38,301,205 | 34,247,958 | ||||||
Net Revenues
For the three months ended March 31, 2025 and 2024, our revenues were $4.4 million and $9.4 million, respectively. Our total revenue decreased by $5.0 million, or 53%, primarily because in the three months ended March 31, 2024, we sold 8 pre-owned buses with revenue of $4.4 million as we acquired those pre-owned buses from acquisition of Proterra transit business unit.
For the three months ended March 31, 2025 and 2024, our revenue breakdown by major categories for relevant periods was as follows:
| Three Months Ended | ||||||||
| March 31, 2025 | March 31, 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Sales of transit buses | $ | 3,675 | $ | 8,531 | ||||
| Sales of EVs | 237 | 250 | ||||||
| Sales of parts | 303 | - | ||||||
| Service revenue | 91 | - | ||||||
| Lease of EVs | 47 | 39 | ||||||
| Sales of forklifts | - | 39 | ||||||
| Others | 58 | 561 | ||||||
| $ | 4,411 | $ | 9,420 | |||||
| 6 |
The following is a summary of the Group’s disaggregated revenues by timing of revenue recognition:
| Three Months Ended | ||||||||
March 31, 2025 | March 31, 2024 | |||||||
| In thousands | (Unaudited) | (Unaudited) | ||||||
| Over time | $ | 211 | $ | 235 | ||||
| Point in time | 4,200 | 9,185 | ||||||
| $ | 4,411 | $ | 9,420 | |||||
Cost of Revenues
Cost of revenues for transit buses sales and EV sales includes direct parts, material and labor costs, manufacturing overheads, and shipping and logistics costs. Cost of revenues for EV leasing primarily includes the depreciation of operating lease vehicles over the lease term and other leasing related charges including vehicle insurance and batteries service cost. Cost of other revenue includes direct parts, material and labor costs, as well as shipping and delivery and other costs.
For the three months ended March 31, 2025 and 2024, our costs of revenues were $3.0 million and $6.9 million, respectively. The decrease in costs of revenues was primarily due to the decrease in costs of transit buses due to decrease in transit bus sales.
Gross Margin
Gross profit is defined as revenues minus cost of revenues. Gross margin, stated as a percentage, is defined as gross profit divided by revenues.
For the three months ended March 31, 2025 and 2024, our combined gross margin was 30.9% and 26.6%, respectively. The increase of gross margin was primarily due to higher margins for both EV sales and transit buses sales. The increase in margin for EV sales was mainly because there was only one EV sold during the three months ended March 31, 2025 with a relatively high margin.
Operating Expenses
Operating expenses consist of selling, general, and administrative expenses as well as impairment on goodwill.
Our selling, general and administrative expenses consist primarily of salaries, research and development, professional service fees, rent expense, and office supplies expenses.
For the three months ended March 31, 2025 and 2024, our selling, general and administrative expenses were $3.3 million and $8.6 million, respectively. The decrease in selling, general and administrative expenses was largely due to a decrease in salary expenses as a result of decreased heads-count.
During the three months ended March 31, 2024, we identified impairment indicator resulted from the Company’s continuous decreasing stock price since January 2024 and performed interim goodwill impairment testing. We recorded an impairment on goodwill of $4.3 million based on the difference between fair value and the carrying amount of the reporting unit.
Other Income (expense), net
Other income (expense), net includes gain on bargain purchase, interest expense, gain on sales-type leases and other income.
Our other expenses for the three months ended March 31, 2025, was $1.7 million, primarily due to interest expense of $1.4 million and loss on change in fair value of warrant liability of $0.2 million.
Our other income for the three months ended March 31, 2024, was $32.1 million, primarily due to gain on bargain purchase of Proterra transit business unit of $32.9 million and gain on change in fair value of warrant liability of $9.4 million, partially offset by the interest expense of $2.7 million resulted from short-term loan and debt discount amortization of convertible note, and loss on warrants issued during private placement of $7.4 million.
| 7 |
Net Income (loss)
As a result of the above factors, the net loss for the three months ended March 31, 2025, was $3.6 million.
As a result of the above factors, the net income for the three months ended March 31, 2024, was $16.8 million.
Critical Accounting Policies and Estimates
Products Warranties on transit buses and batteries
The Group provides a limited warranty to customers on vehicles, battery systems and components. The limited warranty ranges from one to 12 years depending on the components. Pursuant to these warranties, the Group will repair, replace, or adjust the parts on the products that are defective in factory supplied materials or workmanship. The Group records a warranty reserve for the products sold at the point of revenue recognition, which includes the best estimate of the projected costs to repair or replace items under the limited warranty. These estimates are based on actual claims incurred to date and an estimate of the nature, frequency and costs of future claims. These estimates are inherently uncertain given the relatively short history of sales. Changes to the historical or projected warranty experience may cause material changes to the warranty reserve in the future. The portion of the warranty reserve expected to be incurred within the next 12 months is included within warranty reserve - short term liabilities while the remaining balance is included within warranty reservice - long term liabilities on the balance sheets.
Warranty expense is recorded as a component of cost of sales in the condensed consolidated statements of operations. The balance of warranty reserves was $12,943 and $14,289 as of March 31, 2024 and December 31, 2024, respectively.
Recent Accounting Pronouncements
See Note 3 “Summary of Significant Accounting Policies” to our consolidated financial statements in our Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on May 30, 2025 for a description of recently issued or adopted accounting pronouncements that may potentially impact our financial position, results of operations or cash flows.
The Group does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows.
Liquidity and Capital Resources
We had net loss of $3.6 million during the three months ended March 31, 2025 and have incurred significant recurring losses before 2025. In addition, the cash flow used in operating activities was $2.6 million and we need to raise additional funds to sustain our operations. These factors raise substantial doubt as to our ability to continue as a going concern.
| 8 |
We plan to continue pursuing strategies to improve liquidity and raise additional funds while implementing various measures to cut costs. Such strategies and measures include the following: 1) continue to drive for operation integration under ONE Phoenix, re-alignment operating units under ONE Goal, right sizing workforce under ONE Team; 2) re-establish the cost structure and cost base with the new integrated ERP and other operating systems; 3) expand and strengthen strategic partnership to outsource a significant portion of design and engineering work for the next generation product to third party vendors and suppliers to control overall development and supply chain costs; 4) implement working capital initiatives and negotiate better payment terms with customers and for some of the new orders, require down payments; 5) implement cash saving initiatives and tighter cash control, and calibrate capital allocation to manage liquidity; and 6) continue to proactively implement a robust capital market strategy to provide financing for the Group’s operations through proceeds from public or private stock offering, debt financings including but not limited to term loans, revolving line of credit and equity linked instruments, and potentially federal and state incentive funding programs. There is no assurance that the plans will be successfully implemented. If we fail to achieve these goals, we may need additional financing to execute our business plan, and we may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all. In the event that financing sources are not available, or that we are unsuccessful in increasing our gross profit margin and reducing operating losses, we may be unable to implement our current plans for expansion, or respond to competitive pressures, any of which would have a material adverse effect on our business, financial condition and results of operations and may materially adversely affect our ability to continue as a going concern. Our unaudited condensed consolidated financial statements do not include any adjustments that may result from the outcome of these uncertainties.
A summary of the cash flow activities is as follows:
Three Months Ended | Three Months Ended | |||||||
| In thousands | March 31, 2025 | March 31, 2024 | ||||||
| Net cash used in operating activities: | $ | (2,597 | ) | $ | (3,902 | ) | ||
| Net cash used in investing activities | - | (10,113 | ) | |||||
| Net cash generated from financing activities | 2,661 | 13,528 | ||||||
| Net increase / (decrease) in cash, cash equivalents and restricted cash | 64 | (487 | ) | |||||
As of March 31, 2025, we had $0.8 million in cash and cash equivalents. Our primary sources of liquidity were from equity financing (through private offerings) as well as various types of debt financings.
Operating Activities
Net cash used in operating activities was $2.6 million for the three months ended March 31, 2025, primarily as a result of (i) a net loss of $3.6 million, adjusted by non-cash items of depreciation and amortization of $0.4 million, loss on change in fair value of warrant liability of $0.2 million, reversal of warranty reserve of $1.3 million, and amortization of right of use of assets of $0.3 million, and changes in operating assets and liabilities including (i) increase in accounts receivable of $1.2 million due to uncollected accounts receivable from sales of transit buses, (ii) decrease in inventories of $1.3 million due to certain inventories purchase from Proterra have been used; (iii) increase in prepaid expenses and other assets of $0.7 million, (iv) increase in accrued liabilities of $1.9 million mainly due to $0.8 million received from sale of battery leases, which is classified as a liability and $1.0 million of interest accrual on defaulted convertible note, (v) decrease in accounts payable of $0.8 million, and (vi) increase in advance from customers of $1.4 million mainly due to new customer orders received.
Net cash used in operating activities was $3.9 million for the three months ended March 31, 2024, primarily as a result of (i) a net income of $16.8 million, adjusted by non-cash items of bargain purchase gain of $32.9 million from acquisition of Proterra, impairment loss of goodwill of $4.3 million, depreciation and amortization of $0.4 million, amortization of debt discount of convertible notes of $1.5 million, loss on warrants issued during private placement of $7.4 million, gain on change in fair value of warrant liability of $9.4 million, and amortization of right of use of assets of $0.2 million, and changes in operating assets and liabilities including (i) increase in accounts receivable of $4.5 million due to uncollected accounts receivable from sales of transit buses, (ii) decrease in inventories of $5.6 million due to certain inventories purchase from Proterra have been sold, (iii) increase in accrued liabilities of $1.1 million due to interest accrued for Nations Bus loans, (iv) increase in accounts payable of $0.8 million mainly due to additional inventories purchased for upcoming manufacturing of transit buses, and (v) increase in income tax payable of $ 4.9 million due to taxable bargain purchase gain from acquisition of Proterra.
Investing Activities
No investing activity occurred for the three months ended March 31, 2025.
Net cash used in investing activities was $10.1 million for the three months ended March 31, 2024, primarily because of acquisition of Proterra for a total consideration of $10 million and $0.1 million purchase of property and equipment.
Financing Activities
Net cash generated from financing activities was $2.6 million for the three months ended March 31, 2025, primarily as a result of net proceeds from convertible senior note of $3.8 million, partially offset by repayment to borrowings of $1.2 million.
Net cash generated from financing activities was $13.5 million for the three months ended March 31, 2024, primarily as a result of (i) net proceeds from private placements of $11.1 million, (ii) proceeds from borrowings with Nations Bus and Agile Capital of $4.3 million, and (iii) proceeds from borrowing from a related party of $1.0 million. The increase was partially offset by repayment to borrowings of $1.0 million and repayment to borrowings to a related party of $1.9 million.
| 9 |
Capital Expenditures
We incurred capital expenditures of nil and $10.1 million for the three months ended March 31, 2025, and 2024, respectively. Our capital expenditures have historically been comprised of purchase of Proterra assets, equipment for our offices and production infrastructure. Our capital expenditures may increase in the future as we continue to invest in production and technology infrastructure.
Trend Information
Our operating results substantially depend on revenues derived from our sales and leasing of EVs. Other than as disclosed elsewhere in this report, the following trends, uncertainties, demands, commitments, or events for 2023 are reasonably likely to have a material effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause reported consolidated financial information not necessarily to be indicative of future operating results or financial conditions:
| ● | Inflation Reduction Act. The Inflation Reduction Act of 2023, or IRA, was signed into law on August 16, 2023. The $370 billion allocated to climate and clean energy investments dramatically expands tax credits and incentives to deploy more clean vehicles, including commercial vehicles, while supporting a domestic EV supply chain and charging infrastructure buildout. IRA transportation sector provisions will accelerate the shift to zero-emission vehicles (ZEVs) by combining consumer and manufacturing policies. The IRA extends the existing tax credit for electric vehicles and establishes a new tax credit for used electric vehicles, as well as establishes a new tax credit for commercial ZEVs. Under the IRA, commercial ZEVs will be eligible for a federal tax credit of up to the lesser of 30% of the sales price or the incremental cost of a comparable ICE-engine vehicle, capped at $7,500 for vehicles under 14,000 pounds and $40,000 for all others. In addition, governmental entities may also be eligible to claim these credits. Vehicles’ final assembly must be in North America to be eligible for the federal tax credit, but commercial vehicles are exempt from the battery or mineral sourcing requirements that apply to consumer electric vehicles. The federal tax credit on charging equipment has been extended through 2032. For commercial uses, the tax credit is 6% with a maximum credit of $100,000 per unit. The equipment must be placed in a low-income community or non-urban area. The IRS has yet to release further guidance on specific aspects of the aforementioned credits. The announcement of the IRA and the delay in receiving IRS guidance as to the roll-out of the new tax credits has reduced the number of customer orders during the fourth quarter of 2023 and the first quarter of 2024, as many existing or potential customers are waiting to place orders until they are certain of the amount of tax credits available per ZEV. In addition, many customers are evaluating the size and type of ZEV they intend to purchase because the amount of the tax credit depends on the weight of the vehicle, among other factors. Furthermore, other government programs, such as the FTA’s Low- and No-Emission Vehicle Program or certain state programs, recently announced new funding and are in the process of making these funds available for eligible purchases. Until these processes are established, we believe customer orders may be delayed. | |
| ● | Supply-chain challenges. From the beginning of the COVID-19 pandemic, we started to experience chassis and raw material shortages from suppliers. The challenge continues with the current development of our new generation electric vehicles. We need to source new components from various vendors which lead to longer lead times. In addition, because of the generation advancement, large capital spending is necessary to fund the project. Lack of cash flow on hand will also trigger the supply-chain challenges. As a result of these challenges, we have engaged with vendors to negotiate better terms and lower down-payment alternatives. We contracted with new suppliers to optimize costs, minimize supply chain issues, and prepare for an increase in future production. However, adding new suppliers, especially for chassis, increases requirements for working capital and places us at the mercy of price volatility. We expect supply chain challenges will continue for the foreseeable future. | |
| ● | Inflation and interest rates. We are experiencing cost increases due to inflation resulting from various supply chain disruptions and other disruptions caused by the general global economic conditions. The cost of raw materials, manufacturing equipment, labor and shipping and transportation has increased considerably. We expect higher than recent years’ levels of inflation to persist for the foreseeable future. If we are unable to fully offset higher costs through price increases or other measures, we could experience an adverse impact to our business, prospects, financial condition, results of operations and cash flows. Interest rates have also increased considerably. The increase in inflation and interest rates impacts the demand for our EVs, as customers may delay purchasing and/or have difficulty financing their purchases. |
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Off-Balance Sheet Arrangements
As of March 31, 2025, we had no off-balance sheet arrangements that are or have been reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to investors. We have not entered into any derivative contracts that are indexed to our own shares and classified as shareholder’s equity, or that are not reflected in our unaudited condensed consolidated financial statements. We do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.
For more information on our contractual obligations, commitments and contingencies, see Note 17 to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not applicable to smaller reporting companies.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal quarter ended March 31, 2025, as such term is defined in Rules 13a - 15(e) and 15d - 15(e) under the Exchange Act. Based on this evaluation, our principal executive officer and principal financial and accounting officer have concluded that during the period covered by this report, our disclosure controls and procedures were ineffective as of such date to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial and accounting officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
In connection with the audit of our consolidated financial statements for the year ended December 31, 2024, we identified following material weaknesses, in the design or operation of internal controls.
| (1) | Failure to maintain an effective control environment of internal control over financial reporting; | |
| (2) | Failure to develop an effective risk assessment process to identify and evaluate at a sufficient level of detail all relevant risks of material misstatement, including business, operational, and fraud risks; | |
| (3) | Ineffective monitoring activities to assess the operation of internal control over financial reporting; | |
| (4) | Lack of sufficient controls designed and implemented for financial information processing and reporting and lacked resources with requisite skills for the financial reporting under U.S. GAAP. |
We intend to implement measures designed to improve the Company’s internal control over financial reporting to address the underlying causes of these material weaknesses, including (1) hiring more qualified staff and increasing resources with sufficient knowledge and experience to strengthen financial reporting; (2) setting up a financial and system control framework to ensure proper segregation of duty and review procedures, with formal documentation of polices and controls in place; (3) forming a task force to design and improve processes and controls to monitor operations and record financial data; and (4) devoting proper time by senior management to perform comprehensive review of procedures to assess risks and enforce effective accountability.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended March 31, 2025 covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we are involved in various legal proceedings arising in the normal course of business. While we cannot predict the occurrence or outcome of these proceedings with certainty, we do not believe that an adverse result in any pending legal proceeding, individually or in aggregate, would be material to our financial condition.
For more information on our legal proceedings, see Note 17 to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Item 1A. Risk Factors
Risk factors that may affect our business and financial results are discussed within Item 1A “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on May 30, 2025, and our subsequent filings with the SEC. In addition to the those in our prior filings, the following are more risk factors to consider:
Holders of our Notes are entitled to certain payments that may be paid in cash or in shares of our common stock depending on the circumstances. If we make these payments in cash, we may be required to expend a substantial portion of our cash resources. If we make these payments in common stock, it may result in substantial dilution to the holders of our common stock.
On March 14, 2025, the Company entered into a loan agreement with J.J. Astor & Co. (“J.J. Astor”) pursuant to which J.J. Astor agreed to loan the Company the sum of up to $6 million, in two tranches of $4 million and $2 million, in consideration for a senior secured convertible promissory note in the original principal amount of $5.3 million (the “Initial Note”), and an additional senior secured convertible promissory note in the original principal amount of $2.7 million (the “Additional Note,” and together with the Initial Note, the “Notes”). The net proceeds of the loan are to be used to repay existing senior debt in the aggregate principal amount of approximately $1.2 million and for general working capital purposes. On March 14, 2025, the Company closed the first tranche of notes and received net proceeds of $2.7 million after paying off existing senior debts. On May 23, 2025, the Company closed the second tranche of notes and received net proceeds of $1.9 million.
The Initial Note is payable in 26 bi-weekly installments of $204,000 through the maturity date of March 4, 2026 in cash or shares of the Company’s common stock, at the Company’s election. The Notes will not accrue interest (unless there is an event of default) and are subject to an exit fee of $150,000 upon maturity. Upon an event of default, the outstanding principal amount will increase to 120% of the outstanding principal amount, plus interest thereon at the rate of 19% per annum. The Notes will be convertible into shares of common stock by J.J. Astor following an event of default.
The Additional Note is payable commencing on June 6, 2025 in 26 bi-weekly installments of $102,000 through the maturity date of May 22, 2026 in cash or shares of the Company’s common stock, at the Company’s election. The Notes will not accrue interest (unless there is an event of default) and are subject to an exit fee of $100,000 upon maturity. Upon an event of default, the outstanding principal amount will increase to 120% of the outstanding principal amount, plus interest thereon at the rate of 19% per annum. The Notes shall become, at J.J. Astor’s election, immediately due and payable in the default amount or be convertible into shares of common stock by J.J. Astor following an event of default.
The conversion price of the Notes is the lower of (i) 85% of the closing price of the common stock on the trading day immediately prior to the applicable funding date and issuance of the Initial Note or Additional Note, or (ii) 85% of the average of the four lowest VWAP prices for the 20 trading days prior to the applicable funding date. If J.J. Astor or any other holder of the Notes elects to voluntarily convert the Notes, the conversion price will be the lower of (a) 100% of the closing price of the common stock on the trading day immediately prior to the applicable funding date and issuance of the Initial Note or Additional Note, or (b) 100% of the average of the four lowest VWAP prices of the common stock for the 20 trading days prior to the applicable funding date. Upon an event of default, the conversion price of the Notes will be 80% of the closing price of the common stock on the initial funding date. The Notes are subject to a limitation that prohibits ownership of more than 19.9% our outstanding share capital at any time, without stockholder approval.
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On April 15, 2025, we noted that an event of default occurred under the Initial Note, when the common stock ceased trading on Nasdaq. As a result, the outstanding principal amount will increase to 120% of the outstanding principal amount, plus interest thereon at the rate of 19% per annum. As of the date of issuance of the condensed consolidated financial statements, the noteholder has not declared that the entire default amount is due and payable. As a result of the default, an additional $1,029 interest expense was accrued to reflect the default principal amount.
Our ability to make payments due to the holders of the Notes using shares of common stock is subject to certain limitations set forth in the Notes, including a limit on the number of shares that may be issued until our receipt of stockholder approval to issue 20% or more of our outstanding shares of common stock to the holders of the Notes . If we are unable to make payments in shares of common stock, we may be forced to make such payments in cash. If we do not have sufficient cash resources to make these payments, we may need to raise additional equity or debt capital, and we cannot provide any assurance that we will be successful in doing so. If are unable to raise sufficient capital to meet our payment obligations, we may need to delay, reduce or eliminate certain of our operations, sell some or all of our assets or merge with another entity.
Our ability to make payments due to the holders of the Notes using cash is also limited by the amount of cash we have on hand at the time such payments are due, as well as certain provisions of the Delaware General Corporation Law. Further, we intend to make the installment payments due to holders of Notes in the form of common stock to the extent allowed under the Notes and applicable law in order to preserve our cash resources. The issuance of shares of common stock to the holders of our Notes will increase the number of shares of common stock outstanding and could result in substantial dilution to the existing holders of our common stock.
The Notes contain anti-dilution provisions that may result in the reduction of the conversion price of the Notes in the future. These features may increase the number of shares of common stock being issuable upon conversion of the Notes.
The Notes contain anti-dilution provisions, which provisions require the lowering of the applicable conversion price or exercise, as then in effect, to the purchase price of equity or equity-linked securities issued in any subsequent offerings. If in the future, while any of the Notes are outstanding, we issue securities for a consideration per share of common stock (the “New Issuance Price”) that is less than the conversion price of the Notes, as then in effect, we will be required, subject to certain limitations and adjustments as provided in the Notes, to reduce the conversion price to be equal to the New Issuance Price, which will result in a greater number of shares of common stock being issuable upon conversion of the Notes, which in turn will increase the dilutive effect of such conversions or exercises on existing holders of our common stock. The potential for such additional issuances may depress the price of our common stock regardless of our business performance and may make it difficult for us to raise additional equity capital while any of the Notes are outstanding.
If we do not receive approval from our stockholders, we will be unable to pay amounts due to the holders of the Notes in shares of common stock and we will be required to pay such amounts in cash, which may force us to divert cash from other uses.
Under the Notes agreement, we are required to hold a meeting of our stockholders to seek approval under Nasdaq Rule 5635(d) for the sale, issuance or potential issuance by us of our common stock (or securities convertible into or exercisable for our common stock) in excess of 9,620,210 shares, which is 19.99% of the shares of common stock outstanding immediately prior to the execution of the Notes agreement. If our stockholders do not approve this proposal, we will not be able to issue 20% or more of our outstanding shares of common stock to the Notes holders. As a result, we may be unable to make some of the interest payments due to the holders of the Notes in shares of our common stock or issue sufficient shares upon conversion of the Notes, which will, in lieu of those shares, require that we pay substantial cash amounts to the Notes holders. If we do not have sufficient cash resources to make these payments, we may need to delay, reduce or eliminate certain of our operations, sell some or all of our assets or merge with another entity.
Trading of our common stock has been suspended on Nasdaq, which may adversely affect the liquidity and trading price of our shares, and we may be unable to regain or maintain listing on a national securities exchange.
On April 8, 2025, we received a determination letter from the Nasdaq Listing Qualifications Department (the “Staff”) stating that the Staff had determined to delist our securities due to continued non-compliance with Nasdaq Listing Rule 5550(a)(2), which requires a minimum bid price of $1.00 per share, and Listing Rule 5620(a), which requires listed companies to hold an annual meeting of shareholders within one year of the end of the fiscal year. Trading of our common stock on Nasdaq was suspended at the opening of business on April 15, 2025, and our common stock is currently quoted on the OTC Pink Market under the symbol “PEVM”.
In addition, on April 30, 2025, we received a notice from the Staff indicating that we were no longer in compliance with Listing Rule 5250(c)(1) due to our failure to file our Annual Report on Form 10-K for the year ended December 31, 2024. This matter serves as an additional basis for delisting.
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We appealed the delisting determination to a Nasdaq Hearings Panel (the “Panel”) on May 20, 2025. On June 9, 2025, the Company received a written decision from Nasdaq stating that the Panel had denied the Company’s request for continued listing. Accordingly, the Company’s common stock will remain delisted and continue to trade on the OTC Pink Market.
We have the right to request a review of the Panel’s decision by the Nasdaq Listing and Hearing Review Council (the “Council”) within 15 calendar days. The Council may also, on its own motion, initiate a review within 45 calendar days of the decision’s issuance. On June 24, 2025, we submitted a request for a review of the Panel’s decision by the Council.
Notwithstanding the Panel’s decision, we have taken steps to address the identified deficiencies. On April 18, 2025, we held our 2024 annual meeting of stockholders and believe we have regained compliance with Listing Rule 5620(a). On May 30, 2025, we filed our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and believe we have regained compliance with Listing Rule 5250(c)(1).
We are continuing to take actions to regain full compliance with Nasdaq’s listing requirements. In particular, our board of directors has approved a 1-for-5 reverse stock split of its common stock, which is intended to restore compliance with Rule 5550(a)(2) and is currently pending FINRA review.
While there can be no assurance that these actions will result in relisting on Nasdaq or that the review by the Council will be successful, we remain committed to pursuing all reasonable and strategic options to regain compliance and restore our listing on a national securities exchange.
The OTC markets, particularly the Pink Sheets, are generally considered to be less efficient and transparent than national securities exchanges. Securities quoted on the OTC markets tend to have lower trading volumes and wider bid-ask spreads, which can result in limited liquidity and increased price volatility. As a result, the trading price of our common stock may be adversely affected, and investors may experience significant difficulty buying or selling shares or may face delays in the execution of transactions. Some investors may also be restricted from investing in our securities due to difficulty in accessing the OTC markets, policies preventing them from investing in securities not listed on a national exchange or other reasons.
Suspension of trading or delisting from Nasdaq may also have other adverse effects, including a potential loss of confidence among customers, strategic partners, vendors and employees. It may also reduce investor interest, limit our ability to raise capital on favorable terms, and diminish our capacity to engage in strategic transactions or growth opportunities and may also materially and adversely impact our credit terms with our vendors. Furthermore, our ability to attract and retain qualified personnel may be diminished, particularly where equity compensation is a key component of our employment packages.
There can be no assurance that we will be able to regain or maintain compliance with the continued listing requirements of Nasdaq or meet the standards of any other national securities exchange. If we are unable to regain or maintain a listing, our Company and stockholders could face significant material adverse consequences, including limited access to capital markets, decreased analyst coverage, reduced liquidity, increased volatility, reduced investor interest and confidence, and other material adverse effects.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities.
All sales of unregistered securities have been previously included in a Current Report on Form 8-K.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
Item 6. Exhibits
| Exhibit No. | Description | |
| 31.1* | Certification of Chief Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended. | |
| 31.2* | Certification of Chief Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended. | |
| 32** | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104. | Cover Page Interactive Data File - The cover page iXBRL tags are embedded within the inline XBRL document. | |
| * | Filed herewith. |
| ** | Furnished herewith. This certification is being furnished solely to accompany this report pursuant to 18 U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filings of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing. |
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SIGNATURES
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 thereunto duly authorized.
| Phoenix Motor Inc. | ||
| By: | /s/ Xiaofeng Denton Peng | |
| Xiaofeng Denton Peng | ||
| Chairman
and Chief Executive Officer (Principal executive officer) | ||
| By: | /s/ Michael Yung | |
| Michael Yung | ||
| Chief
Financial Officer (Principal financial and accounting officer) | ||
Date: June 27, 2025
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FAQ
Why is [[**PEV**]] now trading on the OTC Pink Market instead of Nasdaq?
How many [[**PEV**]] shares were outstanding as of June 20, 2025?
What period does [[**PEV**]]'s latest 10-Q cover?
Does [[**PEV**]] qualify as a smaller reporting company or emerging growth company?
Has [[**PEV**]] filed all required SEC reports during the past 12 months?
