UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐	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: 001-41414

Phoenix Motor Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

85-4319789

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

1500 Lakeview Loop, Anaheim, CA		92807
(Address of Principal Executive Offices)		(Zip Code)

(909) 978-0815

(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
Common Stock, par value $0.0004 per share		PEV		The Nasdaq Stock Market LLC

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. Yes ☒ No ☐

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). Yes ☒ No ☐

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 ☐
Non-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 37,648,492 shares of common stock outstanding as of October 23, 2024.

TABLE OF CONTENTS

		Page
Part I.	Financial Information
	Item 1. Interim Financial Statements
	Condensed Consolidated Balance Sheets as of June 30, 2024 (Unaudited) and December 31, 2023	F-1
	Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2024 and 2023	F-2
	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2024 and 2023	F-3
	Unaudited Condensed Consolidated Statements of Cash Flows for the Three and Six Months Ended June 30, 2024 and 2023	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

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)

(Unaudited)

	June 30, 2024			December 31, 2023

ASSETS
Current assets:
Cash and cash equivalents	$	1,401		$	31
Restricted cash		-			3,252
Accounts receivable, net		3,656			451
Inventories		47,833			1,796
Prepaid expenses and other current assets, net		797			356
Amount due from a related party		850			130
Assets held-for-sale		5,987			-
Total current assets		60,524			6,016
Property and equipment, net		4,635			1,119
Operating lease right-of-use assets		2,192			-
Net investment in leases		119			230
Goodwill		-			4,271
Total assets	$	67,470		$	11,636

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,950		$	3,529
Accrued liabilities		1,090			926
Advance from customers, current		2,650			167
Deferred income		352			362
Warranty reserve, current		3,803			289
Lease liabilities, current		2,423			1,303
Amounts due to a related party		-			863
Short-term borrowing		1,317			961
Derivative liability		294			1,156
Income tax payable		2,309			-
Convertible note, current		2,550			1,320
Long-term borrowing, current		6			5
Total current liabilities		19,744			10,881
Lease liabilities, noncurrent		3,369			2,696
Warranty reserve, noncurrent		10,895			-
Advance from customers, noncurrent		2,040			2,214
Convertible notes, noncurrent		-			540
Long-term borrowings		143			144
Deferred tax liabilities		9,422			-
Total liabilities	$	45,613			16,475

Commitments and contingencies (Note 16)

Equity:
Common stock, par $0.0004, 450,000,000 shares authorized, 35,401,357 and 21,900,918 shares issued and outstanding as of June 30, 2024, and December 31, 2023, respectively		14			9
Additional paid-in capital		58,509			44,359
Accumulated deficit		(36,666	)		(49,207	)
Total stockholders’ equity (deficit)		21,857			(4,839	)
Total liabilities and stockholders’ equity	$	67,470		$	11,636

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)

	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
	Three Months Ended						Six Months Ended
	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
Revenues	$	12,032		$	1,158		$	21,452		$	2,939
Cost of revenues		10,203			1,219			17,118			2,827
Gross profit (loss)		1,829			(61	)		4,334			112
Operating expenses:
Selling, general and administrative		8,929			3,100			17,578			6,946
Impairment of goodwill		-			-			4,271			-
Operating loss		(7,100	)		(3,161	)		(17,515	)		(6,834	)

Other income (expense):
Interest expense, net		(642	)		(2	)		(3,337	)		(1	)
Gain on sales-type leases		-			-			-			99
Change in fair value of derivative liability		647			-			589			-
(Reversal of) Bargain purchase gain		(836	)		-			32,072			-
Others		(2	)		8			-			803
Total other (expenses) income, net		(833	)		6			29,324			901
(Loss) income before income taxes		(7,933	)		(3,155	)		11,809			(5,933	)
Income tax benefits (expenses)		5,675			(22	)		732			(22	)
Net (loss) income	$	(2,258	)	$	(3,177	)	$	12,541		$	(5,955	)

(Loss) earnings per share of common stock:
Basic	$	(0.06	)	$	(0.15	)	$	0.38			(0.28	)
Diluted	$	(0.06	)	$	(0.15	)	$	0.33			(0.28	)
Weighted average shares outstanding
Basic		34,821,273			21,261,704			32,638,754			21,038,874
Diluted		34,821,273			21,261,704			36,882,268			21,038,874

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
Balance as of January 1, 2023		20,277,046	$	8	$	40,836		$	(28,562	)	$	12,282
Net loss		—		—		—			(2,778	)		(2,778	)
Stock-based compensation		—		—		109			—			109
Issuance of common stock per standby equity purchase agreements		904,878		—		1,154			—			1,154
Balance as of March 31, 2023		21,181,924		8		42,099			(31,340	)		10,767
Net loss		—		—		—			(3,177	)		(3,177	)
Stock-based compensation		—		—		37			—			37
Issuance of common stock per standby equity purchase agreements		110,000		—		73			—			73
Balance as of June 30, 2023		21,291,924		8		42,209			(34,517	)		7,700

Balance as of January 1, 2024		21,900,918	$	9	$	44,359		$	(49,207	)	$	(4,839	)
Net income		—		—		—			14,799			14,799
Stock-based compensation		—		—		50			—			50
Reclass of derivative liability upon conversion of related convertible notes		—		—		144			—			144
Issuance of common stock for convertible note conversion		715,279		—		451			—			451
Issuance of common stock for settlement with vendors		1,365,261		1		1,692			—			1,693
Issuance of restricted shares to Wisdom Financial to repay loan interest (Note 11)		180,202		—		270			—			270
Issuance of common stock for private placements		10,290,560		4		11,100			—			11,104
Balance as of March 31, 2024		34,452,220		14		58,066			(34,408	)		23,672
Balance		34,452,220		14		58,066			(34,408	)		23,672
Net loss		—		—		—			(2,258	)		(2,258	)
Net income (loss)		—		—		—			(2,258	)		(2,258	)
Stock-based compensation		—		—		(67	)		—			(67	)
Reclass of derivative liability upon conversion of related convertible notes		—		—		129			—			129
Issuance of common stock for convertible note conversion		949,137		—		381			—			381
Balance as of June 30, 2024		35,401,357	$	14	$	58,509	$		(36,666	)	$	21,857
Balance		35,401,357	$	14	$	58,509	$		(36,666	)	$	21,857

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)

	2024			2023
	Six Month ended June 30,
	2024			2023
Changes in operating assets and liabilities:
Net income (loss)		12,541			(5,955	)
Adjustments to reconcile net income (loss) to cash used in operating activities:
Depreciation and amortization		835			843
Gain on sales-type leases		-			(99	)
Reversal of credit loss		-			10
Write down of inventories		-			98
Amortization of convertible notes		1,490			-
Gain on change in market value of derivative liability		(589	)		-
Share-based compensation		(17	)		146
Impairment loss on goodwill		4,271			-
Warranty reserve		(586	)		(23	)
Amortization of right-of-use assets		470			491
Bargain purchase gain		(32,072	)		-
Deferred tax liability reversal		(3,041	)		-
Changes in operating assets and liabilities:
Accounts receivable		(3,205	)		(271	)
Inventories		12,854			2,002
Held-for-sale leased assets		413			-
Prepaid expenses and other assets		(441	)		405
Accounts payable		1,115			672
Accrued liabilities		467			(2	)
Deferred revenue		(10	)		(17	)
Advance from customers		2,309			420
Lease liabilities		(869	)		(491	)
Net investment in leases		111			-
Amount due from related party		46			93
Income tax payable		2,309			-
Net cash used in operating activities		(1,599	)		(1,678	)

Cash flows from investing activities:
Purchase of property and equipment		(113	)		(766	)
Loan lent to a related party		(816	)		(400	)
Proceeds from repayment from a related party		50			400
Acquisition of Proterra		(10,000	)		-
Net cash used in investing activities		(10,879	)		(766	)

Cash flows from financing activities:
Repayment of borrowings		(2,008	)		(4	)
Proceeds from borrowings		-			1,464
Proceeds from borrowings		2,363			-
Repayment of related party borrowings		(1,904	)		-
Proceeds from related party borrowings		1,041			-
Proceeds received from private placements		11,104			-
Proceeds received from standby equity purchase agreement		-			1,227
Net cash generated from financing activities		10,596

SEC Form 10-Q filed by Phoenix Motor Inc.