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 September 30, 2022

☐	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)

1500 Lakeview Loop

Anaheim, CA 92807

(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 20,185,526 shares of common stock outstanding at October 31, 2022.

Table of Contents

TABLE OF CONTENTS

		Page
Part I.	Financial Information
	Item 1. Financial Statements
	Condensed Consolidated Balance Sheets as of September 30, 2022 (Unaudited) and December 31, 2021	F-2
	Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021	F-3
	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2022 and 2021	F-4
	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	F-5
	Notes to Unaudited Condensed Consolidated Financial Statements	F-6
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	3
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	10
	Item 4. Controls and Procedures	10
Part II.	Other Information
	Item 1. Legal Proceedings	11
	Item 1A. Risk Factors	11
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	11
	Item 3. Defaults Upon Senior Securities	11
	Item 4. Mine Safety Disclosures	11
	Item 5. Other Information.	11
	Item 6. Exhibits	12
Signatures		13

Table of Contents

PART I

Item 1. Financial Statements

Index to Financial Statements


	Page
Condensed Consolidated Balance Sheets as of September 30, 2022 (Unaudited) and December 31, 2021	F-2
Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022, and 2021	F-3
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2022 and 2021	F-4
Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	F-5
Notes to Unaudited Condensed Consolidated Financial Statements	F-6

F-1

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PHOENIX MOTOR INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per share data)


	September 30, 2022		December 31, 2021
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	1,317	$	2,683
Accounts receivable, net		1,422		1,201
Inventories		5,682		2,225
Prepaid expenses and other current assets		3,464		528
Amount due from a related party		103		—
Total current assets		11,988		6,637
Restricted cash, non current		250		—
Property and equipment, net		1,942		2,205
Security deposits		209		—
Intangible assets, net		1,859		2,323
Goodwill		4,271		4,271
Total assets	$	20,519	$	15,436

Liabilities
Current liabilities
Accounts payable	$	1,245	$	1,786
Accrued liabilities		594		779
Advance from customers		1,124		803
Deferred revenue		477		714
Warranty reserve		325		360
Long-term borrowing, current portion		25		10
Total current liabilities		3,790		4,452
Long-term borrowings		148		756
Total liabilities		3,938		5,208

Commitments and contingencies (Note 10)

Equity
Common stocks, par $0.0004, 450,000,000 shares authorized, 20,185,625 and 17,500,000 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively*		8		7
Subscription receivable		—		(7)
Additional paid in capital		40,607		26,085
Accumulated deficit		(24,034)		(15,857)
Total equity		16,581		10,228
Total liabilities and equity	$	20,519	$	15,436

*	The shares are presented on a retrospective basis to reflect the Company’s stock split (Note 7)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-2

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PHOENIX MOTOR INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for share and per share data)


	Three Months Ended				Nine Months Ended
	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Net revenues	$	409	$	554	$	2,579	$	1,680
Cost of revenues		288		603		2,013		1,836
Gross profit (loss)		121		(49)		566		(156)
Operating expenses:
Selling, general and administrative		3,847		2,117		9,160		6,216
Operating loss		(3,726)		(2,166)		(8,594)		(6,372)

Other income (expense):
Interest expense, net		(2)		(4)		(6)		(2)
Others		(202)		1		437		1
Total other (expense) income, net		(204)		(3)		431		(1)
Loss before income taxes		(3,930)		(2,169)		(8,163)		(6,373)
Income tax provision		—		—		(14)		(3)
Net loss	$	(3,930)	$	(2,169)	$	(8,177)	$	(6,376)

Net loss per share of common stock:
Basic and diluted	$	(0.20)	$	(0.12)	$	(0.44)	$	(0.36)
Weighted average common stocks outstanding		19,664,273		17,500,000		18,390,891		17,500,000

*	The shares are presented on a retrospective basis to reflect the Company’s stock split (Note 7)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-3

Table of Contents

PHOENIX MOTOR INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands, except for share and per share data)


						Additional				Total
	Common Stock			Subscription		Paid-In		Accumulated			Stockholders’
	Shares	Amount		Receivable		Capital		Deficit		Equity
Balance as of January 1, 2021	17,500,000	$	7	$	(7)	$	26,033	$	(1,243)	$	24,790
Net loss									(1,906)		(1,906)
Stock-based compensation							44				44
Balance as of March 31, 2021	17,500,000	$	7	$	(7)	$	26,077	$	(3,149)	$	22,928
Net loss									(2,301)		(2,301)
Stock-based compensation							1				1
Balance as of June 30, 2021	17,500,000	$	7	$	(7)	$	26,078	$	(5,450)	$	20,628
Net loss									(2,169)		(2,169)
Stock-based compensation							4				4
Balance as of September 30, 2021	17,500,000	$	7	$	(7)	$	26,082	$	(7,619)	$	18,463

Balance as of January 1, 2022	17,500,000	$	7		(7)		26,085		(15,857)	$	10,228
Net loss									(2,322)		(2,322)
Stock-based compensation							63				63
Balance as of March 31, 2022	17,500,000	$	7		(7)		26,148		(18,179)	$	7,969
Net loss									(1,925)		(1,925)
Stock-based compensation							52				52
Receipt of subscription receivable					7						7
Issuance of common stock in the initial public offering (“IPO”)	2,100,000		1				13,437				13,438
Balance as of June 30, 2022	19,600,000	$	8		—		39,637		(20,104)	$	19,541
Net loss									(3,930)		(3,930)
Exercise of stock options	80,625						138				138
Issuance of common stock for stock units award	505,000						793				793
Stock-based compensation					—		39				39
Balance as of September 30, 2022	20,185,625	$	8		—		40,607		(24,034)	$	16,581

*	The shares are presented on a retrospective basis to reflect the Company’s stock split (Note 7)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-4

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PHOENIX MOTOR INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


	Nine months ended September 30,
	2022		2021
Cash flows from operating activities:
Net loss		(8,177)		(6,376)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization		1,305		1,384
Gain on disposal of fixed assets		(54)		—
Forgiveness of PPP loan		(586)		—
Stock-based compensation expenses		947		49
Changes in operating assets and liabilities:
Accounts receivable		(221)		20
Inventories		(3,532)		(600)
Prepaid expenses and other assets		(3,145)		(3,586)
Amount due from a related party		(103)		—
Accounts payable		(541)		(399)
Accrued liabilities		(185)		26
Warranty reserve		(35)		(115)
Deferred revenue		(237)		87
Advance from customer		321		(102)
Net cash used in operating activities		(14,243)		(9,612)

Cash flows from investing activities:
Proceeds from disposal of property and equipment		273		—
Purchase of property and equipment		(722)		(680)
Net cash used in investing activities		(449)		(680)

Cash flows from financing activities:
Proceeds from borrowings		—		586
Proceeds from a related party		1,676		—
Repayment to a related party		(1,676)		—
Repayment of borrowings

SEC Form 10-Q filed by Phoenix Motor Inc.