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 March 31, 2023

☐	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: 333-261384

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
Ordinary Shares, par value $0.0004 per share	PEV	NASDAQ Capital Market

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 21,291,924 shares of common stock outstanding at May 15, 2023.

		Page
Part I.	Financial Information
	Item 1. Interim Financial Statements
	Condensed Consolidated Balance Sheets as of March 31, 2023 (Unaudited) and December 31, 2022	F-2
	Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2023, and 2022	F-3
	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2023, and 2022	F-4
	Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023, and 2022	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	9
	Item 4. Controls and Procedures	9
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


	Page
Condensed Consolidated Balance Sheets as of March 31, 2023 (unaudited) and December 31, 2022	F-2
Unaudited Condensed Consolidated Statements of Operations for the Three Months ended March 31, 2023 and 2022	F-3
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months ended March 31, 2023 and 2022	F-4
Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months ended March 31, 2023 and 2022	F-5
Notes to Unaudited Condensed Consolidated Financial Statements	F-6


	March 31, 2023		December 31, 2022
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	133	$	139
Accounts receivable, net		1,525		1,510
Inventories		3,522		4,560
Prepaid expenses and other current assets		1,224		1,344
Amount due from a related party		168		168
Total current assets		6,572		7,721
Restricted cash, noncurrent		250		250
Property and equipment, net		2,306		2,492
Security deposit		208		208
Right-of-use assets		3,611		3,797
Net investment in leases		217		—
Intangible assets, net		1,549		1,704
Goodwill		4,271		4,271
Total assets	$	18,984	$	20,443

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	1,475	$	1,359
Accrued liabilities		557		650
Advance from customers		1,452		1,230
Deferred income		493		503
Warranty reserve		322		325
Lease liabilities - current portion		740		719
Long-term borrowing, current portion		3		3
Total current liabilities		5,042		4,789
Lease liabilities - non-current portion		3,031		3,225
Long-term borrowings		144		147
Total liabilities		8,217		8,161

Commitments and contingencies (Note 10)

Equity:
Common stocks, par $0.0004, 450,000,000 shares authorized, 21,181,924 and 20,277,046 shares issued and outstanding as of March 31, 2023, and December 31, 2022, respectively*		8		8
Additional paid-in capital		42,099		40,836
Accumulated deficit		(31,340)		(28,562)
Total stockholders’ equity		10,767		12,282
Total liabilities and stockholders’ equity	$	18,984	$	20,443


	Three months ended		Three months ended
	March 31, 2023		March 31, 2022
Net revenues	$	1,781	$	671
Cost of revenues		1,608		551
Gross profit:		173		120
Operating expenses:
Selling, general and administrative		3,846		3,023
Operating loss		(3,673)		(2,903)

Other income (expense):
Interest income (expense), net		1		(2)
Gain on sales-type leases		99		—
Others		795		585
Total other income, net		895		583
Loss before income taxes		(2,778)		(2,320)
Income tax provision		—		(2)
Net loss	$	(2,778)	$	(2,322)

Net loss per share of common stock:
Basic and Diluted	$	(0.13)		(0.13)
Weighted average shares outstanding*		20,823,622		17,500,000


						Additional				Total
	Common Stock			Subscription		Paid-In		Accumulated			Stockholders’
	Shares*	Amount		Receivable		Capital		Deficit		Equity
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

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


	Three Month ended March 31,
	2023	2022
Cash flows from operating activities:
Net loss	(2,778)	(2,322)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization	355	427
Gain on sales-type leases	(99)	—
Reversal of doubtful accounts	(25)	—
Write down of inventories	80	—
Forgiveness of PPP loan	—	(586)
Stock-based compensation expenses	109	63
Warranty reserve	(3)	(6)
Amortization of right-of-use assets	280	—
Changes in operating assets and liabilities:
Accounts receivable	10	345
Inventories	795	(442)
Prepaid expenses and other assets	222	(253)
Accounts payable	116	442
Accrued liabilities	(93)	(169)
Deferred revenue	(10)	(157)
Advance from customers	222	50
Lease liabilities	(267)	—
Amount due from a related party	—	(84)
Net cash used in operating activities	(1,086)	(2,692)

Cash flows from investing activities:
Purchase of property and equipment	(71)	—
Net cash used in investing activities	(71)	—

Cash flows from financing activities:
Repayment of borrowings	(3)	(3)
Proceeds from related party	—	78
Proceeds received from standby equity purchase agreement	1,154	—
Net cash generated from financing activities	1,151	75

Decrease in cash, cash equivalents and restricted cash	(6)	(2,617)
Cash, cash equivalents and restricted cash at beginning of the period	389	2,683
Cash, cash equivalents and restricted cash at end of the period	383	66

Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets
Cash and cash equivalents	133	66
Restricted cash	250	—
Total cash, cash equivalents, and restricted cash	383	66

Supplemental cash flow information:
Income tax paid	—	6
Non-cash investing activities:
Inventories transferred to property and equipment	163	35


	Three months ended		Three months ended
	March 31, 2023		March 31, 2022
	(Unaudited)		(Unaudited)
Sales of EVs	$	1,151	$	388
Lease of EVs		90		138
Sales of forklifts		214		—
Others		326		145
	$	1,781	$	671


		Sales-type
In Thousands		(Unaudited)
Years Ending December 31,
Remainder of 2023		74
2024		43
2025		43
2026		11
2027		—
2028 and thereafter		—
Total lease receipt payments		171
Less: Imputed interest		(14)
Total lease receivables (1)		157
Unguaranteed residual assets		138
Net investment in leases		295


	March 31,		December 31,
	2023		2022
	(unaudited)
Accounts receivable, customers	$	860		870
Accounts receivable, governmental incentive		675		675
Less: Allowance for doubtful accounts		(10)		(35)
Accounts receivable, net	$	1,525	$	1,510


	Three Months Ended
In thousands	March 31, 2023		March 31, 2022
Condensed Consolidated Statements of Operations
Net revenues	$	1,781	$	671
Cost of revenues		1,608		551
Gross profit		173		120
Operating expenses:
Selling, general and administrative		3,846		3,023
Operating loss		(3,673)		(2,903)

Other income (expense):
Interest income (expense), net		1		(2)
Gain on sales-type leases		99		—
Others		795		585
Total other income, net		895		583
Loss before income taxes		(2,778)		(2,320)
Income tax provision		—		(2)
Net loss	$	(2,778)	$	(2,322)

Net loss per share of common stock:
Basic and Diluted	$	(0.13)	$	(0.13)
Weighted average common stocks outstanding		20,823,622		17,500,000


	March 31,		December 31,
	2023		2022
	(unaudited)
Raw materials	$	1,494	$	2,251
Work in process		910		979
Finished goods		1,118		1,330
Total inventories	$	3,522	$	4,560

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.

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104.		Cover Page Interactive Data File - The cover page iXBRL tags are embedded within the inline XBRL document.


	Phoenix Motor Inc.

	By:	/s/ Liang Lance Zhou
		Liang Lance Zhou
		Chief Executive Officer (Principal executive officer)

	By:	/s/W. Chris Wang
		W. Chris Wang
		Chief Financial Officer (Principal financial and accounting officer)

SEC Form 10-Q filed by Phoenix Motor Inc.