Financial Performance - Total revenues for the year ended December 31, 2024, were $31.2 million, an increase of $28.0 million or 897.9% compared to $3.1 million in 2023, primarily due to the acquisition of Proterra Transit Business Unit [161]. - The transit business unit contributed $30.0 million of revenue for the year ended December 31, 2024, while EV sales decreased from 1,492 units in 2023 to 806 units in 2024 [161]. - Gross profit for 2024 was $7.1 million, compared to a loss of $276,000 in 2023, resulting in a gross margin of 23.6% for 2024, up from negative 8.8% in 2023 [159][166]. - Net income for the year ended December 31, 2024, was $7.9 million, a significant improvement from a net loss of $20.6 million in 2023 [176]. - The company reported a net income of $7.9 million for the year ended December 31, 2024, primarily due to the acquisition of Proterra Transit Business Unit, but incurred a net loss of $30.3 million excluding this one-time gain [195]. Operating Expenses and Impairments - Operating expenses increased to $33.8 million in 2024 from $14.9 million in 2023, largely due to increased salary expenses following the acquisition of Proterra Transit Business Unit [168]. - The company recorded a goodwill impairment of $4.3 million in 2024 due to a decline in stock price [169]. - The company recorded an impairment of goodwill of $4.3 million for the year ended December 31, 2024, while there was no impairment recorded in 2023 [188]. Cash Flow and Investments - Cash flow used in operating activities was $1.9 million for the year ended December 31, 2024, with significant adjustments including a $38.3 million bargain purchase gain and a $4.3 million impairment loss on goodwill [198]. - Net cash used in investing activities was $10.1 million for the year ended December 31, 2024, compared to $93 thousand in 2023, indicating increased investment activity [197]. - Net cash used in investing activities was $10.1 million for the year ended December 31, 2024, primarily due to the acquisition of Proterra for a total consideration of $10 million [200]. - Net cash generated from financing activities was $9.5 million for the year ended December 31, 2024, mainly from net proceeds of private placements of $11.1 million and proceeds from borrowing of $5.0 million [201]. - The company had a net cash decrease of $2.5 million in cash and cash equivalents for the year ended December 31, 2024, contrasting with a net increase of $2.9 million in 2023 [197]. Market and Regulatory Environment - The company expects ongoing supply chain challenges to impact operations and results in 2024 and beyond, particularly due to reliance on third-party suppliers [157]. - Government subsidies and incentives are expected to drive growth in the electric vehicle market, with significant funding available for zero-emission transportation solutions [158]. - The Inflation Reduction Act of 2022 allocates $370 billion for climate and clean energy investments, significantly expanding tax credits for electric vehicles, including commercial zero-emission vehicles (ZEVs) with potential federal tax credits of up to $40,000 [203]. - The federal tax credit for commercial ZEVs is capped at $7,500 for vehicles under 14,000 pounds and $40,000 for all others, with assembly requirements in North America [203]. - The IRS has yet to release guidance on the new tax credits, leading to a reduction in customer orders during Q4 2022 and Q1 2023 as customers await clarity on available credits [203]. - The announcement of the Inflation Reduction Act has caused delays in customer orders as potential buyers evaluate the size and type of ZEVs based on tax credit eligibility [203]. - The federal tax credit on charging equipment has been extended through 2032, with a maximum credit of $100,000 per unit for commercial uses [203]. - The company is experiencing uncertainties in customer orders due to the pending IRS guidance on tax credits, which may impact future revenue [203]. Accounting and Financial Estimates - The company maintains allowances for doubtful accounts, with a provision for credit loss of $0.5 million for the year ended December 31, 2024, and a reversal of credit loss of $0.2 million during the same period [181]. - The company’s critical accounting estimates include accounts receivables and allowance for credit loss, impairment of long-lived assets, and product warranties, which significantly impact financial statements [180]. - The derivative liabilities as of December 31, 2024, were $33 thousand, down from $1.2 million in 2023, with a gain of $641 thousand on the change in fair value recorded for 2024 [191]. - The company has no significant off-balance sheet arrangements that could materially affect its financial condition or results of operations [204]. Liquidity and Financial Strategies - The company plans to finance operations through public or private stock offerings and debt financing until sufficient revenue is generated from vehicle sales [157]. - The company plans to implement various strategies to improve liquidity, including operational integration, cost structure re-establishment, and expanding strategic partnerships [196].

Acquisition and Business Expansion - The Group completed the acquisition of the Proterra Transit Business Unit for $3.5 million and the Proterra Battery Lease Agreements for $6.5 million, enhancing its capabilities in electric transit buses [155]. - Total revenues for the three months ended September 30, 2024, were $4.8 million, a 1557% increase from $0.3 million in the same period of 2023, primarily due to the acquisition of Proterra transit business unit [163]. - For the nine months ended September 30, 2024, total revenues reached $26.2 million, up 713% from $3.2 million in 2023, with the transit business unit contributing $25.0 million [164]. - Other income for the nine months ended September 30, 2024, was $35.5 million, primarily from a gain on the bargain purchase of Proterra of $32.1 million [179]. Financial Performance - Gross profit for the three months ended September 30, 2024, was $1.1 million, compared to a loss of $5,000 in 2023, resulting in a gross margin of 23.4% [172]. - For the nine months ended September 30, 2024, gross profit was $5.5 million, with a gross margin of 20.8%, up from 3.3% in 2023 [173]. - The company recorded a goodwill impairment of $4.3 million during the nine months ended September 30, 2024, due to a decline in stock price [177]. - The net loss for the three months ended September 30, 2024, was $5.6 million, compared to a net loss of $2.7 million for the same period in 2023 [185]. - For the nine months ended September 30, 2024, the net income was $14.1 million, while there was a net loss of $8.7 million for the same period in 2023 [185]. - The company incurred significant recurring losses before 2024, with a net loss of $17.9 million during the nine months ended September 30, 2024, excluding a one-time bargain purchase gain [192]. Cash Flow and Expenditures - Net cash used in operating activities was $2.8 million for the nine months ended September 30, 2024, compared to $2.5 million for the same period in 2023 [195]. - Net cash used in investing activities was $10.1 million for the nine months ended September 30, 2024, primarily due to the acquisition of Proterra for a total consideration of $10 million [198]. - Net cash generated from financing activities was $9.9 million for the nine months ended September 30, 2024, mainly from private placements and borrowings [200]. - Capital expenditures amounted to $10.1 million for the nine months ended September 30, 2024, compared to $0.2 million for the same period in 2023 [202]. Operational Challenges and Strategies - The Group's long sales and production cycle ranges from 6 to 24 months, impacting revenue recognition and operational efficiency [158]. - The Group is focused on mitigating supply chain challenges that have affected the timely procurement of key components, impacting operations [158]. - The company plans to implement various strategies to improve liquidity, including operational integration and cost-cutting measures [194]. - The company is facing supply chain challenges and inflationary pressures, which may impact future operations and customer demand for EVs [204]. Regulatory Environment and Market Growth - Key regulations in California mandate zero emissions for all transit buses by 2040 and require at least 50% of medium-duty trucks sold to be electric by 2030, driving market growth [160]. - The California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project offers a minimum of $60,000 per vehicle for Class 4 electric vehicles, supporting adoption [161]. - The Group's strategy includes leveraging government subsidies and incentives to enhance the adoption of electric vehicles and charging infrastructure [161]. Product Offerings - The Group's electric vehicle offerings include medium-duty electric vehicles, chargers, and electric forklifts, targeting various commercial fleet customers [154]. Miscellaneous Financial Information - Income tax benefits for the three and nine months ended September 30, 2024, were $3.8 million and $4.5 million, respectively, mainly due to the reversal of deferred tax liabilities from the Proterra acquisition [184]. - The company faced an event of default on its loans, resulting in an automatic interest rate increase to 18% per annum [180]. - The balance of warranty reserves increased to $14.3 million as of September 30, 2024, from $0.3 million as of December 31, 2023 [187]. - As of September 30, 2024, the company had no off-balance sheet arrangements that could materially affect its financial condition or results of operations [206]. - The company has not entered into any derivative contracts indexed to its own shares or classified as shareholder's equity [206]. - There are no retained or contingent interests in assets transferred to unconsolidated entities that provide credit, liquidity, or market risk support [206]. - The company does not have any variable interests in unconsolidated entities that engage in financing, liquidity, or market risk support [206]. - For detailed information on contractual obligations and commitments, refer to Note 16 in the unaudited condensed consolidated financial statements [207]. - Quantitative and qualitative disclosures about market risk are not applicable to smaller reporting companies [208].

Financial Performance - Revenues for the three months ended June 30, 2024, were $12,032 thousand, a significant increase from $1,158 thousand in the same period of 2023, representing a growth of approximately 938%[7] - Gross profit for the six months ended June 30, 2024, was $4,334 thousand, compared to a gross profit of $112 thousand for the same period in 2023, indicating a substantial improvement[7] - The company reported a net loss of $2,258 thousand for the three months ended June 30, 2024, compared to a net loss of $3,177 thousand for the same period in 2023, showing a reduction in losses[7] - Net income for the six months ended June 30, 2024, was $12,541, compared to a net loss of $5,955 for the same period in 2023[10] - The Group recorded a net loss of $2,258 for the three months ended June 30, 2024, compared to a net loss of $3,177 for the same period in 2023, while for the six months ended June 30, 2024, the net income was $12,541, contrasting with a net loss of $5,955 in 2023[107] Assets and Liabilities - Total current assets as of June 30, 2024, reached $60,524 thousand, a dramatic increase from $6,016 thousand as of December 31, 2023[6] - Total liabilities increased to $45,613 thousand as of June 30, 2024, from $16,475 thousand as of December 31, 2023, reflecting a rise of approximately 177%[6] - The accumulated deficit improved to $(36,666) thousand as of June 30, 2024, from $(49,207) thousand as of December 31, 2023, indicating a positive trend in financial health[6] - The company’s total stockholders' equity as of June 30, 2024, was $21,857 thousand, a significant recovery from a deficit of $(4,839) thousand as of December 31, 2023[6] Revenue Sources - Revenue from sales of transit buses for the six months ended June 30, 2024, was $19,116, while sales of EVs were $483, and lease of EVs was $90[25] - The company’s total revenue for the six months ended June 30, 2024, was $21,452, significantly higher than $2,939 in 2023[25] - For the six months ended June 30, 2024, revenues were $21.5 million, up 641% from $2.9 million in the same period of 2023, with the transit business unit contributing $20.7 million[153] Operating Expenses - Operating expenses for the three months ended June 30, 2024, were $8,929 thousand, compared to $3,100 thousand for the same period in 2023, representing an increase of approximately 187%[7] - Operating expenses for the three months ended June 30, 2024, were $8.9 million, an increase from $3.1 million in the same period of 2023, largely due to increased salary expenses from the Proterra acquisition[162] Cash Flow and Financing - Total cash used in operating activities for the six months ended June 30, 2024, was $(1,599), a slight improvement from $(1,678) in 2023[10] - The company generated $10,596 from financing activities in the six months ended June 30, 2024, compared to $2,687 in 2023[10] - Net cash used in operating activities was $1.6 million for the six months ended June 30, 2024, primarily due to a net income of $12.5 million adjusted by non-cash items[177] - Net cash generated from financing activities was $10.6 million for the six months ended June 30, 2024, mainly from net proceeds of $11.1 million from private placements[180] Acquisitions - The company completed the acquisition of Proterra transit business unit for $10,000 in cash, assuming warranty liabilities of $14,994[16] - The Group recorded a gain on bargain purchase of $32,072 million from the acquisition of Proterra's identifiable net assets[52] - The Group completed the acquisition of the Proterra Transit Business Unit for $3.5 million and the Proterra Battery Lease Agreements for $6.5 million in early 2024[140] Inventory and Receivables - As of June 30, 2024, total inventories increased to $47,833 million from $1,796 million as of December 31, 2023[62] - Accounts receivable increased by $(3,205) in the six months ended June 30, 2024, compared to $(271) in 2023[10] - Accounts receivable, net increased significantly to $3,656 million as of June 30, 2024, compared to $451 million as of December 31, 2023[60] Challenges and Risks - The Company faces challenges related to supply chain issues, including significant delivery delays and shortages of key components, impacting operations[144] - The Inflation Reduction Act of 2023 is expected to impact the demand for electric vehicles, with potential delays in customer orders due to uncertainty regarding tax credits[182] - Supply chain challenges continue to affect the company, with increased lead times and capital spending necessary for the development of new generation electric vehicles[183] Compliance and Governance - The Group received a deficiency letter from Nasdaq regarding the minimum bid price requirement, with a compliance deadline of October 9, 2024[123] - The Company must file its Form 10-Q for the period ended June 30, 2024, by October 31, 2024, to avoid delisting from Nasdaq[136] - The Company received a letter from Nasdaq granting an additional 180 calendar days until April 7, 2025, to regain compliance with the Minimum Bid Price Requirement[126] Internal Controls - The company identified material weaknesses in internal controls over financial reporting, including ineffective control environment and risk assessment processes[190] - The company plans to hire qualified staff and enhance financial reporting resources to address identified weaknesses[192] - The company has not experienced any material changes in internal control over financial reporting during the quarter ended June 30, 2024[193]

Financial Data and Key Metrics Changes - The company reported record net revenues of $9.4 million for Q1 2024, a significant increase from $1.8 million in the same period last year [15] - Net income reached a record $14.8 million or $0.49 per share, a turnaround from a net loss in the prior year [3][15] - Total assets increased to $78.7 million, up from $67.1 million at the end of 2023, and net assets rose to $23.7 million [3][16] - Gross profit for the quarter increased to $2.5 million, resulting in a gross margin of 26.6%, compared to 9.7% previously [15] Business Line Data and Key Metrics Changes - The acquisition of Proterra Transit business contributed $9 million in revenue, significantly impacting overall financial performance [15] - The company has a strong order backlog with over 250 units, representing a total of $200 million in potential revenue [5] Market Data and Key Metrics Changes - The zero-emission transit bus segment holds a 40% market share in North America, with over 1,000 buses delivered [3][4] - The market for electric vehicles is supported by strong regulatory mandates, with over $1 billion allocated annually towards low- and zero-emission transportation by the Federal Transit Administration [6] Company Strategy and Development Direction - The company aims to capitalize on the growing demand for sustainable transportation solutions through its expanded product offerings and increased production capabilities [4] - The strategic acquisition of Proterra enhances the company's capabilities in the electric transit bus market, aligning with its vision to lead the electrification of the commercial transportation industry [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued financial performance, expecting $12 million in revenue for Q2 2024, up more than 20% sequentially [17] - The company is focused on new product launches and partnerships, such as with InductEV for wireless charging solutions, to boost revenue and market presence [17] Other Important Information - The company has successfully negotiated a waiver agreement with a principal investor, eliminating the potential issuance of a $12 million convertible promissory note, which prevents dilution of existing shareholders [16] - The integration of transit bus operations has been smooth, enhancing operational capabilities and supporting manufacturing of both medium-duty and heavy-duty vehicles [10][11] Q&A Session Summary Question: Are there any questions from the participants? - There were no questions at this time, and the call concluded [17]

Financial Performance - Revenues for the three months ended March 31, 2024, were $9,420,000, a significant increase from $1,781,000 in the same period last year, representing a growth of 429%[6] - Gross profit for the same period was $2,505,000, compared to $173,000 in the prior year, indicating a substantial improvement in profitability[6] - Operating loss for the three months ended March 31, 2024, was $(10,415,000), compared to $(3,673,000) in the previous year, reflecting increased operating expenses[6] - Net income for the period was $14,799,000, a turnaround from a net loss of $(2,778,000) in the same quarter last year[6] - The company reported a basic net income per share of $0.49 for the three months ended March 31, 2024, compared to a loss of $(0.13) per share in the same period last year[6] - Net income for the three months ended March 31, 2024, was $14,799,000, compared to a net loss of $2,778,000 for the same period in 2023[9] - The company recorded a goodwill impairment of $4.3 million in Q1 2024 due to a decline in stock price[140] - Other income for Q1 2024 was $30.2 million, primarily from a gain on the bargain purchase of Proterra transit business unit amounting to $32.9 million[141] Assets and Liabilities - Total current assets as of March 31, 2024, were $71,073,000, up from $6,016,000 at the end of 2023, showing a significant increase in liquidity[5] - Total liabilities increased to $55,062,000 as of March 31, 2024, compared to $16,475,000 at the end of 2023, indicating a rise in financial obligations[5] - Total stockholders' equity improved to $23,672,000 as of March 31, 2024, from a deficit of $(4,839,000) at the end of 2023, reflecting a positive shift in the company's financial position[5] - Cash, cash equivalents, and restricted cash at the end of the period were $2,796,000, compared to $383,000 at the end of Q1 2023[9] - Accounts receivable, net increased to $4,974 as of March 31, 2024, compared to $451 as of December 31, 2023, with no provision for credit loss during the three months ended March 31, 2024[53] Acquisition and Revenue Contributions - The company completed the acquisition of Proterra's transit business unit for $10,000,000 in cash, assuming warranty liabilities of $14,994,000[13] - The company recorded a bargain purchase gain of $32,908,000, contributing positively to the overall income for the period[6] - Revenues from the Proterra acquisition for the three months ended March 31, 2024, amounted to $8,979 million[48] - The transit business unit contributed $9.0 million in revenue, while EV sales decreased from 5 units in Q1 2023 to only 1 unit in Q1 2024[136] Cash Flow and Financing Activities - Total cash used in operating activities was $(3,902,000) for Q1 2024, an increase from $(1,086,000) in Q1 2023[9] - Proceeds from private placements amounted to $11,104,000 in Q1 2024, compared to $1,154,000 in Q1 2023[9] - The company’s total cash generated from financing activities was $13,528,000 in Q1 2024, up from $1,151,000 in Q1 2023[9] - Net cash generated from financing activities was $13.5 million for Q1 2024, mainly from net proceeds of $11.1 million from private placements and $4.3 million from borrowings[153] Operational Challenges and Market Conditions - Supply chain challenges continue to affect production, with chassis and raw material shortages leading to longer lead times and increased capital spending requirements[156] - Inflation and rising interest rates are causing cost increases, impacting the demand for EVs as customers may delay purchases due to financing difficulties[157] - The company faces a long sales and production cycle, with the time from initial engagement to vehicle acceptance typically ranging from 12 to 24 months[130] Compliance and Governance - The Group received a deficiency letter from Nasdaq regarding non-compliance with the minimum bid price requirement, with a deadline to regain compliance by October 9, 2024[111] - The company is required to regain compliance with Nasdaq listing standards by November 18, 2024, following additional delinquency in financial filings[119] - The company identified material weaknesses in internal controls over financial reporting, including ineffective risk assessment and monitoring activities[162] - The company plans to enhance governance practices and internal controls to address identified weaknesses and improve financial reporting[164]

Financial Performance - Revenues for the year ended December 31, 2023, were $3.1 million, a 27.9% decrease from $4.3 million in 2022, primarily due to reduced sales of all-electric lithium-ion forklifts and EV leases [695]. - Sales of EVs decreased to $1.492 million in 2023 from $1.789 million in 2022, while EV leases dropped to $0.369 million from $0.551 million [696]. - The Group's total loss before income taxes for the year ended December 31, 2023, was $(20,623), compared to $(12,696) in 2022 [793]. - The Group reported a net loss attributable to shareholders of $20,645 for the year ended December 31, 2023, compared to a net loss of $12,705 in 2022, resulting in a basic and diluted net loss per share of $(0.97) for 2023, up from $(0.65) in 2022 [805]. Impairment and Expenses - The company recorded an impairment loss of $492 thousand for property and equipment in 2023, compared to no impairment in 2022 [709]. - Total operating expenses included selling, general, and administrative expenses, with a notable increase in impairment losses for intangible assets amounting to $1.091 million in 2023, up from nil in 2022 [724]. - The Group recorded an impairment charge of $3,385 on long-lived assets for the year ended December 31, 2023, compared to no impairment charges in 2022 [780]. - Stock-based compensation expense for 2023 was $38, a significant decrease from $1,046 in 2022 [733]. - The Group's operating lease expenses were $1,126 for the year ended December 31, 2023, compared to $741 in 2022, reflecting an increase of approximately 52% [823]. Financing and Debt - The company has entered into a short-term loan agreement totaling $961 thousand to finance the purchase of Proterra assets, with total interest expense of $279 thousand [726]. - The Group's carrying amounts of convertible bonds as of December 31, 2023, were $1,860, net of unamortized debt discount of $1,490 [770]. - The Group recorded interest expenses from debt discount amortization of $327 for 2023, compared to nil in 2022 [752]. - The Group's related party, SPI Energy Co., Ltd., lent a loan of $2,140 to the Group, with a remaining outstanding principal balance of $846 and unpaid interest of $17 as of December 31, 2023 [818]. Assets and Cash Management - As of December 31, 2023, cash and cash equivalents were primarily held in federally insured banks, exceeding insured limits, indicating a potential concentration of credit risk [719]. - The Group had total lease payments of $4,489, with a present value of lease payments at $3,999 as of December 31, 2023 [801]. - The Group's operating lease liabilities included current liabilities of $1,303 and noncurrent liabilities of $2,696 as of December 31, 2023 [801]. Strategic Initiatives - The company anticipates that federal funding initiatives will support the transition to electric vehicles, covering up to 80% of costs for electric transit buses and up to 100% for electric school buses [693]. - The company aims to reduce its Bill of Materials (BOM) and overhead costs as a percentage of total revenue through supply chain optimization and strategic partnerships [690]. - The Group entered into an acquisition agreement to purchase Proterra Transit business line assets, expanding its commercial vehicle electrification technology [786]. - The Group completed the acquisition of the Proterra Transit Business Unit for a purchase price of $3,500 and the Proterra Battery Lease Agreements for $6,500 on January 11, 2024, and February 7, 2024, respectively [809]. Legal and Compliance - The Group settled a legal dispute for $25 on October 19, 2023, while another dispute with a landlord is ongoing, with potential damages exceeding $250 [761]. - The Group had other commitments of approximately $815 related to contracts signed with vendors for research and development [799]. Shareholder and Equity Information - The Group entered into a standby equity purchase agreement (SEPA) to sell up to $10,000 of common stock, with only 4,035,086 shares registered, resulting in net proceeds of $1,915 from the sale of 1,546,545 shares during 2023 [731]. - The Group issued October Warrant and Execution Warrant to purchase a total of 2,500,000 shares, with the October Warrant valued at $590 [757]. - The Group issued a warrant to purchase up to 1,500,000 shares of common stock at an exercise price of $1.30 per share [767]. - The Group's weighted-average number of ordinary shares increased to 21,199,023 in 2023 from 19,664,273 in 2022, indicating a dilution effect due to the issuance of new shares [805].

Summary of Phoenix Motor, Inc. (NASDAQ:PEV) Proterra Transit Acquisition Update Call Company Overview - **Company**: Phoenix Motor, Inc. - **Acquisition**: Proterra Transit business - **Headquarters**: Anaheim, California - **Established**: 2003 - **Products**: Electric transit and shuttle buses, school buses, delivery vans, work trucks, and light-duty commercial vehicles under the EdisonFuture brand - **Historical Milestone**: Delivered first electric shuttle bus to NASA in 2014, with over 4 million zero-emission miles logged [5][6] Key Points from the Call Acquisition Details - **Acquisition Significance**: Marks a transformational milestone for Phoenix, enhancing competitiveness in the zero-emission commercial vehicle industry [6] - **Proterra's Market Share**: Proterra accounted for over 40% of all electric transit buses delivered in North America, with over 40 million real-world service miles [6] - **Employee Retention**: 298 out of 305 Proterra Transit employees accepted offers to join Phoenix [7] - **Order Backlog**: Approximately 400 buses with a revenue opportunity of about $400 million [10] Financial Performance - **Historical Revenue**: Proterra delivered approximately 200 buses generating about $200 million in revenue annually from 2020 to 2022 [10] - **2024 Guidance**: Initial guidance set for a minimum of 100 bus deliveries and $100 million in revenue [10] - **Gross Margin Expectations**: Historically single-digit gross margins for Proterra's Transit business, with aspirations to reach mid to high 20% margins [32] Market Position and Strategy - **Market Dynamics**: The transit bus market is heavily regulated, requiring Buy America compliance, limiting competition primarily to a few players [44] - **Competitive Advantages**: Best-in-class battery technology, longest range for 40-foot buses, and strong customer relationships [42][45] - **Integration Focus**: Emphasis on integrating operations and ramping up production of the ZX5 transit bus [7][12] Operational Insights - **Production Capacity**: Aiming to ramp up production to approximately three buses per week by the end of 2024 [30] - **Supply Chain Stability**: Suppliers are eager to resume operations, with a strong inventory position prior to bankruptcy [47] - **Service and Maintenance Opportunities**: Significant potential for revenue and profit in servicing existing fleets, an area previously underinvested [74] Challenges and Risks - **Bankruptcy Impact**: Proterra's bankruptcy led to a lack of focus on the Transit business, which will be addressed by Phoenix's operational rigor [27] - **Customer Contracts**: Minimal erosion of the backlog during bankruptcy, with strong relationships expected to maintain contract integrity [54] Future Outlook - **Production and Delivery Timeline**: Expecting first deliveries under the Phoenix brand within weeks, with all backlog buses anticipated to be delivered in the first half of the year [80] - **Long-term Vision**: Phoenix aims to be a leader in the commercial zero-emission vehicle space, leveraging Proterra's technology and market position [15] Additional Important Information - **Management Team**: Experienced leadership from both Phoenix and Proterra, with a focus on engineering and technology [13] - **Customer Relationships**: Strong ties with transit agencies, municipalities, and educational institutions, ensuring a diverse customer base [10][85] - **Regulatory Environment**: The transit industry benefits from various governmental and environmental incentives, driving demand for electric buses [53] This summary encapsulates the key points discussed during the conference call regarding the acquisition of Proterra Transit by Phoenix Motor, highlighting the strategic importance, financial expectations, market positioning, and operational plans moving forward.

DISCLAIMER& SAFE HARBOR STATEMENT Forward Looking Statements This presentation speaks as of January 2024, and does not reflect any subsequent events. The information presented or contained in this presentation is subject to change without notice. Neither the delivery of this presentation nor any further discussions of the Company, any of its affiliates, shareholders, directors, employees, agents, advisors, representatives or the underwriters with any of the recipients shall, under any circumstances, create ...

Financial Data and Key Metrics Changes - For Q3 2023, net revenues were $0.3 million, a decrease of 30% compared to $0.4 million in Q3 2022, primarily due to lower EV lease and maintenance revenues as certain customer leases rolled off [12] - Gross profit for Q3 2023 was breakeven, compared to a gross profit of $120,000 in the same quarter of the previous year [6] - SG&A expenses decreased to $2.5 million from $3.8 million in the prior year, attributed to cost-cutting initiatives [22] - The net loss for Q3 2023 narrowed to $2.7 million, compared to a net loss of $3.9 million in the same period last year [22] Business Line Data and Key Metrics Changes - The company is developing a light-duty commercial vehicle line under the EdisonFuture brand, which includes pickup trucks, delivery vans, and SUVs [3] - Revenue from the sale of electric forklifts experienced a modest decline, contributing to the overall revenue decrease [12] Market Data and Key Metrics Changes - Proterra accounts for over 40% of all electric transit buses delivered in North America, with over 40 million real-world service miles [20] Company Strategy and Development Direction - The acquisition of Proterra Transit is seen as a significant milestone, providing ownership of advanced technology and a large order backlog, which will enhance competitiveness in the zero-emission commercial vehicle industry [4][11] - The company aims to maximize returns on shareholders' capital while deploying industry-leading technology, positioning itself well in the high-growth zero-emission commercial vehicle sector [7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the integration of Proterra Transit and the potential for market synergies in scale, product offerings, and customer relationships [11] - The management team is excited about upcoming product launches and the opportunities presented by the Proterra acquisition, as well as the development of Gen 4 and Gen 5 products [21][23] Other Important Information - The company has a stable and loyal customer base, having logged over 4 million zero-emission miles on the road since its founding in 2003 [3] - The Anaheim facility will continue to serve as the hub for the Gen 4 product line, while the Greenville location will ramp up production of the ZX5 transit bus [5] Q&A Session Summary - The Q&A session included discussions on the Proterra acquisition and its implications for future growth, as well as inquiries about the company's product development timelines and market strategies [24]

Revenue Performance - For the three months ended September 30, 2023, revenues were $0.3 million, a decrease of 30% compared to $0.4 million in the same period of 2022[87]. - For the nine months ended September 30, 2023, revenues increased by 25% to $3.2 million, up from $2.6 million in the same period of 2022, primarily due to increased EV deliveries[88]. Cost and Expenses - Cost of revenues for the nine months ended September 30, 2023, was $3.1 million, a 55% increase from $2.0 million in the same period of 2022, driven by higher material costs and manufacturing overheads[92]. - Operating expenses for the three months ended September 30, 2023, were $2.5 million, a decrease from $3.8 million in the same period of 2022, largely due to layoffs and cost-cutting measures[96]. - Operating expenses for the nine months ended September 30, 2023, were $9.5 million, a slight increase from $9.2 million in the same period of 2022, primarily due to increased research and development expenses[97]. Profitability and Loss - The company reported a net loss of $2.7 million for the three months ended September 30, 2023, compared to a net loss of $3.9 million in the same period of 2022[86]. - The net loss for the three months ended September 30, 2023, was $2.7 million, compared to a net loss of $3.9 million for the same period in 2022; the net loss for the nine months ended September 30, 2023, was $8.7 million, up from $8.2 million in 2022[100]. Cash Flow and Financial Position - As of September 30, 2023, the company had cash and cash equivalents of $0.4 million and an accumulated deficit of $37.2 million, raising substantial doubt about its ability to continue as a going concern[105]. - Net cash used in operating activities was $2.5 million for the nine months ended September 30, 2023, a significant improvement from $14.2 million in the same period of 2022[106][107]. - The company generated $2.8 million from financing activities for the nine months ended September 30, 2023, compared to $13.6 million in the same period of 2022[110]. - Capital expenditures were $0.2 million for the nine months ended September 30, 2023, down from $0.7 million in the same period of 2022[111]. Market and Regulatory Environment - Government incentives are driving the adoption of electric vehicles, with programs offering up to $100,000 per Class 4 electric vehicle in New York and $60,000 in California[88]. - The Inflation Reduction Act is expected to significantly impact the demand for electric vehicles, with federal tax credits for commercial zero-emission vehicles up to $40,000[112]. - The increase in inflation and interest rates is anticipated to adversely impact demand for electric vehicles, as customers may delay purchases or face financing difficulties[114]. Strategic Initiatives - The company aims to reduce Bill of Materials (BOM) and overhead costs through supply chain optimization and strategic alliances[84]. - The company is focused on expanding its electric vehicle offerings, particularly in the medium-duty truck segment, in response to regulatory requirements for zero-emission transportation[84]. - The company anticipates increased capital and operating expenditures as it invests in technology and scales production to meet growing demand[84]. - Supply chain challenges continue to affect the company, with chassis and raw material shortages leading to longer lead times and increased capital spending requirements[112]. - The company plans to implement cost-cutting measures, including workforce reduction and strategic partnerships to control development costs[105].