[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) [Item 1. Interim Financial Statements](index=4&type=section&id=Item%201.%20Interim%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the three and six months ended June 30, 2025, revealing significant revenue decline, a shift to net loss, and deteriorating cash, raising going concern doubts Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $112 | $764 | | Inventories | $39,521 | $40,760 | | Total current assets | $50,329 | $52,005 | | Total assets | $54,486 | $57,577 | | **Liabilities & Equity** | | | | Total current liabilities | $30,400 | $26,219 | | Total liabilities | $46,679 | $47,257 | | Total stockholders' equity | $7,807 | $10,320 | Condensed Consolidated Statements of Operations Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $2,742 | $12,032 | $7,153 | $21,452 | | Gross profit | $915 | $1,829 | $2,280 | $4,334 | | Operating loss | $(1,689) | $(7,100) | $(3,625) | $(17,515) | | Net (loss) income | $(1,152) | $2,953 | $(4,738) | $19,727 | | Basic EPS | $(0.14) | $0.42 | $(0.59) | $3.02 | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(4,973) | $(1,599) | | Net cash used in investing activities | $0 | $(10,879) | | Net cash generated from financing activities | $4,321 | $10,596 | | **Decrease in cash and cash equivalents** | **$(652)** | **$(1,882)** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes detail the company's business, accounting policies, and significant events, including the Proterra acquisition, declining sales, going concern doubts, and defaulted convertible notes - In January and February 2024, the Group completed the acquisition of the Proterra transit business unit and its battery lease contracts[28](index=28&type=chunk) Disaggregated Revenues (in thousands) | Revenue Category | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Sales of transit buses | $5,198 | $19,116 | | Sales of EVs | $237 | $483 | | Sales of parts | $614 | $90 | | Service revenue | $465 | $0 | | **Total Revenues** | **$7,153** | **$21,452** | - The company has a net loss of **$4.7 million** and negative operating cash flow of **$5.0 million** for the six months ended June 30, 2025, raising substantial doubt about its ability to continue as a going concern[56](index=56&type=chunk) - An event of default occurred on the June 2023 and October 2023 convertible notes in March 2024, increasing the interest rate to **18%** per annum[110](index=110&type=chunk) - A subsequent event of default occurred on new convertible notes on April 15, 2025, when the company's common stock ceased trading on Nasdaq[115](index=115&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 66.7% revenue decrease to post-acquisition order fulfillment and cash shortages, with critically low liquidity reinforcing going concern risk, prompting strategies for cost-cutting and new financing [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Revenues for H1 2025 decreased by 66.7% to $7.2 million due to declining bus sales, while gross margin improved to 31.9% and SG&A decreased, resulting in a net loss of $4.7 million compared to prior year's net income boosted by a bargain purchase gain - Total revenue for the six months ended June 30, 2025, decreased by **$14.2 million**, or **66.7%**, compared to the same period in 2024, primarily due to a surge in sales in 2024 from fulfilling existing orders after the Proterra acquisition, and cash shortages in late 2024 slowing production[143](index=143&type=chunk) - Gross margin for the six months ended June 30, 2025, increased to **31.9%** from **20.2%** in the prior year period, mainly due to a limited number of transit buses and one EV being sold at relatively high selling prices[148](index=148&type=chunk) - Selling, general and administrative expenses for the six months ended June 30, 2025, decreased to **$5.9 million** from **$17.6 million** in the prior year period, largely due to a decrease in salary expenses from a reduced headcount[151](index=151&type=chunk) - The company reported a net loss of **$4.7 million** for the first six months of 2025, compared to a net income of **$19.7 million** for the same period in 2024, with the 2024 income significantly impacted by a **$32.1 million** gain on the bargain purchase of Proterra[156](index=156&type=chunk)[157](index=157&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) The company's precarious liquidity, with only **$0.1 million** cash and **$5.0 million** negative operating cash flow, raises substantial doubt about its going concern ability, prompting management to pursue operational integration, cost controls, and new financing - The company incurred a net loss of **$4.7 million** and used **$5.0 million** in cash from operating activities during the six months ended June 30, 2025, raising substantial doubt about its ability to continue as a going concern[163](index=163&type=chunk) - As of June 30, 2025, the company had only **$0.1 million** in cash and cash equivalents[165](index=165&type=chunk) - Management's plans to address liquidity issues include operational integration, cost reduction, strengthening strategic partnerships, and pursuing a robust capital market strategy for financing[164](index=164&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This disclosure is not required as the company qualifies as a smaller reporting company - The company, as a smaller reporting company, is not required to provide this disclosure[179](index=179&type=chunk) [Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls were ineffective as of June 30, 2025, due to material weaknesses including an ineffective control environment and insufficient U.S. GAAP expertise, with remedial measures planned - Management concluded that the company's disclosure controls and procedures were ineffective as of June 30, 2025[180](index=180&type=chunk) - Material weaknesses identified include: failure to maintain an effective control environment, lack of an effective risk assessment process, ineffective monitoring activities, and insufficient controls and resources for financial reporting under U.S. GAAP[190](index=190&type=chunk) - The company plans to implement remedial measures, including hiring more qualified staff, setting up a formal control framework, and improving review procedures[183](index=183&type=chunk) [Part II. Other Information](index=34&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, none of which are expected to materially impact its financial condition - The company is involved in ordinary course legal proceedings but does not expect any to have a material adverse effect on its financial condition[186](index=186&type=chunk) [Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) Critical risks include potential dilution or cash outlays from convertible notes, and the Nasdaq delisting on April 15, 2025, which now subjects the stock to OTC Pink Market trading, impacting liquidity and stakeholder confidence - Trading of the company's common stock was suspended on Nasdaq on April 15, 2025, and it is now quoted on the OTC Pink Market, which may adversely affect liquidity and trading price[199](index=199&type=chunk) - The company is appealing the delisting decision and has implemented a **1-for-5 reverse stock split** effective July 31, 2025, to try and regain compliance with Nasdaq's minimum bid price rule[202](index=202&type=chunk)[204](index=204&type=chunk) - Senior convertible notes issued in March and May 2025 pose a risk of substantial dilution to common stockholders or may require significant cash outlays, with an event of default occurring on these notes when the stock was delisted, triggering penalty clauses[188](index=188&type=chunk)[193](index=193&type=chunk) [Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%20and%20Issuer%20Purchases%20of%20Equity%20Securities) All sales of unregistered securities have been previously reported in a Current Report on Form 8-K - All sales of unregistered securities have been previously disclosed in Form 8-K filings[209](index=209&type=chunk) [Defaults Upon Senior Securities](index=36&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities in this section, despite detailed discussions of convertible note defaults elsewhere - The company reported 'None' under this item[210](index=210&type=chunk) [Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business operations - This section is not applicable to the company's business[211](index=211&type=chunk) [Other Information](index=36&type=section&id=Item%205.%20Other%20Information.) No information was provided under this item [Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the quarterly report, including CEO and CFO certifications and Inline XBRL data files - The report includes required certifications from the CEO and CFO (Exhibits 31.1, 31.2, 32) and Inline XBRL data files[213](index=213&type=chunk)

Financial Performance - For the three months ended March 31, 2025, the company's revenues were $4.4 million, a decrease of $5.0 million or 53% compared to $9.4 million for the same period in 2024[139]. - For the three months ended March 31, 2024, the company reported a net income of $16.8 million, compared to a net loss of $3.6 million for the three months ended March 31, 2025[152][151]. - The company recorded a goodwill impairment of $4.3 million due to a decrease in stock price[148]. - Other income for the three months ended March 31, 2024, was $32.1 million, primarily from a gain on the bargain purchase of Proterra transit business unit of $32.9 million[150]. - Net cash used in operating activities was $2.6 million for the three months ended March 31, 2025, compared to $3.9 million for the same period in 2024[160][162]. Operational Highlights - The company delivered a total of 140 EVs to more than 48 customers as of March 31, 2025, representing the largest number of Class 4 cutaway medium duty electric shuttle bus deployments in the U.S.[133]. - The company completed the acquisition of the Proterra transit business unit on January 11, 2024, and delivered a total of 34 transit buses to various customers as of March 31, 2025[134]. - The company has accumulated over four million zero-emission miles driven by the vehicles delivered, showcasing significant industry experience and expertise[133]. Cost and Expenses - The gross margin for the three months ended March 31, 2025, was 30.9%, an increase from 26.6% in the same period in 2024, primarily due to higher margins for both EV sales and transit bus sales[145]. - Selling, general, and administrative expenses decreased to $3.3 million for the three months ended March 31, 2025, from $8.6 million in the same period in 2024, largely due to a reduction in salary expenses[147]. - The cost of revenues for the three months ended March 31, 2025, was $3.0 million, down from $6.9 million in the same period in 2024, primarily due to decreased transit bus sales[143]. - Capital expenditures were nil for the three months ended March 31, 2025, compared to $10.1 million for the same period in 2024, primarily due to the acquisition of Proterra assets[167][163]. Future Outlook - The company expects ongoing supply chain challenges to impact its ability to obtain parts and components on a timely basis, affecting operations in 2024 and possibly beyond[136]. - The company anticipates significant capital and operating expenditures to increase as it continues to invest in technology and expand production capabilities[136]. - Government subsidies and incentive policies are expected to drive growth in the company's addressable market, with key regulations mandating zero-emission transportation options in states like California[137]. - The Inflation Reduction Act of 2023 is expected to impact customer orders due to uncertainties regarding tax credits for electric vehicles[168]. - Supply chain challenges continue to affect the company, leading to longer lead times and increased working capital requirements[168]. Liquidity and Financing - The company had $0.8 million in cash and cash equivalents as of March 31, 2025, with significant reliance on equity financing and various types of debt financing[160]. - The company plans to implement strategies to improve liquidity, including cost-cutting measures and seeking additional funding through public or private offerings[159]. - The company experienced a net cash generated from financing activities of $2.6 million for the three months ended March 31, 2025, primarily from convertible senior notes[165].

Part I [Business Overview](index=7&type=section&id=Item%201.%20Business) Phoenix Motor Inc. provides commercial EV solutions, expanding into transit buses via the Proterra acquisition, and focuses on scaling production, cost reduction, and next-gen chassis development - The company operates "Phoenix Motorcars" for commercial EVs and "EdisonFuture" for future light-duty EVs[19](index=19&type=chunk) - In early 2024, the company acquired Proterra's transit business and battery lease contracts, expanding into electric transit buses[22](index=22&type=chunk)[28](index=28&type=chunk) Vehicle Delivery and Backlog (as of Dec 31, 2024) | Category | Units Delivered (Cumulative/2024) | Backlog (Orders) | Backlog Value ($) | | :--- | :--- | :--- | :--- | | Medium-Duty EVs | 138 (cumulative) | 73 | $16.7 million | | Transit Buses | 30 (in 2024) | 154 | $160.8 million | - Key strategies include an asset-light model, scaling through standardization, Gen 4 cost reduction, and developing a chassis-independent Gen 5 platform[31](index=31&type=chunk)[37](index=37&type=chunk) [Recent Developments](index=9&type=section&id=Recent%20Developments) In early 2024, the company acquired Proterra's transit business and battery lease agreements for **$10 million**, later agreeing to sell the battery lease receivables Proterra Asset Acquisition Details | Asset Acquired | Purchase Price | Completion Date | | :--- | :--- | :--- | | Proterra Transit Business Unit | $3.5 million | January 11, 2024 | | Proterra Battery Lease Agreements | $6.5 million | February 7, 2024 | - The company agreed to sell acquired battery lease receivables to Zenobe, retaining associated warranty liability[29](index=29&type=chunk) [Competition](index=10&type=section&id=Competition) The company faces intense competition from specialized commercial EV manufacturers and major automotive OEMs with superior resources - Direct competitors include commercial EV manufacturers like Lightning eMotors and Green Power Motor Company[33](index=33&type=chunk)[65](index=65&type=chunk) - Major OEMs such as Ford, General Motors, Tesla, and Daimler pose significant competitive threats due to their superior resources[33](index=33&type=chunk)[65](index=65&type=chunk) [Manufacturing and Production](index=10&type=section&id=Manufacturing%20and%20Production) Phoenix operates two leased production facilities in Anaheim, CA and Greenville, SC, integrating operations in 2024 for efficiency and supply chain improvements - The company integrated transit bus and medium-duty truck operations in 2024 to enhance efficiency and quality[36](index=36&type=chunk) - Production facilities are in Anaheim, CA (lease expires March 2027) and Greenville, SC (lease expires June 2026)[36](index=36&type=chunk)[145](index=145&type=chunk) [Government Regulation](index=12&type=section&id=Government%20Regulation) The company's operations are subject to extensive regulations, including safety, emissions, Altoona testing for buses, and earning tradable GHG credits - Vehicles must comply with NHTSA's FMVSS for safety and EPA/CARB emissions regulations[44](index=44&type=chunk)[50](index=50&type=chunk) - Altoona testing is required for buses to qualify for FTA funding, potentially covering up to **80%** of vehicle cost[48](index=48&type=chunk)[49](index=49&type=chunk) - The company earns tradable Greenhouse Gas (GHG) credits from EPA and CARB for its zero-emission vehicles, which can be sold[52](index=52&type=chunk)[53](index=53&type=chunk) [Risk Factors](index=14&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant financial, operational, and stock-related risks, including going concern doubts, intense competition, supply chain vulnerabilities, Nasdaq delisting, and internal control weaknesses [Financial Risks](index=14&type=section&id=Risks%20Related%20to%20Our%20Financial%20Condition) The company has a history of unprofitability, with a **$42.0 million** accumulated deficit and negative cash flows, leading to substantial doubt about its going concern ability - The company reported an accumulated deficit of **$42.0 million** as of December 31, 2024, anticipating future significant losses[55](index=55&type=chunk) - Negative cash flow from operating activities was **$1.9 million** in 2024 and **$3.7 million** in 2023[56](index=56&type=chunk) - The FY 2024 audited financial statements include a "going concern" paragraph, indicating substantial doubt about continued operations[57](index=57&type=chunk) [Business and Industry Risks](index=15&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) The company faces business risks including manufacturing delays, intense competition, high costs, reliance on the Ford E-450 chassis, supply chain issues, customer concentration, and Proterra integration challenges - The company faces risks of production ramp-up delays and has limited high-volume manufacturing experience[62](index=62&type=chunk)[78](index=78&type=chunk) - All current medium-duty products rely on Ford's E-450 chassis, creating significant dependency and vulnerability to shortages or Ford's own EV offerings[70](index=70&type=chunk) - The company relies on a limited customer base without long-term purchase agreements, leading to revenue uncertainty[74](index=74&type=chunk) - Significant risks and challenges exist in integrating the acquired Proterra Transit Business Unit, potentially hindering anticipated benefits[95](index=95&type=chunk)[96](index=96&type=chunk) - The company identified material weaknesses in internal controls over financial reporting, potentially impacting accurate financial reporting[100](index=100&type=chunk) [Stock Ownership Risks](index=23&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) Common stock ownership carries significant risks, including Nasdaq delisting to the less liquid OTC Pink Market, potential future dilution, and no anticipated dividends - The company's common stock (PEV) was suspended from Nasdaq on April 15, 2025, and now trades on the OTC Pink Market under "PEVM"[3](index=3&type=chunk)[107](index=107&type=chunk) - The company is appealing the delisting and submitted a compliance plan, including a potential reverse stock split, but success is not assured[109](index=109&type=chunk)[111](index=111&type=chunk) - The company does not anticipate declaring cash dividends in the foreseeable future, requiring investors to rely on stock price appreciation for returns[120](index=120&type=chunk) [Cybersecurity](index=30&type=section&id=Item%201C.%20Cybersecurity) The company integrates cybersecurity risk management into its enterprise framework, with Board oversight delegated to the Audit Committee and management led by the COO and CFO - The Board delegates cybersecurity risk oversight to the Audit Committee, which receives regular management reports[142](index=142&type=chunk) - The COO and CFO lead the cybersecurity risk management program at the management level[143](index=143&type=chunk) [Properties](index=31&type=section&id=Item%202.%20Properties) The company's main offices and medium-duty production are in Anaheim, CA, and transit bus production is in Greenville, SC, both in leased facilities Leased Facilities | Location | Size (sq. ft.) | Primary Use | Lease Expiration | | :--- | :--- | :--- | :--- | | Anaheim, CA | 39,043 | Headquarters, Medium-Duty Production | March 2027 | | Greenville, SC | N/A | Transit Bus Production | June 2026 | Part II [Market for Common Equity and Related Matters](index=32&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock was delisted from Nasdaq to the OTC Pink Market in April 2025, with **11** record holders and no anticipated cash dividends - The company's common stock was suspended from Nasdaq on April 15, 2025, now trading on the OTC Pink Market as "PEVM"[149](index=149&type=chunk) - As of May 20, 2025, there were **11** holders of record for the company's common stock[150](index=150&type=chunk) - The company has not paid cash dividends to date and does not plan to in the foreseeable future[151](index=151&type=chunk) [Management's Discussion and Analysis (MD&A)](index=32&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2024, revenue surged to **$31.1 million** driven by the Proterra acquisition, yielding a **$7.1 million** gross profit and **$7.9 million** net income (due to a one-time gain), but financial condition remains precarious with going concern doubts [Results of Operations](index=35&type=section&id=Results%20of%20Operations) FY 2024 revenue increased to **$31.1 million** due to the Proterra acquisition, yielding a **$7.1 million** gross profit and **$7.9 million** net income, primarily driven by a **$38.3 million** bargain purchase gain Consolidated Results of Operations (in thousands) | Metric | FY 2024 | FY 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenues | $31,154 | $3,122 | 897.9% | | Gross Profit (Loss) | $7,055 | $(276) | N/A | | Operating Loss | $(30,968) | $(20,506) | 51.0% | | Bargain Purchase Gain | $38,271 | $0 | N/A | | Net Income (Loss) | $7,932 | $(20,645) | N/A | | Basic EPS | $0.22 | $(0.97) | N/A | - Total revenue increased by **$28.0 million** (**897.9%**), primarily from the Proterra Transit Business Unit acquisition, which contributed **$30.0 million**[161](index=161&type=chunk) - Gross margin improved to **23.6%** in 2024 from **-8.8%** in 2023, largely due to high-margin Proterra inventory sales[166](index=166&type=chunk) - SG&A expenses increased to **$33.8 million** from **$14.9 million**, mainly due to higher salary expenses from increased headcount post-Proterra acquisition[168](index=168&type=chunk) - A **$4.3 million** goodwill impairment charge was recorded in 2024 due to the company's continuously decreasing stock price[169](index=169&type=chunk) - Other income totaled **$42.4 million**, primarily from a **$38.3 million** bargain purchase gain on Proterra and a **$15.2 million** gain on warrant liability fair value change[174](index=174&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) Going concern is in substantial doubt due to recurring losses and **$1.9 million** negative operating cash flow in 2024, with management planning to raise additional capital - Despite a **$7.9 million** net income in 2024, excluding the one-time bargain purchase gain, the company incurred a **$30.3 million** net loss, raising substantial doubt about its going concern ability[195](index=195&type=chunk)[366](index=366&type=chunk) Summary of Cash Flow Activities (in thousands) | Activity | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,946) | $(3,652) | | Net cash used in investing activities | $(10,113) | $(93) | | Net cash generated from financing activities | $9,540 | $6,639 | - Net cash used in investing activities totaled **$10.1 million**, primarily for the **$10.0 million** Proterra acquisition[200](index=200&type=chunk) - Net cash from financing activities was **$9.5 million**, mainly from **$11.1 million** in private placement proceeds, partially offset by debt repayments[201](index=201&type=chunk) [Critical Accounting Policies and Estimates](index=37&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting estimates include impairment of long-lived assets and goodwill (**$4.3 million** impairment in 2024), fair value of derivative liabilities, and product warranty reserves (**$14.3 million** in 2024) - Critical accounting estimates include accounts receivable, impairment of long-lived assets and goodwill, fair value of derivative liabilities, and product warranties[180](index=180&type=chunk) - The company recorded a goodwill impairment of **$4.3 million** in 2024, with no impairment in 2023[188](index=188&type=chunk) - Product warranty reserve significantly increased to **$14.3 million** as of December 31, 2024, from **$289 thousand** in 2023, primarily due to Proterra acquisition obligations[193](index=193&type=chunk)[413](index=413&type=chunk) - Derivative liabilities for convertible debt were valued at **$33 thousand** as of December 31, 2024, down from **$1.2 million** in 2023, yielding a **$641 thousand** fair value gain[191](index=191&type=chunk) [Changes in and Disagreements with Accountants](index=43&type=section&id=Item%209.%20Changes%20In%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) On March 13, 2025, the company changed auditors from Marcum Asia CPAs LLP to Yu Certified Public Accountant PC, with no disagreements but disclosed material weaknesses and an affiliate guarantee - On March 13, 2025, the company dismissed Marcum Asia CPAs LLP and engaged Yu Certified Public Accountant PC as its new independent auditor[207](index=207&type=chunk)[213](index=213&type=chunk) - No disagreements occurred with former auditor Marcum Asia, but reportable events included material weaknesses in internal controls and an affiliate guarantee for SPI Energy Co., Ltd[209](index=209&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk) [Controls and Procedures](index=45&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls were ineffective as of December 31, 2024, due to material weaknesses in internal control over financial reporting, with remediation plans outlined - Management concluded that disclosure controls and procedures were not effective as of December 31, 2024[216](index=216&type=chunk) - Identified material weaknesses include an ineffective control environment, inadequate risk assessment and monitoring, and insufficient financial reporting resources and controls[221](index=221&type=chunk) - Remediation plans involve hiring qualified staff, establishing a formal control framework, and enhancing monitoring processes[222](index=222&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=47&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The company's leadership includes key executives and a five-member Board with three independent directors, overseeing three independent committees and a code of ethics - Key executive officers include Xiaofeng Denton Peng (CEO), Michael Yung (CFO), and Lewis W. Liu (COO)[228](index=228&type=chunk) - The Board of Directors has five members, with Julia Yu, Yongmei (May) Huang, and James Young identified as independent[238](index=238&type=chunk)[311](index=311&type=chunk) - The Board's three key committees (Audit, Compensation, Nominating) are entirely composed of independent directors[243](index=243&type=chunk) - A code of business conduct and ethics applies to all directors, officers, and employees[258](index=258&type=chunk) [Executive Compensation](index=54&type=section&id=Item%2011.%20Executive%20Compensation) In FY 2024, CEO Xiaofeng Peng's total compensation was **$524,000**, with the company maintaining an equity incentive plan for officers, employees, and directors 2024 Named Executive Officer Compensation | Name and Principal Position | Salary ($) | Stock and Options Awards ($) | Total ($) | | :--- | :--- | :--- | :--- | | Xiaofeng Peng (CEO) | 506,000 | 18,000 | 524,000 | | Michael Yung (CFO) | 131,125 | 8,640 | 139,765 | | Lewis W Liu (COO) | 145,159 | 45,726 | 190,885 | - The company maintains a 2021 Omnibus Equity Incentive Plan for granting equity awards to employees, directors, and consultants[272](index=272&type=chunk) - As of December 31, 2024, CEO Xiaofeng Denton Peng held **1,050,000** unexercised options at **$1.72** and **500,000** unearned options at **$0.34**[264](index=264&type=chunk) [Security Ownership](index=60&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%2C%20Management%20and%20Related%20Stockholder%20Matters) As of May 20, 2025, **49,280,432** common shares were outstanding, with CEO Xiaofeng Denton Peng and his controlled entity being the largest beneficial owners - As of May 20, 2025, **49,280,432** shares of common stock were outstanding[286](index=286&type=chunk) Principal Stockholders (as of May 20, 2025) | Name of Beneficial Owner | Percentage Owned | | :--- | :--- | | Xiaofeng Denton Peng (CEO & Chairman) | 26.2% | | Palo Alto Clean Tech Holding Limited | 24.4% | | EdisonFuture, Inc. | 11.2% | | Sherman Development LLC | 8.8% | | ATI Chemicals LLC | 8.8% | | EXO Commodity Solution LLC | 8.8% | | WWJ Group, Inc. | 8.8% | | World Trade Technology LLC | 8.8% | | Barton Global LLC | 6.0% | | All Directors and Named Executive Officers as a group | 26.3% | [Certain Relationships and Related Transactions](index=62&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company engaged in numerous related-party transactions with affiliate SPI Energy Co., Ltd., including inter-company loans and a temporary **$15.0 million** debt guarantee - During 2024, the company borrowed **$1.0 million** from and repaid **$1.9 million** to its affiliate, SPI[304](index=304&type=chunk) - The company lent up to **$3.0 million** to SPI under a loan agreement, which was fully repaid and terminated[307](index=307&type=chunk) - The company guaranteed a **$15.0 million** debt settlement for SPI, which was released in September 2024 without incurring liability[308](index=308&type=chunk)[471](index=471&type=chunk) [Principal Accountant Fees and Services](index=63&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Total audit fees for FY 2024 were **$530,000**, split between former and current auditors, an increase from **$350,000** in 2023, with all services pre-approved Accountant Fees (in thousands) | Fee Category | 2024 | 2023 | | :--- | :--- | :--- | | Audit fees – Marcum Asia CPAs LLP | $250 | $350 | | Audit fees – Yu Certified Public Accountant PC | $280 | $0 | | **Total** | **$530** | **$350** | - **100%** of audit and audit-related services for FY 2024 and 2023 were pre-approved by the Board[315](index=315&type=chunk) Financial Statements [Consolidated Financial Statements](index=71&type=section&id=Consolidated%20Financial%20Statements) FY 2024 consolidated financial statements show improved equity to **$10.3 million** (from a **$4.8 million** deficit) and **$7.9 million** net income, largely due to the Proterra acquisition, despite negative operating cash flow and going concern doubts Key Balance Sheet Data (in thousands) | Account | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $52,005 | $6,016 | | Total Assets | $57,577 | $11,636 | | Total Current Liabilities | $26,219 | $10,881 | | Total Liabilities | $47,257 | $16,475 | | Total Stockholders' Equity (Deficit) | $10,320 | $(4,839) | Key Operations and Cash Flow Data (in thousands) | Account | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Total Revenues | $31,154 | $3,122 | | Net Income (Loss) | $7,932 | $(20,645) | | Net Cash Used in Operating Activities | $(1,946) | $(3,652) | - The 2024 auditor's report includes a going concern paragraph, expressing substantial doubt due to operating losses and negative cash flows[336](index=336&type=chunk) [Notes to the Consolidated Financial Statements](index=76&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) Financial statement notes detail the Proterra acquisition's **$38.3 million** bargain purchase gain, going concern issues, complex convertible notes, related-party transactions, and subsequent events like Nasdaq delisting and new loan agreements - **Going Concern (Note 2):** Significant recurring losses and negative operating cash flow raise substantial doubt about the company's ability to continue as a going concern, with management's plans uncertain[366](index=366&type=chunk)[367](index=367&type=chunk) - **Business Combination (Note 4):** The Proterra transit business acquisition resulted in a **$38.3 million** bargain purchase gain, primarily driving 2024 net income[430](index=430&type=chunk)[431](index=431&type=chunk) - **Convertible Notes (Note 18):** Complex convertible notes with derivative liabilities experienced a March 29, 2024, default event, increasing interest to **18%** and making notes immediately payable[486](index=486&type=chunk)[496](index=496&type=chunk) - **Subsequent Events (Note 25):** Post-year-end, the company's stock was delisted from Nasdaq in April 2025, and a new senior secured convertible promissory note for up to **$6.0 million** was entered in March 2025[528](index=528&type=chunk)[533](index=533&type=chunk)

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.

Phoenix Motor Inc Business Overview - Phoenix Motor Inc is a leading manufacturer of zero-emission, commercial electric vehicles serving the North American market[5] - The company has over 40 million real world miles on heavy duty EVs and over 4 million real world miles on transit buses[5] - Phoenix Motor acquired Proterra's Transit Bus business in January 2024, becoming a leader in the electric transit bus market with over 40% market share[15] Proterra Transit Bus Business - Proterra delivered approximately 200 buses per year from 2020-2022, generating approximately $200 million in revenue per year[18] - The company has a backlog of approximately 400 buses, representing approximately $400 million in revenue[18] - Proterra has delivered over 1,000 cumulative electric transit buses since inception[21] Phoenix Motorcars - Medium Duty Electric Solutions - Phoenix Motorcars has deployed over 140 shuttle buses & trucks[46] - The company has over 50 commercial fleet customers[46] - Phoenix Motorcars has $175 million in revenue from municipalities[97] EdisonFuture – Future Products & Technology Development - EdisonFuture is developing light duty electric solar pickup trucks and vans[80] - The pickup truck roof solar panel has a solar area of 193 m^2 and a production hourly of 031 kwh[82] - The van roof solar panel has a solar area of 405 m^2 and a production hourly of 065 kwh[85]