Phoenix Motor (PEV) - 2024 Q1 - Quarterly Report

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]