8-K
PHOENIX MOTOR INC. (PEVM)
United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
August 15, 2022
Date of Report (Date of earliest event reported)
Phoenix Motor Inc.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 001-41414 | 85-4319789 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| 1500 Lakeview Loop<br><br> <br>Anaheim, CA | 92807 | |
| --- | --- | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code:
(909) 987-0815
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act |
|---|---|
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act |
| --- | --- |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act |
| --- | --- |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.0004 per share | PEV | NASDAQ Capital Market |
| x | Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | |
| --- | --- | |
| ¨ | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | |
| --- | --- |
Item 2.02 Resultsof Operations and Financial Condition.
On August 15, 2022, Phoenix Motor Inc., a Delaware corporation (the “Company”), issued a press release announcing the Company’s financial results for the quarter ended June 30, 2022. A copy of this press release is furnished as Exhibit 99.1 and is incorporated herein by reference.
The information in this Current Report on Form 8-K (including Exhibit 99.1 attached hereto) is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing by the Company, under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as expressly set forth by specific reference in such filing.
Item9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release dated August 15, 2022 issued by Phoenix Motor Inc. |
| 99.2 | Earnings release conference call transcript dated August 15, 2022 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PHOENIX MOTOR INC. | ||
|---|---|---|
| Dated: August 16, 2022 | ||
| By: | /s/ W. Chris Wang | |
| Name: W. Chris Wang | ||
| Title: Chief Financial Officer |
Exhibit 99.1
Phoenix Motor Inc. Announces Second Quarter2022 Financial and Operational Results
Anaheim, California(August 15, 2022) – Phoenix Motor Inc. (Nasdaq: PEV) (“Company” or “Phoenix”), a leader in manufacturing of all-electric, medium-duty vehicles, today announced its financial results for the second quarter ended June 30, 2022.
Financial Highlights Second Quarter
| · | Revenue totaled $1.5 million for the second quarter,<br>an increase of approximately 130% compared to the prior-year period of $653,000, primarily driven by sales of electric forklifts |
|---|---|
| · | Gross profit increased to $325,000 in the second<br>quarter, compared to a loss of $159,000 in the second quarter of 2021, with gross margin improvement to 21.7% from (24.3%), primarily<br>driven by higher margin electric forklift sales |
| --- | --- |
| · | Net losses decreased to $1.9 million in the second<br>quarter, an improvement of more than 16% compared to a loss of $2.3 million in the prior-year period |
| --- | --- |
| · | Total assets were $24.6 million as of June 30,<br>2022 |
| --- | --- |
| · | Cash and cash equivalents were $7.8 million as<br>of June 30, 2022 |
| --- | --- |
Financial Highlights Six Months Ending June30
| · | Revenues for the six months ended June 30, 2022<br>were $2.2 million representing an increase of 93%, year-over-year |
|---|---|
| · | Gross profit increased to $445,000 for the recent<br>six-month period, compared to a loss of $107,000 for the prior-year period |
| --- | --- |
| · | EBITDA for the first six months of 2022 was a<br>loss of $3.4 million, about the same as in the first six months of 2021 |
| --- | --- |
| · | Phoenix had net losses of $4.2 million during<br>the six-month period ending June 30, 2022, which was unchanged compared to the prior-year period |
| --- | --- |
Q2 Highlights
| · | Raised aggregate gross proceeds of $15.75 million<br>from the Phoenix IPO on June 8, 2022 |
|---|---|
| · | Backlog for vehicles and electric drive systems<br>increased 40% to 88 units compared to the first quarter of 2022 |
| --- | --- |
| · | Initiated strategic partnership with IAT Automotive<br>Technology as part of next generation product development |
| --- | --- |
“We are excited to have completed our initial public offering in the second quarter, while accomplishing strong revenue growth as we continue to build and reshape the company,” Phoenix CEO, Dr. Lance Zhou commented. “We are busy working not only on our new 4^th^ generation drivetrain but also on exciting new additions to our product offerings in the quarters ahead. We are forging important partnerships with service providers, suppliers and customers. We have been expanding our management team by adding seasoned and established EV industry veterans. We are taking all of these measures to position Phoenix Motorcars for tremendous growth in the quarters ahead as we capitalize both on our successful past experience, as well as the emerging industry tailwinds supported by recently-passed legislation in the U.S. and elsewhere encouraging this green energy transition.”
Conference Call Information
Phoenix Motor will host a conference call today at 5:00 PM ET to discuss the results. To access the call, participants may dial 1-888-660-6373, international callers may use 1- 929-203-1975, and use conference ID: 3457210.
About Phoenix Motor Inc.
Phoenix Motor Inc., a pioneer in the electric vehicles (“EVs”) industry, through its wholly owned subsidiaries, designs, assembles, and integrates electric drive systems and light and medium duty EVs and markets and sells electric vehicle chargers for the commercial and residential markets. Phoenix operates two primary brands, “Phoenix Motorcars” focused on commercial products including medium duty EVs, chargers and electric forklifts, and “EdisonFuture” which intends to offer light-duty EVs. As an EV pioneer, the Company delivered its first commercial EV in 2014 and deployed the very first zero emission airport shuttle bus at the Los Angeles International Airport (“LAX”); the LAX fleet has grown to 39 electric shuttle buses, one of the largest of its kind. Los Angeles Air Force Base in El Segundo and NASA’s Jet Propulsion Laboratory in Pasadena, California are among customers for the Company’s first-generation E Series Zeus EVs. Phoenix intends to be a leading designer, developer and manufacturer of electric vehicles and electric vehicle technologies. For more information, please visit: www.phoenixmotorcars.com and www.edisonfuture.com.
Forward-Looking Statement
This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are no guarantee of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company’s expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company’s ability to convert concept trucks and vans into production and sales; the Company’s product development timeline and expected start of production; development of competitive trucks and vans manufactured and sold by the Company’s competitors and major industry vehicle companies; the Company’s ability to scale in a cost-effective manner; the Company’s future capital requirements and sources and uses of cash; the Company’s ability to obtain funding for its future operations; the Company’s financial and business performance; changes in the Company’s strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects and plans; the implementation, market acceptance and success of its business model; expectations regarding the Company’s ability to obtain and maintain intellectual property protection and not infringe on the rights of others; and other risks contained in the Offering prospectus and reports filed by the Company with the SEC. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company’s filings with the SEC, including those set forth in the Risk Factors section of the Company's registration statement and Offering prospectus, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.
Investor Relations Contacts:
Mark Hastings, SVP & Head of Investor Relations
Sioban Hickie, ICR Inc.
PhoenixIR@icrinc.com
Phoenix Motor, Inc.
Consolidated Statement of Operations
For the three and six months ended June 30, 2022 and June 30, 2021
(Dollars in thousands, except per share data)
| Three Months Ended | Six Months Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||
| Revenues | $ | 1,499 | $ | 653 | $ | 2,170 | $ | 1,126 | ||||
| Cost of revenues | 1,174 | 812 | 1,725 | 1,233 | ||||||||
| Gross profit (loss) | 325 | (159 | ) | 445 | (107 | ) | ||||||
| Operating expenses: | ||||||||||||
| Selling, general and administrative | 2,290 | 2,142 | 5,313 | 4,099 | ||||||||
| Operating loss | (1,965 | ) | (2,301 | ) | (4,868 | ) | (4,206 | ) | ||||
| Other income (expense): | ||||||||||||
| Interest (expense) income, net | (2 | ) | 1 | (4 | ) | 2 | ||||||
| Others | 54 | — | 639 | — | ||||||||
| Total other income, net | 52 | 1 | 635 | 2 | ||||||||
| Loss before income taxes | (1,913 | ) | (2,300 | ) | (4,233 | ) | (4,204 | ) | ||||
| Income tax provision | (12 | ) | (1 | ) | (14 | ) | (3 | ) | ||||
| Net loss | $ | (1,925 | ) | $ | (2,301 | ) | $ | (4,247 | ) | $ | (4,207 | ) |
| Net loss per share of common stock: | ||||||||||||
| Basic and Diluted | $ | (0.11 | ) | $ | (0.13 | ) | $ | (0.24 | ) | (0.24 | ) | |
| Weighted average shares outstanding | 17,984,615 | 17,500,000 | 17,740,984 | 17,500,000 |
Phoenix Motor, Inc.
Consolidated Balance Sheet
As of June 30, 2022, and December 31, 2021
| December 31, 2021 | |||||
|---|---|---|---|---|---|
| Assets | |||||
| Current assets | |||||
| Cash and cash equivalents | 7,764 | $ | 2,683 | ||
| Accounts receivable, net | 1,250 | 1,201 | |||
| Inventories | 3,796 | 2,225 | |||
| Prepaid expenses and other current assets | 3,741 | 528 | |||
| Total current assets | 16,551 | 6,637 | |||
| Restricted cash, non-current | 250 | — | |||
| Property and equipment, net | 1,484 | 2,205 | |||
| Intangible assets, net | 2,014 | 2,323 | |||
| Goodwill | 4,271 | 4,271 | |||
| Total assets | 24,570 | $ | 15,436 | ||
| Liabilities | |||||
| Current liabilities | |||||
| Accounts payable | 2,353 | $ | 1,786 | ||
| Accrued liabilities | 880 | 779 | |||
| Advance from customers | 794 | 803 | |||
| Deferred revenue | 487 | 714 | |||
| Warranty reserve | 340 | 360 | |||
| Long-term borrowing, current portion | 10 | 10 | |||
| Total current liabilities | 4,864 | 4,452 | |||
| Long-term borrowings | 165 | 756 | |||
| Total liabilities | 5,029 | 5,208 | |||
| Commitments and contingencies (Note 10) | |||||
| Equity | |||||
| Common stocks, par 0.0004, 450,000,000 shares authorized, 19,600,000 and 17,500,000 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | 8 | 7 | |||
| Subscription receivable | — | (7 | ) | ||
| Additional paid in capital | 39,637 | 26,085 | |||
| Accumulated deficit | (20,104 | ) | (15,857 | ) | |
| Total equity | 19,541 | 10,228 | |||
| Total liabilities and equity | 24,570 | $ | 15,436 |
All values are in US Dollars.
Phoenix Motor, Inc.
Consolidated Statement of Cash Flows
For the six months ended June 30, 2022 and June 30, 2021
| Six months ended June 30, | ||||||
|---|---|---|---|---|---|---|
| 2022 | 2021 | |||||
| Cash flows from operating activities: | ||||||
| Net loss | (4,247 | ) | (4,207 | ) | ||
| Adjustments to reconcile net loss to cash used in operating activities: | ||||||
| Depreciation and amortization | 855 | 862 | ||||
| Gain on disposal of fixed assets | (54 | ) | — | |||
| Forgiveness of PPP loan | (586 | ) | — | |||
| Stock-based compensation expenses | 115 | 45 | ||||
| Changes in operating assets and liabilities: | ||||||
| Accounts receivable | (49 | ) | (235 | ) | ||
| Inventories | (1,607 | ) | (289 | ) | ||
| Prepaid expenses and other assets | (3,213 | ) | (2,477 | ) | ||
| Accounts payable | 567 | 199 | ||||
| Accrued liabilities | 101 | 81 | ||||
| Warranty reserve | (20 | ) | (85 | ) | ||
| Deferred revenue | (227 | ) | (138 | ) | ||
| Advance from customer | (9 | ) | 25 | |||
| Net cash used in operating activities | (8,374 | ) | (6,219 | ) | ||
| Cash flows from investing activities: | ||||||
| Proceeds from disposal of fixed assets | 273 | — | ||||
| Purchase of property, plant and equipment | (8 | ) | (458 | ) | ||
| Net cash generated from (used in) investing activities | 265 | (458 | ) | |||
| Cash flows from financing activities: | ||||||
| Proceeds from borrowings | — | 586 | ||||
| Proceeds from related party | 1,676 | — | ||||
| Repayment to related party | (1,676 | ) | — | |||
| Repayment of borrowings | (5 | ) | (8 | ) | ||
| Proceeds from IPO | 13,438 | — | ||||
| Proceeds from capital injection by a shareholder | 7 | — | ||||
| Net cash generated from financing activities | 13,440 | 578 | ||||
| Increase (Decrease)in cash, cash equivalents and restricted cash | 5,331 | (6,099 | ) | |||
| Cash, cash equivalents and restricted cash at beginning of the period | 2,683 | 15,699 | ||||
| Cash, cash equivalents and restricted cash at end of the period | 8,014 | 9,600 | ||||
| Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets | ||||||
| Cash and cash equivalents | 7,764 | 9,600 | ||||
| Restricted cash | 250 | — | ||||
| Total cash, cash equivalents, and restricted cash | 8,014 | 9,600 | ||||
| Supplemental cash flow information: | ||||||
| Interest paid | — | — | ||||
| Income tax paid | 3 | 3 | ||||
| Non-cash investing activities: | ||||||
| Inventories transferred to property and equipment | 36 | — |
Exhibit 99.2
Script: 2Q 2022 Earnings Call
August 15, 2022
Operator
Welcome to the second quarter 2022 Phoenix Motor Inc earnings conference call. All participants are in a listen-only mode. All questions can be directed after the call to PhoenixIR@icrinc.com. I will now turn the call over to Senior Vice President and Head of Investor Relations, Mark Hastings.
Mark Hastings,SVP & Head of IR, Phoenix Motorcars
Thank you, and welcome everyone to our second quarter earnings call. This is our first earnings call as a publicly traded company and we are excited to have you join us.
First, let me introduce the members of the Phoenix Motorcars leadership team taking part in today's call. We will hear first from Dr. Lance Zhou, our Chief Executive Officer, and then Chris Wang, our Chief Financial Officer.
Before I turn it over to Dr. Zhou, please allow me to give a little background on Phoenix for those of you who are not familiar with us. The company was founded in 2003 and is headquartered in Anaheim, California. Phoenix Motorcars’ goal is to be a leader in sustainable and zero-emission transportation, with a range of products available to our customers including shuttle buses, delivery vans, school buses and work trucks. Phoenix is achieving this through the use of standardized platforms and an asset light strategy, which help us to deliver our products at a lower cost, while maintaining focus on energy-efficient, intelligent and innovative designs.
We market our vehicles through two brands:
The first, PhoenixMotorcars, is our legacy line which offers various all-electric, medium duty, commercial vehicles to the market, with products such as buses, utility and service trucks, box trucks, walk-in vans and refrigerated trucks. We sell our products as complete vehicles as well as in kit form to other entities.
Today, Phoenix Motorcar’s customers are sourced from a wide range of industries with applications such as airport parking, hotels, campuses, municipalities, ports, micro-transit services and dial-a-ride applications. Phoenix today serves over 50 commercial fleet customers, to whom we have deployed over 100 shuttle buses and trucks, with combined miles traveled of over 3 million miles.
We are currently developing our 4^th^ generation drivetrain, for the Phoenix Motorcars brand, which is expected to be introduced in 2023. These 4^th^ gen vehicles will have greatly enhanced reliability and be cost competitive without subsidies. The ability to be cost competitive without subsidies is a key focus as we seek to meet future demand as the markets and EV technologies move from an emerging market phase to a steadier state market phase.
Phoenix’s second vehicle brand, which is currently in development is called EdisonFuture. This is a light-duty consumer line that is expected to be brought to market in 2024. EdisonFuture’s EF1 pickup truck and van debuted last fall at the Los Angeles Auto Show, previewing what will be our solar-powered, light-duty vehicle offering. Our EdisonFuture vehicles will provide cutting edge-technology and be marketed for personal and commercial use in the form of pickup trucks, SUVs and vans.
In addition to our vehicle lines, Phoenix also produces a wide range of affordable and reliable battery-powered forklifts, which boast best-in-class warranties.
And finally, as one of the early movers in the medium-duty EV industry, we have experienced firsthand how infrastructure can be a barrier to the successful electrification of vehicles. As a result, Phoenix also offers products and services through our ‘EV Infrastructure Solutions’ business, which targets both commercial and consumer customers offering ‘one-stop shop-solutions’ through a full charging infrastructure solution portfolio, that extends beyond our clients to include the retail sector with Level 1 and Level 2 chargers.
At its core, Phoenix is an engineering-focused company with patented technologies to address the market’s need for the next generation of pickup trucks, SUVs and commercial vehicles. We have constructed our company to be flexible and asset light. Our asset light approach extends to our production model and our business procedures, as well as the selection of key suppliers and the allocation of cash. In short, this means we’re building a scalable business, maximizing the returns on our capital, while also deploying industry-leading technology. We've put together a management team that's both seasoned and established in the EV sector, putting us in an excellent position in the high-growth commercial electric bus, delivery truck and consumer sectors.
With that, I'll now turn the call over to Dr. Lance Zhou to give some insight into his background and his vision for reshaping our company.
Dr. Lance Zhou,Chief Executive Officer
Thank you, Mark. And thank you for joining us today.
I am Dr. Lance Zhou, CEO of Phoenix Motor Inc. For those who do not know me, I joined the Phoenix team earlier this year. I come to the company with over 30 years of automotive industry experience. My previously experience includes most recently serving as CEO of Karma Automotive. Prior to heading up Karma, I served as CEO and President, of Beijing Foton-Daimler Automotive, Level 1 Vice President of Daimler Global and as CEO of Naveco – IVECO, in China.
I have designed and developed three commercial vehicle platforms from concept to final production to meet customer demand in the Class 3 to Class 7 segments. I developed my first EV van in 2011 for IVECO in China, and I also launched a luxury high performance electric sports car with Karma. Given my prior experience I am excited to join Phoenix as it enters its next stage of growth and development.
We are excited to have completed our initial public offering in the second quarter, while accomplishing strong revenue growth as we continue to build and reshape the company. We are busy working not only on our new 4^th^ generation drivetrain but also on exciting new additions to our product offerings in the quarters ahead. We are forging important partnerships with service providers, suppliers and customers. We have been expanding our management team by adding seasoned and establish EV industry veterans. We are taking all of these measures to position Phoenix Motorcars for tremendous growth in the quarters ahead as we capitalize both on our successful past experience, as well as the emerging industry tailwinds supported by recently passed legislation in the U.S. and elsewhere encouraging this green energy transition.
I will now turn the call over to our CFO, Chris Wang.
Chris Wang,Chief Financial Officer
Thank you, Lance.
Phoenix is not a pre-revenue company like many others in our sector. We have a long history of making and delivering completed products to the total satisfaction of customers. We have a stable and loyal customer base and we provide a simple one-stop-shopping solution for clients by offering vehicles, chargers, and complete service support.
For the three months ended June 30, 2022, our revenues were $1.5 million, compared to $653 thousand for the same period in 2021. Our total revenue increased by 130%, principally driven by the expanded sale of forklifts during the recent quarter. We delivered two EVs during the second quarter of 2022, the same as in the second quarter of 2021.
For the first six months of 2022, our revenues were $2.2 million, compared to $1.1 million in 2021. The 93% increase in revenues was primarily driven by the increase in sales of forklifts.
For the second quarter of 2022, our cost of revenues was $1.2 million, compared to $0.8 million in the year-ago quarter. Cost of revenues increased by $400 thousand, or 45%, primarily driven by higher costs from forklift products, partially offset by lower direct costs associated with EVs due to higher efficiency in production during the recent quarter.
For the six months ended June 30, 2022 our cost of revenues was $1.7 million, up from $1.2 million, driven by higher forklift costs.
Our gross margin comparisons are as follows: for this analysis, Gross Profit is revenues minus cost of revenues and the Gross Margin percentage is Gross Profit divided by revenues.
For the second quarter, our gross margin improved significantly to 21.7% from negative 24.3% in the year-ago quarter, driven by improved margins across all products categories, particularly attributable to the 19.2% gross margin of forklifts products.
For the six months ended June 30, 2022, our gross margin similarly improved to 20.5% from negative 9.5%, again driven by improved margins across all products categories.
Operating expenses, consisting of selling, general, administrative expenses, were $2.3 million in the most recent quarter compared with $2.1 million a year ago. The increase in operating expenses was mainly due to increases in payroll and expenses associated with becoming a public company.
For the first six months of 2022, our operating expenses were $5.3 million, up from $4.1 million in 2021. The increase in operating expenses was driven by an increase in salaries and wages, professional service fees and insurance expenses.
Our other income for the first six months of 2022 were $0.6 million, primarily due to recognition of a forgiven PPP loan.
As a result of the above factors, the net loss for the second quarter of 2022 was $1.9 million, narrower than last year’s $2.3 million loss.
For the first six months of 2022, the net was $4.2 million, the same as in the first half of 2021.
As we’re diligently implementing various measures to boost revenues and control costs and expenses, we’re more excited than ever about the bright and green future of Phoenix.
Thank you so much for joining our call today. I will now turn it back over to Mark.
Mark Hastings,SVP & Head of IR, Phoenix Motorcars
Thanks, Chris.
As we wrap up the call today, I hope we have conveyed our enthusiasm for the outlook here at Phoenix. We are reshaping and refocusing the company under Dr. Zhou’s leadership and are well-positioned to benefit from, as well as be a leader in, the transition to a greener energy future.
If you have any questions after the call today, please direct them to PhoenixIR@icrinc.com. Thank you to everyone who joined the call today. We look forward to sharing more of the Phoenix story and our progress in the coming quarters.
Operator
This concludes our call. You may now disconnect.