Phoenix Motor Reports Material Agreement, Asset Deal, Unregistered Equity Sales

TL;DR

**PEV just did an asset deal and sold new shares, watch for dilution.**

AI Summary

Phoenix Motor Inc. (PEV) filed an 8-K on January 17, 2024, reporting a material definitive agreement, completion of an acquisition or disposition of assets, and unregistered sales of equity securities, all related to events on January 11, 2024. This matters to investors because these actions, particularly the unregistered sales of equity, could dilute existing shareholder value or signal a need for capital, impacting the stock's future performance.

Why It Matters

The filing indicates significant corporate actions, including potential dilution from equity sales, which could affect the stock price and ownership percentage for current and prospective shareholders.

Risk Assessment

Risk Level: medium — The unregistered sales of equity securities could dilute existing shareholder value, posing a moderate risk to current investors.

Analyst Insight

A smart investor would monitor for further details on the material agreement and asset transaction, and assess the impact of the unregistered equity sales on share dilution before making investment decisions in PEV.

Key Numbers

• $0.0004 — Par Value per Share (The par value of Phoenix Motor Inc.'s common stock.)

Key Players & Entities

• Phoenix Motor Inc. (company) — the registrant filing the 8-K
• PEV (company) — trading symbol for Phoenix Motor Inc.
• January 11, 2024 (date) — date of the earliest event reported in the 8-K
• January 17, 2024 (date) — date the 8-K was filed
• $0.0004 (dollar_amount) — par value per share of Common Stock

Forward-Looking Statements

• The unregistered sales of equity securities will lead to a short-term dip in PEV's stock price due to dilution concerns. (PEV) — medium confidence, target: 2024-02-17
• Phoenix Motor Inc. will provide more details on the material definitive agreement and asset transaction in future filings. (Phoenix Motor Inc.) — high confidence, target: 2024-04-17

FAQ

Key Financial Figures

• $0.0004 — h registered Common Stock, par value $0.0004 per share PEV NASDAQ Capital Market
• $1.15 — Common Stock ") at a purchase price of $1.15 per share, and Common Stock Purchase Wa
• $2.00 — shares of Common Stock, exercisable at $2.00 per share (the " Warrant Shares " and t
• $4,000,000, b — the Private Placement of approximately $4,000,000, before deducting offering expenses payabl
• $3.5 million — t Business Unit for a purchase price of $3.5 million. The Company also assumed certain of Pr

Filing Documents

• tm242359d1_8k.htm (8-K) — 39KB
• tm242359d1_ex4-1.htm (EX-4.1) — 78KB
• tm242359d1_ex10-1.htm (EX-10.1) — 87KB
• tm242359d1_ex99-1.htm (EX-99.1) — 8KB
• image_001.jpg (GRAPHIC) — 4KB
• image_003.jpg (GRAPHIC) — 4KB
• 0001104659-24-004512.txt ( ) — 441KB
• pev-20240111.xsd (EX-101.SCH) — 3KB
• pev-20240111_lab.xml (EX-101.LAB) — 33KB
• pev-20240111_pre.xml (EX-101.PRE) — 22KB
• tm242359d1_8k_htm.xml (XML) — 3KB

01. Entry into a Material Definitive

Item 1.01. Entry into a Material Definitive Agreement. Securities Purchase Agreements On January 11, 2024, Phoenix Motor Inc., a Delaware corporation (the " Company " or " Phoenix ")), entered into separate Securities Purchase Agreements (the " Securities Purchase Agreements ") with four accredited investors identified therein (each, a " Purchaser " and collectively, the " Purchasers "), relating to a private placement (the " Private Placement ") by the Company of an aggregate of 3,478,260 shares of the Company's common stock (the " Common Stock ") at a purchase price of $1.15 per share, and Common Stock Purchase Warrants (" Warrants ") to purchase up to 13,913,043 shares of Common Stock, exercisable at $2.00 per share (the " Warrant Shares " and together with the Warrants and shares of Common Stock, the " Securities "). The Warrants are immediately exercisable, in whole or in part, for a term of five years following issuance and may be exercised on a cashless basis if a resale registration statement is not then effective and available for the resale of the Warrant Shares. The exercise price and number of Warrant Shares issuable upon exercise of the Warrants are subject to adjustment upon the occurrence of certain events, such as stock splits, stock dividends, split-ups, recapitalizations, reclassifications or the like. The Company received gross proceeds from the Private Placement of approximately $4,000,000, before deducting offering expenses payable by the Company. The Company used a portion of the proceeds for the acquisition of the Proterra Transit Business Unit (as described in Item 2.01 below) and for working capital. The foregoing descriptions of the Securities Purchase Agreements and the Warrants do not purport to describe all of the terms and provisions thereof and are qualified in their entirety by reference to the form of Securities Purchase Agreement and the form of Warrant which are filed as Exhibits 10.1 and 4.1, respectively, to this Current R

01 Completion of Acquisition or

Item 2.01 Completion of Acquisition or Disposition of Assets. As previously reported, on November 13, 2023, the Company entered into two Asset Purchase Agreements (collectively, the " Asset Purchase Agreements ") with Proterra, Inc. and its subsidiary, Proterra Operating Company, Inc. (collectively, " Proterra "), pursuant to which Phoenix agreed to purchase substantially all of the assets of the Proterra Transit business line. Pursuant to the separate Asset Purchase Agreements, Phoenix agreed to purchase: (i) the Proterra Transit Business Unit, which is the business unit of Proterra that designs, develops and sells electric transit buses as an original equipment manufacturer for North American public transit agencies, airports, universities and other commercial transit fleets (" Proterra Transit Business Unit "), and (ii) the Proterra Battery Lease Agreements, which are all of the battery lease transferred contracts to which Proterra is a party as the "lessor" thereunder, used in connection with deployed Proterra electric transit buses (" Proterra Battery Lease Agreements "). On January 11, 2024, the Company completed the acquisition of the Proterra Transit Business Unit for a purchase price of $3.5 million. The Company also assumed certain of Proterra's obligations associated with the purchased Proterra Transit Business Unit, free and clear of liens, claims, encumbrances, other than certain specified cure payments and other liabilities of Proterra related to the Proterra Transit Business Unit. The parties plan to close the purchase of the Proterra Battery Lease Agreements on or about January 23, 2024. On August 7, 2023, Proterra Inc. and Proterra Operating Company, Inc. filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). The parties received Bankruptcy Court approval for the sale of the Proterra Transit Business Unit a

02. Unregistered Sales of Equity Securities

Item 3.02. Unregistered Sales of Equity Securities. As described more fully in

01 above, the Securities are not registered under the Securities Act of 1933, as amended (the " Securities

Item 1.01 above, the Securities are not registered under the Securities Act of 1933, as amended (the " Securities Act "), and were offered and sold in a private placement pursuant to an exemption from the registration requirements of Section 5 of the Securities Act contained in Section 4(a)(2) thereof and/or Regulation D thereunder. Item 7.01 Regulation FD Disclosure On January 12, 2024, the Company issued a press release announcing the closing of the purchase of the Proterra Transit Business Unit assets. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated by reference herein. The information included in this Form 8-K under Item 7.01 is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to liabilities of that Section, and shall not be deemed to be incorporated by reference into any of the Company's filings under the Securities Act, or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings unless the registrant specifically states that the information is to be considered "filed" under the Exchange Act or incorporates it by reference into a filing under the Exchange Act or the Securities Act. Cautionary Note Regarding

Forward-Looking Statements

Forward-Looking Statements The Securities and Exchange Commission encourages registrants to disclose forward-looking information so that investors can better understand the future prospects of a registrant and make informed investment decisions. This Current Report on Form 8-K and exhibits may contain these types of statements, which are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and which involve risks, uncertainties and reflect the Registrant's judgment as of the date of this Current Report on Form 8-K. Forward-looking statements may relate to, among other things, operating results and are indicated by words or phrases such as "expects," "should," "will," believe, anticipate, estimate, predict, potential, plan, seek, and similar words or phrases. These at the date of this Current Report on Form 8-K. Investors are cautioned not to rely unduly on forward-looking statements when evaluating the information presented within.

01

Item 9.01. Financial Statement and Exhibits. (d) Exhibits. Exhibit No. Description 4.1 Form of Warrant dated January 11, 2024 10.1 Securities Purchase Agreement dated January 11, 2024 99.1 Press Release dated January 12, 2024 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) 3 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: January 17, 2024 By: /s/ Chris Wang Name: Chris Wang Title: Chief Financial Officer 4

View Full Filing

View this 8-K filing on SEC EDGAR