PHOENIX MOTOR INC.

PHOENIX MOTOR INC. (PEV) Implements 1-for-10 Reverse Stock Split: A Strategic Move to Regain Nasdaq Compliance Amidst Financial Headwinds

Phoenix Motor Inc. (PEV), a manufacturer of electric buses and trucks, is implementing a 1-for-10 reverse stock split. This significant corporate action primarily aims to regain compliance with Nasdaq's minimum bid price requirement. While a tactical maneuver, it highlights the company's ongoing challenges and its strategic effort to improve its market standing.

Event Description Phoenix Motor Inc. will implement a 1-for-10 reverse stock split of its common stock. This means ten existing shares will automatically convert into one new share. The company's primary goal with this action is to increase its per-share trading price, meeting Nasdaq's minimum bid price requirement for continued listing. The common stock will have a new CUSIP number: 71910P401. The company will round up fractional shares resulting from the reverse stock split to the nearest whole share.

Key Dates for the Reverse Stock Split

• Stockholder Authorization: December 23, 2025
• Board of Directors Approved Ratio: January 13, 2026
• Delaware Filing: February 9, 2026
• Effective Date: 4:01 p.m. Eastern Time on February 13, 2026
• Trading on Split-Adjusted Basis Begins: Market open on February 17, 2026

Impact of the Reverse Stock Split The reverse stock split carries distinct implications for both the company and its shareholders.

• For Phoenix Motor Inc.:

  • The split aims to elevate the per-share price above Nasdaq's $1.00 minimum bid requirement, helping the company regain compliance and avoid potential delisting.
  • A higher stock price could enhance the company's appeal to institutional investors, potentially increasing trading liquidity and improving market credibility.
  • However, the reverse split alone does not change the company's underlying valuation or operational performance. This action responds to the company's stock trading at low levels, which often reflects investor concerns about financial performance or future growth prospects.

• For Shareholders:

  • Shareholders will own fewer shares, with their total number decreasing by a factor of ten. The price per share is expected to increase proportionally. For instance, an investor holding 100 shares valued at $0.50 each (totaling $50) would, after the split, own 10 shares valued at $5.00 each.
  • The company will round up fractional shares to the nearest whole share.
  • No action is required for electronically held shares; the adjustment will occur automatically. For physical certificates, shareholders may contact VStock Transfer, LLC, the company's transfer agent, for new certificates, though this is not mandatory.

Financial Implications Shareholders can expect their total investment value to remain unchanged immediately following the reverse stock split. The proportional increase in the per-share price will offset the decrease in the number of shares. The primary financial objective of this action is to increase the per-share price to meet Nasdaq's minimum bid requirement. It's worth noting that this filing doesn't dive into the company's broader financial performance, so we don't have specific numbers here on things like revenue, profitability, cash burn, or debt levels.

Key Takeaways for Investors

1. Nasdaq Compliance is Primary: The immediate goal is to regain and maintain Nasdaq listing compliance, a crucial step for market access and investor confidence.
2. Underlying Challenges Persist: A reverse split often signals underlying financial or operational challenges. Investors should critically assess Phoenix Motor's recent financial results, cash burn, debt levels, and competitive landscape, as the split itself does not improve fundamental business performance.
3. Sustainability Risks: There is no guarantee the stock price will sustain above the Nasdaq minimum post-split without fundamental business improvements. The company must also meet other Nasdaq listing requirements beyond the bid price.
4. Operational Strategy is Crucial: The filing lacks details on Phoenix Motor's strategy to improve its core business, such as concrete plans for revenue growth, achieving profitability, managing operating expenses, or securing additional capital. These elements are critical for long-term value creation.
5. Monitor Future Disclosures: Investors should closely monitor Phoenix Motor's upcoming financial reports for signs of operational improvement, progress toward profitability, and a clear strategy for sustainable growth. The true test will be whether the company can leverage this tactical move to attract new capital and execute a robust business plan that justifies a higher valuation.