PHOENIX MOTOR INC. 8-K

What Happened
Phoenix Motor Inc. announced on June 1, 2026 that it entered into a Term Loan, Security and Guaranty Agreement with Concrete Jungle Ltd. providing a single-draw term loan facility with $4.0 million in net proceeds (evidenced by a Senior Secured Term Loan Discount Note with a $5.0 million face amount). The loan bears a 10.0% base interest rate, matures May 31, 2027, and was issued with a $1.0 million original issue discount. The financing includes a Common Stock Purchase Warrant, registration rights, an exclusive option for the lender to acquire 49% of PhoenixEV equity, pledges of subsidiary interests, and governance covenants allowing the lender to designate board members of PhoenixEV. Concurrently, Phoenix settled its dispute with J.J. Astor & Co., paying $3.8 million in cash and transferring four electric buses (stated consideration $870,000) to satisfy prior indebtedness.

Key Details

• Term Loan: $4,000,000 single-draw facility; Note face amount $5,000,000; $1,000,000 original issue discount; interest rate 10.0% per annum; maturity May 31, 2027.
• Warrant: right to purchase 80,896 shares at $3.00 per share; five-year term; cash or cashless exercise; registration rights granted to enable resale.
• Equity Option: exclusive option to acquire 49.0% of PhoenixEV (fully diluted) with an exercise price of $2,250,000, payable by reducing the Note face amount from $5,000,000 to $2,500,000 upon closing; five-year option term.
• J.J. Astor settlement: Company paid $3,800,000 cash and transferred four electric buses (consideration $870,000 applied to indebtedness); repurchase obligation of the buses within 90 days for $870,000 plus certain costs; JJA released liens and agreed to dismiss related litigation.

Why It Matters
This transaction provides near-term liquidity by replacing prior obligations (primarily to J.J. Astor) and funds transaction costs, but it also creates a secured, relatively high‑cost short-term debt obligation and potential dilution. The loan is secured by first‑priority liens on substantially all assets and includes covenants and lender governance rights (board designations at PhoenixEV) that could affect corporate control at the PhoenixEV level. The issued warrant and the equity option give the lender potential upside through equity exposure — investors should note the number of shares underlying the warrant and the 49% equity option when assessing dilution risk. The J.J. Astor settlement resolves prior litigation and releases liens, reducing legal overhang tied to the company’s previous financing.