Business context and reporting period
This is NextGen Acquisition Corporation’s 10-K, not an operating-company 10-K for Xos, Inc. NextGen was a shell company formed to pursue a business combination and reported no operating revenue or business operations. The financial period covers inception on July 29, 2020 through December 31, 2020; it does not provide a separate Q4 result or a prior-year comparable period.
On February 21, 2021, after year-end, NextGen agreed to combine with Xos. The proposed transaction contemplated $1.276 billion of pre-transaction Xos equity value and a $220 million PIPE investment, subject to closing conditions. The filing’s 2020 financial statements do not include Xos operating results.
Key financial metrics
| Metric | Period or date | Amount |
|---|---|---|
| Operating revenue | Inception through Dec. 31, 2020 | $0 |
| Operating expenses | Inception through Dec. 31, 2020 | $360,420 |
| Net loss | Inception through Dec. 31, 2020 | $352,446 |
| Net gain on trust investments | Inception through Dec. 31, 2020 | $7,974 |
| Net cash used in operating activities | Inception through Dec. 31, 2020 | $725,850 |
| Cash at year-end | Dec. 31, 2020 | $821,331 |
| Trust account investments | Dec. 31, 2020 | $375,007,974 |
| Total assets | Dec. 31, 2020 | $376,272,470 |
| Total liabilities | Dec. 31, 2020 | $13,247,735 |
| Shareholders’ equity | Dec. 31, 2020 | $5,000,005 |
Cash flows included $375 million invested in the trust account and $376.5 million of net financing cash inflow, resulting in a $821,331 increase in cash. Current assets were $1.264 million and current liabilities $122,735; management described working capital as approximately $1.2 million. The balance sheet classified $358.0 million of redeemable Class A shares as temporary equity. The filing reports no long-term debt at year-end; the $300,000 sponsor note used before the IPO had been repaid.
No operating margin or meaningful year-over-year comparison is available because NextGen had no operating business and this was its first reporting period. Deferred underwriting commissions were $13.125 million, payable from the trust only if a business combination closes. A sponsor note permitting up to $1 million in borrowing was issued after year-end; the filing reports no amount outstanding under it as of the filing.
Material changes, outlook and risks
- NextGen raised $375 million gross through its October 2020 IPO and November over-allotment; $375 million was placed in the trust account. It also raised $9.5 million from private-placement warrants. Total IPO offering costs were approximately $21.1 million, including $13.125 million of deferred underwriting commissions.
- Management believed available working capital and potential sponsor or affiliate borrowing would fund expenses through the earlier of a business combination or one year from filing. Such affiliate funding was not committed, apart from the post-year-end note facility.
- The company had to complete a business combination by October 9, 2022 or redeem public shares and liquidate. If no combination closes, warrants may expire worthless; creditor claims could reduce shareholder distributions.
- Principal disclosed risks include transaction completion and financing uncertainty, public-share redemptions, competition for targets, dilution and warrant overhang, conflicts of interest among sponsor and management, and COVID-19-related market and execution disruption. Sponsor indemnification for certain trust claims may be limited, and its ability to pay was not verified.
- The proposed Xos transaction’s closing conditions and final financing, dilution, and redemption effects remained unresolved. The 22 million-share PIPE was subject to closing and included 2 million shares owned by certain Xos officers.
- The filing states disclosure controls were effective as of year-end. It did not include management’s internal-control assessment or auditor attestation under a transition period for newly public companies. The financial statements received an unqualified audit opinion.
Most important facts for investors to verify
- Confirm the transaction’s eventual closing status, final terms, and cash proceeds after redemptions, fees, and PIPE funding.
- Review Xos’s own audited financial statements and the transaction disclosure for operating performance, liquidity, debt, forecasts, and business-specific risks; these are not provided by this NextGen 10-K.
- Verify the final share count and dilution, including founder-share conversion adjustments, awards, warrants, and any additional financing.
- Assess trust-account protections, deferred fees, creditor claims, and the sponsor’s capacity to meet any indemnity obligations.
- Reconcile the filing’s approximate working-capital figure with balance-sheet current assets and current liabilities, and confirm subsequent borrowing and cash usage.