Xos, Inc. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. This is an annual report; it does not provide standalone fourth-quarter results. Financial statements are audited under U.S. GAAP. The auditor gave an unqualified opinion on the financial statements, but did not audit internal controls.
Business context
Xos designs and manufactures battery-electric commercial vehicles, powertrains, charging infrastructure, and fleet-management software, primarily for medium- and heavy-duty last-mile and return-to-base fleets. It delivered 283 units in 2023 (277 vehicles, including leases, five powertrains, and one charging hub), versus 275 units in 2022.
Financial performance and liquidity
| Metric | FY2023 | FY2022 | Change |
|---|---|---|---|
| Revenue | $44.5 million | $36.4 million | Up 22% |
| Gross loss | $1.3 million | $30.0 million | Improved $28.7 million |
| Gross margin | Approximately -2.9% | Approximately -82.5% | Improved |
| Operating expenses | $63.7 million | $81.3 million | Down 22% |
| Operating loss | $65.0 million | $111.3 million | Improved $46.4 million |
| Net loss | $75.8 million | $73.3 million | Loss widened $2.5 million |
| Net cash used in operations | $39.3 million | $128.0 million | Use decreased |
Vehicle and powertrain sales generated $42.2 million, or 95% of FY2023 revenue. Fleet-as-a-Service contributed $1.2 million; ancillary revenue was $1.1 million. Two customers accounted for 54% and 10% of revenue, respectively; one customer represented 52% of year-end receivables.
Revenue growth was driven by more stepvan deliveries and higher average selling prices for the updated platform. Cost of goods sold fell 31%, with lower inventory reserves and inventory-count adjustments contributing materially to the improvement. The company still reported a gross loss.
At year-end, cash and cash equivalents were $11.6 million, down from $35.6 million; there were no marketable debt securities, compared with $50.6 million a year earlier. Current assets were $71.7 million and current liabilities $19.6 million. Inventories were $37.8 million. Total liabilities were $48.5 million, including $19.9 million of non-current convertible debt; the filing reports total indebtedness of approximately $25.3 million, including convertible notes, equipment notes, finance leases, and insurance financing notes. The $20 million Aljomaih convertible note matures in August 2025 and carries 10% annual interest.
Cash provided by investing activities was $50.6 million, primarily from sales and maturities of investments; cash used in financing was $38.4 million, including $32.8 million of convertible-debenture principal repayments and $1.6 million of redemption premiums. The company reported a $39.3 million operating cash outflow and states that it has not achieved positive operating cash flow.
Changes, outlook, and material matters
- Cost and losses: Lower operating expenses and a sharply smaller gross loss improved operating results, but net loss increased because other expense rose to $12.0 million and gains from changes in fair values of derivatives and earn-out liabilities were much smaller than in 2022.
- Liquidity and going concern: The filing says the company’s conditions raised substantial doubt about its ability to continue as a going concern. Management concluded its plans would probably alleviate that doubt for at least one year after issuance, relying on additional funding strategies and the subsequent ElectraMeccanica transaction. Access to the $119.5 million remaining SEPA commitment was unavailable as of the filing date pending required SEC filings and a registration-statement amendment.
- Subsequent acquisition: On March 26, 2024, Xos completed its acquisition of ElectraMeccanica, issuing 1,766,388 Xos shares. ElectraMeccanica’s cash was estimated at approximately $48 million at closing; this was not part of Xos’s December 31, 2023 cash balance.
- Operations: Management cited charging-infrastructure constraints, supply-chain delays, and shortages or elevated costs for components including semiconductors, battery cells, vehicle bodies, and aluminum. Charging availability had delayed some customer vehicle deliveries.
- Controls and prior restatement: Management concluded disclosure controls and internal control over financial reporting were ineffective at year-end due to material weaknesses in inventory management and revenue-recognition controls. The company had restated 2022 quarterly statements for inventory and related accounting errors and said it was targeting remediation during 2024.
- Other risks and items: The company has experienced product recalls and identifies lithium-ion battery safety, warranty adequacy, limited manufacturing scale, customer concentration, financing access, and competition as significant risks. No material legal proceeding was reported as of the filing. A 1-for-30 reverse stock split took effect in December 2023 to regain Nasdaq minimum-bid compliance. No numerical revenue, delivery, or profitability guidance is provided in the filing.
Important facts for investors to verify
- Whether the ElectraMeccanica cash balance was available as expected and how much liquidity remains after integration and ongoing operating needs.
- Whether Xos can restore access to the SEPA or secure alternative financing on acceptable terms, and the resulting dilution or debt burden.
- Subsequent cash burn, production and delivery performance, gross margins, and customer concentration—particularly given the reported 52% receivables concentration.
- Progress in remediating inventory and revenue-recognition control weaknesses, and whether the controls operate effectively over a sufficient period.
- Costs or customer impacts from recalls, warranty claims, charging delays, and supply constraints.
- Potential dilution and securities terms, including the outstanding warrants’ $345 exercise price (post-reverse-split terms) and the shares issued for the acquisition.