Xos(US:XOS)2024-05-15 20:16Part I - Financial Information Financial Statements (Unaudited) Unaudited Q1 2024 financials report $13.2 million revenue, $2.8 million gross profit, and a narrowed $11.0 million net loss Condensed Consolidated Balance Sheets Total assets reached $135.0 million by March 31, 2024, with cash and equivalents at $46.2 million post-acquisition Condensed Consolidated Balance Sheet Highlights (in thousands) | | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $46,168 | $11,640 | | Total current assets | $112,801 | $71,695 | | Total assets | $134,980 | $93,684 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $22,305 | $19,573 | | Total liabilities | $67,174 | $48,488 | | Total stockholders' equity | $67,806 | $45,196 | | Total liabilities and stockholders' equity | $134,980 | $93,684 | Condensed Consolidated Statements of Operations and Comprehensive Loss Q1 2024 revenues surged to $13.2 million, achieving a $2.8 million gross profit and reducing net loss to $11.0 million Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Revenues | $13,162 | $4,697 | | Cost of goods sold | $10,374 | $5,574 | | Gross profit (loss) | $2,788 | ($877) | | Total operating expenses | $13,031 | $19,152 | | Loss from operations | ($10,243) | ($20,029) | | Net loss | ($11,003) | ($24,331) | | Net loss per share (Basic & Diluted) | ($1.80) | ($4.32) | Condensed Consolidated Statements of Cash Flows Q1 2024 net cash used in operations was $14.6 million, with a $35.6 million net cash increase driven by the ElectraMeccanica acquisition Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($14,589) | ($15,326) | | Net cash provided by investing activities | $51,325 | $22,812 | | Net cash used in financing activities | ($1,093) | ($9,672) | | Net increase (decrease) in cash | $35,643 | ($2,186) | | Cash, cash equivalents and restricted cash, end of period | $47,283 | $36,489 | Notes to Condensed Consolidated Financial Statements Notes detail the ElectraMeccanica acquisition, its impact on liquidity, going concern considerations, and key accounting policies - The company designs and manufactures Class 5-8 battery-electric commercial vehicles and offers charging infrastructure and fleet management software under a "Fleet-as-a-Service" model34 - On March 26, 2024, Xos acquired ElectraMeccanica, which supplemented its liquidity with approximately $50.2 million in cash, accounted for as an asset acquisition3870 - Management concluded that conditions raise substantial doubt about the company's ability to continue as a going concern, but believes capital-raising plans and the ElectraMeccanica acquisition alleviate this doubt for at least one year4650 - During Q1 2024, one customer accounted for 52% of revenues, and as of March 31, 2024, two customers accounted for 36% and 10% of accounts receivable62 Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes 180% Q1 2024 revenue growth to unit sales, achieving $2.8 million gross profit, reducing expenses, and boosting liquidity Results of Operations Q1 2024 revenues grew 180% to $13.2 million, achieving a $2.8 million gross profit and reducing net loss to $11.0 million Comparison of Operations (in thousands) | | For the Three Months Ended March 31, | | | | :--- | :--- | :--- | :--- | | | 2024 | 2023 | $ Change | | Revenues | $13,162 | $4,697 | $8,465 | | Gross profit (loss) | $2,788 | ($877) | $3,665 | | Total operating expenses | $13,031 | $19,152 | ($6,121) | | Loss from operations | ($10,243) | ($20,029) | $9,786 | | Net Loss | ($11,003) | ($24,331) | $13,328 | - Revenue growth was driven by an increase in unit sales to 60 stepvans and 2 powertrains in Q1 2024, compared to 30 stepvans and 1 powertrain in Q1 2023176205 - The decrease in operating expenses was primarily due to reduced headcount and personnel costs across G&A, R&D, and S&M, along with lower professional fees and insurance costs209210211 Liquidity and Capital Resources Liquidity improved to $46.2 million cash post-ElectraMeccanica acquisition, alleviating going concern doubts for 12 months - The company's liquidity was significantly enhanced by the acquisition of ElectraMeccanica, which provided approximately $50.2 million in cash180221 - Management identified substantial doubt about the company's ability to continue as a going concern but believes its plans, including the recent cash acquisition and access to capital markets, are sufficient to fund operations for the next twelve months217218221 Summary of Cash Flow Data (in thousands) | | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($14,589) | ($15,326) | | Net cash provided by investing activities | $51,325 | $22,812 | | Net cash used in financing activities | ($1,093) | ($9,672) | Quantitative and Qualitative Disclosures About Market Risk The company faces market risk primarily from inflation, which could negatively impact operations if higher costs are not offset - The primary market risk identified is inflation, which increases the cost of goods and services; the company's inability to fully offset or mitigate these higher costs could negatively impact its business and financial condition238239 Controls and Procedures Disclosure controls were ineffective as of March 31, 2024, due to material weaknesses in inventory and revenue recognition, with remediation planned by year-end - The Principal Executive Officer and Principal Financial Officer concluded that disclosure controls and procedures were not effective as of March 31, 2024241 - The ineffectiveness is due to material weaknesses in internal controls related to inventory management and revenue recognition, identified during the preparation of the 2023 Annual Report243 - Remediation efforts are underway, including adding new internal controls and working with external consultants, with a target completion by the end of 2024244 Part II - Other Information Legal Proceedings The company is not currently involved in any material legal proceedings that would adversely affect its operations - As of the report date, Xos is not involved in any material legal proceedings249 Risk Factors No material changes to the company's risk factors have occurred since the 2023 Annual Report on Form 10-K filing - No material changes to risk factors have occurred since the 2023 Form 10-K was filed250 Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities On January 24, 2024, the company issued 5,500 Common Stock shares under SEPA, raising $46,750 in an unregistered sale - On January 24, 2024, the company sold 5,500 shares of Common Stock under the SEPA, raising $46,750 in an unregistered sale251