Shareholders to Vote on Highly Dilutive Equity Plan Expansion and Convertible Note Issuance Below Nasdaq Minimum Price

summarizeSummary

Xos, Inc. seeks shareholder approval for a significant increase in its equity incentive plan (31% potential dilution) and the potential issuance of shares from convertible notes (up to 67% potential dilution) at prices below the Nasdaq minimum, critical for capital but highly dilutive.

check_boxKey Events

• Equity Incentive Plan Expansion Proposed

  Shareholders will vote on an amendment to the 2021 Equity Incentive Plan to add 3,740,000 new shares. This represents a potential dilution of approximately 31.02% based on the 12,056,211 shares outstanding as of April 24, 2026. The company intends to grant $8.6 million in RSU awards to executive officers and employees for fiscal year 2026 from this pool.

• Critical Convertible Note Share Issuance Sought

  The company is requesting approval to issue shares from its $17.0 million outstanding Convertible Promissory Notes, potentially at prices less than the Nasdaq Minimum Price. This could result in substantial dilution, with illustrative examples showing up to 6,206,575 shares issued for interest alone at lower stock prices, and an additional 1,864,035 shares for principal if the conversion price is reduced to $9.12. The company explicitly states that without this approval, it may lack the resources to repay the note in cash, which could materially impair working capital.

• Potential Change of Control Approval

  Shareholders are also asked to approve any change of control that may be deemed to occur in connection with the convertible note issuance, as the current note holder, Aljomaih Automotive Co., already owns 21.8% of outstanding shares.

• Annual Meeting Scheduled

  The 2026 Annual Meeting of Stockholders will be held virtually on Tuesday, June 23, 2026, at 11:00 a.m. Pacific Daylight Savings Time.

auto_awesomeAnalysis

Xos, Inc. has filed its definitive proxy statement, outlining critical proposals for its upcoming annual meeting. The company is seeking shareholder approval for two highly dilutive measures: a significant increase in its equity incentive plan and the potential issuance of shares related to convertible notes at prices below the Nasdaq minimum. The proposed equity plan amendment would add 3.74 million shares, representing a potential dilution of approximately 31% based on current outstanding shares. Furthermore, the company explicitly warns that if the convertible note share issuance is not approved, it may lack the cash resources to repay the $17 million outstanding principal and accrued interest, which could materially impair working capital. This situation, coupled with the potential for substantial dilution (up to 67% from the convertible notes alone, or nearly 98% combined with the equity plan), signals severe financial pressure and a critical need for capital, even at the cost of significant shareholder value erosion. This follows a recent 10-K/A filing that detailed significant equity dilution and going concern warnings, reinforcing the company's precarious financial position.