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Xos, Inc. (NASDAQ:XOS), an electric vehicle manufacturer with a market capitalization of $26.2 million and currently trading at $2.99, reported Wednesday that it has entered into a lease termination agreement for its 235,094 square foot manufacturing facility in Mesa, Arizona. According to InvestingPro analysis, the company’s overall financial health score is currently rated as WEAK, with multiple challenges ahead. The termination is contingent upon the landlord securing a replacement lessee. If a new lease is signed, Xos will make monthly payments totaling approximately $2.7 million over 18 months, forfeit a security deposit valued at about $1.2 million, and pay leasing commissions of roughly $1.3 million related to the replacement lease. If the landlord does not secure a new tenant, the original lease, which is set to expire in 2033, will remain in effect.
The Mesa lease was assumed by Xos in March 2024 as part of its acquisition of ElectraMeccanica Vehicles Corp. Xos stated it will continue to use its other manufacturing facilities and does not anticipate any impact to operations from the potential lease termination. While the company maintains a healthy current ratio of 2.22, InvestingPro data reveals the company is quickly burning through cash, which may have influenced this decision. Get access to 13 more key ProTips and comprehensive analysis with an InvestingPro subscription.
Separately, Xos disclosed that on Monday it issued 1,803,262 shares of unregistered common stock to Aljomaih Automotive Company. This issuance was in payment of approximately $6.0 million in accrued interest under a convertible note. With total debt standing at $42.04 million, InvestingPro analysis indicates the company operates with a significant debt burden. Discover the complete financial picture with InvestingPro’s detailed Research Report, available for over 1,400 US stocks. The interest was converted into shares at the 10-day volume-weighted average price as of August 25, 2025, under the terms of the convertible note agreement. The company relied on exemptions from registration under Section 3(a)(9) and Section 4(2) of the Securities Act of 1933, as well as Regulation S. No commission or remuneration was paid by Aljomaih in connection with this transaction.
These announcements are based on a press release statement included in a Form 8-K filing with the Securities and Exchange Commission.
In other recent news, Xos Inc reported record revenue of $18.4 million for the second quarter of 2025. This milestone comes alongside a decline in the company’s gross margin, which fell to 8.8% from 20.6% in the previous quarter. Additionally, Xos has entered into a letter agreement with Aljomaih Automotive Co. to limit the number of common shares issued for interest payments under a convertible promissory note. The agreement sets a cap of 1,737,247 shares, representing 19.99% of Xos’s outstanding common shares as of August 8, 2025. In corporate governance developments, former General Motors executive John F. Smith has joined the Xos Board of Directors. Smith, who brings over four decades of experience from his tenure at General Motors, will also serve on the Board’s Audit Committee. These updates reflect recent strategic and financial moves by Xos.
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