Xos, Inc.XOS
Xos, Inc. Stock Compensation Disclosure
Stock-Based Compensation
2018 Stock Plan
On November 27, 2018, the Legacy Xos’s board of directors and stockholders adopted the 2018 Stock Plan. There are no shares available for issuance under the 2018 Stock Plan, however, the 2018 Stock Plan continues to govern the terms and conditions of the outstanding awards granted under the 2018 Stock Plan.
As of December 31, 2024 there were 1,669 Options outstanding under the 2018 Stock Plan. The amount and terms of Option grants were determined by the board of directors of Legacy Xos. The Options granted under the 2018 Stock Plan generally expire within 10 years from the date of grant and generally vest over four years, at the rate of 25% on the first anniversary of the date of grant and ratably on a monthly basis over the remaining 36-month period thereafter based on continued service.
Stock option activity during the year ended December 31, 2024 consisted of the following:
| Options | Weighted Average Fair Value | Weighted Average Exercise Price | Weighted Average Remaining Years | Intrinsic Value | |||||||||||||||||||||||||
December 31, 2023 — Options outstanding | 22,512 | $ | 0.40 | $ | 0.51 | 0.55 | $ | 168,194 | |||||||||||||||||||||
| Granted | — | — | — | ||||||||||||||||||||||||||
| Exercised | (20,843) | 0.39 | 0.50 | 141,766 | |||||||||||||||||||||||||
| Forfeited | — | — | — | — | |||||||||||||||||||||||||
December 31, 2024 — Options outstanding | 1,669 | $ | 0.54 | $ | 0.60 | 4.80 | $ | 4,404 | |||||||||||||||||||||
December 31, 2024 — Options vested and exercisable | 1,669 | $ | 0.54 | $ | 0.60 | 4.80 | $ | 4,404 | |||||||||||||||||||||
Aggregate intrinsic value represents the difference between the exercise price of the options and the fair value of the Company’s Common Stock. The aggregate intrinsic value of options exercised during the years ended December 31, 2024 and 2023 were approximately $0.1 million and $0.2 million, respectively.
The Company estimates the grant date fair value of options utilizing the Black-Scholes option pricing model, which is dependent upon several variables, including expected option term, expected volatility of the Company's share price over the expected term, expected risk-free rate and expected dividend yield rate. There were no option grants during the years ended December 31, 2024 and 2023.
2021 Equity Plan
On August 19, 2021 the Company’s stockholders approved the 2021 Equity Plan, which was ratified by the Company’s board of directors on August 20, 2021. The 2021 Equity Plan provides for the grant of incentive stock options (“ISOs”), within the meaning of Section 422 of the Code to employees, including employees of any parent or subsidiary, and for the grant of non-statutory stock options (“NSOs”), stock appreciation rights, restricted stock awards, RSUs, performance awards and other forms of awards to employees, directors and consultants, including employees and consultants of Xos’s affiliates. On June 24, 2024, the Company’s stockholders approved the Xos, Inc. Amended and Restated 2021 Equity Incentive Plan (the “A&R 2021 Equity Plan”) to increase the aggregate number of shares of Common Stock reserved for issuance under the 2021 Equity Plan by 1,180,819 shares.
As of December 31, 2024, there were 536,139 shares of Common Stock available for issuance under the A&R 2021 Equity Plan.
RSU activity during the year ended December 31, 2024 consisted of the following:
| RSUs | Weighted Average Grant Date Fair Value | Aggregate Fair Value | |||||||||||||||
December 31, 2023 — RSU outstanding | 603,040 | $ | 18.97 | $ | 4,819,138 | ||||||||||||
| Granted | 1,587,213 | 6.64 | 8,936,180 | ||||||||||||||
| Vested | (471,948) | 15.77 | 3,526,706 | ||||||||||||||
| Forfeited | (187,824) | 10.64 | 1,004,728 | ||||||||||||||
December 31, 2024 — RSU outstanding | 1,530,481 | $ | 8.14 | $ | 4,961,551 | ||||||||||||
The Company recognized stock-based compensation expense (including Earn-out RSUs) in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2024 and 2023 totaling approximately $7.7 million and $7.9 million, respectively, which consisted of the following (in thousands):
| December 31, 2024 | December 31, 2023 | |||||||||||||
Cost of goods sold | $ | 354 | $ | 396 | ||||||||||
Research and development | 1,435 | 1,824 | ||||||||||||
Sales and marketing | 738 | 966 | ||||||||||||
General and administrative | 5,183 | 4,720 | ||||||||||||
Total | $ | 7,710 | $ | 7,906 | ||||||||||
We allocate stock-based compensation expense to cost of goods sold, research and development expense, sales and marketing expense and general and administrative expense, based on the roles of the applicable recipients of such stock-based compensation. The unamortized stock-based compensation expense was $10.1 million as of December 31, 2024, and weighted average remaining amortization period as of December 31, 2024 was 1.91 years.
The aggregate fair value of RSUs that vested was $3.5 million during the year ended December 31, 2024.
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.