Item 1.01. Entry into a Material Definitive Agreement.
On March 23, 2022, Xos, Inc. (the “Company”) entered into a Standby Equity Purchase Agreement (the “Purchase Agreement”) with YA II PN, Ltd. (“Yorkville”). Yorkville is a fund managed by Yorkville Advisors Global, LP, headquartered in Mountainside, New Jersey.
Pursuant to the Purchase Agreement, the Company has the right, but not the obligation, to sell to Yorkville up to $125,000,000 of its shares of common stock, par value $0.0001 per share, at the Company’s request any time during the 36 months following the execution of the Purchase Agreement. At the Company’s option, the shares would be purchased at either (i) 97% of the average VWAP (as defined below) during the three consecutive trading days commencing on the notice date (an “Option 1 Advance”) or (ii) 95% of the closing VWAP during the first trading day commencing on notice date (an “Option 2 Advance”). The Company may also specify a certain minimum acceptable price per share in each sale that it requests under the Purchase Agreement (an “Advance”). “VWAP” means, for any trading day, the daily volume weighted average price of the Company’s common stock for such date on the Nasdaq Global Market (“Nasdaq”) as reported by Bloomberg L.P. during regular trading hours.
Each Advance may be for a number of shares of common stock with an aggregate value of up to $20,000,000. Except as otherwise may be agreed by the Company and Yorkville, each Option 1 Advance and Option 2 Advance would be further limited to 150% or 50%, respectively, of the average trading volume during the three trading days preceding the Advance notice. Moreover, under the applicable Nasdaq rules, in no event may Yorkville purchase any shares that would result in it owning more than 19.99% of the Company’s outstanding common stock as of the date of the Purchase Agreement (the “Exchange Cap”). The Exchange Cap will not apply under certain circumstances, including if the average price of all applicable sales of common stock under the Purchase Agreement equals or exceeds a certain minimum price.
Yorkville’s obligation to purchase shares of common stock pursuant to the Purchase Agreement is subject to a number of conditions, including that a registration statement (the “Registration Statement”) be filed with the Securities and Exchange Commission (the “SEC”), registering the Commitment Fee Shares (as defined below) and the shares to be issued pursuant to an Advance under the Securities Act of 1933, as amended (the “Securities Act”), and that the Registration Statement is declared effective by the SEC.
As consideration for Yorkville’s commitment to purchase shares of common stock at the Company’s direction upon the terms and subject to the conditions set forth in the Purchase Agreement, upon execution of the Purchase Agreement, the Company issued 18,582 shares of common stock to Yorkville (the “Commitment Shares”).
The foregoing is a summary description of certain terms of the Purchase Agreement. For a full description of all terms, please refer to the copy of the Purchase Agreement that is filed herewith as Exhibit 10.1 to this Current Report on Form 8‑K and is incorporated herein by reference.
This Current Report on Form 8‑K shall not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.