Share-Based Compensation

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

2018 Stock Plan

On November 27, 2018, the Legacy Xos’ 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 September 30, 2024, there were 1,834 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 nine months ended September 30, 2024 consisted of the following:


	Options	Weighted Average Fair Value Per Share		Weighted Average Exercise Price Per Share		Weighted Average Remaining Years	Aggregate Intrinsic Value
December 31, 2023 — Options outstanding	22,512	$	0.40	$	0.51	0.55	$	168,194
Exercised	(20,659)	0.38		0.50			141,076
March 31, 2024 — Options outstanding	1,853	$	0.56	$	0.63	5.79	$	17,806
Exercised	(16)	0.64		0.46			115
June 30, 2024 — Options outstanding	1,837	$	0.56	$	0.63	5.54	$	11,532

Exercised	(3)	0.64		0.46			13

September 30, 2024 - Options outstanding	1,834	$	0.56	$	0.63	5.28	$	7,184
September 30, 2024 - Options vested and exercisable	1,834	$	0.56	$	0.63	5.28	$	7,184

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 three months ended September 30, 2024 and 2023 were approximately $13 and $10,000, respectively. The aggregate intrinsic value of options exercised during the nine months ended September 30, 2024 and 2023 were approximately $141,000 and $190,000, 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 three and nine months ended September 30, 2024 and 2023.

2021 Equity Plan

On August 19, 2021 the Company’s stockholders approved the Xos, Inc. 2021 Equity Incentive Plan (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 Internal Revenue Code of 1986, as amended (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, restricted stock units (“RSUs”), performance awards and other forms of awards to employees, directors and consultants, including employees and consultants of Xos’ 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 September 30, 2024, there were 522,419 shares of Common Stock available for issuance under the A&R 2021 Equity Plan.

RSU activity during the nine months ended September 30, 2024 consisted of the following:


	RSUs	Weighted Average Grant Date Fair Value		Weighted Average Fair Value
December 31, 2023 — RSU outstanding	603,040	$	18.97	$	4,819,138
Granted	95,636	9.15		863,989
Vested	(94,428)	17.76		848,522
Forfeited	(4,845)	21.26		55,365
March 31, 2024 — RSU outstanding	599,403	$	17.43	$	6,146,714
Granted	92,505	7.64		706,702
Vested	(265,157)	13.83		2,120,841
Forfeited	(25,055)	16.52		218,566
June 30, 2024 — RSU outstanding	401,696	$	17.61	$	2,781,676
Granted	1,251,551	6.71		6,804,667
Vested	(56,549)	18.78		319,171
Forfeited	(14,247)	11.20		70,316
September 30, 2024 — RSU outstanding	1,582,451	$	9.01	$	7,204,074

The Company recognized stock-based compensation expense (including Earn-out RSUs) in the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2024 totaling approximately $2.2 million and $5.9 million, respectively, and September 30, 2023, totaling approximately $2.2 million and $6.3 million, respectively, which consisted of the following (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Cost of goods sold	$	67	$	91	$	303	$	357
Research and development	335		470		1,150		1,428
Sales and marketing	244		257		568		782
General and administrative	1,601		1,424		3,866		3,741
Total	$	2,247	$	2,242	$	5,887	$	6,308

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 $12.7 million as of September 30, 2024, and weighted average remaining amortization period as of September 30, 2024 was 2.16 years.

The aggregate fair value of RSUs that vested was $0.3 million and $3.3 million during the three and nine months ended September 30, 2024, respectively.