SCHEDULE: Aljomaih Automotive Increases Stake in Xos, Inc.

Aljomaih Automotive Co. reported a 25.3% beneficial ownership stake in Xos, Inc. following the receipt of interest shares and debt restructuring.

Summary

• Aljomaih Automotive Co. and Aljomaih Holding Co. now beneficially own 2,726,549 shares of Xos, Inc. common stock.
• The stake represents 25.3% of the company's outstanding common stock.
• On August 25, 2025, Xos issued 1,803,262 shares to Aljomaih as payment for approximately $6.0 million in accrued interest on a convertible note.
• The debt repayment schedule for the $20 million principal was restructured into ten quarterly installments from November 2025 to February 2028.
• A letter agreement limits the issuance of interest and conversion shares to 19.99% of outstanding shares without further stockholder approval.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as a neutral event; while it provides the company with necessary debt relief, it comes at the cost of significant shareholder dilution.

Positives

• Debt restructuring provides Xos with a more manageable repayment schedule over the next three years.
• Aljomaih maintains a long-term strategic interest in the company, including rights of first offer for Middle East distribution.

Negatives

• Significant dilution of existing shareholders due to the issuance of 1.8 million interest shares.
• The company is utilizing equity to satisfy interest obligations, indicating potential cash flow constraints.

Risks

• Potential for further dilution if additional interest or principal is converted into equity.
• Regulatory and shareholder approval requirements for issuing shares beyond the 19.99% limit.
• Dependence on future financing activities to potentially accelerate debt repayment.

Future Outlook

The company has committed to a structured debt repayment plan through February 2028 and maintains a strategic partnership with Aljomaih for potential Middle East market expansion.

Management Comments

• The Reporting Persons expressly disclaim status as a group for purposes of this Schedule 13D/A.
• The Reporting Persons may acquire additional shares or dispose of shares in open-market or private transactions.

Industry Context

StockSavvy.ai notes that Xos is navigating the capital-intensive EV manufacturing sector by leveraging debt-for-equity swaps to preserve cash, a common strategy for growth-stage companies facing liquidity pressure.

Comparison to Industry Standards

• The use of convertible notes with equity-settled interest is standard for emerging EV manufacturers like Rivian or Lucid when managing balance sheet leverage.
• The 19.99% issuance threshold is a standard governance safeguard to avoid triggering immediate shareholder approval requirements under exchange listing rules.

Corporate Governance

Related Party Transactions

• Aljomaih Automotive Co. acts as both a major shareholder and a creditor to the Issuer.

Stakeholder Impact

• Shareholders face dilution from the issuance of 1.8 million new shares.
• Creditors benefit from a formalized, multi-year repayment schedule.

Next Steps

• Commencement of quarterly principal repayments starting November 11, 2025.
• Potential future conversion of remaining note principal into common stock.
• Monitoring of potential Middle East distribution developments.

Key Dates

Recommendation

The stock is in a 'hold' position as the company manages its debt obligations through dilution; investors should wait for signs of operational cash flow improvement before increasing exposure.

Keywords

Xos, Aljomaih, Schedule 13D, Convertible Note, Equity Dilution, Electric Vehicles, Debt Restructuring