qxo-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________

FORM 10-Q

____________

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2024

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38063

QXO, INC.

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation)			16-1633636 (IRS Employer Identification No.)

Five American Lane

Greenwich, CT 06831

(Address of principal executive offices)

(888) 998-6000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.00001 per share	QXO	The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” accelerated filer” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:


Large accelerated filer	o	Accelerated filer	o

Non-accelerated filer	x	Smaller Reporting Company	x

		Emerging Growth Company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of August 7, 2024, there were 409,430,195 shares outstanding of the registrant’s common stock.

QXO, INC.

TABLE OF CONTENTS


		Page No.
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited):
	Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023	5
	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2024 and 2023	6
	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2024 and 2023	7
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023	9
	Notes to Condensed Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analy sis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	21

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	D efaults Upon Senior Securities	29
Item 4.	M ine Safety Disclosures	29
Item 5.	Other Information	29
Item 6.	Exhibits	30
	SIGNATURES

PART I – FINANCIAL INFORMATION

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements. Statements that are not historical facts, including statements about beliefs, expectations, targets and goals are forward-looking statements. These statements are based on plans, estimates, expectations and/or goals at the time the statements are made, and readers should not place undue reliance on them. In some cases, readers can identify forward-looking statements by the use of forward-looking terms such as “may,” “will,” “should,” “expect,” “opportunity,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “target,” “goal,” or “continue,” or the negative of these terms or other comparable terms. Forward-looking statements involve inherent risks and uncertainties and readers are cautioned that a number of important factors could cause actual results to differ materially from those contained in any such forward-looking statements. Factors that could cause actual results to differ materially from those described herein include, among others:

•risks associated with potential significant volatility and fluctuations in the market price of the Company’s common stock;

•risks associated with raising additional equity or debt capital from public or private markets to pursue the Company’s business plan, including potentially one or more additional private placements of common stock, and the effects that raising such capital may have on the Company and its business, including the risk of substantial dilution or that the Company’s common stock may experience a substantial decline in trading price;

•the possibility that additional future financings may not be available to the Company on acceptable terms or at all;

•the possibility that an active, liquid trading market for the Company’s common stock may not develop or, if developed, may not be sustained;

•the possibility that the Company’s outstanding warrants and preferred stock may or may not be converted or exercised, and the economic impact on the Company and the holders of common stock of the Company that may result from either such exercise or conversion, including dilution, or the continuance of the preferred stock remaining outstanding, and the impact its terms, including its dividend, may have on the Company and the common stock of the Company;

•uncertainties regarding the Company’s focus, strategic plans and other management actions;

•the risk that the Company is or becomes highly dependent on the continued leadership of Brad Jacobs as chairman and chief executive officer and the possibility that the loss of Mr. Jacobs in these roles could have a material adverse effect on the Company’s business, financial condition and results of operations;

•the possibility that the concentration of ownership by Mr. Jacobs may have the effect of delaying or preventing a change in control of the Company and might affect the market price of shares of the common stock of the Company;

•the risk that Mr. Jacobs’ past performance may not be representative of future results;

•the risk that the Company is unable to attract and retain world-class talent;

•the risk that the failure to consummate any acquisition expeditiously, or at all, could have a material adverse effect on the Company’s business prospects, financial condition, results of operations or the price of the Company’s common stock;

•risks that the Company may not be able to enter into agreements with acquisition targets on attractive terms, or at all, that agreed acquisitions may not be consummated, or, if consummated, that the anticipated benefits thereof may not be realized and that the Company encounter difficulties in integrating and operating such acquired companies, or that matters related to an acquired business (including operating results or liabilities or contingencies) may have a negative effect on the Company or its securities or ability to implement its business strategy, including that any such transaction may be dilutive or have other negative consequences to the Company and its value or the trading prices of its securities;

•risks associated with cybersecurity and technology, including attempts by third parties to defeat the security measures of the Company and its business partners, and the loss of confidential information and other business disruptions;

•the possibility that new investors in any future financing transactions could gain rights, preferences and privileges senior to those of the Company’s existing stockholders;

•the possibility that building products distribution industry demand may soften or shift substantially due to cyclicality or seasonality or dependence on general economic conditions, including inflation or deflation, interest rates, governmental subsidies or incentives, consumer confidence, labor and supply shortages, weather and commodity prices;

•the possibility that regional or global barriers to trade or a global trade war could increase the cost of products in the building products distribution industry, which could adversely impact the competitiveness of such products and the financial results of businesses in the industry;

•risks associated with periodic litigation, regulatory proceedings and enforcement actions, which may adversely affect the Company’s business and financial performance;

•uncertainties regarding general economic, business, competitive, legal, regulatory, tax and geopolitical conditions; and

•other factors, including those set forth in the Company’s filings with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and subsequent Quarterly Reports on Form 10-Q.

You should not rely on forward-looking statements as predictions of future events, and you should understand that these statements are not guarantees of performance or results, and our actual results could differ materially from those expressed in the forward-looking statements due to a variety of factors. We have based the forward-looking statements contained in this Quarterly Report primarily on our current assumptions, expectations and projections about future events and trends that we believe may affect our business, financial condition, and results of operations. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

Forward-looking statements herein speak only as of the date each statement is made. The Company undertakes no obligation to update any of these statements in light of new information or future events, except to the extent required by applicable law.

Item 1. Financial Statements (Unaudited)

QXO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)


ASSETS	June 30, 2024		December 31, 2023
Current assets:	(unaudited)
Cash and cash equivalents	$	971,284	$	6,143
Accounts receivable, net	3,015		2,969
Prepaid expenses and other current assets	5,539		2,684
Total current assets	979,838		11,796
Property and equipment, net	511		503
Operating lease right-of-use assets	380		522
Intangible assets, net	4,486		4,919
Goodwill	1,140		1,140
Deferred tax assets	1,614		1,444
Other non-current assets	216		171
Total assets	$	988,185	$	20,495
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	6,194	$	4,563
Accrued expenses	5,397		2,681
Deferred revenue	3,113		3,161
Long-term debt – current portion	784		702
Finance lease obligations – current portion	141		154
Operating lease liabilities – current portion	217		263
Total current liabilities	15,846		11,524
Long-term debt net of current portion	693		994
Finance lease obligations net of current portion	247		247
Operating lease liabilities net of current portion	164		259
Total liabilities	16,950		13,024
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock, $0.001 par value; authorized 10,000,000 shares, 1,000,000 and 0 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively	498,684		—
Common stock, $0.00001 par value; authorized 2,000,000,000 shares, 664,284 and 664,448 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively1	—		—
Additional paid-in capital	474,951		9,419
Accumulated deficit	(2,400)		(1,948)
Total stockholders’ equity	971,235		7,471
Total liabilities and stockholders’ equity	$	988,185	$	20,495

See accompanying notes to the unaudited condensed consolidated financial statements.

1 Amounts have been adjusted to reflect the 8-for-1 Reverse Stock Split effective June 6, 2024. See Note 3 - Equity for additional details.

QXO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(Unaudited)


	Three Months Ended				Six Months Ended
	June 30, 2024		June 30, 2023		June 30, 2024		June 30, 2023
Revenue:
Software product, net	$	3,776	$	3,298	$	7,256	$	6,620
Service and other, net	10,764		9,959		21,719		19,765
Total revenue, net	14,540		13,257		28,975		26,385
Cost of revenue:
Product	2,369		2,027		4,568		3,960
Service and other	6,376		6,045		12,955		11,883
Total cost of revenue	8,745		8,072		17,523		15,843
Operating expenses:
Selling, general and administrative expenses	9,835		4,525		15,024		9,305
Depreciation and amortization expenses	261		204		501		411
Total operating expenses	10,096		4,729		15,525		9,716
(Loss) income from operations	(4,301)		456		(4,073)		826
Other income (expense), net:
Interest income (expense), net	3,470		(17)		3,450		(35)
Total other income (expense)	3,470		(17)		3,450		(35)
(Loss) income before taxes	(831)		439		(623)		791
(Benefit) provision for income taxes	(240)		95		(171)		170
Net (loss) income	$	(591)	$	344	$	(452)	$	621
(Loss) earnings per common share – basic and fully diluted	$	(9.93)	$	0.52	$	(9.72)	$	0.95
Weighted average shares outstanding:1
Basic	664		657		664		657
Diluted	664		657		664		657

See accompanying notes to the unaudited condensed consolidated financial statements.

1 Amounts have been adjusted to reflect the 8-for-1 Reverse Stock Split effective June 6, 2024. See Note 3 - Equity for additional details.

QXO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(Unaudited)

FOR THE THREE MONTHS ENDED JUNE 30, 2024


	Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount		Shares1	Amount
Balance at April 1, 2024	—	$	—	664	$	—	$	9,419	$	(1,809)	$	7,610
Issuance of Convertible Preferred Stock and Warrants, net of issuance costs	1,000	498,684		—	—		482,977		—		981,661
Cash paid for fractional shares	—	—		—	—		(45)		—		(45)
Common stock dividend	—	—		—	—		(17,400)		—		(17,400)
Net loss	—	—		—	—		—		(591)		(591)
Balance at June 30, 2024	1,000	$	498,684	664	$	—	$	474,951	$	(2,400)	$	971,235

FOR THE THREE MONTHS ENDED JUNE 30, 2023


	Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount		Shares1	Amount
Balance at April 1, 2023	—	$	—	657	$	—	$	10,471	$	(600)	$	9,871
Share-based compensation	—	—		—	—		—		—		—
Net income	—	—		—	—		—		344		344
Balance at June 30, 2023	—	$	—	657	$	—	$	10,471	$	(256)	$	10,215

See accompanying notes to the unaudited condensed consolidated financial statements.

1 Amounts have been adjusted to reflect the 8-for-1 Reverse Stock Split effective June 6, 2024. See Note 3 - Equity for additional details.

QXO, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (CONTINUED)

(in thousands)

(Unaudited)

FOR THE SIX MONTHS ENDED JUNE 30, 2024


	Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount		Shares1	Amount
Balance at January 1, 2024	—	$	—	664	$	—	$	9,419	$	(1,948)	$	7,471
Issuance of Convertible Preferred Stock and Warrants, net of issuance costs	1,000	498,684		—	—		482,977		—		981,661
Cash paid for fractional shares	—	—		—	—		(45)		—		(45)
Common stock dividend	—	—		—	—		(17,400)		—		(17,400)
Net loss	—	—		—	—				(452)		(452)
Balance at June 30, 2024	1,000	$	498,684	664	$	—	$	474,951	$	(2,400)	$	971,235

FOR THE SIX

SEC Form 10-Q filed by QXO Inc.