hyzn-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________

FORM 10-Q

______________________

(Mark One)


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

For the quarterly period ended March 31, 2022


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

For the transition period from __________ to __________

______________________

Hyzon Motors Inc.

(Exact name of registrant as specified in its charter)

______________________


Delaware	001-39632	82-2726724
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)


475 Quaker Meeting House Road Honeoye Falls, NY			14472
(Address of principal executive offices)			(Zip Code)

(585)-484-9337

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

______________________

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 $0.0001 per share

HYZN

NASDAQ Capital Market

Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share

HYZNW

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 preceding 12 months (or for such shorter period that the registrant was required to file such reports), 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 a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

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 April 29, 2022, 247,900,979 shares of Class A Common Stock, par value $0.0001 per share, were issued and outstanding.

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CAUTIONARY NOTE REGARDING FORWARD- LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements include, without limitation, statements regarding the financial position, business strategy, plans and objectives of management for future operations, and any statements that refer to characterizations of future events or circumstances, including any underlying circumstances. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this report, the words “could,” “should”, “will,” “may,” “anticipate,” “believe,” “expect,” “estimate,” “intend,” “plan,” “project,” the negative of such terms, and other similar expressions are intended to identify forward looking statements, although not all forward-looking statements contain such identifying words. Such forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events.

Forward-looking statements are subject to a number of risks and uncertainties including, but not limited to, those described below and under the section entitled “Risk Factors” included in our Annual Report filed on Form 10-K for the year ended December 31, 2021, and in subsequent reports that we file with the SEC, including this Form 10-Q for the three months ended March 31, 2022.

•our ability to commercialize our products and strategic plans, including our ability to establish facilities to produce our vehicles or secure hydrogen supply in appropriate volumes, at competitive costs or with competitive emissions profiles;

•our ability to compete effectively in the heavy-duty transportation sector, and withstand intense competition and competitive pressures from other companies worldwide in the industries in which we operate;

•our ability to convert non-binding memoranda of understanding and letters of intent into binding orders or sales (including because of current or prospective resources of our counterparties) and the ability of our counterparties to make payments on orders;

•our ability to invest in hydrogen production, distribution, and refueling operations to supply our customers with hydrogen at competitive costs to operate their fuel cell electric vehicles;

•disruptions to the global supply chain, including as a result of the COVID-19 pandemic and geopolitical events, and shortage of raw materials, and the related impacts on our third party suppliers and assemblers;

• our ability to maintain the listing of our common stock on NASDAQ;

• our ability to raise financing in the future;

• our ability to retain or recruit, or changes required in, our officers, key employees or directors;

• our ability to protect, defend, or enforce intellectual property on which we depend; and

•the impacts of legal proceedings, regulatory disputes and governmental inquiries.

Should one or more of the risks or uncertainties described above, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements.

The forward-looking statements contained in this report are based on our current expectations and beliefs concerning future developments and their potential effects on us and speak only as of the date of this report. Except as otherwise required by applicable law, we disclaim any duty to update any forward looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this report. You should, however, review additional disclosures we make in subsequent filings with the SEC.

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Hyzon Motors, Inc.

Quarterly Report on Form 10-Q

Table of Contents


		Page No.
PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	4

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27

Item 4.	Controls and Procedures	27

PART II – OTHER INFORMATION		28

Item 1.	Legal Proceedings	29

Item 1A.	Risk Factors	29

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29

Item 3.	Defaults Upon Senior Securities	29

Item 4.	Mine Safety Disclosures	29

Item 5.	Other Information	29

Item 6.	Exhibits	30

SIGNATURE		31

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

HYZON MOTORS INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

(unaudited)


	March 31, 2022		December 31, 2021
ASSETS
Current assets
Cash	$	407,333	$	445,146
Accounts receivable	774		2,598
Related party receivable	417		264
Inventory	26,082		19,245
Prepaid expenses and other current assets	29,951		27,970
Total current assets	464,557		495,223
Property, plant, and equipment, net	18,249		14,311
Right-of-use assets	10,970		10,265
Investments in equity securities	17,478		4,948
Other assets	6,146		5,430
Total Assets	$	517,400	$	530,177
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	7,938	$	8,430
Accrued liabilities	9,034		6,026
Related party payables	648		3,633
Contract liabilities	11,063		11,230
Current portion of lease liabilities	2,409		1,886
Total current liabilities	31,092		31,205
Long term liabilities
Lease liabilities	9,249		8,830
Private placement warrant liability	13,705		15,228
Earnout liability	100,520		103,761
Deferred income taxes	526		—
Other liabilities	1,243		1,296
Total liabilities	156,335		160,320
Commitments and contingencies (Note 11)
Stockholders’ Equity
Common stock, $0.0001 par value; 400,000,000 shares authorized, 247,881,568 and 247,758,412 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively.	25		25
Additional paid-in capital	404,992		403,016
Accumulated deficit	(37,182)		(28,117)
Accumulated other comprehensive gain	486		373
Total Hyzon Motors Inc. stockholders’ equity	368,321		375,297
Noncontrolling interest	(7,256)		(5,440)
Total Stockholders’ Equity	361,065		369,857
Total Liabilities and Stockholders’ Equity	$	517,400	$	530,177

The accompanying notes are an integral part of these unaudited consolidated financial statements

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HYZON MOTORS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except per share amounts)

(unaudited)


	Three Months Ended March 31,
		2022		2021
Revenue		$	356	$	—
Operating expense:
Cost of revenue		424		—
Research and development		6,212		627
Selling, general, and administrative		20,470		3,146
Total operating expenses		27,106		3,773
Loss from operations		(26,750)		(3,773)
Other income (expense):
Change in fair value of private placement warrant liability		1,523		—
Change in fair value of earnout liability		3,241		—
Change in fair value of equity securities		12,530		—
Foreign currency exchange loss and other expense		(1,057)		(28)
Interest income (expense), net		17		(4,588)
Total other income (expense)		16,254		(4,616)
Net loss before income taxes		(10,496)		(8,389)
Income tax expense		526		—
Net loss		$	(11,022)	$	(8,389)
Less: Net loss attributable to noncontrolling interest		(1,957)		(242)
Net loss attributable to Hyzon		$	(9,065)	$	(8,147)
Comprehensive loss:
Net loss		$	(11,022)	$	(8,389)
Foreign currency translation adjustment		254		(29)
Comprehensive loss		$	(10,768)	$	(8,418)
Less: Comprehensive loss attributable to noncontrolling interest		(1,816)		(233)
Comprehensive loss attributable to Hyzon		$	(8,952)	$	(8,185)
Net loss per share attributable to Hyzon:
Basic		$	(0.04)	$	(0.05)
Diluted		$	(0.04)	$	(0.05)
Weighted average common shares outstanding:
Basic		247,940		166,201
Diluted		247,940		166,201

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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HYZON MOTORS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands, except share data)

(unaudited)


	Legacy Common Stock			Common Stock Class A			Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Loss		Total Hyzon Motors Inc. Stockholders’ Equity (Deficit)		Noncontrolling Interest		Total Stockholders’ Equity (Deficit)
	Shares	Amount		Shares	Amount
Balance as of December 31, 2021	—	$	—	247,758,412	$	25	$	403,016	$	(28,117)	$	373	$	375,297	$	(5,440)	$	369,857
Exercise of stock options	—	—		30,008	—		34		—		—		34		—		34
Stock-based compensation	—	—		—	—		2,133		—		—		2,133		—		2,133
Vesting of RSUs	—	—		64,815	—		—		—		—		—		—		—
Net share settlement of equity awards	—	—		—	—		(160)		—		—		(160)		—		(160)
Common stock issued for the cashless exercise of warrants	—	—		28,333	—		—		—		—		—		—		—
Repurchase of warrants	—	—		—	—		(31)		—		—		(31)		—		(31)
Net loss attributable to Hyzon	—	—		—	—		—		(9,065)		—		(9,065)		—		(9,065)
Net loss attributable to noncontrolling interest	—	—		—	—		—		—		—		—		(1,957)		(1,957)
Foreign currency translation loss	—	—		—	—		—		—		113		113		141		254
Balance as of March 31, 2022	—	$	—	247,881,568	$	25	$	404,992	$	(37,182)	$	486	$	368,321	$	(7,256)	$	361,065

	Legacy Common Stock			Common Stock Class A			Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Loss		Total Hyzon Motors Inc. Stockholders’ Equity (Deficit)		Noncontrolling Interest		Total Stockholders’ Equity (Deficit)
	Shares	Amount		Shares	Amount
Balance as of December 31, 2020	93,750,000	$	94	—	$	—	$	29,045	$	(14,271)	$	(16)	$	14,852	$	(91)	$	14,761
Retroactive application of recapitalization	(93,750,000)	(94)		166,125,000	17		77		—		—		—		—		—
Adjusted balance, beginning of period	—	—		166,125,000	17		29,122		(14,271)		(16)		14,852		(91)		14,761
Exercise of stock options	—	—		115,189	—		187		—		—		187		—		187
Stock-based compensation	—	—		—	—		290		—		—		290		—		290
IP transaction - deemed distribution	—	—		—	—		(10,000)		—		—		(10,000)		—		(10,000)
Net loss attributable to Hyzon	—	—		—	—		—		(8,147)		—		(8,147)		—		(8,147)
Net loss attributable to noncontrolling interest	—	—		—	—		—		—		—		—		(242)		(242)
Foreign currency translation loss	—	—		—	—		—		—		(38)		(38)		9		(29)
Balance at March 31, 2021	—	$	—	166,240,189	$	17	$	19,599	$	(22,418)	$	(54)	$	(2,856)	$	(324)	$	(3,180)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

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HYZON MOTORS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Three Months Ended March 31,
	2022		2021
Cash Flows from Operating Activities:
Net loss	$	(11,022)	$	(8,389)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	912		129
Stock-based compensation	2,133		290
Deferred income tax expense	526		—
Noncash interest expense

SEC Form 10-Q filed by Hyzon Motors Inc.