What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2021-02-26 compared with 2020-03-23 · 1479 added, 783 removed, 32 unchanged (99% of the section changed)

Statements and Supplementary Data.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Balance Sheets as of December 31, 2019 and 2018

Statements of Operations for the year ended December 31, 2019 and for the period from November 7, 2018 (inception) through

December 31, 2018

Statements of Changes in Stockholders’

Equity for the year ended December 31, 2019 and for the period from November 7, 2018 (inception) through December 31, 2018

Statements of Cash Flows for the year ended December 31, 2019 and for the period from November 7, 2018 (inception) through December 31, 2018

Notes to Financial Statements

of Independent Registered Public Accounting Firm

Consolidated financial

balance sheets

statements of operations

statements of stockholders’

equity (deficit)

statements of cash flows

to consolidated financial statements

REPORT OF INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM

the Stockholders and the Board of Directors of

Acquisition Corp.

on the Financial Statement

have audited the accompanying balance sheets of Tortoise Acquisition Corp.

(the “Company”) as of December 31, 2019

and 2018, and the related statements of operations, changes in shareholders’

equity and cash flows, for the year ended December

31, 2019 and for the period from November 7, 2018 (inception) through December 31, 2018, and the related notes (collectively referred

to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects,

the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for

the year ended December 31, 2019 and for the period from November 7, 2018 (inception) through December 31, 2018, in conformity

with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming

that the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, if the Company does not

complete a business combination by March 4, 2021, then the Company will cease all operations except for the purpose of winding

down and liquidating.

The mandatory liquidation and subsequent dissolution raise substantial doubt about the Company’s ability

to continue as a going concern.

The financial statements do not include any adjustments that might result from the outcome of this

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight

Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit

to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not

for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Board of Directors and Shareholders

Hyliion Holdings Corp.

Opinion on the financial statements

We have audited the accompanying consolidated balance sheets

of Hyliion Holdings Corp.

and subsidiaries (the “Company”) as of December 31, 2020 and 2019, the related consolidated

statements of operations, changes in stockholders’

equity (deficit), and cash flows for each of the two years in the period

ended December 31, 2020, and the related notes (collectively referred to as the “financial statements”).

In our opinion,

the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020

and 2019, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2020,

in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

These financial statements are the responsibility of the Company’s

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and

are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged

to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

Accordingly, we express no such opinion.

audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to

error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

WithumSmith+Brown, PC

have served as the Company’s auditor since 2018.

York, New York

ACQUISITION CORP.

Our audits included performing procedures to assess the risks

of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial

Our audits also included evaluating the accounting principles used and significant estimates made by management, as

well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis

for our opinion.

We have served as the Company’s auditor since 2020.

/s/ GRANT THORNTON LLP

Dallas, Texas

February 25, 2021

Holdings Corp.

Balance Sheets

amounts in thousands, except share and per share data)

Current assets:

Prepaid expenses

Cash and cash equivalents

Accounts receivable

Prepaid expenses and other current assets

Short-term investments

Total current assets

Investments held in Trust Account

Deferred offering costs associated with initial public offering

$ 237,148,974

Property and equipment, net

Operating lease right-of-use assets

Intangible assets, net

Long-term investments

Liabilities and stockholders’

equity (deficit)

Current liabilities:

Accounts payable

Accrued expenses

Note payable to Sponsor

Accrued franchise tax

Convertible notes payable derivative liabilities

Current portion of operating lease liabilities

Current portion of debt

Accrued expenses and other current liabilities

Total current liabilities

Deferred legal fees associated with initial public offering

Deferred underwriting commissions associated with initial public offering

Operating lease liabilities, net of current portion

Convertible notes payable derivative liabilities, net of

current portion

Debt, net of current portion

Total liabilities

Class A common stock, $0.0001 par value;

22,366,276 and -0- shares subject to possible redemption at $10.00 per share as of December 31, 2019 and 2018, respectively

Commitments and contingencies (Note 15)

Stockholders’

Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding as of December 31, 2019 and 2018

Class A common stock, $0.0001 par value;

200,000,000 shares authorized;

934,641 and -0- shares issued and outstanding (excluding 22,366,276 and -0- shares subject to possible redemption) as of December 31, 2019 and 2018, respectively

Class B common stock, $0.0001 par value;

equity (deficit)

Common stock, $0.0001 par value;

250,000,000 shares authorized;

5,825,230 and 6,468,750 shares issued and outstanding as of December 31, 2019 and 2018, respectively

169,316,421 and 86,762,463 shares issued and outstanding at December 31, 2020 and 2019, respectively

Additional paid-in capital

Retained earnings (accumulated deficit)

Accumulated deficit

Total stockholders’

equity (deficit)

Total liabilities and stockholders’

$ 237,148,974

amounts have been retroactively restated to reflect the stock dividend of 718,750 shares of Class B common stock in February 2019

(see Note 4).

This number includes up to 843,750 shares of Class B common stock that were subject to forfeiture to the extent the over-allotment

option was not exercised in full or in part by the underwriters.

On March 4, 2019, the underwriters partially exercised

their over-allotment option and on March 7, 2019, the underwriters waived the remainder of their over-allotment option.

In connection

therewith, the Sponsor forfeited 643,520 Founder Shares for cancellation by the Company.

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

ACQUISITION CORP.

OF OPERATIONS

For the Year Ended

For the period from

(inception) through

General and administrative expenses

Administrative expenses - related party

Franchise tax expense

equity (deficit)

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

Holdings Corp.

Statements of Operations

amounts in thousands, except share and per share data)

Years Ended December 31,

Operating expenses:

Research and development

Selling, general and administrative expenses

Loss from operations

Investment income from investments held in Trust Account

Income before income tax expense

Income tax expense

Weighted average shares outstanding of Class A common stock

Basic and diluted net income per share, Class A

Weighted average

shares outstanding of Class B common stock

Basic and diluted net income per share, Class B

Share amounts have been retroactively restated to reflect the stock dividend of 718,750 shares of Class B common stock in February

2019 (see Note 4).

This number excludes up to 843,750 shares of Class B common stock that were subject to forfeiture to the extent the over-allotment

option was not exercised in full or in part by the underwriters.

On March 4, 2019, the underwriters partially exercised their

over-allotment option and on March 7, 2019, the underwriters waived the remainder of their over-allotment option.

In connection

therewith, the Sponsor forfeited 643,520 Founder Shares for cancellation by the Company.

accompanying notes are an integral part of these financial statements.

ACQUISITION CORP.

OF CHANGES IN STOCKHOLDERS’

Retained earnings

Class B (1)(2)

Other income (expense):

Interest expense

Change in fair value of convertible notes payable derivative liabilities

Loss on extinguishment of debt

Total other expense

Net loss per share, basic and diluted

Weighted-average shares outstanding, basic and diluted

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

Holdings Corp.

Statements of Stockholders’

Equity (Deficit)

amounts in thousands, except share data)

A-1 Redeemable,

Convertible Preferred Stock

A-2 Redeemable,

Convertible Preferred Stock

A-3 Redeemable,

Convertible Preferred Stock

Stockholders’

Balances - November 7, 2018 (date of inception)

Issuance of Class B common stock to Sponsor

Balances - December 31, 2018

Sale of units in initial public offering, gross

Offering costs

(13,355,381 )

Sale of private placement warrants to Sponsor in private placement

Forfeiture of Class B common stock

Common stock subject to possible redemption

(22,366,276 )

(223,660,524 )

Balance at December 31, 2018

application of recapitalization (See Note 3)

(23,460,903 )

Balances - December 31, 2019

Share amounts have been retroactively restated to reflect the stock dividend of 718,750 shares of Class B common stock in February

2019 (see Note 4).

This number excludes up to 843,750 shares of Class B common stock that were subject to forfeiture to the extent the over-allotment

option was not exercised in full or in part by the underwriters.

On March 4, 2019, the underwriters partially exercised their

over-allotment option and on March 7, 2019, the underwriters waived the remainder of their over-allotment option.

In connection

therewith, the Sponsor forfeited 643,520 Founder Shares for cancellation by the Company.

accompanying notes are an integral part of these financial statements.

ACQUISITION CORP.

OF CASH FLOWS

For the Year Ended

For the period from

(inception) through

Cash Flows from Operating Activities:

Net income (loss)

Adjustments to reconcile net income to net cash used in operating activities:

General and administrative expenses paid by Sponsor

Investment income from investments held in Trust Account

Changes in operating assets and liabilities:

Prepaid expenses

Adjusted balance, beginning of period

Exercise of common stock options

Share-based compensation

Balance at December 31, 2019

Exercise of common stock options

Conversion of convertible

notes payable to common stock

Business Combination and

PIPE financing

Common stock issued for

warrants exercised, net of issuance cost

Redemption of unexercised

Share-based compensation

Balance at December 31,

The accompanying

notes are an integral part of these consolidated financial statements.

Holdings Corp.

Statements of Cash Flows

amounts in thousands, except share data)

Years Ended December 31,

Operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Loss on extinguishment of debt

Noncash lease expense

Paid-in-kind interest on convertible notes payable

Amortization of debt discount

Share-based compensation

Change in fair value of convertible notes payable derivative liabilities

Change in fair value of contingent consideration liability

Change in operating assets and liabilities, net of effects of business

Accounts receivable

Prepaid expenses and other current assets

Accounts payable

Accrued expenses

Accrued franchise tax

Accrued expenses and other current liabilities

Operating lease liabilities

Net cash used in operating activities

Cash Flows from Investing Activities

Cash deposited in Trust Account

(233,009,170 )

Interest released from Trust Account

Investing activities:

Purchase of property and equipment

Purchase of investments

Proceeds from sale of property and equipment

Net cash used in investing activities

(232,197,170 )

Cash Flows from Financing Activities:

Gross proceeds received from initial public offering

Proceeds received from sale of private placement warrants

Repayment of note payable to Sponsor

Offering costs paid

Financing activities:

Business Combination and PIPE financing, net of issuance costs paid

Proceeds from the exercise of stock warrants

Proceeds from convertible notes payable issuance and derivative liabilities

Proceeds from Paycheck Protection Program loan

Payments for deferred financing costs

Repayments on finance lease obligations

Proceeds from exercise of common stock options

Net cash provided by financing activities

Net increase in cash

Cash - beginning of the period

Cash - end of the period

Supplemental disclosure of noncash investing and financing activities:

Reduction of accounts payable paid by Sponsor included in note payable

Offering costs paid by Sponsor in exchange for issuance of Class B common stock

Offering costs included in accrued expenses

Offering costs included in accounts payable

Offering costs included in note payable

Deferred underwriting commissions associated with the initial public offering

Deferred legal fees associated with the initial public offering

Prepaid expenses included in note payable

Value of common stock subject to possible redemption

$ 223,662,761

Supplemental cash flow disclosure:

Cash paid for income taxes

The accompanying notes are an integral

part of these financial statements.

DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Acquisition Corp.

(the “Company”) was incorporated in Delaware on November 7, 2018.

The Company was formed for the

purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination

with one or more businesses (the “Initial Business Combination”).

The Company is an “emerging growth company,”

as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart

Our Business Startups Act of 2012 (the “JOBS Act”).

of December 31, 2019, the Company had not commenced any operations.

All activity for the period from November 7, 2018 (date of

inception) to December 31, 2019 relates to the Company’s formation and the initial public offering (the “Initial Public

Offering”) described below, and since the closing of the Initial Public Offering, the identification and evaluation of prospective

acquisition targets for an Initial Business Combination and ongoing administrative and compliance matters.

The Company will not

generate any operating revenues until after completion of its Initial Business Combination, at the earliest.

The Company generates

non-operating income in the form of interest income earned on investments from the net proceeds derived from the Initial Public

and Initial Public Offering

Company’s sponsor is Tortoise Sponsor LLC, a Delaware limited liability company (the “Sponsor”).

in Note 3, on March 4, 2019, the Company consummated the Initial Public Offering of 23,300,917 of its units (the “Units”),

including 800,917 Units that were issued pursuant to the underwriters’

partial exercise of their over-allotment option,

generating gross proceeds of approximately $233.0 million.

As described in Note 4, on March 4, 2019, simultaneously with the closing

of the Initial Public Offering, Tortoise Borrower LLC, a Delaware limited liability company (“Tortoise Borrower”)

and an affiliate of the Sponsor, purchased an aggregate of 6,660,183 warrants (the “Private Placement Warrants”) at

a purchase price of $1.00 per warrant, generating gross proceeds to the Company of approximately $6.66 million (the “Private

Placement”).

Company intends to finance its Initial Business Combination with proceeds from the Initial Public Offering, the Private Placement,

the private placement of Forward Purchase Securities (described in Note 5), and from additional issuances, if any, of the Company’s

capital stock, debt or a combination of the foregoing.

the closing of the Initial Public Offering and the Private Placement, approximately $233.0 million was placed in a trust account

(the “Trust Account”), with Continental Stock Transfer & Trust Company acting as trustee.

The proceeds held in

the Trust Account are invested only in U.S.

government securities with a maturity of 180 days or less or in money market funds

that meet certain conditions under Rule 2a-7 under the Investment Company Act of 1940, as amended, which invest only in direct

government treasury obligations.

Funds will remain in the Trust Account until the earlier of (i) the consummation of the

Initial Business Combination and (ii) the distribution of the Trust Account proceeds as described below.

The remaining proceeds

outside the Trust Account may be used to pay for business, legal and accounting due diligence on prospective acquisitions and

general and administrative expenses.

Company’s amended and restated certificate of incorporation provides that, except for the withdrawal of interest to pay

franchise and income taxes, none of the funds held in the Trust Account (including the interest earned on the funds in the Trust

Account) will be released from the Trust Account until the earlier of:

(i) the completion of the Initial Business Combination;

(ii) the redemption of any shares of Class A common stock included in the Units sold in the Initial Public Offering (the “Public

Shares”) that have been properly tendered in connection with a stockholder vote seeking to amend the Company’s amended

and restated certificate of incorporation to affect the substance or timing of its obligation to redeem 100% of such Public Shares

if it has not consummated an Initial Business Combination within 24 months from the closing of the Initial Public Offering (the

“Combination Period”);

and (iii) the redemption of 100% of the Public Shares if the Company is unable to complete

an Initial Business Combination within the Combination Period.

The proceeds deposited in the Trust Account could become subject

to the claims of the Company’s creditors, if any, which could have priority over the claims of the Company’s public

stockholders.

Business Combination

Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public

Offering, although substantially all of the net proceeds of the Initial Public Offering are intended to be generally applied toward

consummating an Initial Business Combination.

The New York Stock Exchange (the “NYSE”) rules require that the Initial

Business Combination occur with one or more target businesses that together have a fair market value of at least 80% of the assets

held in the Trust Account (excluding the deferred underwriting discounts and commissions and taxes payable on the interest earned

on the Trust Account) at the time of the agreement to enter into the Initial Business Combination.

There is no assurance that

the Company will be able to successfully effect an Initial Business Combination.

Company, after signing a definitive agreement for an Initial Business Combination, will either (i) seek stockholder approval of

the Initial Business Combination at a meeting called for such purpose in connection with which stockholders may seek to redeem

their Public Shares, regardless of whether they vote for or against the Initial Business Combination, for cash equal to their

pro rata share of the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the

Initial Business Combination, including interest not previously released to the Company to pay its franchise and income taxes,

or (ii) provide stockholders the opportunity to sell their Public Shares to the Company by means of a tender offer (and thereby

avoid the need for a stockholder vote) for an amount in cash equal to their pro rata share of the aggregate amount on deposit

in the Trust Account as of two business days prior to the consummation of the Initial Business Combination, including interest

not previously released to the Company to pay its franchise and income taxes.

The decision as to whether the Company will seek

stockholder approval of the Initial Business Combination or allow stockholders to sell their Public Shares in a tender offer will

be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction

and whether the terms of the transaction would otherwise require the Company to seek stockholder approval, unless a vote is required

by law or under NYSE rules.

If the Company seeks stockholder approval, it will complete its Initial Business Combination only

if a majority of the outstanding shares of common stock voted are voted in favor of the Initial Business Combination.

in no event will the Company redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001.

In such case, the Company would not proceed with the redemption of its Public Shares and the related Initial Business Combination,

and instead would search for an alternate Initial Business Combination.

the Company holds a stockholder vote or there is a tender offer for shares in connection with an Initial Business Combination,

a stockholder will have the right to redeem such holder’s Public Shares for an amount in cash equal to such holder’s

pro rata share of the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the

Initial Business Combination, including interest not previously released to the Company to pay its franchise and income taxes.

As a result, such Public Shares are recorded as temporary equity upon the completion of the Initial Public Offering, in accordance

with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480,

“Distinguishing Liabilities from Equity.”

Notwithstanding

the foregoing, the Company’s amended and restated certificate of incorporation provides that a public stockholder, together

with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group”

(as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted

from redeeming their shares with respect to more than an aggregate of 20% or more of the shares of Class A common stock sold in

the Initial Public Offering, without the prior consent of the Company.

Sponsor, Tortoise Borrower, the Company’s officers and directors and Atlas Point Energy Infrastructure Fund, LLC (“Atlas

Point Fund”) (collectively, the “Initial Stockholders”) agreed not to propose an amendment to the amended and

restated certificate of incorporation that would affect the substance or timing of the Company’s obligation to redeem 100%

of the Public Shares if the Company does not complete an Initial Business Combination, unless the Company provides the public

stockholders the opportunity to redeem their shares of Class A common stock in conjunction with any such amendment.

to the Company’s amended and restated certificate of incorporation, if the Company is unable to complete an Initial Business

Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii)

as promptly as reasonably possible but no more than 10 business days thereafter subject to lawfully available funds therefor,

redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account

including interest earned on the funds held in the Trust Account and not previously released to the Company to pay the Company’s

franchise and income taxes (less up to $100,000 of such net interest to pay dissolution expenses), divided by the number of then-outstanding

Public Shares, which redemption will completely extinguish the public stockholders’

rights as stockholders (including the

right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible

following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board

of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for

claims of creditors and the requirements of other applicable law.

The Initial Stockholders have entered into a letter agreement

with the Company, pursuant to which they agreed to waive their rights to liquidating distributions from the Trust Account with

respect to any Founder Shares (as defined below) held by them if the Company fails to complete the Initial Business Combination

within the Combination Period.

However, if any of the Initial Stockholders acquire shares of Class A common stock in or after

the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such shares

if the Company fails to complete the Initial Business Combination within the Combination Period.

the event of a liquidation, dissolution or winding up of the Company after an Initial Business Combination, the Company’s

stockholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities

and after provision is made for each class of stock, if any, having preference over the common stock.

The Company’s stockholders

have no preemptive or other subscription rights.

There are no sinking fund provisions applicable to the common stock, except that

the Company will provide its stockholders with the opportunity to redeem their Public Shares for cash equal to their pro rata

share of the aggregate amount then on deposit in the Trust Account and not previously released to the Company to pay the Company’s

franchise and income taxes, upon the completion of the Initial Business Combination, subject to the limitations described herein.

April 22, 2019, holders of the Units were permitted to elect to separately trade the shares of Class A common stock and Warrants

(as defined below) included in the Units.

No fractional shares will be issued upon separation of the Units and only whole Warrants

Concern Consideration

of December 31, 2019, the Company had approximately $916,000 of cash in its operating account and approximately $3.0 million of

investment income in the Trust Account available to pay franchise and income taxes (less up to $100,000 of such net interest to

pay dissolution expenses).

December 31, 2019, the Company’s liquidity needs have been satisfied through a $25,000 capital contribution from the Sponsor

in exchange for the issuance of the Founder Shares (as defined below and described in Note 4) to the Sponsor, an approximately

$580,000 loan from the Sponsor pursuant to an unsecured promissory note (the “Note”), the net proceeds from the consummation

of the Private Placement not held in the Trust Account and an aggregate of $812,000 of interest income released from the Trust

Account since inception to fund tax obligations.

The Company repaid the Note to the Sponsor in full on March 29, 2019.

connection with the Company’s assessment of going concern considerations in accordance with FASB Accounting Standards Update

(“ASU”) 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern,”

management has determined that the mandatory liquidation and subsequent dissolution raises substantial doubt about the Company’s

ability to continue as a going concern.

No adjustments have been made to the carrying amounts of assets or liabilities should

the Company be required to liquidate after March 4, 2021.

Net increase in cash and cash equivalents:

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

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

Description of business and basis of presentation

Hyliion Holdings Corp.

and its wholly owned

subsidiary, designs and develops hybrid and electrified powertrain systems for long haul “Class 8”

semi-tractors

which modify semi-tractors into Hybrid and fully electric range extender vehicles, respectively.

Hyliion Holdings Corp.’s Hybrid systems

utilize intelligent electric drive axles with advanced algorithms and battery technology to optimize fuel savings and vehicle performance

with reduced emissions, enabling fleets to access an easy, efficient way to decrease fuel expenses, lower emissions and/or improve

vehicle perfomance.

Hyliion Holdings Corp.’s fully electric

range extender systems utilize an intelligent electric powertrain with advanced algorithms to optimize emissions performance and

efficiency with no new infrastructure required.

The Hypertruck ERX system enables fleets to reduce the cost of ownership while

providing the ability to deliver net-negative carbon emissions and operate fully electric when needed.

Hyliion Holdings Corp.

is in a pre-commercialization

stage of development in which its electric Hybrid system is in the testing phase and the Hypertruck ERX system is in the prototype

Basis of Presentation and Principles

of Consolidation:

On October 1, 2020 (the “Closing Date”), Tortoise Acquisition Corp (“TortoiseCorp”)

entered into a business combination agreement (the “Business Combination”) with each of the shareholders of Hyliion

(“Legacy Hyliion”).

Pursuant to the Business Combination, TortoiseCorp acquired all of the issued and outstanding

shares of common stock from the Legacy Hyliion shareholders.

In connection with the closing of the transaction, Tortoise Corp.

changed its name to Hyliion Holdings Corp.

For more information on this transaction see Note 3.

On the Closing Date, and in connection

with the closing of the Business Combination, TortoiseCorp changed its name to Hyliion Holdings Corp.

(the “Company”

or “Hyliion”) and the Company’s common stock began trading on the New York Stock Exchange under the ticker symbol

Legacy Hyliion was deemed the accounting acquirer in the Business Combination based on an analysis of the criteria outlined

in Accounting Standards Codification (“ASC”) 805.

The determination was primarily based on Legacy Hyliion’s shareholders

prior to the Business Combination having a majority of the voting interests in the combined company, Legacy Hyliion’s board

of directors comprising a majority of the board of directors of the combined company, Legacy Hyliion’s existing shareholders’

control over decisions regarding the election and removal of directors and officers of the combined company’s board of directors,

and Legacy Hyliion’s senior management comprising the senior management of the combined company.

Accordingly, for accounting

purposes, the Business Combination was treated as the equivalent of Legacy Hyliion issuing stock for the net assets of TortoiseCorp,

accompanied by a recapitalization.

The net assets of TortoiseCorp are stated at historical cost, with no goodwill or other intangible

assets recorded.

TortoiseCorp was the legal acquirer in the Business Combination, because Legacy Hyliion was deemed the accounting acquirer, the

historical financial statements of Legacy Hyliion became the historical financial statements of the combined company, upon the

consummation of the Business Combination.

As a result, the financial statements included in this report reflect (i) the historical

operating results of Legacy Hyliion prior to the Business Combination;

(ii) the combined results of TortoiseCorp and Legacy Hyliion

following the closing of the Business Combination;

(iii) the assets and liabilities of Legacy Hyliion at their historical cost;

and (iv) the Company’s equity structure for all periods presented.

In accordance with guidance applicable

to these circumstances, the equity structure has been restated in all comparative periods up to the Closing Date, to reflect the

number of shares of the Company’s common stock, $0.0001 par value per share, issued to Legacy Hyliion shareholders and Legacy

Hyliion convertible noteholders in connection with the recapitalization transaction.

As such, the shares and corresponding capital

amounts and earnings per share related to Legacy Hyliion redeemable convertible preferred stock and Legacy Hyliion common stock

prior to the Business Combination have been retroactively restated as shares reflecting the exchange ratio established in the Business

accompanying consolidated financial statements include the accounts of Hyliion Holdings Corp.

and its wholly-owned subsidiary.

Intercompany transactions and balances have been eliminated upon consolidation.

The consolidated financial statements and accompanying

notes have been prepared in accordance with generally accounting principles in the United States of America (“U.S.

and in accordance with the rules and regulations of the Unites States Securities and Exchange Commission (“SEC”).

Any reference in these footnotes to the applicable guidance is meant to refer to the authoritative U.S.

GAAP as found in the Accounting

Standards Codification and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).

These consolidated financial statements have been prepared on a going concern basis, which contemplates the realization

of assets and settlement of liabilities in the normal course of business.

The Company is an early stage growth company in the

pre-commercialization stage of development and has generated negative cash flows from operating activities since inception.

On October 1, 2020, the Company consummated

the Business Combination and raised net proceeds of $516.5 million net of transaction costs and expenses.

As of December 31, 2020,

all outstanding warrants were either exercised or redeemed, with gross proceeds of $140.8 million raised, of which $16.3 million

was collected during the first quarter of 2021 (see Note 7).

As of December 31, 2020, the Company had a cash and cash equivalents

balance of $389.7 million and total investments of $237.9 million.

Based on this, the Company has sufficient funds to continue

to execute its business strategy for the next twelve months.

Summary of significant accounting policies

of Presentation

accompanying financial statements are presented in U.S.

dollars in conformity with accounting principles generally accepted in

the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.

preparation of these financial statements in conformity with GAAP requires the Company’s management to make estimates and

assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at

the date of the balance sheet and the reported amounts of revenue and expenses during the reporting period.

It is at least reasonably

possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the balance

sheet, which management considered in formulating its estimate, could change due to one or more future confirming events.

results could differ from these estimates.

Growth Company :

102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting

standards until private companies (that is, those that have not had a Securities Act registration statement declared effective

or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial

accounting standards.

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with

the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable.

The Company has

elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different

application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard

at the time private companies adopt the new or revised standard.

This may make comparison of the Company’s financial statements

with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of

using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Section 102(b)(1) of the Jumpstart Our Business Startups Act (“JOBS Act”) exempts emerging

growth companies from being required to comply with new or revised financial accounting standards until private companies (that

is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered

under the Securities Exchange Act of 1934, as amended) are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that

apply to non-emerging growth companies but any such election to opt out is irrevocable.

The Company has elected not to opt out

of such extended transition period which means that when a standard is issued or revised and it has different application dates

for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time

private companies adopt the new or revised standard, until such time the Company is no longer considered to be an emerging growth

At times, the Company may elect to early adopt a new or revised standard.

of estimates and uncertainty of the coronavirus pandemic :

The preparation of financial statements in conformity with U.S.

GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities

and disclosure of contingent assets and liabilities as of the balance sheet date, as well as reported amounts of expenses during

the reporting period.

The Company’s most significant estimates and judgments involve valuation of share-based compensation,

including the fair value of common stock prior to the Business Combination, and the valuation of the convertible notes payable

derivative liability.

Management bases its estimates on historical experience and on various other assumptions believed to be

reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

results could differ from those estimates, and such differences could be material to the Company’s consolidated financial

On January 30, 2020, the World Health

Organization declared the coronavirus outbreak a “Public Health Emergency of International Concern”

and on March 11,

2020, declared the coronavirus outbreak a pandemic.

In mid-March 2020, U.S.

State Governors, local officials and leaders outside

began ordering various “shelter-in-place”

orders, which have had various impacts on the U.S.

This has required greater use of estimates and assumptions in the preparation of the unaudited consolidated financial

the coronavirus pandemic continues to evolve, the Company believes the extent of the impact to its businesses, operating results,

cash flows, liquidity and financial condition will be primarily driven by the severity and duration of the coronavirus pandemic,

the pandemic’s impact on the U.S.

and global economies and the timing, scope and effectiveness of federal, state and local

governmental responses to the pandemic.

Those primary drivers are beyond the Company’s knowledge and control, and as a result,

at this time the Company is unable to predict the cumulative impact, both in terms of severity and duration, that the coronavirus

pandemic will have on its business, operating results, cash flows and financial condition, but it could be material if the current

circumstances continue to exist for a prolonged period.

Although the Company has made its best estimates based upon current information,

actual results could materially differ from the estimates and assumptions developed by management.

If so, the Company may be subject

to future impairment charges as well as changes to recorded reserves and valuations.

ASC 280, Segment Reporting , defines operating segments as components of an enterprise where discrete

financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”) in deciding

how to allocate resources and in assessing performance.

The Company operates as a single operating segment.

The Company’s

chief operating decision maker (“CODM”) is the chief executive officer, who has ultimate responsibility for the operating

performance of the Company and the allocation of resources.

The CODM uses cash flows as the primary measure to manage the business

and does not segment the business for internal reporting or decision making.

Concentration

of Credit Risk

instruments that potentially subject the Company to credit risk consist principally of cash and investments held in the Trust

Cash is maintained in accounts with financial institutions, which, at times may exceed the federal depository insurance

coverage of $250,000.

The Company has not experienced losses on its cash accounts and management believes, based upon the quality

of the financial institutions, that the credit risk with regard to these deposits is not significant.

The Company’s investments

held in the Trust Account consist entirely of an investment in a money market fund that comprises only U.S.

treasury securities.

Held in Trust Account

Company’s portfolio of investments held in the Trust Account are comprised solely of an investment in a money market fund

that comprises only U.S.

treasury securities classified as trading securities.

Trading securities are presented on the balance

sheets at fair value at the end of each reporting period.

Gains and losses resulting from the change in fair value of these securities

is included in gain on marketable securities (net), dividends and interest, held in the Trust Account in the accompanying statement

of operations.

The fair value for trading securities is determined using quoted market prices in active markets.

of supplier risk:

The Company is dependent on certain suppliers, the majority of which are single source suppliers, and

the inability of these suppliers to deliver necessary components of the Company’s products in a timely manner at prices,

quality levels and volumes that are acceptable, or the Company’s inability to efficiently manage these components from these

suppliers, could have a material adverse effect on the Company’s business, prospects, financial condition and operating

Cash and cash equivalents:

Company considers all highly liquid investments with a maturity date of 90 days or less at the time of purchase to be cash and

cash equivalents only if in checking, savings or money market accounts.

Cash and cash equivalents include cash held in banks and

money market accounts.

Cash equivalents are carried at cost, which approximates fair value.

Company maintains cash in excess of federally insured limits at financial institutions.

The Company makes such deposits with entities

it believes are of high credit quality and has not incurred any losses related to these balances to date.

Management believes

its credit risk, with respect to the financial institutions to be minimal.

Accounts receivable are stated at a gross invoice amount, net of an allowance for doubtful accounts.

The allowance

for doubtful accounts is maintained at a level considered adequate to provide for potential account losses on the balance based

on management’s evaluation of the anticipated impact of current economic conditions, changes in the character and size of

the balance, past and expected future loss experience, among other pertinent factors.

As of December 31, 2020 and 2019, there

was no allowance for doubtful accounts required based on management’s evaluation.

The Company’s

investments consist of corporate bonds, treasury securities and commercial paper, all of which are classified as held-to-maturity,

with a maturity date of 36-months or less at the time of purchase.

Management determines the appropriate classification of investments

at the time of purchase and re-evaluates such designation as of each balance sheet date.

Investments are classified as held-to-maturity

when the Company has the positive intent and ability to hold the securities to maturity.

Held-to-maturity securities are stated

at amortized cost, adjusted for amortization of premiums and accretion of discounts to maturity.

Such amortization is included

in investment income.

Interest on securities classified as held-to-maturity is included in investment income.

Company uses the specific identification method to determine the cost basis of securities sold.

are impaired when a decline in fair value is judged to be other-than-temporary.

The Company evaluates an investment for impairment

by considering the length of time and extent to which market value has been less than cost or amortized cost, the financial condition

and near-term prospects of the issuer as well as specific events or circumstances that may influence the operations of the issuer

and the Company’s intent to sell the security or the likelihood that it will be required to sell the security before recovery

of the entire amortized cost.

Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded

to other income (expense) and a new costs basis in the investment is established.

value measurements:

value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction

between market participants at the measurement date.

GAAP establishes a three-tier fair value hierarchy, which prioritizes the

inputs used in measuring fair value.

hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level

1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

These tiers include:

1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments

in active markets;

2, defined as inputs other than quoted prices in active markets that are either directly

or indirectly observable such as quoted prices for similar instruments in active markets

or quoted prices for identical or similar instruments in markets that are not active;

3, defined as unobservable inputs in which little or no market data exists, therefore

requiring an entity to develop its own assumptions, such as valuations derived from valuation

techniques in which one or more significant inputs or significant value drivers are unobservable.

some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy.

In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest

level input that is significant to the fair value measurement.

of December 31, 2019 and 2018, the recorded values of cash, accounts payable, accrued expenses and notes payable to Sponsor approximate

their fair values due to the short-term nature of the instruments.

Offering Costs

costs consist of expenses incurred in connection with preparation of the Initial Public Offering, of approximately $13.36 million

consisted principally of underwriter discounts of $12.77 million (including $8.13 million of which payment is deferred) and approximately

$583,000 of professional, printing, filing, regulatory and other costs.

These expenses, together with the underwriting discounts

and commissions, were charged to equity upon completion of the Initial Public Offering.

A Common Stock Subject to Possible Redemption

Company accounts for its Class A common stock subject to possible redemption in accordance with FASB ASC 480, “Distinguishing

Liabilities from Equity.”

Shares of Class A common stock subject to mandatory redemption (if any) are classified as a liability

and measured at fair value.

Shares of conditionally redeemable Class A common stock (including shares of Class A common stock

that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of

uncertain events not solely within the Company’s control) are classified as temporary equity.

At all other times, shares

of Class A common stock are classified as stockholders’

The Company’s Class A common stock features certain

redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain

future events.

The Company recognizes changes in redemption value immediately as they occur and will adjust the carrying value

of the security at the end of each reporting period.

Increases or decreases in the carrying value amount of redeemable shares

of Class A common stock are affected by charges against additional paid-in capital.

Accordingly, as of December 31, 2019, 22,366,276

shares of Class A common stock subject to conditional redemption are presented as temporary equity, outside of the stockholders’

equity section of the Company’s balance sheet.

Income (Loss) Per Share of Common Stock

Company’s statement of operations includes a presentation of income per share for common stock subject to redemption in

a manner similar to the two-class method of income per share.

Basic and diluted net income per share of Class A common stock for

the year ended December 31, 2019 is calculated by dividing the investment income earned on the investments held in the Trust Account

(approximately $3.9 million, net of funds available to be withdrawn from the Trust Account for payment of taxes, resulting in

a total of approximately $2.9 million), by the weighted average number of approximately 23.3 million shares of Class A common

stock outstanding for the periods.

Basic and diluted net loss per share of Class B common stock for the year ended December 31,

2019 is calculated by dividing the net income (approximately $2.3 million, less income attributable to Class A common stock in

the amount of approximately $2.9 million, resulting in a net loss of approximately $565,000), by the weighted average number of

5.8 million shares of Class B common stock outstanding for the period.

income (loss) per share of common stock is computed by dividing net income (loss) applicable to common stockholders by the weighted

average number of shares of common stock outstanding for the period.

The Company has not considered the effect of the Warrants

sold in the Initial Public Offering and the Private Placement Warrants to purchase an aggregate 18,310,641 shares of Class A common

stock in the calculation of diluted loss per share, since inclusion would be anti-dilutive under the treasury stock method as

of December 31, 2019.

Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes”

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences

between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred income

tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those

temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in

tax rates is recognized in income during the period that included the enactment date.

Valuation allowances are established, when

necessary, to reduce deferred tax assets to the amount expected to be realized.

740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of

tax positions taken or expected to be taken in a tax return.

For those benefits to be recognized, a tax position must be more

likely than not to be sustained upon examination by taxing authorities.

There were no unrecognized tax benefits as of December

31, 2019 and 2018.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.

No amounts were accrued for the payment of interest and penalties as of December 31, 2019 and 2018.

The Company is currently not

aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

The Company is subject to income tax examinations by major taxing authorities since inception.

of December 31, 2019 and 2018, the Company had gross deferred tax assets related to federal and state net operating loss carryforwards

for income tax purposes of approximately $119,000 and $120, respectively.

The Company has not performed a detailed analysis to

determine whether an ownership change under Section 382 of the Internal Revenue Code has occurred.

The effect of an ownership

change would be the imposition of an annual limitation on the use of net operating loss carryforwards attributable to periods

before the change.

assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or

all of the deferred tax assets will be realized.

The ultimate realization of deferred tax assets is dependent upon the generation

of future taxable income during the period in which those temporary differences become deductible.

Management considers the scheduled

reversal of deferred tax liabilities, projected future taxable income and taxing strategies in making this assessment.

the deferred tax assets will not be realized in future periods, the Company has provided a valuation allowance for the full amount

of the deferred tax assets as of December 31, 2019 and 2018.

Accounting Pronouncements

December 2019, the FASB issued ASU No.

2019-12, “Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes”

(“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes.

removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent

This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December

ASC 820, Fair Value Measurements , clarifies that fair value is an exit price, representing

the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

As such, fair value is a market-based measurement that should be determined based upon assumptions that market participants would

use in pricing an asset or liability.

As a basis for considering such assumptions, ASC 820 establishes a three-tier fair value

hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Company can access at the measurement

Significant other observable inputs other than level 1 prices such as quoted prices for similar assets or liabilities,

quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data.

Significant unobservable inputs that reflect the Company’s own assumptions about the assumptions that market participants

would use in pricing an asset or liability.

asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of

any input that is significant to the fair value measurement.

Valuation techniques used need to maximize the use of observable

inputs and minimize the use of unobservable inputs.

and liabilities measured at fair value are based on one or more of the following three valuation techniques noted in ASC 820:

Prices and other relevant information generated by market transactions involving

identical or comparable assets or liabilities.

Amount that would be required to replace the service capacity of an asset (replacement

Techniques to convert future amounts to a single present value amount based

upon market expectations (including present value techniques, option pricing and excess

earnings models)

Company believes its valuation methods are appropriate and consistent with other market participants, however the use of different

methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value

measurement at the reporting date.

Company’s financial instruments consist of cash and cash equivalents, accounts receivable, investments, accounts payable,

accrued expenses, contingent consideration liability, convertible notes payable derivative liability, and convertible notes payable.

carrying value of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximates fair value

because of the short-term nature of those instruments.

We estimate the fair value of our convertible notes payable using level

two and level three inputs by discounting the future cash flows using current interest rates at which we could obtain similar

borrowings in consideration of the estimated enterprise value of the Company.

The fair value of corporate bonds, treasury securities

and commercial paper are based on quoted prices for identical or similar instruments in markets that are not active.

corporate bonds, treasury securities and commercial paper are classified within Level II of the fair value hierarchy.

The Company’s assets and liabilities

that are measured at fair value on a recurring basis include the Company’s contingent consideration liability and convertible

notes payable derivative liabilities (See Note 4).

Prepaid expenses and other current

Prepaid expenses and other current assets include prepaid insurance, prepaid rent, supplies, and amounts owed

to the Company from the Company’s transfer agent (see Note 7) which are expected to be recognized, received or realized

within the next 12 months.

and equipment, net:

Property and equipment, net is stated at cost less accumulated depreciation, or if acquired in a business

combination, at fair value as of the date of acquisition.

Depreciation is calculated using the straight-line method, based upon

the following estimated useful lives:

Production machinery and equipment

Leasehold improvements

shorter of lease term or 7 years

Demo fleet systems

Furniture and fixtures

Computers and related equipment

renewals and improvements are capitalized, while replacements, maintenance and repairs, which do not improve or extend the lives

of the respective assets, are expensed as incurred.

When property and equipment is retired or otherwise disposed of, the related

cost and accumulated depreciation are removed from the accounts, and any gain or loss on the disposition is recorded in the consolidated

statement of operations as a component of other (expense) income.

Intangible assets consist of developed technology and a non-compete agreement and are amortized over their

estimated useful life which range from three to six years.

of long-lived assets :

The Company reviews long-lived assets, including property and equipment and intangible assets with

definite lives, for impairment whenever events or changes in circumstances indicate that an asset group’s carrying amount

may not be recoverable.

The Company conducts its long-lived asset impairment analysis in accordance with ASC 360-10, Impairment

or Disposal of Long-Lived Assets , which requires the Company to group assets and liabilities at the lowest level for which

identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group

against the sum of the undiscounted future cash flows.

If the undiscounted cash flows do not indicate the carrying amount of the

asset group is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds

its fair value.

The Company follows the five steps to recognize revenue from contracts with customers under ASC 606, Revenue from Contracts

with Customers (“ASC 606”), which are:

Identify the contract(s) with a customer

Identify the performance obligations in the contract

Determine the transaction price

Allocate the transaction price to the performance obligations in the contract

Recognize revenue when (or as) a performance obligation is satisfied

Company intends to generate revenue from the sale of its hybrid and electrified drive systems for the long haul “Class 8”

semi-tractors.

However, since the Company is still in the pre-commercialization stage, it has not generated revenue from the sale

of the products.

Company did not enter into any agreement that meets the definition of a contract with a customer that would be accounted for under

ASC 606 through December 31, 2020.

The Company determines if an arrangement is a lease at inception of the contract.

Operating leases are included in operating

lease right-of-use (“ROU”) assets, current portion of operating lease liabilities, and operating lease liabilities,

net of current portion in the accompanying consolidated balance sheets.

Finance leases are included in property and equipment,

net, current portion of long-term debt, and long-term debt, net of current portion in the accompanying consolidated balance sheets.

assets represent the Company’s right to use underlying assets for the lease term, and lease liabilities represent the Company’s

obligation to make lease payments arising from the leases.

ROU assets and lease liabilities are recognized at the commencement

date based on the present value of lease payments over the lease term.

The discount rate used to calculate the present value for

lease payments is the Company’s incremental borrowing rate, which is determined based on information available at lease

commencement and is equal to the rate of interest that the Company would have to pay to borrow on a collateralized basis over

a similar term in an amount equal to the lease payments in a similar economic environment.

The Company uses the implicit rate

when readily determinable.

Company has entered into operating leases for corporate offices having initial lease terms of one to eight years.

has entered into finance leases primarily for vehicles and equipment, having initial terms of three years.

Company’s real estate leases may include one or more options to renew, with the renewal extending the lease term for an

additional one to five years.

The exercise of lease renewal option is at the Company’s sole discretion.

In general, the

Company does not consider renewal option to be reasonably likely to be exercised, therefore renewal option are generally not recognized

as part of the ROU assets and lease liabilities.

Lease costs for lease payments are recognized on a straight-line basis over the

lease term, unless there is a transfer of title or purchase option reasonably certain to be exercised.

The Company does not record

operating leases with an initial term of twelve months or less (“short-term leases”) in the consolidated balance sheets.

Company’s vehicle and equipment leases may include transfer rights or options to purchase at the end of the lease that the

Company is reasonably certain to exercise.

Interest expense is recognized using the effective interest rate method, and the ROU

asset is amortized over the useful life of the underlying asset.

The Company also enters into arrangements whereby space within the real estate is subleased.

At the lease commencement

date these subleases are recognized as operating leases.

Operating leases are recognized on a straight-line basis over the lease

Company has entered into various trial and evaluation agreements that contain an operating lease component that is within the

scope of ASC 842, Leases (“ASC 842”).

These agreements also contain non-lease components related to certain

stand-ready services where control transfers over time over the same period and based on the same pattern as the lease component.

Because the Company has determined the lease component is the most predominant component of the arrangement and the timing and

pattern of transfer for the lease and non-lease components associated with the lease component are the same, the Company has decided

to elect the practical expedient not to separate the lease and non-lease component and accounts for the entire arrangement under

trial and evaluation agreements contain only variable payments not based on an index or rate as a result of refund provisions

within those contracts.

The Company records accounts receivable when the Company meets the criteria within the trial and evaluation

agreements to invoice the lessee.

In accordance with ASC 842, the Company recognizes variable lease payments as profit or loss

in the period in which the changes in facts and circumstances on which the variable lease payments are based occur, which will

generally be the end of the trial period when the customer refund rights lapse.

During the years ended December 31, 2020 and 2019,

the Company has not recognized any lease income related to these trial and evaluation agreements either because the Company has

not received any consideration from the lease contracts, or the uncertainty related to the consideration received has not been

of the Company’s lessee and lessor lease agreements contain both lease and non-lease components, which are generally accounted

for as a single lease component.

Additionally, for certain vehicle leases, we apply a portfolio approach to effectively account

for the finance lease ROU assets and liabilities.

The Company accounts for income taxes in accordance with ASC 740, Income Taxes , under which deferred tax

liabilities and assets are recognized for the expected future tax consequences of temporary differences between financial statement

carrying amounts and the tax basis of assets and liabilities and net operating loss and tax credit carryforwards.

Valuation allowances

are established when necessary to reduce deferred tax assets to the amount expected to be realized.

to the Company’s history of losses since inception, the net deferred tax assets

have been fully offset by a valuation allowance as of December 31, 2020 and 2019.

tax positions taken or expected to be taken in a tax return are accounted for using the

more likely than not threshold for financial statement recognition and measurement.

the years ended December 31, 2020 and 2019, there were no uncertain tax positions taken

or expected to be taken in the Company’s tax returns.

compensation:

The Company accounts for share-based compensation in accordance with ASC 718, Compensation –

Compensation , under which shared based payments that involve the issuance of common stock to employees and nonemployees and

meet the criteria for equity-classified awards are recognized in the financial statements as share-based compensation expense

based on the fair value on the date of grant.

The Company issues stock option awards and restricted stock awards to employees

and nonemployees.

Company utilizes the Black-Scholes model to determine the fair value of the stock option awards, which requires the input of subjective

These assumptions include estimating (a) the length of time grantees will retain their vested stock options before

exercising them for employees and the contractual term of the option for nonemployees (“expected term”), (b) the volatility

of the Company’s common stock price over the expected term, (c) expected dividends, and (d) the fair value of a share of

common stock prior to the Business Combination.

After the closing of the Business Combination, the Company’s board of directors

determined the fair value of each share of common stock underlying stock-based awards based on the closing price of the Company’s

common stock as reported by the NYSE on the date of grant.

The Company has elected to recognize the adjustment to share-based

compensation expense in the period in which forfeitures occur.

assumptions used in the Black-Scholes model are management’s best estimates, but the estimates involve inherent uncertainties

and the application of management judgment (see Note 8).

As a result, if other assumptions had been used, the recorded share-based

compensation expense could have been materially different from that depicted in the financial statements.

and development expense:

Research and development costs did not meet the requirements to be recognized as an asset as

the associated future benefits were at best uncertain and there was no alternative future use at the time the costs were incurred.

Research and development costs include, but are not limited to, outsourced engineering services, allocated facilities costs, depreciation

on equipment utilized in research and development activities, internal engineering and development expenses, materials, and employee

related expenses (including salaries, benefits, travel, and share-based compensation) related to development of the Company’s

products and services.

loss per share:

Basic earnings (loss) per share (“EPS”) are computed by dividing net loss (the numerator)

by the weighted average number of common shares outstanding for the period (the denominator).

Diluted EPS attributable to common

shareholders is computed by adjusting net loss by the weighted average number of common shares and potential common shares outstanding

(if dilutive) during each period.

Potential common shares include shares issuable upon exercise of stock options and vesting of

restricted stock awards (see Note 8).

The number of potential common shares outstanding are calculated using the treasury stock

or if-converted method.

accounting pronouncements issued, not yet adopted:

June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses

of Financial Instruments , which, together with subsequent amendments, amends the requirement on the measurement and recognition

of expected credit losses for financial assets held to replace the incurred loss model for financial assets measured at amortized

cost and require entities to measure all expected credit losses for financial assets held at the reporting date based on historical

experience, current conditions, and reasonable and supportable forecasts.

ASU 2016-13 is effective for the Company beginning January 1,

2023, with early adoption permitted.

The Company is currently evaluating the impact of this standard on its financial statements

and related disclosures.

does not believe that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would

have a material impact on the Company’s financial statements.

INITIAL PUBLIC OFFERING

Company sold 23,300,917 Units in the Initial Public Offering, including 800,917 Units that were issued pursuant to the underwriters’

partial exercise of their over-allotment option, at a price of $10.00 per Unit, generating gross proceeds of approximately $233.0

million, and incurring offering costs of approximately $13.36 million, inclusive of approximately $8.13 million in deferred underwriting

Unit consists of one share of the Company’s Class A common stock, par value $0.0001 per share, and one-half of one redeemable

warrant (each, a “Warrant”

and, collectively, the “Warrants”).

Each whole Warrant entitles the holder

to purchase one share of Class A common stock at an exercise price of $11.50 per share.

No fractional shares will be issued upon

separation of the Units and only whole Warrants will trade.

Each Warrant will become exercisable on the later of 30 days after

the completion of the Company’s Initial Business Combination and 12 months from the closing of the Initial Public Offering

and will expire five years after the completion of the Company’s Initial Business Combination or earlier upon redemption

or liquidation.

Once the Warrants become exercisable, the Company may redeem the outstanding Warrants in whole, but not in part,

at a price of $0.01 per Warrant upon a minimum of 30 days’

prior written notice of redemption, if and only if the last reported

sale price of the Company’s Class A common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading

day period ending on the third business day prior to the date on which the Company sent the notice of redemption to the warrant

the Units sold in the Initial Public Offering, an aggregate of 77,750 Units (the “Affiliated Units”) were purchased

by certain employees of affiliates of the Company.

underwriters of the Initial Public Offering were entitled to underwriting discounts and commissions of 5.5%, of which 2.0% (approximately

$4.64 million) was paid at the closing of the Initial Public Offering and 3.5% (approximately $8.13 million) was deferred.

March 4, 2019, the underwriters partially exercised their over-allotment option and on March 7, 2019, the underwriters waived

the remainder of their over-allotment option.

In connection therewith, the Sponsor forfeited 643,520 shares of the Company’s

Class B common stock (the “Founder Shares”) for cancellation by the Company.

RELATED PARTY TRANSACTIONS

November 2018, the Sponsor paid $25,000 in offering expenses on behalf of the Company in exchange for the issuance of 5,750,000

Founder Shares, or approximately $0.004 per share.

In February 2019, the Company effected a stock dividend of 718,750 shares of

Class B common stock, resulting in the Sponsor holding an aggregate of 6,468,750 Founder Shares (up to 843,750 shares of which

were subject to forfeiture to the extent the underwriters did not exercise their over-allotment option).

On March 4, 2019, the

underwriters partially exercised their over-allotment option and on March 7, 2019, the underwriters waived the remainder of their

over-allotment option.

In connection therewith, the Sponsor forfeited 643,520 Founder Shares for cancellation by the Company.

As used herein, unless the context otherwise requires, “Founder Shares”

shall be deemed to include the shares of Class

A common stock issuable upon conversion thereof.

The Founder Shares are identical to the shares of Class A common stock included

in the Units sold in the Initial Public Offering except that the Founder Shares are shares of Class B common stock which automatically

convert into shares of Class A common stock at the time of the Initial Business Combination and are subject to certain transfer

restrictions, as described in more detail below.

holders of the Founder Shares have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder

Shares until the earlier to occur of:

(i) one year after the completion of the Initial Business Combination and (ii) subsequent

to the Initial Business Combination, (a) if the last reported sale price of the Company’s Class A common stock equals or

The Company is currently in the process of evaluating the effects of this pronouncement on

the Company’s financial statements and does not expect it to have a material impact on the consolidated financial statements.

December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes , which

is intended to simplify various aspects related to accounting for income taxes.

The pronouncement is effective for fiscal years,

and for interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted.

2019-12 is effective for the Company beginning January 1, 2021, with early adoption permitted.

The Company is currently in

the process of evaluating the effects of this pronouncement on the Company’s financial statements and does not expect it

to have a material impact on the financial statements.

Reverse Recapitalization

On October 1, 2020, Legacy Hyliion and

TortoiseCorp consummated the merger contemplated by the Business Combination, with Legacy Hyliion surviving the merger as a wholly-owned

subsidiary of TortoiseCorp.

the closing of the Business Combination, TortoiseCorp’s certificate of incorporation was amended and restated to, among

other things, increase the total number of authorized shares of capital stock to 260,000,000 shares, of which 250,000,000 shares

were designated common stock, $.0001 par value per share, and of which 10,000,000 shares were designated preferred stock, $0.0001

par value per share.

prior to the closing of the Business Combination, each

issued and outstanding share of Legacy Hyliion’s redeemable, convertible preferred stock, was converted into shares Legacy Hyliion common stock based on a one-to-one ratio (see Note 7).

The Business Combination is accounted for with a retrospective application of the Business Combination that results in 34,799,813 shares of redeemable, convertible preferred stock converting into the same number of shares of Legacy Hyliion common stock.

● convertible

note payable, plus accrued paid-in-kind interest, was converted into an aggregate 2,336,235

shares of Legacy Hyliion common stock at the predetermined discount (see Note 4).

Upon the consummation of the Business Combination,

each share of Legacy Hyliion common stock issued and outstanding was cancelled and converted into the right to receive 1.45720232

shares (the “Exchange Ratio”) of the Company’s common stock (the “Per Share Merger Consideration”).

Additionally,

Legacy Hyliion issued 1,000,000 shares of Legacy Hyliion common stock with an estimated grant date fair value of $10.00 per share

to one of the convertible noteholders in connection with the commercial matters agreement (“Commercial Matters Agreement”)

that was entered into in June 2020, that was not subject to the Exchange Ratio (see Note 14).

stock options, whether vested or unvested, to purchase shares of Legacy Hyliion common stock granted under the 2016 Plan (“Legacy

Options”) (see Note 8) converted into stock options for shares of the Company’s common stock upon the same terms and

conditions that were in effect with respect to such stock options immediately prior to the Business Combination, after giving

effect to the Exchange Ratio.

warrants to purchase shares of TortoiseCorp Class A common stock will remain outstanding at the Closing Date.

The warrants will

become exercisable 30 days after the completion of the Business Combination and will expire five years after the completion of

the Business Combination or earlier upon redemption or liquidation.

On November 30, 2020, the Company issued a notice of redemption

to the warrant holders and on December 31, 2020, it redeemed all outstanding public warrants.

See Note 7 “Capital Structure”

for more information.

connection with the Business Combination,

TortoiseCorp shareholders exercised their right to redeem certain of their outstanding

shares for cash, resulting in the redemption of 3,308 shares of TortoiseCorp common stock

for gross redemption payments of less than $0.1 million.

number of investors purchased from the Company an aggregate of 30,750,000 shares of common

stock (the “PIPE Shares”), for a purchase price of $10.00 per share and an

aggregate purchase price of $307.5 million pursuant to separate subscription agreements

entered into effective June 18, 2020 (the “PIPE”).

The PIPE investment closed

simultaneously with the consummation of the Business Combination.

investor purchased 1,750,000 TortoiseCorp units (consisting of one share of common stock

and one half of one warrant, the “Forward Purchase Units”), consisting of

1,750,000 shares of common stock (“Forward Purchase Shares”) and warrants

to purchase 875,000 shares of common stock (“Forward Purchase Warrants”)

for an aggregate purchase price of $17.5 million pursuant to a forward purchase agreement

entered into effective February 6, 2019, as amended by the First Amendment to Amended

and Restated Forward Purchase Agreement, dated June 18, 2020.

The Business Combination is accounted for as a reverse recapitalization

in accordance with U.S.

Under this method of accounting, TortoiseCorp was treated as the “acquired”

financial reporting purposes.

See Note 1 “Description of business and basis of presentation”

for further details.

for accounting purposes, the Business Combination was treated as the equivalent of Legacy Hyliion issuing stock for the net assets

of TortoiseCorp, accompanied by a recapitalization.

The net assets of TortoiseCorp are stated at historical cost, with no goodwill

or intangible assets recorded.

Prior to the Business Combination, Legacy

Hyliion and TortoiseCorp filed separate standalone federal, state and local income tax returns.

As a result of the Business Combination

Legacy Hyliion will file a consolidated income tax return.

Although, for legal purposes, TortoiseCorp acquired Legacy Hyliion,

and the transaction represents a reverse acquisition for federal income tax purposes.

TortoiseCorp will be the parent of the consolidated

group with Legacy Hyliion a subsidiary, but in the year of the closing of the Business Combination, Legacy Hyliion will file a

full year tax return with TortoiseCorp joining in the return the day after the Closing Date.

The following table reconciles the elements

of the Business Combination to the consolidated statements of cash flows and the consolidated statement of changes in stockholders’

equity (deficit) for the year ended December 31, 2020 (in thousands):

Cash - TortoiseCorp’s trust and cash (net of redemption)

Cash - forward purchase units

transaction costs and advisory fees paid

Net Business Combination and PIPE financing

number of shares of common stock issued immediately following the consummation of the Business Combination were:

Common stock, outstanding prior to Business Combination

redemption of TortoiseCorp shares

Common stock of TortoiseCorp

TortoiseCorp founder shares

Shares issued in PIPE

Shares issued in connection with forward purchase agreement

Business Combination, PIPE, and forward purchase agreement financing shares

Legacy Hyliion shares (1)

Total shares of common stock immediately after Business Combination

Hyliion Holdings Corp.

exercise of warrants

Total shares of common stock at December 31, 2020

number of Legacy Hyliion shares was determined as follows:

Legacy Hyliion

Balance at December 31, 2018

Recapitalization applied to Series A outstanding at December 31, 2018

Exercise of common stock options - 2019

Exercise of common stock options - 2020 (pre-Closing)

of convertible notes payable to common stock (2)

number of shares issued for the conversion of convertible notes payable to common stock

is calculated by applying the Exchange Ratio to the Legacy Hyliion shares issued at the

time of conversion and adding 1,000,000 shares issued in connection with the Commercial

Matters Agreement.

All fractions were rounded down.

former stockholders of Legacy Hyliion and TortoiseCorp have agreed to lock-up restrictions regarding the future transfer shares

of common stock.

Such shares may not be transferred or otherwise disposed of for a period of six months through April 1, 2021,

subject to certain exceptions.

Transaction costs incurred in connection

with the Business Combination totaled approximately $45.0 million which were charged to additional paid-in capital for the year

ended December 31, 2020.

At December 31, 2020 and 2019, the carrying

value of debt was as follows:

(in thousands)

Convertible notes payable, net of unamortized

discount at December 31, 2020 and 2019 of $0 and $6,451, respectively

Paycheck Protection Program loan

Finance lease obligations

Less current portion

Debt, net of current portion

During 2018, the Company issued a convertible

note payable in exchange for cash totaling $5.0 million (the “2018 Note”).

The 2018 Note bears interest at 6% per

annum and matures in September 2020 (two years subsequent to its issuance date).

The 2018 Note includes the following embedded

(a) Automatic conversion

upon the next equity financing of at least $5.0 million in proceeds.

The conversion price is dependent upon the pre-money valuation

of the Company in connection with the next equity financing, with the conversion price set at a 35% discount on the next equity

financing price if the pre-money valuation is $100.0 million or less, or 35% multiplied by the quotient of $100.0 million divided

by the pre-money valuation if it is greater than $100.0 million.

(b) Optional conversion

upon a change in control.

In the event of a change in control, the holder can elect to convert the 2018 Note into shares of common

stock at a conversion price equal to (i) the product of the change in control purchase price multiplied by 65%, divided by (ii)

the total number of outstanding shares of capital stock of the Company (on a fully diluted basis).

upon a change in control.

In the event of a change in control, the holder can elect to request payment of all outstanding principal

(with no penalty) and unpaid accrued interest.

(d) Automatic or

optional redemption upon an event of default.

Upon the occurrence of an event of default, the 2018 Note will either automatically

become due and payable or can become due and payable at the holder’s option (based on the nature of the event of default).

Upon such acceleration, all outstanding principal (with no penalty) and unpaid accrued interest will become payable.

(e) Additional interest

of 3% (or a total of 9%) upon an event of default.

In addition to the above embedded features,

the Company agreed that the holder of the 2018 Note would be the Company’s preferred supplier for certain components or

products that the holder sells.

See Note 14 for further details on this related party agreement.

The Company assessed the embedded features

within the 2018 Note and determined that the automatic conversion feature upon next equity financing and optional conversion feature

upon change in control (share-settled redemption features) and the additional interest feature met the definition of a derivative

and were not clearly and closely related to the host contract and required separate accounting.

At issuance, the Company estimated the

fair value of the automatic and optional conversion features to be approximately $1.8 million.

The Company’s fair value

measurements are more fully described in (Note 6).

At issuance, the Company concluded the

fair value of the additional interest feature was de minimis.

Between February and July 2019, the Company

issued a series of convertible notes payable in exchange for cash totaling $13.6 million (the “Initial 2019 Notes”).

The Initial 2019 Notes bear interest at 6% per annum and mature two to five years after their respective issuance dates.

2019 Notes are only prepayable with the consent of the holders.

One of the Initial 2019 Notes (totaling $1.8 million) is secured

by substantially all of the assets of the Company, subordinate to the first priority, senior secured interest held by a note holder

of a convertible note issued in January 2020.

The holder of this note has first priority secured interest in these assets.

The Initial 2019 Notes include the following

embedded features:

(a) Automatic or

optional (for one of the Initial 2019 Notes) conversion upon the next equity financing of at least $15.0 million in proceeds (the

“Next Equity Financing”).

The conversion price is dependent upon the pre-money valuation of the Company in connection

with the next equity financing, with the conversion price set at a 25% discount on the next equity financing price if the pre-money

valuation is $100.0 million or less, or 25% multiplied by the quotient of $100.0 million divided by the pre-money valuation if

it is greater than $100.0 million.

(b) Optional conversion

(for one of the Initial 2019 Notes) upon a subsequent equity financing if the holder did not elect to convert upon the Next Equity

Financing, at the price that is set by the subsequent equity financing (no discount).

upon a change in control.

In the event of a change in control, the holder can elect to convert the Initial 2019 Notes into shares

of common stock at a conversion price equal to (i) the product of the change in control purchase price multiplied by 75%, divided

by (ii) the total number of outstanding shares of capital stock of the Company (on a fully diluted basis).

(d) Optional redemption

upon a change in control.

In the event of a change in control, the holder can elect to request payment of all outstanding principal

(with no penalty) and unpaid accrued interest.

(e) Automatic or

optional redemption upon an event of default.

Upon the occurrence of an event of default, the Initial 2019 Notes will either automatically

become due and payable or can become due and payable at the holder’s option (based on the nature of the event of default).

Upon such acceleration, all outstanding principal (with no penalty) and unpaid accrued interest will become payable.

(f) Additional interest

of 3% (or a total of 9%) upon an event of default.

In addition, the Company has the right

to modify one of the Initial 2019 Notes (totaling $1.8 million) in the event the holder does not convert upon next equity financing

to adjust the interest rate to 4% per annum.

The Company assessed the embedded features

within the Initial 2019 Notes and determined that the automatic or optional conversion feature upon next equity financing and

the optional conversion feature upon change in control (share-settled redemption features), the additional interest feature, and

the interest rate adjustment feature met the definition of a derivative and were not clearly and closely related to the host contract

and required separate accounting.

At issuance, the Company estimated the

fair value of the automatic and optional conversion features to be approximately $6.0 million.

The Company’s fair value

measurements are more fully described in (Note 6).

At issuance, the Company concluded the

fair value of the additional interest feature and the interest rate adjustment feature was de minimis.

In December 2019, the Company issued a

convertible note payable in exchange for cash totaling $3.2 million (the “December 2019 Note”).

The December 2019

Note bears interest at 6% per annum and matures in December 2020 (one year subsequent to its issuance date).

The December 2019

Note is only prepayable with the consent of the holder.

The December 2019 Note is secured by substantially all of the assets of

the Company, subordinate to the security interest held by one of the Initial 2019 Note holders.

The December 2019 Note includes

the following embedded features:

(a) Automatic conversion

upon the next equity financing of at least $35.0 million in proceeds.

The conversion price will be based on the next equity financing

per share price, with a 50% discount.

(b) Optional conversion

upon the next equity financing of at least $15.0 million in proceeds.

The conversion price will be based on the next equity financing

per share price, with a 50% discount.

upon a subsequent equity financing of at least $35.0 million if the holder did not elect to convert upon any previous equity financing,

at the price that is set by the subsequent equity financing (no discount).

(d) Optional conversion

upon a change in control.

In the event of a change in control, the holder can elect to convert the December 2019 Note into shares

of common stock at a conversion price equal to (i) the product of the change in control purchase price multiplied by 50%, divided

by (ii) the total number of outstanding shares of capital stock of the Company (on a fully diluted basis).

(e) Optional redemption

upon a change in control.

In the event of a change in control, the holder can elect to request payment of all outstanding principal

(with no penalty) and unpaid accrued interest.

(f) Automatic or

optional redemption upon an event of default.

Upon the occurrence of an event of default, the December 2019 Note will either automatically

become due and payable or can become due and payable at the holder’s option (based on the nature of the event of default).

Upon such acceleration, all outstanding principal (with no penalty) and unpaid accrued interest will become payable.

(g) Additional interest

of 3% (or a total of 9%) upon an event of default.

In addition, in the event the holder does

not convert upon an equity financing, the maturity date of the December 2019 Note will automatically extend by one year.

situation, the holder also has the right to extend the maturity date for an additional two years beyond the modified maturity

The Company assessed the embedded features

within the December 2019 Note and determined that the automatic and optional conversion features upon next equity financing (share-settled

redemption features), the additional interest feature and the term extension feature met the definition of a derivative and were

not clearly and closely related to the host contract and required separate accounting.

The Company also concluded that the conversion

features did not represent beneficial conversion features.

At issuance and at December 31, 2019,

the Company estimated the fair value of the automatic and optional conversion features to be approximately $1.4 million.

The Company’s

fair value measurements are more fully described in (Note 6).

At issuance, the Company concluded the

fair value of the additional interest and term extension features was de minimis.

During January 2020, the Company issued

a convertible note payable in exchange for cash totaling $3.2 million (the “January 2020 Note”).

The January 2020

Note bears interest at 6% per annum and matures in January 2025 (five years subsequent to its issuance date).

The January 2020

Note is only prepayable with the consent of the holder.

The January 2020 Note is secured by a first priority, senior secured interest

in substantially all of the assets of the Company.

The January 2020 Note includes the following embedded features:

(a) Optional conversion

upon the next equity financing of at least $15.0 million in proceeds.

The conversion price will be based on the next equity financing

per share price, with a 50% discount.

(b) Optional conversion

upon a subsequent equity financing of at least $15.0 million if the holder did not elect to convert upon the next equity financing,

at the price that is set by the subsequent equity financing (no discount).

upon a change in control.

In the event of a change in control, the holder can elect to convert the January 2020 Note into shares

of common stock at a conversion price equal to (i) the product of the change in control purchase price multiplied by 50%, divided

by (ii) the total number of outstanding shares of capital stock of the Company (on a fully diluted basis).

(d) Optional redemption

upon a change in control.

In the event of a change in control, the holder can elect to request payment of all outstanding principal

(with no penalty) and unpaid accrued interest.

(e) Optional redemption

upon the Company obtaining at least $10.0 million in commercial debt which would result in the January 2020 Note having the same

priority or being treated as subordinate to the commercial debt.

In such scenario, the holder can elect to request payment of

all outstanding principal (with no penalty) and unpaid accrued interest.

(f) Automatic or

optional redemption upon an event of default.

Upon the occurrence of an event of default, the January 2020 Note will either automatically

become due and payable or can become due and payable at the holder’s option (based on the nature of the event of default).

Upon such acceleration, all outstanding principal (with no penalty) and unpaid accrued interest will become payable.

(g) Additional interest

of 3% (or a total of 9%) upon an event of default.

In addition, in the event the holder does

not convert upon an equity financing or change in control event, the noteholder may extend the maturity date of the January 2020

Note by five years beyond the original maturity date.

In addition, in the event the holder does

not convert upon an equity financing, the interest rate on the January 2020 Note will automatically be adjusted to a rate of 4%

The Company assessed the embedded features

within the January 2020 Note and determined that the automatic and optional conversion features upon next equity financing (share-settled

redemption features), the additional interest feature and the term extension feature met the definition of a derivative and were

not clearly and closely related to the host contract and required separate accounting.

The Company also concluded that the conversion

features did not represent beneficial conversion features.

At issuance, the Company estimated the

fair value of the automatic and optional conversion features to be approximately $2.7 million.

The Company’s fair value

measurements are more fully described in (Note 6).

At issuance, the Company has concluded

the fair value of the additional interest and term extension features was de minimis.

The terms of the convertible notes payable

include certain restrictive covenants related to the Company’s ability to enter into certain transactions or agreements,

pay dividends, or take other similar corporate actions.

During June 2020, the holders of the convertible

notes executed amendments (the “Note Amendments”) to their respective convertible notes clarifying the planned Business

Combination would qualify as a next financing, as defined in the respective convertible notes.

The convertible notes would either

automatically convert or convert at the holder’s option (the election of which was evidenced by entering into the Note Amendments)

in connection with such next financing (in this case the Business Combination).

The convertible notes would convert into shares

of common stock at a conversion price equal to (i) the valuation of the Company established in connection with such next financing,

divided by (ii) the total number of shares of capital stock of the Company (on a fully diluted and as-converted basis), as established

in the original respective convertible notes.

This conversion price would then be discounted based on the negotiated conversion

discounts that were established in the noteholders’

original convertible notes.

The amended terms of the Note Amendments

were determined to be clarifications of the existing terms and did not result in substantially different terms.

Accordingly, the

Note Amendments were accounted for as modifications.

In connection with the reverse recapitalization

discussed in Note 3, immediately prior to the closing of the Business Combination, the convertible notes, plus accrued paid-in-kind

interest, totaling $26.8 million were converted into an aggregate of 2,336,235 shares of Legacy Hyliion common stock, which were

then exchanged for an aggregate of 3,404,367 shares of the Company’s common stock on the Closing Date (see Note 3).

the Company issued 1,000,000 shares of Legacy Hyliion common stock to a noteholder of the 2018 Note, Initial 2019 Notes, and January

2020 Note, with a grant date fair value of $10.00 per share in accordance with the Commercial Matters Agreement (see Note 14).

In connection with this conversion of

the convertible notes, the Company recorded a loss on extinguishment of $10.2 million included within other income (expense) on

the accompanying consolidated statements of operations.

During August

2020, the Company issued a term loan (the “Term Loan”) with a principal balance totaling $10.1 million that matured

on the earlier of (i) December 15, 2020, (ii) the termination of the Business Combination or, (iii) the consummation of the Business

Combination as provided in the Business Combination.

In connection with the Term Loan, the Company paid $0.5 million of financing

The Term Loan bore interest at a rate equal to 6.5% plus the greater of (a) the Federal Funds rate plus 0.5%, (b) LIBOR

Rate for a one-month interest period plus 1.0%, and (c) Prime Rate in effect on such day.

While outstanding in 2020, the Term Loan

bore interest at 8.5% per annum.

The Term Loan plus accrued interest was repaid in full in October 2020.

Payroll Protection Program loan:

During May 2020, the Company received loan proceeds in the amount of $0.9 million under the Payroll Protection Program

(the “PPP”).

The PPP was established as part of Coronavirus Aid, Relief, and Economic Security Act and provides for

loans to qualifying businesses for amounts up to 2.5 times the average monthly payroll expenses of the business, subject to certain

The loans and accrued interest are forgivable after eight weeks so long as the borrower uses the loan proceeds for

eligible purposes, including payroll, benefits, rent and utilities, and so long as the borrower maintains its pre-funding employment

and wage levels.

Although the Company used the PPP loan proceeds for purposes consistent with the provisions of the PPP and that

such usage met the criteria established for forgiveness of the loan, the Company intends to repay the PPP loan plus accrued interest.

The PPP loan matures in May 2022.

Finance Lease Obligations:

The Company’s debt arising from finance lease obligations primarily relates to vehicles and equipment.

See Note 9 for future

maturities of finance lease obligations.

The amortized cost, unrealized gains and

losses, and fair value of our investments at December 31, 2020 are summarized as follows:

Fair Value Measurements as

December 31, 2020

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses

(in thousands)

Held-to-maturity investments

Treasury securities

Commercial paper

Corporate bonds and notes

Total held-to-maturity investments

December 31, 2020

Amortized Cost

(in thousands)

Due in one year or less

Due after one year through five years

Total held-to-maturity securities

The Company did not have any investments

at December 31, 2019.

Fair Value Measurements

The convertible notes payable derivative

liabilities are considered a Level 3 measurement due to the utilization of significant unobservable inputs in the valuation.

Company utilized a scenario-based with and without valuation model to estimate the fair value of the embedded derivative features

requiring bifurcation associated with the convertible notes payable at issuance, as of the December 31, 2019 reporting date, and

upon the settlement of the convertible notes payable derivative liabilities in connection with the extinguishment accounting applied

to the convertible notes payable (see Note 4).

This valuation model is designed to utilize the Company’s best estimates

of the timing and likelihood of the settlement events that are related to the embedded derivative features in order to estimate

the fair value of the respective convertible notes with these embedded derivative features.

The fair value of the convertible notes

with the derivative features is compared to the fair value of a plain vanilla note (excluding the derivative features), which

is calculated based on the present value of the future cash flows.

The difference between the two values represents the fair value

of the bifurcated derivative features as of each respective valuation date.

The key inputs to the valuation models

that were utilized to estimate the fair value of the convertible debt derivative liabilities include:

October 1, 2020

Issuance of January 2020 Note

Issuance of December 2019 Note and December

Issuances of Initial 2019 Notes

Probability-weighted conversion discount

Remaining term (years)

Equity volatility

Probability of next financing event 1

Timing of next financing event 1

Probability of default event 1

Timing of default event 1

Probability of sale event 1

Timing of sale event 1

Negotiation discount 1 2

a Level 3 unobservable input

the terms and provisions of the December 2019 and January 2020 Notes, the valuation model

incorporated this additional assumption

The key inputs to the valuation models

are defined as follows:

probability-weighted conversion discount is based on the contractual terms of the convertible

note agreement and the expectation of the pre-money valuation of the Company as of the

estimated date that the next equity financing event occurs.

remaining term was determined based on the remaining time period to maturity of the related

convertible note with embedded features subject to valuation (as of the respective valuation

Company’s equity volatility estimate was based on the re-levered historical equity

volatility of a selection of the Company’s comparable guideline public companies,

based on the remaining term of the respective convertible notes.

risk rate was the discount rate utilized in the valuation and was determined based on

reference to market yields for debt instruments with similar credit ratings and terms.

probabilities and timing of the next financing event and default event are based on management’s

best estimate of the future settlement of the respective convertible notes.

negotiation discount utilized was calculated in order to further discount the specified

instruments in order to agree to the principal value of the convertible notes at issuance.

The utilization of the negotiation discount reflects the fact that there was a significant

need for new investment and limited availability of market participants who have interest

in making investments in such companies.

The presence of the additional discount reflects

the higher rate of return that these investors would seek in making such investments.

The convertible notes payable derivative

liabilities were settled upon the conversion of the related convertible notes during the year ended December 31, 2020 (see Note

The following table shows the fair value measurements of the Company’s assets and liabilities that are measured at fair

value on a recurring basis at December 31, 2020 and 2019:

Fair Value Measurements as

of December 31, 2020

(in thousands)

Cash and cash equivalents

Held-to-maturity investments:

Treasury securities

Commercial paper

Corporate bonds and notes

Fair Value Measurements as

of December 31, 2019

(in thousands)

Convertible notes payable derivative

Total Liabilities

The following is a rollforward of the

Company’s Level 3 instruments (in thousands):

Balance, December 31, 2018

Issuance of convertible notes payable derivative liabilities

Fair value adjustments

Balance, December 31, 2019

Issuance of convertible note payable derivative liability

Fair value adjustments

Settlement of convertible notes payable derivative

Balance, December 31, 2020

Capital Structure

As discussed in Note 1 and Note 3, on

October 1, 2020, the Company consummated the Business Combination, which has been accounted for as a reverse recapitalization.

Pursuant to the Certificate of Incorporation as amended on October 1, 2020 and as a result of the reverse recapitalization, the

Company has retrospectively adjusted the Legacy Hyliion preferred shares and Legacy Hyliion common shares issued and outstanding

prior to October 1, 2020 to give effect to the Exchange Ratio used to determine the number of shares of common stock of the combined

entity into which they were converted.

Preferred Stock:

is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.0001 per share.

The Company’s board of

directors is authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, option

or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series.

As of December 31, 2020 and 2019, there were no shares of preferred stock issued and outstanding.

Common Stock:

is authorized to issue 250,000,000 shares of common stock with a par value of $0.0001 per share, of which 169,316,421 and 86,762,463 shares

were issued and outstanding at December 31, 2020 and 2019, respectively.

The following shares of common stock are

reserved for future issuance:

Stock options issued and outstanding

Authorized for future grant under 2020 Equity Incentive Plan

Public Warrants:

On March 4, 2019, TortoiseCorp completed an initial public offering that included warrants for shares of common stock (the “Public

Warrants”).

Each Public Warrant entitles the holder to the right to purchase one share of common stock at an exercise price

of $11.50 per share.

No fractional shares will be issued upon exercise of the Public Warrants.

The Company may elect to redeem

the Public Warrants, in whole and not in part, at a price of $0.01 per Public Warrant if (i) 30 days’

prior written notice

of redemption is provided to the holders, and (ii) the last reported sale price of the Company’s common stock equals or

exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for

any 20 trading days within any 30-trading day period commencing at least 150 days after the consummation of the Initial Business

Combination, or (b) the date on which the Company completes a liquidation, merger, stock exchange or other similar transaction

that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities

or other property.

Placement Warrants

with the closing of the Initial Public Offering, Tortoise Borrower purchased an aggregate of 6,660,183 Private Placement Warrants

at a price of $1.00 per warrant, generating gross proceeds of approximately $6.66 million, in the Private Placement.

Placement Warrant is exercisable for one share of the Company’s Class A common stock at an exercise price of $11.50 per

A portion of the purchase price of the Private Placement Warrants was added to the proceeds from the Initial Public Offering

held in the Trust Account.

If the Initial Business Combination is not completed within the Combination Period, the proceeds from

the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Public Shares

(subject to the requirements of applicable law) and the Private Placement Warrants will expire worthless.

any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which the Company sends

the notice of redemption to the warrant holders.

Upon issuance of a redemption notice by the Company, the warrant holders have

a period of 30 days to exercise for cash, or on a cashless basis.

On the Closing Date, there were 11,650,458 Public Warrants issued

and outstanding.

Private Placement Warrants:

Simultaneous with TortoiseCorp’s initial public offering in March 2019, Tortoise Borrower purchased warrants at

a purchase price of $1.00 per warrant in a private placement (the “Private Placement Warrants”).

The Private Placement

Warrants will be non-redeemable for cash and exercisable on a cashless basis so long as they are held by Tortoise Borrower or

its permitted transferees.

Borrower agreed, subject to limited exceptions, not to transfer, assign or sell any of its Private Placement Warrants until 30

days after the completion of the Initial Business Combination.

to the consummation of the Initial Public Offering, the Sponsor agreed to loan the Company funds to cover expenses related to

the Initial Public Offering and certain operating expenses.

This loan was non-interest bearing and payable upon the closing of

the Initial Public Offering.

The Company borrowed approximately $580,000 from the Sponsor, and repaid the loan in full on March

Administrative

Services Agreement

to an Administrative Services Agreement between the Company and the Sponsor, dated February 27, 2019 (the “Administrative

Services Agreement”), the Company agreed to pay the Sponsor a total of $10,000 per month for office space, utilities and

administrative support.

Upon completion of the Initial Business Combination or the Company’s liquidation, the agreement

will terminate.

The Company incurred $100,000 for expenses in connection with the Administrative Services Agreement for the year

ended December 31, 2019, which is reflected in the accompanying statements of operations.

On March 29, 2019, the Sponsor assigned

all of its rights, interests and obligations under the Administrative Services Agreement to Tortoise Capital Advisors, L.L.C.

COMMITMENTS & CONTINGENCIES

Purchase Agreement

Company entered into an amended and restated forward purchase agreement (the “Forward Purchase Agreement”) with Atlas

Point Fund, pursuant to which Atlas Point Fund, which is a fund managed by CIBC National Trust but is not affiliated with the

Company or the Sponsor, agreed to purchase up to an aggregate maximum amount of $150,000,000 of either (i) a number of units (the

“Forward Purchase Units”), consisting of one share of Class A common stock (the “Forward Purchase Shares”)

and one-half of one redeemable warrant (the “Forward Purchase Warrants”), for $10.00 per unit or (ii) a number of

Forward Purchase Shares for $9.67 per share (such Forward Purchase Shares valued at $9.67 per share or the Forward Purchase Units,

as the case may be, the “Forward Purchase Securities”), in a private placement that will close simultaneously with

the closing of the Initial Business Combination.

The Forward Purchase Warrants will have the same terms as the Warrants and the

Forward Purchase Shares will be identical to the shares of Class A common stock included in the Units sold in the Initial Public

Offering, except the Forward Purchase Shares and the Forward Purchase Warrants will be subject to transfer restrictions and certain

registration rights.

The proceeds from the sale of the Forward Purchase Securities may be used as part of the consideration to

the sellers in the Initial Business Combination, and any excess funds may be used for the working capital needs of the post-transaction

This agreement is independent of the percentage of stockholders electing to redeem their Public Shares and may provide

the Company with an increased minimum funding level for the Initial Business Combination.

The Forward Purchase Agreement is subject

to conditions, including Atlas Point Fund giving the Company its irrevocable written consent to purchase the Forward Purchase

Securities no later than five days after the Company notifies it of the Company’s intention to meet to consider entering

into a definitive agreement for a proposed Initial Business Combination.

Atlas Point Fund may grant or withhold its consent to

the purchase entirely within its sole discretion.

Accordingly, if Atlas Point Fund does not consent to the purchase, it will not

be obligated to purchase the Forward Purchase Securities.

holders of the Founder Shares, the Private Placement Warrants and Warrants that may be issued upon conversion of working capital

loans, if any (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and Warrants

that may be issued upon conversion of working capital loans), are entitled to registration rights pursuant to a registration rights

agreement entered into on February 27, 2019 (the “Registration Rights Agreement”).

The holders of these securities

are entitled to make up to three demands, excluding short-form demands, that the Company register such securities.

the holders have certain “piggy-back”

registration rights with respect to registration statements filed subsequent

to the consummation of an Initial Business Combination.

However, the Registration Rights Agreement provides that the Company will

not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up

The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Company granted the underwriters a 45-day option to purchase up to 3,375,000 additional Units to cover any over-allotments at

the Initial Public Offering price of $10.00 per Unit, less the underwriting discounts and commissions.

On March 4, 2019, the underwriters

partially exercised their over-allotment option to purchase 800,917 additional Units, and on March 7, 2019, the underwriters notified

the Company of their intent to waive the remainder of their over-allotment option.

underwriters were entitled to an underwriting discount for each Unit sold in the Initial Public Offering, except for the Affiliated

An aggregate of approximately $4.64 million (or $0.20 per Unit), was paid to the underwriters upon the closing of the Initial

Public Offering.

An additional fee of approximately $8.13 million (or $0.35 per Unit), will be payable to the underwriters for

deferred underwriting commissions.

The deferred fee will become payable to the underwriters from the amounts held in the Trust

Account solely in the event that the Company completes an Initial Business Combination, subject to the terms of the underwriting

Legal Fees Associated with the Initial Public Offering

Company entered into an engagement letter to obtain legal advisory services, pursuant to which the Company’s legal counsel

agreed to defer half of their fees until the closing of the Initial Business Combination.

As of December 31, 2019, the Company

recorded an aggregate of $150,000 in connection with such arrangement as deferred legal fees in the accompanying balance sheets.

STOCKHOLDERS’

A Common Stock

Company is authorized to issue 200,000,000 shares of Class A common stock with a par value of $0.0001 per share.

No Class A common

stock was issued or outstanding as of December 31, 2018.

As of December 31, 2019, there were 23,300,917 shares of Class A common

stock issued and outstanding, of which 22,366,276 shares of Class A common stock were classified outside of permanent equity.

B Common Stock

Company is authorized to issue 20,000,000 shares of Class B common stock with a par value of $0.0001 per share.

Holders of Class

B common stock are entitled to one vote per share of Class B common stock.

In November 2018, the Company issued 5,750,000 shares

of Class B common stock.

In February 2019, the Company effected a stock dividend of 718,750 shares of Class B common stock.

of March 4, 2019, there were 6,468,750 shares of Class B common stock outstanding (up to 843,750 shares of which were subject

to forfeiture to the extent the underwriters did not exercise their over-allotment option).

On March 4, 2019, the underwriters

partially exercised their over-allotment option to purchase 800,917 additional Units.

On March 7, 2019, the underwriters waived

the remainder of their over-allotment option and in connection therewith, the Sponsor forfeited 643,520 shares of Class B common

stock for cancellation by the Company.

As of December 31, 2019 and 2018, there were 5,825,230 and 6,468,750 shares of Class B

common stock outstanding, respectively.

of Class A common stock and holders of Class B common stock will vote together as a single class on all matters submitted to a

vote of the Company’s stockholders, except as required by law or stock exchange rule;

provided that only holders of Class

B common stock have the right to vote on the election of the Company’s directors prior to the Initial Business Combination.

shares of Class B common stock will automatically convert into shares of Class A common stock at the time of the Initial Business

Combination on a one-for-one basis, subject to adjustment.

In the case that additional shares of Class A common stock, or equity-linked

securities, are issued or deemed issued in excess of the amounts sold in the Initial Public Offering and related to the closing

of the Initial Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common

stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such

adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable

upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of

the total number of all shares of common stock outstanding upon the completion of the Initial Public Offering plus all shares

of Class A common stock and equity-linked securities issued or deemed issued in connection with the Initial Business Combination

(excluding the Forward Purchase Securities and any shares or equity-linked securities issued, or to be issued, to any seller in

the Initial Business Combination).

Company is authorized to issue 1,000,000 shares of preferred stock with such designations, voting and other rights and preferences

as may be determined from time to time by the Company’s board of directors.

As of December 31, 2019 and 2018, there were

no shares of preferred stock issued or outstanding.

Warrants will become exercisable on the later of (i) 30 days after the completion of the Initial Business Combination and (ii)

12 months from the closing of the Initial Public Offering;

provided in each case that the Company has an effective registration

statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the Warrants and a current

prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities,

or blue sky, laws of the state of residence of the holder (or the Company permits holders to exercise their Warrants on a cashless

basis under the circumstances specified in the warrant agreement).

The Company has agreed that as soon as practicable, but in

no event later than 15 business days, after the closing of the Initial Business Combination, the Company will use its best efforts

to file with the SEC a registration statement for the registration, under the Securities Act, of the shares of Class A common

stock issuable upon exercise of the Warrants.

The Company will use its best efforts to cause the same to become effective, but

in no event later than 60 business days after the closing of the Initial Business Combination, and to maintain the effectiveness

of such registration statement, and a current prospectus relating thereto, until the expiration of the Warrants in accordance

with the provisions of the warrant agreement.

Notwithstanding the above, if the Company’s Class A common stock is at the

time of any exercise of a Warrant not listed on a national securities exchange such that it satisfies the definition of a “covered

security”

under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Warrants who

exercise their Warrants to do so on a “cashless basis”

in accordance with Section 3(a)(9) of the Securities Act or

another exemption.

The Warrants will expire five years after the completion of the Initial Business Combination or earlier upon

redemption or liquidation.

Private Placement Warrants are identical to the Warrants, except that the Private Placement Warrants and the shares of Class A

common stock issuable upon exercise of the Private Placement Warrants will not be transferable, assignable or salable until 30

days after the completion of the Initial Business Combination, subject to certain limited exceptions.

Additionally, the Private

Placement Warrants will be non-redeemable for cash and exercisable on a cashless basis so long as they are held by Tortoise Borrower

or Tortoise Borrower’s permitted transferees.

If the Private Placement Warrants are held by someone other than Tortoise

Borrower or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such

holders on the same basis as the Warrants.

exercise price and number of shares of Class A common stock issuable upon exercise of the Warrants may be adjusted in certain

circumstances including in the event of a share capitalization, or recapitalization, reorganization, merger or consolidation.

In addition, if the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes

in connection with the closing of the Initial Business Combination at an issue price or effective issue price of less than $9.20

per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s

board of directors, and in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder

Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”),

the exercise price of the Warrants will be adjusted (to the nearest cent) to be equal to 115% of the Newly Issued Price.

Company may call the Warrants for redemption for cash (except with respect to the Private Placement Warrants):

whole and not in part;

a price of $0.01 per Warrant;

a minimum of 30 days’

prior written notice of redemption;

and only if, the last reported sale price of the Company’s Class A common stock

equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations,

recapitalizations and the like) for any 20 trading days within a 30-trading day period

ending on the third business day prior to the date on which the Company sends the notice

of redemption to the warrant holders.

90 days after the Warrants become exercisable, the Company may redeem the outstanding Warrants (including both the Warrants and

the Private Placement Warrants) in whole and not in part, at a price equal to a number of shares of Class A common stock to be

determined by reference to the table set forth in the Company’s prospectus relating to the Initial Public Offering based

on the redemption date and the “fair market value”

of the Company’s Class A common stock, upon a minimum of

30 days’

prior written notice of redemption and if, and only if, the last reported sale price of the Company’s Class

A common stock equals or exceeds $10.00 per share (as adjusted per share splits, share dividends, reorganizations, recapitalizations

and the like) on the trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.

The “fair market value”

of the Company’s Class A common stock is the average last reported sale price of the

Company’s Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice

of redemption is sent to the holders of Warrants.

the Company calls the Warrants for redemption for cash, management will have the option to require all holders that wish to exercise

the Warrants to do so on a “cashless basis,”

as described in the warrant agreement.

Additionally, in no event will

the Company be required to net cash settle any Warrants.

If the Company is unable to complete the Initial Business Combination

within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of Warrants will not receive

any of such funds with respect to their Warrants, nor will they receive any distribution from the Company’s assets held

outside of the Trust Account with the respect to such Warrants.

Accordingly, the Warrants may expire worthless.

FAIR VALUE MEASUREMENTS

following table presents information about the Company’s assets that are measured on a recurring basis as of December 31,

2019 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value.

In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets

or liabilities.

Fair values determined by Level 2 inputs utilize data points that are observable, such as quoted prices, interest

rates and yield curves.

Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and

include situations where there is little, if any, market activity for the asset or liability.

Warrants may not be redeemed by the Company so long as the Private Placement Warrants are held by the initial purchasers, or such

purchasers’

permitted transferees.

The Private Placement Warrants have terms and provisions identical to those of the Public

Warrants, including as to exercise price, exercisability and exercise period, except if the Private Placement Warrants are held

by someone other than the initial purchasers’

permitted transferees, then the Private Placement Warrants are redeemable

by the Company and exercisable by such holders on the same basis as the Public Warrants.

On the Closing Date, there were 6,660,183

Private Warrants issued and outstanding.

Forward Purchase Warrants:

Simultaneous with the consummation of the Business Combination in October 2020, 875,000 Forward Purchase Warrants to purchase

shares of common stock were issued in connection with the forward purchase agreement (See Note 3).

The Forward Purchase Warrants

have terms and provisions identical to those of the Public Warrants, including as to exercise price, exercisability and exercise

period, except that the Forward Purchase Warrants are subject to transfer restrictions and certain registration rights.

All warrants were determined

to have equity classification at issuance, and as such, were recorded to additional-paid-in capital at the time of issuance.

On November 30, 2020, the Company issued

a notice of redemption of all its outstanding Public Warrants and Forward Purchase Warrants which was completed in December 2020.

However, the Private Warrants held by the initial holders thereof or permitted transferees of the initial holders were not subject

to this redemption.

As of December 31, 2020, all outstanding Public Warrants and Forward Purchase Warrants were either exercised

or redeemed by the holder.

As of December 31, 2020, the Company’s transfer agent received gross proceeds of $140.8 million

corresponding to the exercise of 15,786,127 warrants.

However, due to the timing of the receipt of the warrant exercise and the

cash, the Company’s transfer agent issued 15,414,592 shares of common stock as of December 31, 2020.

The remaining 371,535

shares of common stock were issued in January 2021.

Additionally, as of December 31, 2020, the Company’s transfer agent had

not yet remitted $12.0 million of the gross proceeds associated with the shares of issued common stock to the Company and is included

within prepaid expenses and other current assets on the accompanying consolidated balance sheets as of December 31, 2020.

were 281,065 warrants not exercised by the end of the redemption period that were redeemed for a price of $0.01 per warrant, and

subsequently cancelled by the Company.

The Company made the redemption payment on these cancelled warrants in January 2021.

holders of the warrants elected a cashless exercise, resulting in the forfeiture of 3,118,445 shares.

Share-based Compensation

2016 Equity Incentive Plan

For periods prior to the reverse recapitalization

(See Note 3), the Hyliion Inc.

2016 Equity Incentive Plan (the “2016 Plan”), as amended in August 2017 and approved

by the board of directors (the “Board”), permitted the granting of various awards including stock options (including

both nonqualified options and incentive options), stock appreciation rights (“SARs”), stock awards, phantom stock

units, performance awards, and other share-based awards to employees, outside directors and consultants and advisors of the Company.

Only stock options have been awarded to employees, consultants and advisors under the 2016 Plan.

Legacy Options converted into an option

to purchase a number of shares of common stock equal to the product of the number of shares of Legacy Hyliion common stock and

the Exchange Ratio at an exercise price per share equal to the exercise price of the Legacy Option divided by the Exchange Ratio.

Each exchanged option is governed by the same terms and conditions applicable to the Legacy Option prior to the Business Combination.

No further grants can be made under the 2016 Plan.

The option exercise price for all grantees

equals the stock’s estimated fair value on the date of the grant, after giving effect to the Exchange Ratio.

The Board determined

the fair value of common stock at the time of grant by considering a number of objective and subjective factors, including independent

third-party valuations of the Company’s common stock, operating and financial performance, the lack of liquidity of capital

stock, and general and industry-specific economic outlook, amongst other factors.

The Company believes the fair value of the stock

options granted to nonemployees is more readily determinable than the fair value of the services received.

The fair value of each option is estimated

on the date of the grant using the Black-Scholes option-pricing model in order to measure the compensation cost associated with

This model incorporates certain assumptions for inputs including an expected volatility in the market value of the

underlying common stock, expected term, a risk-free interest rate, and the expected dividend yield of the underlying common stock.

The following assumptions were used for

options issued in the following periods:

Years Ended December 31,

Expected volatility

Expected term (in years)

Risk-free interest rate

Expected dividend yield

The expected volatility was determined by examining the historical

volatilities of a group of industry peers, as the Company did not have any trading history

for the Company’s common stock.

For employees, the expected term is determined using the “simplified”

method, as prescribed by the SEC’s Staff Accounting Bulletin No.

107, Share-Based

Payment, to estimate on a formula basis the expected term of the Company’s employee

stock options which are considered to have “plain vanilla”

characteristics.

For nonemployees, the expected term represents the contractual term of the option.

interest rate:

The risk-free interest rate was based upon quoted market yields

for the United States Treasury instruments with terms that were consistent with the expected

term of the Company’s stock options.

dividend yield:

The expected dividend yield was based on the Company’s

history and management’s current expectation regarding future dividends.

Employee and nonemployee stock options

generally vest over four years, with a maximum term of ten years from the date of grant.

These awards become available to the

recipient upon the satisfaction of a vesting condition based on a period of service, which may be accelerated at the discretion

of the Board.

Share-based compensation expense is recognized on a straight-line basis over the applicable vesting period.

A summary of the status of the 2016 Plan

at December 31, 2020 and 2019, and changes during the same periods is presented below:

Weighted Average Exercise Price

Weighted Average Remaining Contractual Term

Outstanding at December 31, 2018

Cancelled or forfeited

Outstanding at December 31, 2019

Cancelled or forfeited

Outstanding at December 31, 2020

Exercisable at December 31, 2019

Exercisable at December 31, 2020

As of December 31, 2020, the options outstanding

and exercisable have an intrinsic value of $113.8 million and $62.8 million, respectively.

There were no options with an exercise

price greater than the market price on December 31, 2020 to exclude from the intrinsic value computation.

The intrinsic value

of options exercised during the years ended December 31, 2020 and 2019 was $18.4 million and less than $0.1 million, respectively.

Share-based compensation expense for the

years ended December 31, 2020 and 2019 was $0.3 million and $0.1 million, respectively.

As of December 31, 2020, there was $0.4

million of unrecognized compensation cost related to share-based payments, which is expected to be recognized over the remaining

vesting periods, with a weighted-average period of 2.6 years.

2020 Equity Incentive Plan

On October 1, 2020, the Company’s

shareholders approved a new long-term incentive award plan (the “2020 Plan”) in connection with the Business Combination.

The 2020 Plan is administered by the Board and the compensation committee.

The selection of participants, allotment of shares,

determination of price and other conditions are approved by the Board and the compensation committee at its sole discretion in

order to attract and retain personnel instrumental to the success of the Company.

Under the 2020 Plan, the Company may grant an

aggregate of 12,937,713 shares of common stock in the form of nonstatutory stock options, incentive stock options, SARs, restricted

stock awards, performance awards, and other awards.

No grants have been authorized to date by the Company’s Board and the

compensation committee under the 2020 Plan.

The Company has operating and finance

leases for its corporate office, temporary office, vehicles and equipment.

In addition, the Company enters into arrangements whereby

portions of the leased premises are subleased to third parties and are classified as operating leases.

The following table provides

a summary of the components of lease income, costs and rent, which are included within research and development and selling, general

and administrative on the accompanying consolidated statements of operations:

Years Ended December 31,

(in thousands)

Operating lease costs:

Operating lease cost

Short-term lease cost

Variable lease cost

Sublessor income

Total operating lease costs

Finance lease costs:

Amortization of right-of-use assets

Interest on lease liabilities

Total finance lease costs

Finance lease ROU assets were $0.3 million

and $0.7 million as of December 31, 2020 and 2019 and accumulated amortization was $0.1 million and $0.2 million as of December

31, 2020 and 2019, respectively.

The following table provides the weighted-average

lease terms and discount rates used for the Company’s operating and finance leases:

Weighted-average remaining lease term (in years):

Operating leases

Finance leases

Weighted-average discount rate:

Operating leases

Finance leases

The following table provides a summary of

lease liability maturities for the next five years and thereafter:

(in thousands)

Total lease payments

Imputed interest

Total lease obligations

Property and Equipment,

Property and equipment, net consisted

of the following at December 31, 2020 and 2019:

(in thousands)

Production machinery and equipment

Leasehold improvements

Demo fleet systems

Office furniture and fixtures

Computers and related equipment

Less accumulated depreciation

Property and equipment, net

Depreciation expense for the years ended

December 31, 2020 and 2019 totaled approximately $0.8 million and $0.9 million, respectively.

For the year ended December 31,

2020, less than $0.1 million and $0.7 million is included within selling, general and administrative expenses and research and

development expenses on the accompanying consolidated statements of operations, respectively.

For the year ended December 31,

2019, $0.1 million and $0.8 million is included within selling, general and administrative expenses and research and development

expenses on the accompanying consolidated statements of operations, respectively.

Intangible assets, net

The gross carrying amount and accumulated

amortization of separately identifiable intangible assets at December 31, 2020 and 2019 are as follows:

December 31, 2020

Quoted Prices in

Active Markets

Significant Other

Money market fund

$ 236,054,346

of December 31, 2019, the investments held in the Trust Account were comprised solely of U.S.

treasury securities.

income tax provision (benefit) consists of the following:

Income tax provision expense

Company’s net deferred tax assets are as follows:

Deferred tax asset

Net operating loss carryforward

Startup/Organizational Costs

Total deferred tax assets

Valuation Allowance

Deferred tax asset, net of allowance

assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or

all of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation

of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible.

Management considers the scheduled reversal of deferred tax assets, projected future taxable income and tax planning strategies

in making this assessment.

After consideration of all of the information available, management believes that significant uncertainty

exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance.

For the year ended December 31, 2019, the valuation allowance was approximately $119,000.

reconciliation of the statutory federal income tax rate (benefit) to the Company’s effective tax rate (benefit) is as follows:

Statutory federal income tax rate

State taxes, net of federal tax benefit

Federal tax rate change

Intangible Asset

Weighted Average Remaining Life

Gross Carrying Value

Accumulated Amortization

(in thousands)

Developed technology

December 31, 2019

Intangible Asset

Gross Carrying Value

Accumulated Amortization

(in thousands)

Developed technology

Total amortization expense was $0.1 million

for each of the years ended December 31, 2020 and 2019 and is included within selling, general and administrative expenses on

the accompanying consolidated statements of operations.

Total future amortization expense for

the finite-lived intangible assets is estimated as follows (in thousands):

Accrued Expenses and Other

Current Liabilities

Accrued expenses and other current liabilities

consisted of the following at December 31, 2020 and 2019:

(in thousands)

Accrued professional services

Accrued compensation and related benefits

Refundable grant

Other accrued liabilities

The income tax provision consists of the

Years Ended December 31,

(in thousands)

Current tax expense (benefit):

Total current tax expense

Deferred tax expense (benefit):

Valuation allowance

Income tax provision expense

SUBSEQUENT EVENTS

accordance with ASC Topic 855, “Subsequent Events,”

which establishes general standards of accounting for and disclosure

of events that occur after the balance sheet date but before financial statements are issued, the Company evaluated subsequent

events and transactions that occurred after December 31, 2019, the balance sheet date, up to the date that the audited financial

statements were available to be issued.

Based upon these evaluations, the Company did not identify any subsequent events that

would have required adjustment or disclosure in the financial statements.

in and Disagreements With Accountants on Accounting and Financial Disclosure.

Total deferred tax expense (benefit)

The components of deferred taxes as of December

31, 2020 and 2019 are as follows:

Years Ended December 31,

(in thousands)

Deferred tax assets:

Federal net operating loss carryforwards

State net operating loss carryforwards

Operating lease obligation

R&D tax credit

Property and equipment, net

Total deferred tax assets

Deferred tax liabilities:

Operating lease right of use asset, net

Intangible assets, net

Property and equipment, net

Total deferred tax liabilities

Total net deferred tax assets (liabilities)

Less valuation allowance

Net deferred tax assets (liabilities)

reconciliation of taxes at the federal statutory rate to the Company’s provision for income taxes for the years ended December

31, 2020, and 2019 was as follows:

Years Ended December 31,

(in thousands)

Provision at statutory rate of 21%

Non-deductible convertible debt interest expense

State tax expense

Stock options

Transaction costs

Shares issued in connection with Commercial Matters Agreement (see Notes 3, 4, and 14)

R&D tax credit

Change in valuation allowance

The net change in the total valuation

allowance for the year ended December 31, 2020, was an increase of $9.2 million, (compared to an increase of $2.8 million in 2019).

In assessing the realizability of deferred tax assets, management considered whether it is more likely than not that some portion

or all of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the

generation of future taxable income during the periods in which those temporary differences become deductible.

Management considered

the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this

Based upon the level of historical taxable income and projections for future taxable income over the periods in which

the deferred tax assets are deductible, management believes it is more likely than not that the Company will not realize the benefits

of these deductible differences at December 31, 2020.

The Company has federal net operating loss

carryforwards of approximately $82.2 million and $43.3 million at December 31, 2020 and 2019, respectively.

$10.5 million of this

amount will begin to expire in 2036.

The remaining $71.7 million has an indefinite carryforward period.

The Company also has state

net operating loss carryforwards of approximately $12.5 million and $10.5 million at December 31, 2020 and 2019.

They will expire

beginning in 2036.

The Company also has R&D credits of $0.3 million that begin to expire in 2037.

The Company’s ability

to utilize a portion of its net operating loss carryforwards and credits to offset future taxable income, and tax, respectively,

is subject to certain limitations under section 382 of the Internal Revenue Code upon changes in equity ownership of the Company.

Due to such limitation, $2.0 million of the Company’s net operating loss and less than $0.1 million of the Company’s

R&D credits will expire unused, regardless of taxable income in future years.

The Company files a United States federal

income tax return, as well as income tax returns in various states.

The tax returns for years 2016 and thereafter remain open

for examination.

Commitments and Contingencies

Economic Incentive Agreement :

During 2018, the Company entered into an agreement with the Cedar Park Economic Development Corporation (EDC), whereby the

Company will receive grants from the EDC contingent upon the Company fulfilling and maintaining certain corporate office lease

and employment requirements.

The specified requirements must be met on or before specific measurement dates and maintained throughout

the term of the agreement, which expires effective December 31, 2024.

Should the Company fail to meet and maintain

any performance requirements, all amounts received from the EDC are subject to refund.

During 2018, the Company achieved the first

performance requirement and received a payment of $0.2 million.

During 2019, the Company continued maintaining the employment

level of the first performance requirement but failed to meet the second performance requirement.

As a result, the Company did

not receive any additional grant funding in 2019, the agreement is subject to termination by the EDC and all amounts received

are subject to refund.

As the terms of the EDC grant agreement

require the Company to meet and maintain all of the performance requirements throughout the term of the agreement, the Company

has not substantially met all the conditions for the grant funding received.

Accordingly, the grant funding of $0.2 million received

in 2018 is recorded as part of accrued expenses and other current liabilities as of December 31, 2020 and 2019 and will continue

to be reflected as a currently liability until all related performance requirements have been met through the end of the agreement

on December 31, 2024.

Under the agreement, the EDC has the right

to file a security interest to all assets of the Company.

This security interest is subordinate to the holders of the convertible

notes payable with security interests.

Preferred Sourcing Arrangement and

Commercial Matters Agreement:

During 2018, the Company entered into a preferred sourcing arrangement, as amended (the “PSA”),

with a noteholder of the 2018 Note, Initial 2019 Notes, and January 2020 Note (the “PSA Partner”).

Under the terms

of the PSA, so long as the PSA Partner is one of the Company’s stockholders or debtholders and for a period of five years

following a change of control affecting the Company, the Company will treat the PSA Partner as the Company’s preferred source

for any products that the PSA Partner manufactures or sells in preference to other competing products as long as the PSA Partner’s

products meet the technical criteria established by the Company and on reasonably competitive terms.

the PSA, the Company is allowed to purchase competing products upon the request of any customer.

In June 2020 and in conjunction with the

Business Combination, the Company entered into a Commercial Matters Agreement with the PSA Partner pursuant to which, among other

things, contingent and effective upon the execution of the Business Combination, the Company issued to the PSA Partner $10.0 million

worth of Legacy Hyliion’s Common Stock, immediately prior to the effective time of the merger in consideration for the Note

Amendments and for any future services to be provided pursuant to the terms of a services agreement to provide engineering or operational

services to the Company that was entered into in June 2020.

The terms of the services agreement are yet to, and may ultimately

not, be negotiated and the PSA Partner is under no obligation to enter into such services agreement.

As a result, immediately prior to the

consummation of the Business Combination discussed in Note 3, the Company issued 1,000,000 shares of Legacy Hyliion common stock

with a fair value of $10.00 per share in exchange for future services to the Company.

Legal Proceedings:

is periodically involved in legal proceedings, legal actions and claims arising in the normal course of business, including proceedings

relating to product liability, intellectual property, safety and health, employment and other matters.

Management believes that

the outcome of such legal proceedings, legal actions and claims will not have a significant adverse effect on the Company’s

financial position, results of operations or cash flows.

Net Loss Per Share

As a result of the reverse recapitalization

(see Note 3), the Company has retroactively adjusted the weighted average shares outstanding prior to October 1, 2020 to give

effect to the Exchange Ratio used to determine the number of shares of common stock into which they were converted.

The following table sets forth the computation

of basic and diluted net loss per share of common stock for the years ended December 31, 2020, and 2019:

Years Ended December 31,

(in thousands, except share and per share data)

Net loss attributable to common stockholders

Weighted average shares outstanding, basic and diluted

Net loss per share, basic and diluted

The Company excluded the following weighted

average potential common shares from the computation of diluted net loss per share for the years ended December 31, 2020 because

including them would have had an anti-dilutive effect:

Years Ended December 31,

Stock options, including incentive stock options and non-qualified

Common shares issuable from the exercise of warrants

Common shares issuable from convertible notes payable

Supplemental Cash Flow Information

The following table provides supplemental

cash flow information for the years ended December 31, 2020 and 2019:

Years Ended December 31,

(in thousands)

Cash paid for interest

Cash paid for taxes

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

Operating cash flows from finance leases

Right-of-use assets obtained in exchange for lease obligations

The following table provides supplemental

disclosures of noncash financing activities for the year ended December 31, 2020 and 2019:

Years Ended December 31,

(in thousands)

Warrants exercised

where proceeds are included within prepaid expenses and other current assets

Settlement of convertible notes payable and convertible note payable derivative

Redemption of unexercised warrants included within prepaid expenses and

other current assets

Retirement Plan

The Company has adopted a 401(k) plan to

provide all eligible employees a means to accumulate retirement savings on a tax-advantaged basis.

The 401(k) plan requires participants

to be at least 20 years old.

Plan participants may make before tax elective contributions up to the maximum percentage of compensation

and dollar amount allowed under the Internal Revenue Code and are always 100% vested in their elective contributions.

makes discretionary employer contributions at its election.

Plan participants must be employed on the last day of the year to be

eligible for the employer match.

Participants may defer specified portions of their compensation.

The Company did not provide a

match of the employee’s contribution for the years ended December 31, 2020 and 2019.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

1, 2020 , after the recommendation of the Audit Committee of the Board, the Board approved the engagement of Grant Thornton

LLP (“Grant Thornton”) as the Company’s independent registered public accounting firm to audit the Company’s

consolidated financial statements for the year ending December 31, 2020.

Grant Thornton served as the independent registered public

accounting firm of Legacy Hyliion prior to the Business Combination.

Accordingly, WithumSmith+Brown, PC (“Withum”),

the Company’s independent registered public accounting firm prior to the Business Combination, was informed on October 1,

2020 that it would be replaced by Grant Thornton as the Company’s independent registered public accounting firm following

completion of the Company’s review of the quarter ended September 30, 2020, which consists only of the accounts of the pre-Business

Combination special purpose acquisition company, TortoiseCorp.

Withum’s report of independent registered

public accounting firm, dated March 20, 2020, on the Company’s balance sheets as of December 31, 2019 and 2018, the related

statements of operations, stockholders’

equity and cash flows for the year ended December 31, 2019 and for the period from

November 7, 2018 (inception) to December 31, 2018, and the related notes to the financial statements (collectively, the “financial

statements”) did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty,

audit scope or accounting principles other than the Company’s ability to continue as a going concern due to Company’s

obligation to either complete a business combination by the close of business on March 4, 2021, or cease all operations except

for the purpose of winding down and liquidating.

During the period from November 7, 2018

(inception) to December 31, 2019 and the subsequent period through October 1, 2020, there were no:

(i) disagreements with Withum

on any matter of accounting principles or practices, financial statement disclosures or audited scope or procedures, which disagreements

if not resolved to Withum’s satisfaction would have caused Withum to make reference to the subject matter of the disagreement

in connection with its report or (ii) reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.

During the period from November 7, 2018

(inception) to December 31, 2018, and the interim period through October 1, 2020, the Company did not consult Grant Thornton with

respect to either (i) the application of accounting principles to a specified transaction, either completed or proposed;

type of audit opinion that might be rendered on the Company’s financial statements, and no written report or oral advice

was provided to the Company by Grant Thornton that Grant Thornton concluded was an important factor considered by the Company in

reaching a decision as to the accounting, auditing or financial reporting issue;

or (ii) any matter that was either the subject

of a disagreement, as that term is described in Item 304(a)(1)(iv) of Regulation S-K under the Exchange Act and the related instructions

to Item 304 of Regulation S-K under the Exchange Act, or a reportable event, as that term is defined in Item 304(a)(1)(v) of Regulation

S-K under the Exchange Act.

The Company has provided Withum with a

copy of the disclosures made by the Company in connection with this change and requested that Withum furnish the Company with a

letter addressed to the SEC stating whether it agrees with the statements made by the Company in response to Item 304(a) of Regulation

S-K under the Exchange Act and, if not, stating the respects in which it does not agree.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data