What changed in this filing

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Item 1. Financial Statements

2021-05-17 compared with 2020-11-12 · 285 added, 1191 removed, 37 unchanged (98% of the section changed)

1 unchanged sentence

HYLIION HOLDINGS CORP.

(f/k/a TORTOISE ACQUISITION CORP.)

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

(Dollar amounts in thousands, except share and per share data)

2021 December 31,

Current assets:

$ 117,102,142

Prepaid expenses

Cash and cash equivalents $ 334,718 $ 389,705

Accounts receivable 80 92

Prepaid expenses and other current assets 3,616 20,690

Short-term investments 144,829 201,881

Total current assets 483,243 612,368

and Investments held in Trust Account

$ 353,676,680

$ 237,148,974

Liabilities and Stockholders’

Property and equipment, net 1,350 1,171

Operating lease right-of-use assets 4,833 5,055

Intangible assets, net 308 332

Other assets 193 193

Long-term investments 152,481 35,970

Total assets $ 642,408 $ 655,089

Liabilities and stockholders’ equity:

Current liabilities:

Accounts payable $ 2,022 $ 1,890

Accrued expenses

Note payable to Sponsor

Accrued franchise tax

Due to Private Placement Investors

Current portion of operating lease liabilities 790 734

Accrued expenses and other current liabilities 5,073 6,313

Total current liabilities 7,885 8,937

Deferred legal fees associated with initial public offering

Deferred underwriting commissions associated with initial public offering

Operating lease liabilities, net of current portion 4,838 5,076

Debt, net of current portion — 908

Total liabilities 12,723 14,921

Commitments and Contingencies

Class A common stock, $0.0001 par value;

21,891,375 and 22,366,276 shares subject to possible redemption at $10.00 per share as of September 30, 2020 and December 31, 2019, respectively

Stockholders’

Preferred stock, $0.0001 par value;

1,000,000 shares authorized;

none issued and outstanding as of September 30, 2020 and December 31, 2019

Class A common stock, $0.0001 par value;

200,000,000 shares authorized;

1,409,542 and 934,641 shares issued and outstanding (excluding 21,891,375 and 22,366,276 shares subject to possible redemption) as of September 30, 2020 and December 31, 2019, respectively

Class B common stock, $0.0001 par value;

Stockholders’ Equity:

Common stock, $ 0.0001 par value;

250,000,000 shares authorized;

5,825,230 shares issued and outstanding as of September 30, 2020 and December 31, 2019

171,519,811 and 169,316,421 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

Additional paid-in capital 371,077 364,998

(Accumulated deficit) retained earnings

Total stockholders’

Total Liabilities and Stockholders’

$ 353,676,680

$ 237,148,974

The accompanying notes are an integral

part of these unaudited condensed consolidated financial statements.

Accumulated deficit 258,589 275,151

Total stockholders’ equity 629,685 640,168

Total liabilities and stockholders’ equity $ 642,408 $ 655,089

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

HYLIION HOLDINGS CORP.

(f/k/a TORTOISE ACQUISITION CORP.)

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS

OF OPERATIONS

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

General and administrative expenses

Administrative expenses - related party

Franchise tax expense

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollar amounts in thousands, except share and per share data)

Three Months Ended March 31,

Operating expenses:

Research and development ( 9,332 ) ( 2,671 )

Selling, general and administrative $ ( 7,399 ) $ ( 691 )

Loss from operations ( 16,731 ) ( 3,362 )

Investment income from investments held in Trust Account

Income/(loss) before income tax expense

Income tax expense

Net income/(loss)

$ (2,770,010 )

$ (4,749,009 )

Weighted average shares outstanding of Class A Common Stock

diluted net income per share, Class A Common Stock

Weighted average shares outstanding of Class B Common Stock

diluted net (loss) per share, Class B Common Stock

The accompanying notes are an integral

part of these unaudited condensed consolidated financial statements.

Other income (expense)

Interest expense — ( 1,565 )

Interest income 169 —

Change in fair value of convertible notes payable derivative liabilities — ( 635 )

Total other income (expense) 169 ( 2,200 )

Net loss $ ( 16,562 ) $ ( 5,562 )

Weighted-average shares outstanding, basic and diluted 170,249,708 86,762,463

Net loss per share, basic and diluted $ ( 0.10 ) $ ( 0.06 )

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

HYLIION HOLDINGS CORP.

(f/k/a TORTOISE ACQUISITION CORP.)

UNAUDITED CONDENSED CONSOLIDATED STATEMENT

OF CHANGES IN STOCKHOLDERS’

For the Nine Months Ended September 30, 2020

Retained Earnings

Stockholders’

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Dollar amounts in thousands, except share data)

For the Three Months Ended March 31, 2021

Deficit Total

Stockholders’

Shares Amount

Balance - December 31, 2020 169,316,421 $ 19 $ 364,998 $ 275,151 $ 640,168

Common stock subject to possible redemption

Common stock issued for warrants exercised, net of issuance costs 371,535 — 4,282 — 4,282

Exercise of common stock options 1,831,855 — 287 — 287

Share-based compensation — — 1,510 — 1,510

Net loss — — — ( 16,562 ) ( 16,562 )

Balances - March 31, 2021 171,519,811 19 371,077 258,589 629,685

Common stock subject to possible redemption

Balances - June 30, 2020

Common stock subject to possible redemption

Balances - September 30, 2020

$ (2,425,212 )

For the Nine Months Ended September 30, 2019

Retained Earnings

Stockholders’

For the Three Months Ended March 31, 2020

Deficit Total

Stockholders’

Shares Amount

Balance - December 31, 2019 86,762,463 $ 9 $ 30,888 $ ( 48,966 ) $ ( 18,069 )

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

(22,153,130 )

(221,529,085 )

(221,531,300 )

Share-based compensation — — 57 — 57

Net loss — — — ( 5,562 ) ( 5,562 )

Balances - March 31, 2020 86,762,463 $ 9 30,945 $ ( 54,528 ) $ ( 23,574 )

Common stock subject to possible redemption

Balances - June 30, 2019

Common stock subject to possible redemption

Balances - September 30, 2019

(1) 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).

(2) Share amounts include 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 shares

of Class B Common Stock for cancellation by the Company.

The accompanying notes are an integral

part of these unaudited condensed consolidated financial statements.

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

HYLIION HOLDINGS CORP.

(f/k/a TORTOISE ACQUISITION CORP.)

UNAUDITED CONDENSED CONSOLIDATED STATEMENT

OF CASH FLOWS

For the Nine Months Ended

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollar amounts in thousands)

For the Three Months Ended March 31,

Cash Flows from Operating Activities:

Net income (loss)

$ (4,749,009 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

General and administrative expenses paid by Sponsor

Investment income from investments held in Trust Account

Net loss $ ( 16,562 ) $ ( 5,562 )

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

Depreciation and amortization 203 251

Noncash lease expense 222 276

Paid-in-kind interest on convertible notes payable — 306

Amortization of debt discount — 1,250

Share-based compensation 1,510 57

Change in fair value of convertible notes payable derivative liabilities — 635

Changes in operating assets and liabilities:

Prepaid expenses

Accounts receivable 12 107

Prepaid expenses and other current assets 817 28

Accounts payable 132 ( 270 )

Accrued expenses

Accrued franchise tax

Accrued expenses and other current liabilities 3,091 ( 120 )

Operating lease liabilities ( 182 ) ( 283 )

Net cash used in operating activities ( 10,757 ) ( 3,325 )

Cash Flows from Investing Activities:

Cash deposited in Trust Account

(233,009,170 )

Interest released from Trust Account

Net cash provided by/(used in) investing activities

(232,397,170 )

Purchase of property and equipment ( 358 ) ( 80 )

Purchase of investments ( 219,460 ) —

Proceeds from sale of investments 160,001 —

Net cash used in investing activities ( 59,817 ) ( 80 )

Cash Flows from Financing Activities:

Proceeds from Private Placement Investors

Proceeds from note payable to related parties

Gross proceeds received from initial public offering

Proceeds received from sale of private placement warrants

Repayment of note payable to Sponsor

Offering costs paid

Proceeds from exercise of stock warrants, net of issuance costs 16,257 —

Payments for Paycheck Protection Program loan ( 908 ) —

Proceeds from exercise of common stock options 287 —

Proceeds from convertible notes payable issuance and derivative liability — 3,200

Repayments on finance lease obligations ( 49 ) ( 54 )

Net cash provided by financing activities 15,587 3,146

Net increase in

Cash - beginning of the period

Cash - end of the period

$ 117,102,142

Supplemental disclosure of noncash investing and financing activities:

Reduction of accounts payable paid by Sponsor included in note payable

Offering costs included in accrued expenses

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

Change in value

of Class A Common Stock subject to possible redemption

$ 223,079,940

The accompanying notes are an integral

part of these unaudited condensed consolidated financial statements.

HYLIION HOLDINGS CORP.

(f/k/a TORTOISE ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Description of Organization and Business

Organization and General

Net decrease in cash and cash equivalents ( 54,987 ) ( 259 )

Cash and cash equivalents- beginning of the period 389,705 6,285

Cash and cash equivalents - end of the period $ 334,718 $ 6,026

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

HYLIION HOLDINGS CORP.

(the “Company”) was initially incorporated in Delaware on November 7, 2018 under the name “Tortoise Acquisition

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”).

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”).

As of September 30,

2020, the Company had not commenced any operations.

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

to September 30, 2020 related 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 the Initial Business Combination and ongoing administrative and compliance matters.

The Company did not generate any

operating revenues prior to completion of its Initial Business Combination.

The Company generated non-operating income in the form

of interest income earned on investments from the net proceeds derived from the Initial Public Offering through the completion of

the Initial Business Combination.

The Company has selected December 31st as its fiscal year end.

On October 1,

2020 (the “Closing Date”), the Company consummated the merger (the “Closing”) pursuant to that

certain Business Combination Agreement and Plan of Reorganization, dated June 18, 2020 (the “Business Combination

Agreement”), by and among the Company, SHLL Merger Sub Inc., a wholly owned subsidiary of the Company incorporated in

the State of Delaware (“Merger Sub”), and Hyliion Inc., a Delaware corporation (“Legacy Hyliion”).

Pursuant to the terms of the Business Combination Agreement, a business combination between the Company and Legacy Hyliion

was effected through the merger of Merger Sub with and into Legacy Hyliion, with Legacy Hyliion surviving as the surviving

company and as a wholly owned subsidiary of the Company (the “Merger”

and, collectively with the other

transactions described in the Business Combination Agreement, the “Business Combination”).

On the Closing Date,

the Company changed its name from Tortoise Acquisition Corp.

to Hyliion Holdings Corp.

At the effective time of the Merger

(the “Effective Time”), each share of common stock of Legacy Hyliion (the “Legacy Hyliion Common

Stock”) was converted into and exchanged for 1.45720232 shares (the “Exchange Ratio”) of the

Company’s Class A Common Stock, par value $0.0001 per share (“Class A Common Stock”).

Pursuant to the

Amended and Restated Certificate of Incorporation of the Company, each share of Class B Common Stock, par value $0.0001 per

share (the “Class B Common Stock”), converted into one share of Class A Common Stock, par value $0.0001 per share

(the “Class A Common Stock”), at the Closing.

After the Closing and following the effectiveness of the Second

Amended and Restated Certificate of Incorporation (the “Second A&R Charter”) of the Company, each share of

Class A Common Stock was automatically reclassified, redesignated and changed into one validly issued, fully paid and

non-assessable share of common stock, par value $0.0001 per share (the “Common Stock”), without any further

action by the Company or any stockholder thereof.

Sponsor and Initial Public Offering

The Company’s

sponsor was Tortoise Sponsor LLC, a Delaware limited liability company (the “Sponsor”).

As described 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.

Each Unit consisted of one share of Class A Common Stock, and one-half of one redeemable

warrant (each, a “Warrant”

and, collectively, the “Warrants”).

As described in Note 4, on March 4, 2019,

simultaneously with the closing of the Initial Public Offering, TortoiseEcofin Borrower LLC, a Delaware limited liability company

and an affiliate of the Sponsor (f/k/a “

Tortoise Borrower LLC ”

and hereinafter referred to as “

Borrower ”), 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”).

The Company financed

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.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands, except for separately indicated)

Description of Organization and Business Operations

On October 1, 2020, our predecessor company, Tortoise Acquisition Corp.

(“Tortoise”), consummated a business combination (the “Business Combination”) with Hyliion Inc., a Delaware corporation (“Legacy Hyliion”) pursuant to which Legacy Hyliion merged with and into SHLL Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Tortoise, with Legacy Hyliion surviving the merger (together with the related transactions, the “Business Combination”).

Upon consummation of the Business Combination, Legacy Hyliion became a direct wholly-owned subsidiary of Tortoise, and Tortoise was renamed Hyliion Holdings Corp.

References to the “Company” in this report refer to Tortoise before the consummation of the Business Combination or Hyliion Holdings Corp.

and its wholly owned subsidiary (“Hyliion”, “we” or “us”) after the Business Combination, unless expressly indicated or the context otherwise requires.

Hyliion designs and develops hybrid and electrified powertrain systems for long haul “Class 8” semi-trucks which modify semi-tractors into Hybrid and fully electric range extender vehicles, respectively.

The Company’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 performance.

The Company’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.

The Company 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 phase.

On October 1, 2020, the Company consummated a business combination which was accounted for as a reverse recapitalization.

For more details on the reverse recapitalization, see Note 3 to the Company's Consolidated Financial Statements as presented in its Annual Report, as amended on Form 10-K/A for the year ended December 31, 2020.

As a result of the reverse recapitalization, all references to numbers of common shares and per common share data for 2020 in these condensed consolidated financial statements and related notes have been retroactively adjusted to account for the effect of the reverse recapitalization.

These condensed 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.

As of March 31, 2021, the Company had a cash and cash equivalents balance of $ 334.7 million and total investments of $ 297.3 million.

Based on this, the Company has sufficient funds to continue to execute its business strategy for the next twelve months.

Significant Accounting Policies

B asis of Presentation:

On October 1, 2020, the Company consummated the Business Combination which was accounted for as a reverse recapitalization with Legacy Hyliion being deemed the accounting acquirer in the Business Combination based on an analysis of the criteria outlined in Accounting Standards Codification (“ASC”) 805.

Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Legacy Hyliion issuing stock for the net assets of Tortoise, accompanied by a recapitalization.

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

While Tortoise 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 Tortoise 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.

For more details on the reverse recapitalization, see Note 3 to the Company’s Consolidated Financial Statements as presented in its Annual Report, as amended on Form 10-K/A for the year ended December 31, 2020 which was filed with the Securities and Exchange Commission

HYLIION HOLDINGS CORP.

(f/k/a TORTOISE ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Trust Account

Upon 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

were 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 U.S.

treasury obligations.

Funds remained in the Trust Account until the earlier of (i) the consummation of the Initial Business Combination

or (ii) the distribution of the Trust Account proceeds as described below.

The remaining proceeds outside the Trust Account were

able to be used to pay for business, legal and accounting due diligence on prospective acquisitions and general and administrative

On September 30, 2020, the investments were converted to cash and cash equivalents held in the trust prior

to the Closing.

The Company’s

amended and restated certificate of incorporation that was in effect at September 30, 2020 provided 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) would be released from the Trust Account until the earlier of:

(i) the completion of the Initial Business

(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.

The Company filed the Second A&R Charter on October 1, 2020 upon completion of the Business Combination, which

was the Initial Business Combination.

Initial Business Combination

The Company’s

management had 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 were applied toward consummating the 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 Company successfully effected the Initial Business Combination

on October 1, 2020.

The Company sought

stockholder approval of the Business Combination, which was completed following approval of a majority of the outstanding shares

of Class A Common Stock voting in favor.

Stockholders had 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, the Public Shares were 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 .”

Business Combination

On June 18, 2020, the

Company, Merger Sub and Legacy Hyliion, entered into the Business Combination Agreement, pursuant to which Merger Sub merged with

and into Legacy Hyliion, with Legacy Hyliion surviving the Merger as a wholly owned subsidiary of the Company.

Hyliion designs,

develops and sells electrified powertrain solutions that can be installed on Class 8 trucks from most major commercial vehicle

original equipment manufacturers.

Hyliion’s headquarters are located in Cedar Park, Texas.

At the closing of the

proposed Merger, 100,000,000 shares of the Company’s Class A Common Stock were issued to the securityholders of Legacy Hyllion

(the “Historical Rollover Stockholders”) in the Business Combination in exchange for all outstanding shares of Legacy

Hyliion Common Stock, or reserved for issuance in respect of stock options of New Hyliion issued in exchange for outstanding pre-merger

Legacy Hyliion options.

Concurrent with closing

of the Merger, an investor purchased from the Company 1,750,000 Units (the “Forward Purchase Units”), consisting of

1,750,000 shares of the Company’s Class A Common Stock (the “Forward Purchase Shares”) and warrants to purchase

875,000 shares of the Company’s Class A Common Stock (the “Forward Purchase Warrants”), for an aggregate purchase

price of $17,500,000, pursuant to a forward purchase agreement.

Additionally, other investors purchased from the Company 30,750,000

shares of the Company’s Class A Common Stock, for an aggregate purchase price of $307,500,000.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands, except for separately indicated)

(“SEC”) on May 17, 2021 (the “2020 Amended Annual Report”).

These condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary.

Intercompany accounts and transactions have been eliminated in consolidation.

These interim consolidated statements have been prepared pursuant to the rules and regulations of the SEC, which permit reduced disclosure for interim periods.

The Consolidated Balance Sheet as of December 31, 2020 was derived from audited financial statements for the fiscal year then ended, but does not include all necessary disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) with respect to annual financial statements.

In the opinion of management, these unaudited condensed consolidated financial statements include all recurring adjustments and normal accruals necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the dates and periods presented.

These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s 2020 Amended Annual Report.

Results for interim periods are not necessarily indicative of the results to be expected for a full fiscal year or for any future period.

Emerging Growth Company:

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 registration statement under the Securities Act of 1933, as amended (the “Securities Act”) declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended) (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, until such time the Company is no longer considered to be an emerging growth company.

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

Use 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.

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

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 of the U.S.

began ordering various “shelter-in-place” orders, which have had various impacts on the U.S.

and global economies.

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

As 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.

HYLIION HOLDINGS CORP.

(f/k/a TORTOISE ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

The Closing occurred on October 1, 2020

following the satisfaction or waiver of all of the closing conditions.

Stockholder Support Agreement

Contemporaneously with

the execution of the Business Combination Agreement, on June 18, 2020, the Company entered into the Stockholder Support Agreement

(the “Stockholder Support Agreement”) pursuant to which certain of the Hyliion stockholders agreed to vote all of their

shares of Hyliion common stock and Hyliion preferred stock in favor of the approval and adoption of the business combination and

the Business Combination Agreement.

Additionally, such Hyliion stockholders agreed not to (a) sell, assign, transfer (including

by operation of law), pledge, dispose of, permit to exist any material lien with respect to or otherwise encumber any of their

shares of Hyliion common stock and Hyliion preferred stock (or enter into any arrangement with respect thereto), subject to certain

exceptions, or (b) deposit any of their shares of Hyliion common stock and Hyliion preferred stock into a voting trust or enter

into any voting arrangement that is inconsistent with the Stockholder Support Agreement.

A&R Registration Rights Agreement

In connection with

the Closing, the Company entered into an amended and restated registration rights agreement (the “A&R Registration Rights

Agreement”) with the Sponsor, Tortoise Borrower and certain of the Historical Rollover Stockholders (collectively, the

“Holders”), pursuant to which the Holders are entitled to registration rights.

Pursuant to the A&R Registration

Rights Agreement, the Company filed with the SEC (at its sole cost and expense) a registration statement registering the resale

of certain of the Holders’

securities of the Company (collectively, the “Registrable Securities”), and the Company

agreed to use its reasonable best efforts to have such registration statement declared effective by the SEC as soon as reasonably

practicable after the filing thereof.

Certain of the Holders were granted demand underwritten offering registration rights and

all of the Holders were granted piggyback registration rights.

The A&R Registration

Rights Agreement will terminate upon the earlier of (a) ten years following the Closing or (b) the date as of which the Holders

cease to hold any Registrable Securities.

Lock-Up Agreement

In connection with

the Closing, certain existing Hyliion investors agreed, subject to certain exceptions, not to (a) sell, offer to sell, contract

or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or

indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning

of Section 16 of the Exchange Act and the rules and regulations of the SEC promulgated thereunder, any shares of Class A Common

Stock held by them immediately after the Effective Time, or issuable upon the exercise of options to purchase shares of Class A

Common Stock held by them immediately after the Effective Time, or securities convertible into or exercisable or exchangeable for

Class A Common Stock held by them immediately after the Effective Time, (b) enter into any swap or other arrangement that transfers

to another, in whole or in part, any of the economic consequences of ownership of any of such shares of Class A Common Stock or

securities convertible into or exercisable or exchangeable for Class A Common Stock, whether any such transaction is to be settled

by delivery of such securities, in cash or otherwise or (c) publicly announce any intention to effect any transaction specified

in clause (a) or (b) until 180 days after the closing date.

Thereafter until two years after the closing date, subject to certain

exceptions, Thomas Healy also agreed not to transfer more than 10% of the number of shares of Class A Common Stock held by him

immediately after the Effective Time, or issuable upon the exercise of options to purchase shares of Class A Common Stock held

by him immediately after the Effective Time.

Second Amended and Restated Charter

Pursuant to the terms

of the Business Combination Agreement, upon the Closing, the Company amended and restated its certificate of incorporation to,

among other things, (a) increase the number of authorized shares of Class A Common Stock from 200,000,000 shares to 250,000,000

shares, (b) reclassify the Company’s board of directors, (c) eliminate certain provisions in the certificate of incorporation

relating to an Initial Business Combination that are no longer applicable following the Closing, (d) change the post-combination

company’s name to “Hyliion Holdings Corp.”

and (e) make certain other changes that the Company’s board

of directors deems appropriate for a public operating company.

Following the effectiveness of the Second A&R Charter, each

share of Class A Common Stock was automatically reclassified, redesignated and changed into one validly issued, fully paid and

non-assessable share of common stock.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands, except for separately indicated)

Recently Adopted Accounting Pronouncements:

In 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.

The Company adopted ASU 2019-12 on January 1, 2021.

However, there is no impact to the Company as a result of the adoption in the current quarter, nor is there an expected impact to the Company for the remainder of the year.

Convertible Notes Payable:

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 after 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 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 per share price of the next equity financing, 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).

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

The Company assessed the embedded features within the January 2020 Note and determined that the automatic and optional conversion features upon the 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.

HYLIION HOLDINGS CORP.

(f/k/a TORTOISE ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Subscription Agreements

In connection with

the execution of the Business Combination Agreement, on June 18, 2020, the Company entered into separate subscription agreements

(collectively, the “Subscription Agreements”) with a number of investors (each a “Subscriber”), pursuant

to which the Subscribers agreed to purchase, and the Company agreed to sell to the Subscribers, an aggregate 30,750,000 shares

of Class A Common Stock issued in the PIPE Financing (“PIPE Shares”), for a purchase price of $10.00 per share and

an aggregate purchase price of $307,500,000 million in the private offering o certain investors in connection with the Business

Combination (“PIPE Financing”).

The Company agreed to give certain customary registration rights to the Subscribers

with respect to the PIPE Shares pursuant to the Subscription Agreements.

Pursuant to the registration

rights granted to the Subscribers in connection with the Subscription Agreements, the Company filed a registration statement registering

for resale under the Securities Act all of the PIPE Shares acquired by the Subscribers, and agreed to use commercially reasonable

efforts to have such registration statement declared effective as soon as practicable after the filing thereof, but no later than

the earlier of (a) the 60th day following the Closing and (b) the tenth business day after the date it is notified by the SEC that

such registration statement will not be reviewed or will not be subject to further review.

The closing of the

sale of the PIPE Shares pursuant to the Subscription Agreements occurred immediately prior to the Closing.

The purpose of the PIPE

Financing was to raise additional capital for use by the post-combination company following the Closing.

Stockholders Rights Agreement

On June 18, 2020, Vincent

Cubbage, Stephen Pang, certain stockholders of Hyliion and the Company entered into the Stockholder Rights Agreement (the “Stockholders

Rights Agreement”), pursuant to which the Company agreed to take all necessary action so that immediately after the Effective

Time, the board of directors, including its committees, is comprised of the individuals set forth in the Business Combination Agreement.

Pursuant to the Stockholders Rights Agreement, the Surviving Corporation also took all necessary action to cause its board of directors

to nominate and recommend for election at its annual meeting of stockholders in 2021 Vincent T.

Cubbage and Thomas Healy.

The stockholders

party to the Stockholders Rights Agreement agreed to vote in favor of Messrs.

Cubbage and Healy at the annual meeting of stockholders

Amendment to IPO Forward Purchase Agreement

On June 18, 2020, Atlas

Point Energy Infrastructure Fund, LLC (“Atlas Point Fund”), the Company and Sponsor entered into the First Amendment

to Amended and Restated Forward Purchase Agreement, which amends the IPO Forward Purchase Agreement (the “FPA Amendment”).

Pursuant to the FPA Amendment, Atlas Point Fund purchased 1,750,000 units (“Forward Purchase Units”), consisting of

1,750,000 shares of Class A Common Stock and warrants (“Forward Purchase Warrants”) to purchase 875,000 shares of Class

A Common Stock, for an aggregate purchase price of $17,500,000.

The shares of Class A Common Stock purchased as part of the Forward

Purchase Units were identical to the shares of Class A Common Stock included in the units sold in the Initial Public Offering,

except the shares comprising the Forward Purchase Units are subject to transfer restrictions and certain registration rights.

whole Forward Purchase Warrant is exercisable to purchase one share of Common Stock at $11.50 per share.

The Forward Purchase Warrants

will have the same terms as the public warrants, except that the Forward Purchase Warrants are subject to transfer restrictions

and certain registration rights.

Summary of Significant Accounting

Basis of Presentation

The accompanying unaudited

condensed consolidated financial statements of the Company have been prepared in accordance with United States generally accepted

accounting principles (“GAAP”) for interim financial information and Article 8 of Regulation S-X.

Accordingly, they

do not include all of the information and footnotes required by GAAP.

In the opinion of management, all adjustments (consisting

of normal accruals) considered for a fair presentation have been included.

Operating results for the nine months ended September

30, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020 or any future period.

The accompanying unaudited

condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto

included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with U.S.

Securities and

Exchange Commission (the “SEC”) on March 23, 2020.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands, except for separately indicated)

At issuance, the Company estimated the fair value of the automatic and optional conversion features to be approximately $ 2.7 million.

At issuance, the Company 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.

In connection with the reverse recapitalization, immediately prior to the closing of the Business Combination, these convertible notes, plus accrued paid-in-kind interest, were converted into the Company’s common stock on the closing date.

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 limitations.

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 such usage met the criteria established for forgiveness of the loan, the Company repaid the balance of the PPP loan plus accrued interest during the three months ended March 31, 2021.

HYLIION HOLDINGS CORP.

(f/k/a TORTOISE ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Emerging Growth Company

Section 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

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.

Net Income (Loss) Per Share of Common

The Company’s

unaudited condensed consolidated 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 three months ended September 30, 2020 and 2019 is calculated by dividing the investment

income earned on the investments held in the Trust Account (approximately $17,000 and $1.2 million, respectively, net of funds

available to be withdrawn from the Trust Account for payment of franchise and income taxes, resulting in a total of $0 and $894,000,

respectively), by the weighted average number of approximately 23.3 million shares of Class A Common Stock outstanding for the

Basic and diluted net loss per share of Class B Common Stock for the three months ended September 30, 2020 and 2019 is

calculated by dividing the net loss of approximately $2.8 million and net income of $740,000, respectively, less income attributable

to Class A Common Stock in the amount of approximately $0 and $894,000, respectively, resulting in a net loss of approximately

$2.8 million and $0.2 million, respectively, by the weighted average number of 5.8 million shares of Class B Common Stock outstanding

for the periods.

Basic and diluted net

income per share of Class A Common Stock for the nine months ended September 30, 2020, and 2019 is calculated by dividing the investment

income earned on the investments held in the Trust Account (approximately $886,000 and $2.9 million, respectively, net of funds

available to be withdrawn from the Trust Account for payment of franchise and income taxes, resulting in a total of approximately

$574,000 and $2.2 million, respectively), 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 nine months ended September

30, 2020 and 2019 is calculated by dividing the net loss of approximately $4.7 million and net income of $1.7 million respectively,

less income attributable to Class A Common Stock in the amount of approximately $886,000 and $2.2 million respectively, resulting

in a net loss of approximately $5.3 million and $0.4 million respectively, by the weighted average number of 5.8 million shares

of Class B Common Stock outstanding for the periods.

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 because inclusion would be anti-dilutive

under the treasury stock method as of September 30, 2020 and 2019.

Concentration of Credit Risk

Financial instruments

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

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

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.

Investments Held in Trust Account

Investments held in

the Trust Account at December 31, 2019 are classified as trading securities and are comprised solely of an investment in a money

market fund that invests only in U.S.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands, except for separately indicated)

The amortized cost, unrealized gains and losses, and fair value of our held-to-maturity investments at March 31, 2021 and December 31, 2020 are summarized as follows:

Fair Value Measurements as of March 31, 2021

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

(in thousands)

Held-to-maturity investments

Commercial paper $ 116,658 $ — $ ( 24 ) $ 116,634

State and municipal bonds 15,805 — ( 21 ) 15,784

Corporate bonds and notes 164,847 — ( 644 ) 164,203

Total held-to-maturity investments $ 297,310 $ — $ ( 689 ) $ 296,621

As of March 31, 2021, the Company has determined that the unrealized losses totaling $ 0.7 million is temporary and fully expects to recover the cost basis.

Fair Value Measurements as of December 31, 2020

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

(in thousands)

Held-to-maturity investments

Treasury securities $ 149,996 $ — $ ( 1 ) $ 149,995

Trading securities are presented on the unaudited condensed consolidated

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 investment income from investments held in the Trust Account in the accompanying unaudited condensed

consolidated statement of operations.

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

At September 30, 2020, Investments held in Trust Account were held in cash.

HYLIION HOLDINGS CORP.

(f/k/a TORTOISE ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Commercial paper 37,963 — ( 15 ) 37,948

Corporate bonds and notes 49,892 — ( 63 ) 49,829

Total held-to-maturity investments $ 237,851 $ — $ ( 79 ) $ 237,772

March 31, 2021 December 31, 2020

Amortized Cost Fair Value Amortized Cost Fair Value

(in thousands) (in thousands)

Due in one year or less $ 144,829 $ 144,788 $ 201,881 $ 201,864

Due after one year through five years 152,481 151,833 35,970 35,908

Total held-to-maturity securities $ 297,310 $ 296,621 $ 237,851 $ 237,772

Fair Value Measurements

Fair 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.

The 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:

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

in active markets;

● Level 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;

● Level 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.

In 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.

As of September 30,

2020, and December 31, 2019, the recorded values of cash, prepaid expenses, accounts payable, franchise taxes payable, and accrued

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

Principles of Consolidation

The unaudited condensed

consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Merger Sub, at September 30, 2020.

significant inter-company transactions and balances have been eliminated in consolidation.

Use of Estimates

The 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 unaudited

condensed consolidated balance sheet and the reported amounts of revenues 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 unaudited condensed consolidated balance sheet, which management considered in formulating its estimate, could change due

to one or more future confirming events.

Actual results could differ from estimates.

Offering Costs

Offering costs consist

of expenses incurred in connection with preparation of the Initial Public Offering, of which 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 consisted 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.

HYLIION HOLDINGS CORP.

(f/k/a TORTOISE ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Class A Common Stock Subject

to Possible Redemption

The Company accounted

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) were 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) were classified as temporary equity.

At all other times, shares of Class

A Common Stock were classified as stockholders’

The Company’s Class A Common Stock featured certain redemption

rights that were considered to be outside of the Company’s control and subject to the occurrence of uncertain future events.

The Company recognized changes in redemption value immediately as they occurred and adjusted the carrying value of the security

at the end of each reporting period.

Increases or decreases in the carrying value of redeemable shares of Class A Common Stock

were affected by charges against additional paid-in capital.

Accordingly, as of September 30, 2020 and December 31, 2019, 21,891,375

and 22,366,276 shares of Class A Common Stock subject to conditional redemption, respectively, were presented as temporary equity,

outside of the stockholders’

equity section of the Company’s consolidated balance sheets.

completion of the Business Combination and filing of the Second A&R Charter, each share of Class A Common Stock was automatically

reclassified, redesignated and changed into one validly issued, fully paid and non-assessable share of Common Stock, without any

further action by the Company or any stockholder thereof and there are no longer any shares of Class A Common Stock outstanding.

The Company follows

the asset and liability method of accounting for income taxes under FASB ASC 740, “

Income Taxes .”

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

condensed consolidated balance sheets carrying amounts of existing assets and liabilities and their respective tax bases.

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.

FASB ASC 740, “

Taxes ,”

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 September

30, 2020 and December 31, 2019.

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

No amounts were accrued for the payment of interest and penalties as of September 30, 2020 and December 31, 2019.

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.

As of September 30,

2020, and December 31, 2019, the Company had gross deferred tax assets related to federal and state net operating loss carryforwards

for income tax purposes of approximately $1,082,000 and $119,000, 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.

Following the Merger, the

Company anticipates that its net operating loss carryforwards and certain other tax attributes (such as losses and deductions that

have accrued in the current year prior to the Merger) will be subject to limitation under Section 382 of the Internal Revenue Code

as a result of an “ownership change”

by reason of the Merger.

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.

Any limitation

may result in expiration of a portion of the net operating loss before utilization.

In 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, any limitation on the use of net operating losses under Section 382 of the Internal

Revenue Code, and taxing strategies in making this assessment.

In case 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 September 30, 2020 and December

HYLIION HOLDINGS CORP.

(f/k/a TORTOISE ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Recent Accounting Pronouncements

In December 2019, the

FASB issued ASU No.

2019-12, “

Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes ”

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

ASU 2019-12 removes certain

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

This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020,

with early adoption permitted.

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

related disclosures.

Management 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 unaudited condensed consolidated financial statements.

Initial Public Offering

On March 4, 2019, the 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

Each 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 became 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.

Warrants became 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 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 warrantholders.

Of 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.

The 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.

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 shares of the Company’s Class B Common Stock

(the “Founder Shares”) for cancellation by the Company.

Related Party Transactions

Founder Shares

In 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 issued upon conversion thereof.

The Founder Shares were 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 converted 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.

ASC Topic 820, Fair Value Measurements and Disclosures, establishes a framework for measuring fair value and the corresponding disclosure requirements around fair value measurements.

This topic applies to all financial instruments that are being measured and reported on a fair value basis.

HYLIION HOLDINGS CORP.

(f/k/a TORTOISE ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

The 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 common stock equals or exceeds $12.00 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.

Private Placement Warrants

Concurrently 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.

Each Private Placement

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

the purchase price of the Private Placement Warrants was added to the proceeds from the Initial Public Offering held in the Trust

The Private Placement Warrants are non-redeemable for cash and exercisable on a cashless basis so long as they are

held by Tortoise Borrower or its permitted transferees.

Tortoise 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.

Related Party Loans

Prior 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 29, 2019.

In August 2020, the

Sponsor agreed to loan the Company up to $500,000 pursuant to a non-interest bearing promissory note that is due and payable upon

the earlier of the date on which the Company consummates its initial Business Combination and the effective date of the winding

up of the Company.

At September 30, 2020, $120,000 was outstanding and is included as Note payable to Sponsor on the unaudited

condensed balance sheets.

On October 1, 2020, in connection with the Closing, the promissory note was paid in full.

Administrative Services Agreement

Pursuant 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.

completion of the Initial Business Combination, the agreement terminated.

The Company incurred $30,000 for expenses in connection

with the Administrative Services Agreement for the three months ended September 30, 2020 and 2019, which are recorded in the accompanying

unaudited condensed consolidated statements of operations.

The Company incurred $60,000 and $40,000 for expenses in connection

with the Administrative Services Agreement for the nine months ended September 30, 2020 and 2019, respectively, which are recorded

in the accompanying unaudited condensed consolidated 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

Forward Purchase Agreement

The 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,

purchased up to an aggregate maximum amount of $150,000,000 of a number of Forward Purchase Units, consisting of one Forward Purchase

Shareand one Forward Purchase Warrants, for $10.00 per Unit in a private placement that closed simultaneously with the closing

of the Business Combination.

The Forward Purchase Warrants have the same terms as the Warrants and the Forward Purchase Shares

are 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 are subject to transfer restrictions and certain registration rights.

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 company.

This agreement is

independent of the percentage of stockholders electing to redeem their Public Shares and provided the Company with an increased

minimum funding level for the Initial Business Combination.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands, except for separately indicated)

The following table shows the fair value measurements of the Company's assets that are measured at fair value on a recurring basis as of March 31, 2021 and 2020.

Fair Value Measurements as of March 31, 2021

Level I Level II Level III Total

(in thousands)

Cash and cash equivalents $ 334,718 $ — $ — $ 334,718

Held-to-maturity investments:

Commercial paper — 116,634 — 116,634

State and municipal bonds — 15,784 — 15,784

Corporate bonds and notes — 164,203 — 164,203

Total Assets $ 334,718 $ 296,621 $ — $ 631,339

Fair Value Measurements as of December 31, 2020

Level I Level II Level III Total

(in thousands)

Cash and cash equivalents $ 389,705 $ — $ — $ 389,705

Held-to-maturity investments:

Treasury securities — 149,995 — 149,995

Commercial paper — 37,948 — 37,948

Corporate bonds and notes — 49,829 — 49,829

Total Assets $ 389,705 $ 237,772 $ — $ 627,477

Commitments and Contingencies

Legal Proceedings:

The Company 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.

HYLIION HOLDINGS CORP.

(f/k/a TORTOISE ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Registration Rights

The 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.

In addition, 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 period.

will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriting Agreement

The 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.

The underwriters were

entitled to an underwriting discount for each Unit sold in the Initial Public Offering, except for the Affiliated Units.

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

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 agreement.

Deferred Legal Fees Associated with

the Initial Public Offering

The 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 September 30, 2020, the Company recorded an aggregate

of $150,000 in connection with such arrangement as deferred legal fees in the accompanying unaudited condensed consolidated balance

Stockholders’

Class A Common Stock

Pursuant to the amended

and restated certificate of incorporation in effect as of September 30, 2020, the Company was authorized to issue 200,000,000 shares

of Class A Common Stock with a par value of $0.0001 per share.

As of September 30, 2020, and December 31, 2019, there were 23,300,917

shares of Class A Common Stock issued and outstanding, of which 21,891,375 and 22,366,276 shares of Class A Common Stock were classified

outside of permanent equity, respectively.

Class B Common Stock

Pursuant to the amended

and restated certificate of incorporation in effect as of September 30, 2020, the Company was 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 were 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.

As 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 September 30, 2020, and December

31, 2019, there were 5,825,230 shares of Class B Common Stock outstanding.

Holders of Class A

Common Stock and holders of Class B Common Stock voted 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 had the right

to vote on the election of the Company’s directors prior to the Initial Business Combination.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands, except for separately indicated)

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.

There 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.

Certain holders of the warrants elected a cashless exercise, resulting in the forfeiture of 3,118,445 shares.

The accrued liability totaling $4.3 million for warrants exercised but not settled represents all warrants that were exercised as of December 31, 2020 under broker protects resulting in cash collection and share issuance being delayed until January 4, 2021.

HYLIION HOLDINGS CORP.

(f/k/a TORTOISE ACQUISITION CORP.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

The shares of Class

B Common Stock automatically converted into shares of Class A Common Stock at the time of the Business Combination on a one-for-one basis,

subject to adjustment.

Following the effectiveness of the Second A&R Charter, each share of Class A Common Stock was automatically

reclassified, redesignated and changed into one validly issued, fully paid and non-assessable share of Common Stock, without any

further action by the Company or its stockholders.

Preferred Stock

Pursuant to the amended

and restated certificate of incorporation in effect as of September 30, 2020, the Company was 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 September 30, 2020, and December 31, 2019, there were no shares of preferred stock issued

or outstanding.

The Warrants became

exercisable 30 days after the completion of the Business Combination o;

provided in each case that the Company has an effective

registration statement under the Securities Act covering the shares of 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 filed with the SEC a registration

statement for the registration, under the Securities Act, of the shares of 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 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 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 Business Combination or earlier upon redemption or liquidation.

The Private Placement

Warrants are identical to the Warrants, except that the Private Placement Warrants and the shares of common stock issuable upon

exercise of the Private Placement Warrants were not transferable, assignable or salable until 30 days after the completion of the

Business Combination, subject to certain limited exceptions.

Additionally, the Private Placement Warrants are 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.

The exercise price

and number of shares of 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.

The Company may call

the Warrants for redemption for cash (except with respect to the Private Placement Warrants):

● in whole and 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 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 warrantholders.

Commencing 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 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 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 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 warrantholders.

The “fair market value”

Company’s common stock is the average last reported sale price of the Company’s 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.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands, except for separately indicated)

Share-based Compensation

During the three months ended March 31, 2021, the Company granted 3,174,341 restricted stock units to certain employees, some of which vested at issuance, some of which will vest over a period of three or four years , and some of which will vest based on achievement of performance criteria.

The criteria for the awards is based on the achievement of key milestones based on the Company's performance.

During the three months ended March 31, 2020, the Company awarded 1,920,000 options to certain employees and non-employees, which will vest over a period that ranges from four to ten years .

The estimated grant date fair value of the options granted during the three months ended March 31, 2020 totaled $ 0.4 million.

Share-based compensation expense for the three months ended March 31, 2021 and 2020 was $ 1.5 million and $ 0.1 million, respectively.

Net Loss Per Share

The following table sets forth the computation of basic and diluted net loss per share of common stock for the three months ended March 31, 2021 and 2020:

Three Months Ended March, 31

(Dollar amounts in thousands, except for shares and per share data)

Net loss attributable to common stockholders $ ( 16,562 ) $ ( 5,562 )

Weighted average shares outstanding, basic and diluted 170,249,708 86,762,463

Net loss per share, basic and diluted $ ( 0.10 ) $ ( 0.06 )

The Company excluded the following weighted average potential common shares from the computation of diluted net loss per share for the three months ended March 31, 2021 and 2020 because including them would have had an anti-dilutive effect:

Three Months Ended March, 31

Stock options, including incentive stock options and non-qualified 4,360,010 4,559,583

Unvested restricted stock units 3,174,341 —

Total 7,534,351 4,559,583

Supplemental Cash Flow Information

HYLIION HOLDINGS CORP.

(f/k/a TORTOISE ACQUISITION CORP.)

NOTES TO UNAUDITED

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

If 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

The following tables

present information about the Company’s financial assets that are measured at fair value on a recurring basis as of December

31, 2019 by level within the fair value hierarchy.

September 30, 2020

Quoted Prices in Active Markets (Level 1)

Significant Other Unobservable Inputs

Investments held in Trust Account

$ 236,643,898

December 31, 2019

Quoted Prices in Active Markets (Level 1)

Significant Other Unobservable Inputs

Investments held in Trust Account

Money Market Fund

$ 236,054,346

As of September 30,

2020, there was soley cash held in the Trust Account.

As of December 31, 2019, the investments held in the Trust Account were comprised

solely of an investment in a money market fund that invests only in U.S.

treasury securities.

Transfers to/from Levels

1, 2 and 3 are recognized at the end of the reporting period.

There were no transfers between levels for the three and nine months

ended September 30, 2020 and 2019.

At December 31, 2019, Level 1 instruments include investments

in money market funds and U.S.

Treasury securities.

The Company uses inputs such as the actual trade data, benchmark yields, quoted

market prices from dealers or broker, and other similar sources to determine the fair value of its investments.

Subsequent Events

As described in Note

1 and 4, the Company completed its Initial Business Combination on October 1, 2020 and closed on the PIPE Financing and the Forward

Unit Purchase.

In connection with the closing of the Business Combination, the Company paid the underwriters’

deferred discount

of $8.13 million to the underwriters of the Initial Public Offering, the deferred legal fees of $150,000, the promissory note of

$120,000 and paid approximately $33,573 to redeem 3,308 shares of Class A Common Stock.

Management has evaluated all other subsequent

events to determine if events or transactions occurring through the date the unaudited condensed consolidated financial statements

were available for issuance require potential adjustment to or disclosure in the unaudited condensed consolidated financial statements

and has concluded that all such events that would require recognition or disclosure have been recognized or disclosed.

Management’s Discussion

and Analysis of Financial Condition and Results of Operations

References to “we,”

“us,”

“our”

or the “Company”

are to Hyliion Holdings Corp.

(f/k/a Tortoise Acquisition Corp).,

except where the context requires otherwise.

The following discussion should be read in conjunction with our unaudited condensed

consolidated financial statements and related notes thereto included elsewhere in this report.

Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking

statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and

Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Our forward-looking statements

include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions

or strategies regarding the future.

In addition, any statements that refer to projections, forecasts or other characterizations

of future events or circumstances, including any underlying assumptions, are forward-looking statements.

The words “anticipate,”

“believe,”

“continue,”

“could,”

“estimate,”

“expect,”

“intend,”

“may,”

“might,”

“plan,”

“possible,”

“potential,”

“predict,”

“project,”

“should,”

“would”

and similar expressions may identify forward-looking statements,

but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking

statements contained in this Quarterly Report on Form 10-Q are based on our current expectations and beliefs concerning future

developments and their potential effects on us.

There can be no assurance that future developments affecting us will be those that

we have anticipated.

These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control)

or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by

these forward-looking statements.

Factors that might cause or contribute to such a discrepancy include, but are not limited to,

those described under the heading “Risk Factors”

in our other U.S.

Securities and Exchange Commission (the “SEC”)

Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual

results may vary in material respects from those projected in these forward-looking statements.

We undertake no obligation to update

or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be

required under applicable securities laws.

We are a former blank

check company incorporated as a Delaware corporation under the name “Tortoise Acquisition Corp.”

and 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.

On October, 1, 2020, we consummated our Business Combination with Legacy Hyliion (as defined below).

Recent Developments

Business Combination

On October 1, 2020,

we consummated the merger (the “Closing”) pursuant to that certain Business Combination Agreement and Plan of Reorganization,

dated June 18, 2020 (the “Business Combination Agreement”), by and among the our company, SHLL Merger Sub Inc., our

wholly owned subsidiary incorporated in the State of Delaware (“Merger Sub”), and Hyliion Inc., a Delaware corporation

(“Legacy Hyliion”).

Pursuant to the terms of the Business Combination Agreement, we effected a business combination

with Legacy Hyliion through the merger of Merger Sub with and into Legacy Hyliion, with Legacy Hyliion surviving as the surviving

company and as our wholly owned subsidiary (the “Merger”

and, collectively with the other transactions described in

the Business Combination Agreement, the “Business Combination”).

On the Closing Date, we changed our name from Tortoise

Acquisition Corp.

to Hyliion Holdings Corp.

At the effective time of the Merger (the “Effective Time”), each share

of Legacy Hyliion Common Stock was converted into and exchanged for 1.45720232 shares (the “Exchange Ratio”) of our

Class A Common Stock, par value $0.0001 per share (the “Class A Common Stock”).

Pursuant to the Amended and Restated

Certificate of Incorporation in effect at the Effective Time, each share of Class B Common Stock, par value $0.0001 per share (the

“Class B Common Stock”), converted into one share of Class A Common Stockat the Closing.

After the Closing and following

the effectiveness of our Second Amended and Restated Certificate of Incorporation, each share of Class A Common Stock was automatically

reclassified, redesignated and changed into one validly issued, fully paid and non-assessable share of our Common Stock, par value

$0.0001 per share (the “Common Stock”), without any further action by us or any of our stockholders.

PIPE Financing and Forward Purchase

On October 1, 2020,

a number of purchasers (each, a “

Subscriber ”) purchased an aggregate of

30,750,000 shares of Class A Common Stock (the “

PIPE Shares ”) , for a purchase price of $10.00 per share

and an aggregate purchase price of $307,500,000 (the “PIPE Financing”), pursuant to separate subscription agreements

(each, a “

Subscription Agreement ”) entered into effective as of June 18, 2020.

Pursuant to the Subscription

Agreements, the we gave certain registration rights to the Subscribers with respect to the PIPE Shares.

The sale of PIPE Shares

was consummated concurrently with the Closing.

On October 1, 2020,

Atlas Point Energy Infrastructure Fund, LLC (“

Atlas Point Fund ”) purchased 1,750,000 units (consisting of one

share of our Class A Common Stock and one half of one Warrant, the “

Tortoise Units ”), consisting of 1,750,000

shares of our Class A Common Stock and Warrants to purchase 875,000 shares of our Class A Common Stock, for an aggregate purchase

price of $17,500,000, and transferred 894,375 shares of our Class A Common Stock to TortoiseEcofin Borrower LLC (formerly known

Tortoise Borrower LLC ”

and hereinafter referred to as “

Tortoise Borrower ”) pursuant to

the Amended and Restated Forward Purchase Agreement, dated February 6, 2019 (“

Amended and Restated Forward Purchase

Agreement ”), as amended by the First Amendment to Amended and Restated Forward Purchase Agreement, dated June 18, 2020

First Amendment to the Forward Purchase Agreement ”) (as amended, “

Forward Purchase Agreement ”).

Results of Operations

Prior to completion

of the Business Combination, we neither engaged in any significant operations nor generated any operating revenue.

Our only activities

from inception through the closing of the Business Combination related to our formation, our initial public offering and efforts

directed toward locating a suitable business combination.

Although we did not generate operating revenue prior to completion of

the Business Combination, we have generated non-operating income in the form of investment income from investments held in the

Trust Account.

As a result of the closing of the Business Combination, our business has substantially changed and is now that of

Legacy Hyliion.

Accordingly, we expect to incur increased expenses as a result of being a public operating company.

For the three months

ended September 30, 2020, we had net loss of approximately $2.8 million, which consisted of approximately $17,000 in investment

income, offset by approximately $2.7 million in general and administrative expenses, $30,000 in related-party administrative expenses,

$50,000 in franchise tax expense and approximately $0 in income tax expense due to a full valuation allowance.

For the three months

ended September 30, 2019, we had net income of approximately $740,000, which consisted of approximately $1.2 million in investment

income, offset by approximately $124,000 in general and administrative expenses, $30,000 in related-party administrative expenses,

$50,000 in franchise tax expense and approximately $238,000 in income tax expense.

For the nine months

ended September 30, 2020, we had net loss of approximately $4.7 million, which consisted of approximately $886,000 in investment

income, offset by approximately $5.2 million in general and administrative expenses, $90,000 in related-party administrative expenses,

$150,000 in franchise tax expense and approximately $162,000 in income tax expense.

For the nine months

ended September 30, 2019, we had net income of approximately $1.7 million, which consisted of approximately $2.9 million in investment

income, offset by approximately $343,000 in general and administrative expenses, $70,000 in related-party administrative expenses,

$150,000 in franchise tax expense and approximately $573,000 in income tax expense.

Liquidity and Capital Resources

Following the consummation

of our February 2019 initial public offering, our liquidity needs have been satisfied through the net proceeds from the consummation

of the sale of equity securities not held in the Trust Account and an aggregate of approximately $1.1 million of interest income

released from the Trust Account since inception to fund income tax and franchise tax payments.

As of September 30,

2020, we had approximately $117.1 million of cash, a working capital deficit of approximately $4.3 million, and approximately $3.4

million of investment income earned from investments held in the Trust Account that may be released to us to pay our franchise

and income taxes (less up to $100,000 of such net interest to pay dissolution expenses).

On June 18, 2020, we

entered into the Business Combination Agreement with Merger Sub and Hyliion and closed the Business Combination on October 1,

Approximately $33,573 of funds held in the Trust Account were also used to fund the redemption of 3,308 shares of Class A

Common Stock.

Critical Accounting Policies and Estimates

The preparation of

financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of

America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and

liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during

the periods reported.

Actual results could materially differ from those estimates.

We have identified the following critical accounting

Investments Held in Trust Account

Investments held

in the Trust Account have been classified as trading securities and are comprised solely of an investment in a money market

fund that invests only in U.S.

treasury 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

investment income from investments held in the Trust Account in our statement of operations.

The fair value for trading

securities is determined using quoted market prices in active markets.

Class A Common Stock Subject to Possible

We accounted for the

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 our control) are classified as temporary equity.

At all other times, shares of Class A Common Stock are classified as stockholders’

Our Class A Common Stock featured certain redemption rights that are considered to be outside of our control and subject

to the occurrence of uncertain future events.

We recognized changes in redemption value immediately as they occurred and adjusted

the carrying value of the security at the end of each reporting period.

Increases or decreases in the carrying value of redeemable

shares of Class A Common Stock were affected by charges against additional paid-in capital.

Accordingly, as of September 30, 2020,

21,891,375 shares of Class A Common Stock subject to conditional redemption were presented as temporary equity, outside of the

stockholders’

equity section of our balance sheet.

Recent Accounting Pronouncements

In December 2019, the

FASB issued ASU No.

2019-12, “

Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes ”

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

ASU 2019-12 removes certain

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

This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020,

with early adoption permitted.

We are currently evaluating the impact of this standard on our financial statements and related

We do not believe that

any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material impact

on our financial statements.

Off-Balance Sheet Arrangements

As of September 30,

2020, and December 31, 2019, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii)

of Regulation S-K.

Contractual Obligations

As of September 30,

2020, we did not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities.

27, 2019, we entered into the Administrative Services Agreement pursuant to which we have agreed to pay our Sponsor a total of

$10,000 per month for office space, utilities, secretarial support and administrative services.

This agreement terminated upon

completion of the Business Combination.

The underwriters of

our 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 and paid upon

the consummation of the Business Combination from the amounts held in the Trust Account.

The underwriters are not entitled to any

interest accrued on the deferred underwriting discounts and commissions.

The Jumpstart Our Business

Startups Act of 2012 (the “JOBS Act”) contains provisions that, among other things, relax certain reporting requirements

for qualifying public companies.

We qualify as an “emerging growth company”

and under the JOBS Act are allowed to comply

with new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies.

We are electing

to delay the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting

standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies.

our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public

company effective dates.

Additionally, we are

in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act.

to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,”

we choose to rely on such exemptions

we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls

over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (ii) provide all of the compensation disclosure that

may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii)

comply with any requirement that may be adopted by the Public Company Accounting and Oversight Board regarding mandatory audit

firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial

statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items such as the correlation

between executive compensation and performance and comparisons of our Chief Executive Officer’s compensation to median employee

compensation.

These exemptions will apply for a period of five years following the IPO Closing Date or until we are no longer an

“emerging growth company,”

whichever is earlier.

Quantitative and Qualitative

Disclosures About Market Risk

We are a smaller reporting

company as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required by this

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands, except for separately indicated)

The following table provides supplemental cash flow information for the three months ended March 31, 2021 and 2020:

Three months ended March 31,

(in thousands)

Cash paid for interest $ — $ 306

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases $ ( 321 ) $ ( 404 )

Operating cash flows from finance leases $ ( 1 ) $ ( 9 )

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-Q

Item 1. Financial Statements