What changed in this filing

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Item 1. Financial Statements

2021-08-11 compared with 2021-05-17 · 79 added, 49 removed, 273 unchanged (32% of the section changed)

28 unchanged sentences

250,000,000 shares authorized;

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

172,798,338 and 169,316,421 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively

Additional paid-in capital 373,209 364,998

Accumulated deficit 258,589 275,151

Retained earnings 235,345 275,151

Total stockholders’ equity 608,574 640,168

4 unchanged sentences

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

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Operating expenses:

12 unchanged sentences

HYLIION HOLDINGS CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(Dollar amounts in thousands, except share data)

For the Three Months Ended March 31, 2021

Deficit Total

For the Six Months Ended June 30, 2021

Capital Retained Earnings Total

Stockholders’

5 unchanged sentences

Net loss — — — ( 16,562 ) ( 16,562 )

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

For the Three Months Ended March 31, 2020

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

Exercise of common stock options 1,278,527 1 215 — 216

Share-based compensation — — 1,917 — 1,917

Net loss — — — ( 23,244 ) ( 23,244 )

Balance - June 30, 2021 172,798,338 $ 20 $ 373,209 $ 235,345 $ 608,574

For the Six Months Ended June 30, 2020

Deficit Total

4 unchanged sentences

Net loss — — — ( 5,562 ) ( 5,562 )

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

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

Exercise of common stock options 234,057 — 25 — 25

Share-based compensation — — 34 — 34

Net loss — — — ( 4,001 ) ( 4,001 )

Balances - June 30, 2020 86,996,520 $ 9 31,004 $ ( 58,529 ) $ ( 27,516 )

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

2 unchanged sentences

(Dollar amounts in thousands)

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Cash Flows from Operating Activities:

2 unchanged sentences

Depreciation and amortization 414 482

Amortization of investment premiums and discounts 847 —

Noncash lease expense 518 540

12 unchanged sentences

Purchase of property and equipment ( 965 ) ( 80 )

Proceeds from sale of property and equipment — 10

Payments for security deposit ( 57 ) —

Purchase of investments ( 239,021 ) —

3 unchanged sentences

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

Payments for Paycheck Protection Program loan ( 908 ) —

(Payments for)/proceeds from Paycheck Protection Program loan ( 908 ) 908

Proceeds from exercise of common stock options 502 25

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

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

Payments for deferred transaction costs — ( 339 )

Repayments on finance lease obligations — ( 153 )

4 unchanged sentences

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

Supplemental disclosures of noncash financing information:

Acquisitions of property and equipment included in accounts payable $ 268 $ —

Deferred transaction costs included in accounts payable $ — $ ( 1,725 )

HYLIION HOLDINGS CORP.

17 unchanged sentences

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.

As of June 30, 2021, the Company had a cash and cash equivalents balance of $ 317.7 million and total investments of $ 299.7 million.

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

26 unchanged sentences

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.

As of June 30, 2021, the last business day of our most recently completed second fiscal quarter, the market value of our common stock that was held by non-affiliates was greater than $700 million.

As a result, we will become a large accelerated filer and will no longer qualify as an emerging growth company on December 31, 2021, the end of our current fiscal year.

Accordingly, at that time we will no longer qualify for the provisions of the JOBS Act that allow companies to adopt new or revised accounting standards when required by private company accounting standards.

Use of estimates and uncertainty of the coronavirus pandemic:

9 unchanged sentences

and global economies.

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

This may require 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.

1 unchanged sentence

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.

Although the Company has made its best estimates based upon current information, actual results could materially differ from the estimates and assumptions developed

HYLIION HOLDINGS CORP.

1 unchanged sentence

(Dollar amounts in thousands, except for separately indicated)

by management.

If so, the Company may be subject to future impairment charges as well as changes to recorded reserves and valuations.

Recently Adopted Accounting Pronouncements:

25 unchanged sentences

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.

1 unchanged sentence

(Dollar amounts in thousands, except for separately indicated)

required separate accounting.

The Company also concluded that the conversion features did not represent beneficial conversion features.

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

10 unchanged sentences

(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

The amortized cost, unrealized gains and losses, and fair value of our held-to-maturity investments at June 30, 2021 and December 31, 2020 are summarized as follows:

Fair Value Measurements as of June 30, 2021

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

5 unchanged sentences

Total held-to-maturity investments $ 299,667 $ 7 $ ( 372 ) $ 299,302

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.

As of June 30, 2021, the Company has determined that the unrealized losses totaling $ 0.4 million is temporary and fully expects to recover the cost basis.

Fair Value Measurements as of December 31, 2020

6 unchanged sentences

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

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Amortized Cost Fair Value Amortized Cost Fair Value

3 unchanged sentences

Total held-to-maturity securities $ 299,667 $ 299,302 $ 237,851 $ 237,772

Fair Value Measurements

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.

1 unchanged sentence

(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

Fair Value Measurements

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.

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 June 30, 2021 and December 31, 2020.

Fair Value Measurements as of June 30, 2021

Level I Level II Level III Total

37 unchanged sentences

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.

During the six months ended June 30, 2021, the Company granted 3,277,315 restricted stock units and performance stock units to certain employees 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 performance stock unit awards is based on the achievement of key milestones based on the Company's performance.

During the six months ended June 30, 2020, the Company awarde d 1,920,000 options to certain employees and non-employees, which will vest over a period of four years .

The estimated grant date fair value of the options granted during the six months ended June 30, 2020 totaled $ 0.4 million.

Share-based compensation expense for the three and six months ended June 30, 2021 was $ 1.9 million and $ 3.4 million, respectively.

Share-based compensation expense for the three and six months ended June 30, 2020 was $ 0.03 million and $ 0.09 million, respectively.

The Company has operating and finance leases for its corporate office, temporary office, vehicles and equipment.

In June 2021, the Company amended the lease for its corporate office.

This amendment increased the amount of space under the original lease, adjusted the monthly lease payments, and extended the term of the lease through 2028.

The Company accounted for this extension as a lease modification and recorded an increase to the operating lease right-of-use (ROU) assets and lease liability of approximately $ 4.1 million in the condensed consolidated balance sheets.

The lease amendment includes the option to extend the term for up to two consecutive terms of five years each.

When an implicit rate is not provided, the Company uses its incremental borrowing rate based on the information available at the lease commencement of modification date in determining the present value of the lease payments.

In connection with the lease amendment on July 2, 2021, the Company provided the lessor with a letter of credit for approximately $ 0.7 million to secure the performance of lease obligations.

The Company provided the issuing bank with a restricted cash deposit that the bank will hold to cover its obligation to pay any draws on the letter of credit by the lessor.

The following table provides supplemental cash flow information for the six months ended June 30, 2021 and 2020:

For the Six Months Ended June 30,

(in thousands)

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

Operating cash flows from operating leases $ ( 625 ) $ ( 808 )

Operating cash flows from finance leases $ ( 1 ) $ ( 27 )

Right-of-use assets obtained in exchange for lease obligations $ 4,139 $ —

HYLIION HOLDINGS CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands, except for separately indicated)

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)

The following table sets forth the computation of basic and diluted net loss per share of common stock for the three and six months ended June 30, 2021 and 2020:

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

(Dollar amounts in thousands, except share data)

Net loss attributable to common stockholders $ ( 23,244 ) $ ( 4,001 ) $ ( 39,806 ) $ ( 9,563 )

1 unchanged sentence

Net loss per share, basic and diluted $ ( 0.13 ) $ ( 0.05 ) $ ( 0.23 ) $ ( 0.11 )

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

The Company excluded the following potential common shares from the computation of diluted net loss per share for the three and six months ended June 30, 2021 and 2020 because including them would have had an anti-dilutive effect:

Three Months Ended June, 30 Six Months Ended June 30,

2021 2020 2021 2020

Stock options, including incentive stock options and non-qualified 3,852,897 6,685,909 3,852,897 6,685,909

1 unchanged sentence

Total 7,047,762 6,685,909 7,047,762 6,685,909

Supplemental Cash Flow Information

HYLIION HOLDINGS CORP.

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