Hyliion Holdings Corp. 10-Q/A

Item 1. Financial Statements HYLIION HOLDINGS CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (Dollar amounts in thousands, except share and per share data) June 30, 2021 December 31, 2020 (Unaudited) Assets Current assets: Cash and cash equivalents $ 317,712 $ 389,705 Accounts receivable 92 92 Prepaid expenses and other current assets 3,777 20,690 Short-term investments 139,984 201,881 Total current assets 461,565 612,368 Property and equipment, net 2,039 1,171 Operating lease right-of-use assets 8,676 5,055 Intangible assets, net 283 332 Other assets 250 193 Long-term investments 159,683 35,970 Total assets $ 632,496 $ 655,089 Liabilities and stockholders’ equity: Current liabilities: Accounts payable $ 8,098 $ 1,890 Current portion of operating lease liabilities 722 734 Accrued expenses and other current liabilities 6,131 6,313 Total current liabilities 14,951 8,937 Operating lease liabilities, net of current portion 8,971 5,076 Debt, net of current portion — 908 Total liabilities 23,922 14,921 Stockholders’ Equity: Common stock, $ 0.0001 par value; 250,000,000 shares authorized; 172,798,338 and 169,316,421 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively 20 19 Additional paid-in capital 373,209 364,998 Retained earnings 235,345 275,151 Total stockholders’ equity 608,574 640,168 Total liabilities and stockholders’ equity $ 632,496 $ 655,089 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 1 Table of Contents HYLIION HOLDINGS CORP. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollar amounts in thousands, except share and per share data) Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Operating expenses: Research and development $ ( 13,389 ) $ ( 2,554 ) ( 22,721 ) ( 5,225 ) Selling, general and administrative ( 10,052 ) ( 874 ) $ ( 17,451 ) $ ( 1,565 ) Loss from operations ( 23,441 ) ( 3,428 ) ( 40,172 ) ( 6,790 ) Other income (expense): Interest expense — ( 1,663 ) — ( 3,228 ) Interest income 197 — 366 — Change in fair value of convertible notes payable derivative liabilities — 1,090 — 455 Total other income (expense) 197 ( 573 ) 366 ( 2,773 ) Net loss $ ( 23,244 ) $ ( 4,001 ) $ ( 39,806 ) $ ( 9,563 ) Weighted-average shares outstanding, basic and diluted 172,260,525 86,777,844 171,260,671 86,770,153 Net loss per share, basic and diluted $ ( 0.13 ) $ ( 0.05 ) $ ( 0.23 ) $ ( 0.11 ) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 2 Table of Contents HYLIION HOLDINGS CORP. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (Dollar amounts in thousands, except share data) For the Six Months Ended June 30, 2021 Additional Paid-In Capital Retained Earnings Total Stockholders’ Equity Common Stock Shares Amount Balance - December 31, 2020 169,316,421 $ 19 $ 364,998 $ 275,151 $ 640,168 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 ) 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 Additional Paid-In Capital Accumulated Deficit Total Stockholders’ Deficit Common Stock Shares Amount Balance - December 31, 2019 86,762,463 $ 9 $ 30,888 $ ( 48,966 ) $ ( 18,069 ) Share-based compensation — — 57 — 57 Net loss — — — ( 5,562 ) ( 5,562 ) 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. 3 Table of Contents HYLIION HOLDINGS CORP. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollar amounts in thousands) For the Six Months Ended June 30, 2021 2020 Cash Flows from Operating Activities: Net loss $ ( 39,806 ) $ ( 9,563 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 414 482 Amortization of investment premiums and discounts 847 — Noncash lease expense 518 540 Paid-in-kind interest on convertible notes payable — 690 Amortization of debt discount — 2,523 Share-based compensation 3,427 91 Change in fair value of convertible notes payable derivative liabilities — ( 455 ) Changes in operating assets and liabilities: Accounts receivable — 83 Prepaid expenses and other current assets 4,939 66 Accounts payable 5,940 ( 332 ) Accrued expenses and other current liabilities ( 182 ) ( 122 ) Operating lease liabilities ( 256 ) ( 558 ) Net cash used in operating activities ( 24,159 ) ( 6,555 ) Cash Flows from Investing Activities: 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 ) — Proceeds from sale of investments 176,358 — Net cash used in investing activities ( 63,685 ) ( 70 ) Cash Flows from Financing Activities: Proceeds from exercise of stock warrants, net of issuance costs 16,257 — (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 liabilities — 3,200 Payments for deferred transaction costs — ( 339 ) Repayments on finance lease obligations — ( 153 ) Net cash provided by financing activities 15,851 3,641 Net decrease in cash and cash equivalents ( 71,993 ) ( 2,984 ) Cash and cash equivalents- beginning of the period 389,705 6,285 Cash and cash equivalents - end of the period $ 317,712 $ 3,301 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 Table of Contents 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 ) 5 Table of Contents HYLIION HOLDINGS CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollar amounts in thousands, except for separately indicated) 1. 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 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. 2. 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 6 Table of Contents HYLIION HOLDINGS CORP. 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”). 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 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. 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: 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 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. 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 7 Table of Contents HYLIION HOLDINGS CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (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: 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. 3. Debt 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). (c) Optional conversion upon a change in control. In the event of a change in control, the holder can elect to convert the January 2020 Note into shares of common stock at a conversion price equal to (i) the product of the change in control purchase price multiplied by 50 %, divided by (ii) the total number of outstanding shares of capital stock of the Company (on a fully diluted basis). (d) Optional redemption upon a change in control. In the event of a change in control, the holder can elect to request payment of all outstanding principal (with no penalty) and unpaid accrued interest. (e) Optional redemption upon the Company obtaining at least $ 10.0 million in commercial debt which would result in the January 2020 Note having the same priority or being treated as subordinate to the commercial debt. In such scenario, the holder can elect to request payment of all outstanding principal (with no penalty) and unpaid accrued interest. (f) Automatic or optional redemption upon an event of default. Upon the occurrence of an event of default, the January 2020 Note will either automatically become due and payable or can become due and payable at the holder’s option (based on the nature of the event of default). Upon such acceleration, all outstanding principal (with no penalty) and unpaid accrued interest will become payable. (g) Additional interest of 3 % (or a total of 9 %) upon an event of default. In addition, in the event the holder 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 8 Table of Contents HYLIION HOLDINGS CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (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. 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. 9 Table of Contents HYLIION HOLDINGS CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollar amounts in thousands, except for separately indicated) 4. Investments 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 (in thousands) Held-to-maturity investments Commercial paper $ 106,933 $ 7 $ — $ 106,940 State and municipal bonds 16,799 — ( 16 ) 16,783 Corporate bonds and notes 175,935 — ( 356 ) 175,579 Total held-to-maturity investments $ 299,667 $ 7 $ ( 372 ) $ 299,302 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 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (in thousands) Held-to-maturity investments Treasury securities $ 149,996 $ — $ ( 1 ) $ 149,995 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 June 30, 2021 December 31, 2020 Amortized Cost Fair Value Amortized Cost Fair Value (in thousands) (in thousands) Due in one year or less $ 139,984 $ 139,980 $ 201,881 $ 201,864 Due after one year through five years 159,683 159,322 35,970 35,908 Total held-to-maturity securities $ 299,667 $ 299,302 $ 237,851 $ 237,772 10 Table of Contents HYLIION HOLDINGS CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollar amounts in thousands, except for separately indicated) 5. 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 (in thousands) Assets Cash and cash equivalents $ 317,712 $ — $ — $ 317,712 Held-to-maturity investments: Commercial paper — 106,940 — 106,940 State and municipal bonds — 16,783 — 16,783 Corporate bonds and notes — 175,579 — 175,579 Total Assets $ 317,712 $ 299,302 $ — $ 617,014 Fair Value Measurements as of December 31, 2020 Level I Level II Level III Total (in thousands) Assets 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 6. 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. 11 Table of Contents HYLIION HOLDINGS CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollar amounts in thousands, except for separately indicated) 7. Warrants 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. 12 Table of Contents HYLIION HOLDINGS CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollar amounts in thousands, except for separately indicated) 8. Share-based Compensation 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. 9. Leases 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, 2021 2020 (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 $ — 13 Table of Contents HYLIION HOLDINGS CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollar amounts in thousands, except for separately indicated) 10. 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 and six months ended June 30, 2021 and 2020: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Numerator: (Dollar amounts in thousands, except share data) Net loss attributable to common stockholders $ ( 23,244 ) $ ( 4,001 ) $ ( 39,806 ) $ ( 9,563 ) Denominator: Weighted average shares outstanding, basic and diluted 172,260,525 86,777,844 171,260,671 86,770,153 Net loss per share, basic and diluted $ ( 0.13 ) $ ( 0.05 ) $ ( 0.23 ) $ ( 0.11 ) 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 Unvested restricted stock units 3,194,865 — 3,194,865 — Total 7,047,762 6,685,909 7,047,762 6,685,909 14 Table of Contents