What changed in this filing

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Item 1. Financial Statements

2023-08-09 compared with 2023-05-09 · 66 added, 44 removed, 291 unchanged (27% of the section changed)

30 unchanged sentences

250,000,000 shares authorized;

180,695,572 and 179,826,309 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively

181,152,151 and 179,826,309 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively

Additional paid-in capital 401,439 397,810

6 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,

2023 2022 2023 2022

Product sales and other $ 266 $ 172 $ 576 $ 512

10 unchanged sentences

Interest income 3,349 855 6,811 1,140

Gain (loss) on disposal of assets 2 ( 2 )

Other expense, net ( 15 ) —

(Loss) gain on disposal of assets ( 1 ) ( 133 ) 1 ( 135 )

Other income (expense), net 3 — ( 12 ) —

Net loss $ ( 35,227 ) $ ( 33,475 ) $ ( 64,058 ) $ ( 60,583 )

5 unchanged sentences

(Dollar amounts in thousands, except share data)

Three Months Ended March 31, 2023

Six Months Ended June 30, 2023

Common Stock Additional

7 unchanged sentences

Balance at March 31, 2023 180,695,572 18 399,674 ( 3,085 ) 396,607

Three Months Ended March 31, 2022

Exercise of common stock options and vesting of restricted stock units, net 456,579 — 44 — 44

Share-based compensation — — 1,721 — 1,721

Net loss — — — ( 35,227 ) ( 35,227 )

Balance at June 30, 2023 181,152,151 $ 18 $ 401,439 $ ( 38,312 ) $ 363,145

Six Months Ended June 30, 2022

Common Stock Additional

7 unchanged sentences

Balance at March 31, 2022 173,805,134 17 376,266 151,995 528,278

Exercise of common stock options and vesting of restricted stock units, net 193,834 — 15 — 15

Share-based compensation — — 1,922 — 1,922

Net loss — — — ( 33,475 ) ( 33,475 )

Balance at June 30, 2022 173,998,968 $ 17 $ 378,203 $ 118,520 $ 496,740

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

2 unchanged sentences

(Dollar amounts in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities

18 unchanged sentences

Proceeds from sale of property and equipment 2 —

Payments for security deposit, net ( 45 ) —

Purchase of investments ( 99,193 ) ( 106,797 )

10 unchanged sentences

Acquisitions of property and equipment included in accounts payable and other $ 554 $ 66

Right-of-use assets obtained in exchange for lease obligations $ 2,096 $ —

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

7 unchanged sentences

The Company designs and develops hybrid and fully electric powertrain systems for Class 8 semi-trucks, which modify semi-tractors into hybrid and range-extending electric vehicles, respectively.

The Company’s hybrid system utilizes intelligent electric drive axles with advanced algorithms and battery technology to optimize vehicle performance, enabling fleets to access an easy, efficient way to decrease fuel expenses, lower emissions and/or improve vehicle performance (“Hybrid”).

The Hypertruck ERX TM system utilizes 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 when fueled by renewable natural gas, and operate fully electric when needed.

The Company is currently selling its commercial Hybrid system, and the Hypertruck ERX system is in the design verification phase.

Additionally, in 2022 the Company acquired new fuel agnostic capable generator technology with which it plans to develop and commercialize as the Hypertruck KARNO.

We have begun the build of our first production unit of the Hypertruck ERX system 12-liter variant as of mid-2023.

Additionally, in 2022 the Company acquired new fuel agnostic capable generator technology with which it plans to develop and commercialize as the Hypertruck KARNO system and a KARNO generator to be used in stationary power applications.

Finally, the Company recently announced an agreement with Hyzon Motors USA Inc.

(“Hyzon”) to jointly develop a prototype fuel cell powered vehicle, with limited research and development in the first phase.

The Company is currently selling its hybrid system, which utilizes intelligent electric drive axles with advanced algorithms and battery technology to optimize vehicle performance, enabling fleets to access an easy, efficient way to decrease fuel expenses, lower emissions and/or improve vehicle performance (“Hybrid”).

Summary of Significant Accounting Policies

10 unchanged sentences

The Company is an early-stage growth company and has generated negative cash flows from operating activities since inception.

At March 31, 2023, the Company had total equity of $ 396.6 million, inclusive of cash and cash equivalents of $ 85.2 million and total investments of $ 300.2 million.

At June 30, 2023, the Company had total equity of $ 363.1 million, inclusive of cash and cash equivalents of $ 48.2 million and total investments of $ 306.1 million.

Based on this, the Company has sufficient funds to continue to execute its business strategy for the next twelve months from the issuance date of the financial statements included in this Quarterly Report on Form 10-Q.

15 unchanged sentences

Total cash and cash equivalents and restricted cash as presented in the condensed consolidated statements of cash flows is summarized as follows:

March 31, 2023 December 31, 2022 March 31, 2022 December 31, 2021

June 30, 2023 December 31, 2022 June 30, 2022 December 31, 2021

Cash and cash equivalents $ 48,205 $ 119,468 $ 199,933 $ 258,445

4 unchanged sentences

The allowance for doubtful accounts is maintained at a level considered adequate to provide for potential account losses on the balance based on the Company’s evaluation of the anticipated impact of current economic conditions, changes in the character and size of the balance, past and expected future loss experience and other pertinent factors.

At March 31, 2023 and December 31, 2022, accounts receivable included amounts receivable from customers of $ 0.4 million and $ 1.1 million, respectively.

At March 31, 2023 and December 31, 2022, allowance for doubtful accounts on customer receivables was $ 0.1 million and $ 0.1 million, respectively.

At June 30, 2023 and December 31, 2022, accounts receivable included amounts receivable from customers of $ 0.3 million and $ 1.1 million, respectively.

At June 30, 2023 and December 31, 2022, allowance for doubtful accounts on customer receivables was $ 0.1 million and $ 0.1 million, respectively.

The portion of our net accounts receivable from significant customers is summarized as follows:

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Customer A 55 % 82 %

Customer C — 12

Customer F 13 —

Customer G 24 —

Customer H 21 —

The Company’s investments consist of corporate bonds, U.S.

41 unchanged sentences

taking deposits to secure future Hypertruck ERX production slots.

Such deposits were immaterial at March 31, 2023 and December 31, 2022.

When a Class 8 semi-truck with a Hybrid system upfit is resold to a customer, judgment is required to determine if we are the principal or agent in the arrangement.

Such deposits were immaterial at June 30, 2023 and December 31, 2022.

When a Class 8 semi-truck with a Hybrid system upfit is sold to a customer, judgment is required to determine if we are the principal or agent in the arrangement.

We consider factors such as, but not limited to, which entity has the primary responsibility for fulfilling the promise to provide the specified good or service, which entity has inventory risk before the specified good or service has been transferred to a customer and which entity has discretion in establishing the price for the specified good or service.

1 unchanged sentence

The disaggregation of our revenue sources is summarized as follows and is attributable to the U.S.:

Three Months Ended March 31,

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

2023 2022 2023 2022

Hybrid systems and other $ 266 $ 172 $ 320 $ 512

2 unchanged sentences

The portion of our revenues from significant customers is summarized as follows:

Three Months Ended March 31,

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

2023 2022 2023 2022

Customer A 28 % — % 60 % 18 %

2 unchanged sentences

Customer E — — — 11

Customer F 13 —

Customer G 62 — 29 —

90 % 61 % 89 % 81 %

We provide limited assurance-type warranties under our contracts and do not offer extended warranties or maintenance contracts.

3 unchanged sentences

Warranty expense is recorded as a component of cost of revenue.

The amortized cost, unrealized gains and losses, fair value and maturities of our held-to-maturity investments at March 31, 2023 and December 31, 2022 are summarized as follows:

Fair Value Measurements at March 31, 2023

Research and Development Expense

Research and development costs did not meet the requirements to be recognized as an asset as the associated future benefits were at best uncertain and there was no alternative future use at the time the costs were incurred.

Research and development costs include, but are not limited to, outsourced engineering services, allocated facilities costs, depreciation on equipment utilized in research and development activities, internal engineering and development expenses, materials, internally-developed software and employee related expenses (including salaries, benefits, travel, and share-based compensation) related to development of the Company’s products and services.

The amortized cost, unrealized gains and losses, fair value and maturities of our held-to-maturity investments at June 30, 2023 and December 31, 2022 are summarized as follows:

Fair Value Measurements at June 30, 2023

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

11 unchanged sentences

$ 302,308 $ 112 $ ( 4,461 ) $ 297,959

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Amortized Cost Fair Value Amortized Cost Fair Value

3 unchanged sentences

Fair Value Measurements

The fair value measurements of our financial assets at March 31, 2023 and December 31, 2022 are summarized as follows:

Fair Value Measurements at March 31, 2023

The fair value measurements of our financial assets at June 30, 2023 and December 31, 2022 are summarized as follows:

Fair Value Measurements at June 30, 2023

Level I Level II Level III Total

17 unchanged sentences

$ 120,133 $ 297,959 $ — $ 418,092

The carrying value of our inventory at March 31, 2023 and December 31, 2022 is summarized as follows:

March 31, 2023 December 31, 2022

The carrying value of our inventory at June 30, 2023 and December 31, 2022 is summarized as follows:

June 30, 2023 December 31, 2022

Raw materials $ 761 $ —

Work in process — —

Finished goods 131 74

During the three months ended March 31, 2023 and 2022, we recorded inventory write-downs of $ 0.2 million and $ 1.3 million, respectively, included in cost of revenues.

During the three and six months ended June 30, 2023, we recorded inventory write-downs of nil and $ 0.2 million, respectively.

During the three and six months ended June 30, 2022, we recorded inventory write-downs of $ 2.0 million and $ 3.3 million, respectively.

These write-downs are included in cost of revenues.

Property and Equipment, Net

Property and equipment, net at March 31, 2023 and December 31, 2022 is summarized as follows:

March 31, 2023 December 31, 2022

Property and equipment, net at June 30, 2023 and December 31, 2022 is summarized as follows:

June 30, 2023 December 31, 2022

Production machinery and equipment $ 8,479 $ 5,897

6 unchanged sentences

Share-Based Compensation

During the three months ended March 31, 2023 and 2022, the Company granted 2.1 million and 2.0 million, respectively, restricted stock units which will vest over a period of one to three years , some of which include performance criteria based on the achievement of key Company milestones.

During the three months ended March 31, 2023 and 2022, 0.2 million and 0.4 million , respectively, restricted stock units and options were forfeited.

Share-based compensation expense for the three months ended March 31, 2023 and 2022 was $ 2.0 million and $ 1.6 million, respectively.

During the six months ended June 30, 2023 and 2022, the Company granted 2.5 million and 2.1 million, respectively, restricted stock units which will vest over a period of one to three years , some of which include performance criteria based on the achievement of key Company milestones.

During the six months ended June 30, 2023 and 2022, 0.6 million and 0.5 million , respectively, restricted stock units and options were forfeited.

Share-based compensation expense for the three and six months ended June 30, 2023 was $ 1.7 million and $ 3.8 million, respectively.

Share-based compensation expense for the three and six months ended June 30, 2022 was $ 1.9 million and $ 3.5 million, respectively.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities at March 31, 2023 and December 31, 2022 are summarized as follows:

March 31, 2023 December 31, 2022

Accrued expenses and other current liabilities at June 30, 2023 and December 31, 2022 are summarized as follows:

June 30, 2023 December 31, 2022

Accrued professional services and other $ 11,041 $ 5,834

2 unchanged sentences

$ 15,581 $ 11,535

The change in warranty liability for the three months ended March 31, 2023 and 2022 is summarized as follows and included within accrued expenses and other current liabilities and other liabilities in the condensed consolidated balance sheets:

Three Months Ended March 31,

The change in warranty liability for the three and six months ended June 30, 2023 and 2022 is summarized as follows and included within accrued expenses and other current liabilities and other liabilities in the condensed consolidated balance sheets:

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

2023 2022 2023 2022

Balance at beginning of period $ 535 $ 238 $ 527 $ 44

8 unchanged sentences

Net Loss Per Share

The computation of basic and diluted net loss per share for the three months ended March 31, 2023 and 2022 is summarized as follows (in thousands, except share and per share data):

Three Months Ended March 31,

The computation of basic and diluted net loss per share for the three and six months ended June 30, 2023 and 2022 is summarized as follows (in thousands, except share and per share data):

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

2023 2022 2023 2022

Net loss attributable to common stockholders $ ( 35,227 ) $ ( 33,475 ) $ ( 64,058 ) $ ( 60,583 )

1 unchanged sentence

Net loss per share, basic and diluted $ ( 0.19 ) $ ( 0.19 ) $ ( 0.35 ) $ ( 0.35 )

Potential common shares excluded from the computation of diluted net loss per share because including them would have had an anti-dilutive effect for the three months ended March 31, 2023 and 2022 are summarized as follows:

Three Months Ended March 31,

Potential common shares excluded from the computation of diluted net loss per share because including them would have had an anti-dilutive effect for the three and six months ended June 30, 2023 and 2022 are summarized as follows:

Three and Six Months Ended June 30,

Unexercised stock options 2,053,599 2,761,006

1 unchanged sentence

6,116,626 6,915,429

* Potential common shares from unvested restricted stock units for the periods ended March 31, 2023 and 2022 include 687,084 and 1,345,000 shares, respectively, where no accounting grant date has been established.

* Potential common shares from unvested restricted stock units for the periods ended June 30, 2023 and 2022 include 649,584 and 1,361,667 shares, respectively, where no accounting grant date has been established.

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