What changed in this filing

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Item 1. Financial Statements

2024-08-06 compared with 2024-05-01 · 63 added, 44 removed, 279 unchanged (28% of the section changed)

29 unchanged sentences

250,000,000 shares authorized;

184,016,695 and 183,071,317 shares issued at March 31, 2024 and December 31, 2023, respectively;

175,304,238 and 183,034,255 shares outstanding as of March 31, 2024 and December 31, 2023, respectively

184,155,114 and 183,071,317 shares issued at June 30, 2024 and December 31, 2023, respectively;

173,545,044 and 183,034,255 shares outstanding as of June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 406,175 404,045

Treasury stock, at cost;

8,712,457 and 37,062 shares as of March 31, 2024 and December 31, 2023, respectively

10,610,070 and 37,062 shares as of June 30, 2024 and December 31, 2023, respectively

( 14,141 ) ( 33 )

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,

2024 2023 2024 2023

Product sales and other $ — $ 266 $ — $ 576

11 unchanged sentences

Interest income 3,129 3,349 6,525 6,811

Gain on disposal of assets 3 2

Other expense, net — ( 15 )

Gain (loss) on disposal of assets — ( 1 ) 3 1

Other income (expense), net 32 3 32 ( 12 )

Net loss $ ( 10,856 ) $ ( 35,227 ) $ ( 26,448 ) $ ( 64,058 )

5 unchanged sentences

(Dollar amounts in thousands, except share data)

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

Common Stock Treasury Stock Additional

8 unchanged sentences

Balance at March 31, 2024 184,016,695 $ 18 ( 8,712,457 ) $ ( 11,370 ) $ 405,118 $ ( 113,356 ) $ 280,410

Three Months Ended March 31, 2023

Exercise of common stock options and vesting of restricted stock units, net 138,419 — — — ( 68 ) — ( 68 )

Share-based compensation — — — — 1,125 — 1,125

Repurchase of treasury stock — — ( 1,897,613 ) ( 2,771 ) — — ( 2,771 )

Net loss — — — — — ( 10,856 ) ( 10,856 )

Balance at June 30, 2024 184,155,114 $ 18 ( 10,610,070 ) $ ( 14,141 ) $ 406,175 $ ( 124,212 ) $ 267,840

Six Months Ended June 30, 2023

Common Stock Treasury Stock Additional

7 unchanged sentences

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

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

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

19 unchanged sentences

Proceeds from sale of property and equipment 3,470 2

Payments for security deposit, net — ( 45 )

Purchase of investments ( 32,623 ) ( 99,193 )

12 unchanged sentences

Acquisitions of property and equipment included in accounts payable and other $ 150 $ 554

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.

8 unchanged sentences

On November 7, 2023, the Board of the Company approved a strategic plan to wind down its powertrain business and preserve the related intellectual property (the “Plan”).

We have not accounted for the impacts of the Plan as a discontinued operation through March 31, 2024 as we have not abandoned or sold the underlying intellectual property.

We have not accounted for the impacts of the Plan as a discontinued operation through June 30, 2024 as we have not abandoned or sold the underlying intellectual property.

We historically provided limited assurance-type warranties under our powertrain contracts and plan to continue to service such warranties through their remaining term, with the majority ending in 2024.

Total charges and expenses related to the Plan of $ 4.4 million, inclusive of charges to assets held for sale discussed below, were incurred in the Company’s first quarter of 2024 and are included in exit and termination costs in the condensed consolidated statements of operations.

Total charges and expenses related to the Pla n of ($ 0.6 ) million and $ 3.9 million for the three and six months, respectively, ended June 30, 2024, inclusive of recoveries from assets sold and charges to assets held for sale discussed below, are included in exit and te rmination costs in the condensed consolidated statements of operations.

The change in total liabilities associated with the Plan is included within accrued expenses and other current liabilities as presented in Note 8, and accounts payable, and is summarized as follows (in millions):

March 31, 2024 Charged to Expense Costs Paid or Settled June 30, 2024

Employee severance and retention $ 0.7 $ — $ ( 0.3 ) $ 0.4

Contract terminations 2.1 — ( 1.1 ) 1.0

Warranty obligations 0.1 — — 0.1

$ 2.9 $ — $ ( 1.4 ) $ 1.5

December 31, 2023 Charged to Expense Costs Paid or Settled March 31, 2024

6 unchanged sentences

Assets Held for Sale

During the quarter ended March 31, 2024 certain assets of our powertrain business including Class 8 semi-trucks and capital equipment were being actively marketed for sale, and we were actively locating buyers, at a price that was reasonable in relation to their current fair value and the assets were available for immediate sale in their present condition.

Through the quarter ended June 30, 2024 certain assets of our powertrain business including Class 8 semi-trucks and capital equipment were being actively marketed for sale, and we were actively locating buyers, at a price that was reasonable in relation to their current fair value and the assets were available for immediate sale in their present condition.

Further, we estimated that the sale of the disposal groups were expected to be completed within one year and it was unlikely that significant changes to the plan of sale would be made.

We review assets held for sale each reporting period to determine whether the existing carrying amounts are fully recoverable in comparison to their estimated fair values less costs to sell.

We have recorded assets held for sale of $ 6.0 million consisting of property and equipment in connection with the Plan at their fair value less costs to sell at March 31, 2024.

We used fair value hierarchy Level III inputs including comparable assets, adjusted for condition, and recorded charges of $ 5.6 million included in exit and termination costs in the condensed consolidated statements of operations.

We had assets held for sale of $ 3.6 million consisting of property and equipment in connection with the Plan at their fair value less costs to sell at June 30, 2024.

We used fair value hierarchy Level III inputs including comparable assets, adjusted for condition, and recorded charges of $ 0.0 million and $ 5.6 million included in exit and termination costs in the condensed consolidated statements of operations in the three and six months, respectively, ended June 30, 2024.

The estimates of fair value less costs to sell are subject to a number of assumptions and actual amounts may differ materially from estimates.

We recorded benefits for recoveries related to asset sales of $ 0.6 million and $ 1.2 million i ncluded in exit and termination costs in the condensed consolidated statements of operations in the three and six months, respectively, ended June 30, 2024

Summary of Significant Accounting Policies

5 unchanged sentences

The condensed consolidated balance sheet at December 31, 2023 was derived from audited financial statements for the fiscal year then ended, but does not include all necessary disclosures required with respect to annual financial statements.

In the opinion of the Company, these 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.

In the opinion of the Company, these 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 2023 Annual Report.

2 unchanged sentences

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

At March 31, 2024, the Company had total equity of $ 280.4 million, inclusive of cash and cash equivalents of $ 14.7 million and total investments of $ 249.2 million.

At June 30, 2024, the Company had total equity of $ 267.8 million, inclusive of cash and cash equivalents of $ 19.1 million and total investments of $ 229.6 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.

16 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, 2024 December 31, 2023 March 31, 2023 December 31, 2022

June 30, 2024 December 31, 2023 June 30, 2023 December 31, 2022

Cash and cash equivalents $ 19,133 $ 12,881 $ 48,205 $ 119,468

4 unchanged sentences

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

The allowance for doubtful accounts is maintained at a level considered adequate to provide for potential account losses on the balance based on 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, 2024 and December 31, 2023, there were no accounts receivable due from customers or allowances for doubtful accounts.

The allowance for doubtful accounts is maintained at a level considered adequate to provide for potential account losses on the balance based on 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 June 30, 2024 and December 31, 2023, there were no accounts receivable due from customers or allowances for doubtful accounts.

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

22 unchanged sentences

As a result, investments are classified within Level II of the fair value hierarchy.

Through March 31, 2024, we have not yet commercialized the KARNO generator.

Through June 30, 2024, we have not yet commercialized the KARNO generator.

Costs incurred for components acquired prior to our determination of reaching a commercial stage are expensed as research and development costs, resulting in zero cost basis for those components.

As a result, moving-average prices for inventory that is capitalized in future periods may be

significantly affected by those zero cost items.

During the three months ended March 31, 2024 and March 31, 2023, we recorded inventory write-downs of $ 0.0 million and $ 0.2 million, respectively.

As a result, moving-average prices for inventory that is capitalized in future periods may be significantly affected by those zero cost items.

Research and Development Expense

7 unchanged sentences

The pronouncement is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024 and we expect a material impact to our disclosures as a result of adoption.

The amortized cost, unrealized gains and losses, fair value and maturities of our held-to-maturity investments at March 31, 2024 and December 31, 2023 are summarized as follows:

Fair Value Measurements at March 31, 2024

The amortized cost, unrealized gains and losses, fair value and maturities of our held-to-maturity investments at June 30, 2024 and December 31, 2023 are summarized as follows:

Fair Value Measurements at June 30, 2024

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

11 unchanged sentences

$ 278,483 $ 590 $ ( 499 ) $ 278,574

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

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, 2024 and December 31, 2023 are summarized as follows:

Fair Value Measurements at March 31, 2024

The fair value measurements of our financial assets at June 30, 2024 and December 31, 2023 are summarized as follows:

Fair Value Measurements at June 30, 2024

Level I Level II Level III Total

18 unchanged sentences

Property and Equipment, Net

Property and equipment, net at March 31, 2024 and December 31, 2023 is summarized as follows:

March 31, 2024 December 31, 2023

Property and equipment, net at June 30, 2024 and December 31, 2023 is summarized as follows:

June 30, 2024 December 31, 2023

Production machinery and equipment $ 17,060 $ 10,376

7 unchanged sentences

Share-Based Compensation

During the three months ended March 31, 2024 and 2023, the Company granted 5.9 million and 2.1 million, respectively, restricted stock units which will vest over a period of one to three years .

During the three months ended March 31, 2024 and 2023, 0.9 million and 0.2 million, respectively, of restricted stock units and options were forfeited.

Share-based compensation expense for the three months ended March 31, 2024 and 2023 was $ 1.3 million and $ 2.0 million, respectively.

Of the restricted stock units granted during the three months ended March 31, 2024, 2.7 million units may vest between February 13, 2025 and December 31, 2026 contingent upon achieving underlying closing stock price thresholds.

During the six months ended June 30, 2024 and 2023, the Company granted 5.9 million and 2.5 million, respectively, restricted stock units which will vest over a period of one to three years .

During the six months ended June 30, 2024 and 2023, 1.1 million and 0.6 million, respectively, of restricted stock units and options were forfeited.

Share-based compensation expense for the three and six months ended June 30, 2024 was $ 1.1 million and $ 2.4 million, respectively.

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

In May 2024, stockholders of the Company approved the Hyliion Holdings Corp.

2024 Equity Incentive Plan which allows issuance of up to 8,000,000 shares, subject to certain adjustments.

Of the restricted stock units granted in the first quarter of 2024, 2.7 million units may vest between February 13, 2025 and December 31, 2026 contingent upon achieving underlying closing stock price thresholds.

These awards were valued at $ 0.83 per unit using fair value hierarchy Level III inputs including an underlying share volatility of 90 % and a risk-free rate of 4.35 %.

There were no market-conditioned awards granted after the first quarter of 2024.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities at March 31, 2024 and December 31, 2023 are summarized as follows:

March 31, 2024 December 31, 2023

Accrued expenses and other current liabilities at June 30, 2024 and December 31, 2023 are summarized as follows:

June 30, 2024 December 31, 2023

Accrued professional services and other $ 1,332 $ 2,606

7 unchanged sentences

The requirements must be met on or before specific measurement dates and maintained throughout the term of the agreement, which expires effective December 31, 2029.

The Company is further required to refund $ 0.7 million and allowed to retain $ 0.4 million, subject to performance of above requirements, of grant funding previously received which was been included within a ccrued expenses and other current liabilities and other liabilities, respectively, as of March 31, 2024.

The Company has received payments to date of $ 0.4 million which remain refundable and subject to these performance requirements and are included within other liabilities as of June 30, 2024.

Under the agreement, the EDC has the right to file a security interest to all assets of the Company.

3 unchanged sentences

Net Loss Per Share

The computation of basic and diluted net loss per share for the three months ended March 31, 2024 and 2023 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, 2024 and 2023 is summarized as follows (in thousands, except share and per share data):

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

2024 2023 2024 2023

Net loss attributable to common stockholders $ ( 10,856 ) $ ( 35,227 ) $ ( 26,448 ) $ ( 64,058 )

1 unchanged sentence

Net loss per share, basic and diluted $ ( 0.06 ) $ ( 0.19 ) $ ( 0.15 ) $ ( 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, 2024 and 2023 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, 2024 and 2023 are summarized as follows:

Three and Six Months Ended June 30,

Unexercised stock options 271,996 2,053,599

1 unchanged sentence

6,722,048 6,116,626

* Potential common shares from unvested restricted stock units for the periods ended March 31, 2024 and 2023 include no and 687,084 shares, respectively, where no accounting grant date had been established.

* Potential common shares from unvested restricted stock units for the periods ended June 30, 2024 and 2023 include no and 649,584 shares, respectively, where no accounting grant date had 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