What changed in this filing

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Item 1. Financial Statements

2024-11-14 compared with 2024-08-06 · 82 added, 50 removed, 292 unchanged (31% of the section changed)

3 unchanged sentences

(Dollar amounts in thousands, except share data)

September 30,

2024 December 31,

24 unchanged sentences

250,000,000 shares authorized;

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

184,335,183 and 183,071,317 shares issued at September 30, 2024 and December 31, 2023, respectively;

173,725,113 and 183,034,255 shares outstanding as of September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 407,259 404,045

Treasury stock, at cost;

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

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

( 14,135 ) ( 33 )

6 unchanged sentences

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

12 unchanged sentences

Interest income 2,979 3,534 9,504 10,345

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

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

Gain on disposal of assets — — 3 1

Other income, net — 26 32 14

Net loss $ ( 11,202 ) $ ( 30,322 ) $ ( 37,650 ) $ ( 94,380 )

5 unchanged sentences

(Dollar amounts in thousands, except share data)

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Common Stock Treasury Stock Additional

13 unchanged sentences

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

Exercise of common stock options and vesting of restricted stock units, net 180,069 — — — ( 12 ) — ( 12 )

Share-based compensation — — — — 1,096 — 1,096

Repurchase of treasury stock — — — 6 — — 6

Net loss — — — — — ( 11,202 ) ( 11,202 )

Balance at September 30, 2024 184,335,183 $ 18 ( 10,610,070 ) $ ( 14,135 ) $ 407,259 $ ( 135,414 ) $ 257,728

Nine Months Ended September 30, 2023

Common Stock Treasury Stock Additional

11 unchanged sentences

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

Exercise of common stock options and vesting of restricted stock units, net 1,564,294 — — — 130 — 130

Share-based compensation — — — — 1,409 — 1,409

Net loss — — — — — ( 30,322 ) ( 30,322 )

Balance at September 30, 2023 182,716,445 $ 18 — $ — $ 402,978 $ ( 68,634 ) $ 334,362

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

2 unchanged sentences

(Dollar amounts in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities

5 unchanged sentences

Inventory write-down — 992

Gain on disposal of assets ( 1,078 ) ( 1 )

Gain on disposal of assets, including assets held for sale ( 2,109 ) ( 1 )

Share-based compensation 3,541 5,170

9 unchanged sentences

Cash flows from investing activities

Purchase of property and equipment and other ( 8,054 ) ( 3,952 )

Purchase of property and equipment ( 10,548 ) ( 6,755 )

Proceeds from sale of property and equipment 4,110 2

2 unchanged sentences

Proceeds from sale and maturity of investments 126,686 178,556

Net cash provided by (used in) investing activities 46,027 ( 7,542 )

Net cash provided by investing activities 64,865 1,561

Cash flows from financing activities

3 unchanged sentences

Net cash used in financing activities ( 14,308 ) ( 2 )

Net decrease in cash and cash equivalents and restricted cash ( 1,666 ) ( 71,263 )

Net increase (decrease) in cash and cash equivalents and restricted cash 7,266 ( 90,868 )

Cash and cash equivalents and restricted cash, beginning of period 21,464 120,133

9 unchanged sentences

Hyliion Holdings Corp.

is a Delaware corporation headquartered in Cedar Park, Texas, with research and development facilities near Cincinnati, Ohio, that designs and develops power generators for stationary and mobile applications.

References to the “Company,” “Hyliion,” “we,” or “us” in this report refer to Hyliion Holdings Corp.

2 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 June 30, 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 September 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 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):

Total charges and expenses (income) related to the Plan of ($ 0.9 ) million and $ 2.9 million for the three and nine months, respectively, ended September 30, 2024, inclusive of recoveries from assets sold and charges to assets held for sale discussed below, are included in exit and termination costs in the condensed consolidated statements of operations.

Th e 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):

June 30, 2024 Charged to Expense Costs Paid or Settled September 30, 2024

Employee severance and retention $ 0.4 $ — $ ( 0.1 ) $ 0.3

Contract terminations 1.0 — ( 0.2 ) 0.8

Warranty obligations 0.1 — — 0.1

$ 1.5 $ — $ ( 0.3 ) $ 1.2

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

11 unchanged sentences

Assets Held for Sale

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.

Through the quarter ended September 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 for these assets at prices that were reasonable in relation to their current fair value and the assets were available for immediate sale in their present condition.

At the time of initial classification as held for sale, we estimated that the sale of these assets was 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 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

HYLIION HOLDINGS CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands, except as separately indicated)

We had assets held for sale of $ 3.5 million consisting of property and equipment in connection with the Plan at their fair value less costs to sell at September 30, 2024.

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

We recorded net benefits for recoveries related to asset sales of $ 0.9 million and $ 2.1 million included in exit and termination costs in the condensed consolidated statements of operations in the three and nine months, respective ly, ended September 30, 2024 and included in gain on disposal of assets in the condensed consolidated statements of cash flows for the nine months ended September 30, 2024.

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 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.

At September 30, 2024, the Company had total equity of $ 257.7 million, inclusive of cash and cash equivalents of $ 28.1 million and total investments of $ 209.4 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.

Use of Estimates

The preparation of financial statements in conformity with 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 disposals, income taxes and valuation of share-based compensation.

The preparation of financial statements in conformity with GAAP require s 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 assets held for sale, income taxes and valuation of share-based compensation.

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.

12 unchanged sentences

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

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

September 30, 2024 December 31, 2023 September 30, 2023 December 31, 2022

Cash and cash equivalents $ 28,065 $ 12,881 $ 28,600 $ 119,468

5 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 June 30, 2024 and December 31, 2023, there were no accounts receivable due from customers or allowances for doubtful accounts.

At September 30, 2024 and December 31, 2023, there were no accounts receivable due from customers or allowances for doubtful accounts.

Accounts receivable consisted of amounts due from performance of government contracts for which the Company was a prime and subcontractor and for sales of equipment associated with the wind down of the powertrain business.

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

Through September 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.

The Company has been performing under two contracts as both a prime and subcontractor to the United States government to provide research and development services in contractual amounts up to $ 2.4 million.

The larger of these two contracts was modified and will be accounted for as a new contract in the quarter ending December 31, 2024.

These contracts were not accounted for as revenue as they were not made in the ordinary course of business and the counterparties were not customers under GAAP.

In September 2024, the Company was awarded a cost-plus-fixed fee contract up to $ 16.0 million by the United States Department of the Navy’s Office of Naval Research (“ONR”) to research the applicability of its KARNO generator for navy ships and stationary power applications.

Under the agreement, the Company will provide up to seven KARNO generators and related research and development services through September 2026.

The ONR contract represented a significant change in business strategy toward providing research and development activities in the ordinary course of business in addition to designing and developing power generators for stationary and mobile applications.

The Company will account for all three contracts under ASC 606 beginning in the quarter ending December 31, 2024.

The amounts remaining to be billed on these contracts was up to $ 17.2 million as of September 30, 2024.

We had accounts receivable due on these contracts of $ 0.5 million and nil at September 30, 2024 and December 31, 2023, respectively, and no allowance for doubtful accounts.

Inventory is consumed in the performance of these contracts in the quarter in which it is purchased and we therefore do not record inventory at each reporting period pertaining to these contracts.

Research and Development Expense

2 unchanged sentences

Recent Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) , to enable investors to better understand the major components of an entity’s income statement.

The pronouncement is effective for fiscal years beginning after December 15, 2026 and interim periods beginning after December 15, 2027 and we expect a material impact to our disclosures as a result of adoption.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) , to enhance transparency and decision usefulness of income tax disclosures.

2 unchanged sentences

Improvements to Reportable Segment Disclosures , to improve the disclosures about a public entity’s reportable segments.

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 June 30, 2024 and December 31, 2023 are summarized as follows:

Fair Value Measurements at June 30, 2024

The pronouncement is effective for fiscal years beginning after December 15, 2023 and interim periods 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 September 30, 2024 and December 31, 2023 are summarized as follows:

Fair Value Measurements at September 30, 2024

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

11 unchanged sentences

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

June 30, 2024 December 31, 2023

September 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 June 30, 2024 and December 31, 2023 are summarized as follows:

Fair Value Measurements at June 30, 2024

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

Fair Value Measurements at September 30, 2024

Level I Level II Level III Total

18 unchanged sentences

Property and Equipment, Net

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

June 30, 2024 December 31, 2023

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

September 30, 2024 December 31, 2023

Production machinery and equipment $ 18,734 $ 10,376

6 unchanged sentences

Total property and equipment, net $ 17,428 $ 9,987

We began placing new additive manufacturing equipment into service in our Cedar Park facility during the current quarter, with useful lives up to 12 years, included in production machinery and equipment.

Share-Based Compensation

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.

During the nine months ended September 30, 2024 and 2023, the Company granted 6.1 million and 2.2 million, respectively, restricted stock units which will vest over a period of one to three years .

During the nine months ended September 30, 2024 and 2023, 1.2 million and 0.6 million, respectively, of restricted stock units and options were forfeited.

Share-based compensation expense for the three and nine months ended September 30, 2024 was $ 1.1 million and $ 3.5 million, respectively.

Share-based compensation expense for the three and nine months ended September 30, 2023 was $ 1.4 million and $ 5.2 million, respectively.

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

2 unchanged sentences

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.

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

Accrued Expenses and Other Current Liabilities

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

September 30, 2024 December 31, 2023

Accrued professional services and other $ 1,822 $ 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 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.

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 September 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 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,

The computation of basic and diluted net loss per share for the three and nine months ended September 30, 2024 and 2023 is summarized as follows (in thousands, except share and per share data):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

2 unchanged sentences

Net loss per share, basic and diluted $ ( 0.06 ) $ ( 0.17 ) $ ( 0.21 ) $ ( 0.52 )

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,

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 nine months ended September 30, 2024 and 2023 are summarized as follows:

Three and Nine Months Ended September 30,

Unexercised stock options 190,529 683,090

1 unchanged sentence

6,637,372 4,659,313

* 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.

* Potential common shares from unvested restricted stock units for the periods ended September 30, 2024 and 2023 include no and 653,334 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