ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
State or other jurisdiction of incorporation or organization |
(I.R.S. Employer Identification Number) |
Title of each class |
Trading Symbols |
Name of each exchange on which registered | ||
lass A Common Stock, par value $0.0001 per share |
Capital Market | |||
Warrants, each whole warrant exercisable for one share of Class A common stock, $0.0001 par value, at an exercise price of $11.50 per share |
Capital Market |
Large accelerated filer |
☐ |
Accelerated filer |
☐ | |||
☒ |
Smaller reporting company |
☒ | ||||
Emerging growth company |
☒ |
PCAOB ID: 0 |
Auditor Name: |
Auditor Location: |
• |
our ability to commercialize our products and strategic plans, including our ability to establish facilities to produce our vehicles or secure hydrogen supply in appropriate volumes, at competitive costs or with competitive emissions profiles; |
• |
our ability to effectively compete in the heavy-duty transportation sector, and withstand intense competition and competitive pressures from other companies worldwide in the industries in which we operate; |
• |
our ability to convert non-binding memoranda of understanding into binding orders or sales (including because of the current or prospective resources of our counterparties) and the ability of our counterparties to make payments on orders; |
• |
our ability to invest in hydrogen production, distribution and refueling operations to supply our customers with hydrogen at competitive costs to operate their fuel cell electric vehicles; |
• |
disruptions to the global supply chain, including as a result of the COVID-19 pandemic and geopolitical events, and shortages of raw materials, and the related impacts on our third party suppliers and assemblers |
• |
our ability to maintain the listing of our common stock on NASDAQ; |
• |
our ability to raise financing in the future; |
• |
our ability to retain or recruit, or changes required in, our officers, key employees or directors; |
• |
our ability to protect, defend or enforce intellectual property on which we depend; and |
• |
the impacts of legal proceedings, regulatory disputes and governmental inquiries. |
4 |
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4 |
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32 |
||||
66 |
||||
66 |
||||
66 |
||||
66 |
||||
67 |
||||
67 |
||||
68 |
||||
68 |
||||
83 |
||||
84 |
||||
117 |
||||
117 |
||||
119 |
||||
119 |
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120 |
||||
120 |
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129 |
||||
135 |
||||
137 |
||||
142 |
||||
144 |
||||
144 |
||||
147 |
||||
148 |
• | Higher fuel efficiency: |
• | Potentially lower cost of fuel non-renewable hydrocarbon resources, including diesel fuel. Because the cost to transport hydrogen can be significant, close-to-fleet |
• | Improved performance |
• | Reduced noise |
• | Zero GHG emissions near-zero-emission powertrain, as there is no combustion occurring in hydrogen fuel cells. |
• | Significant local area health benefits: |
• | Reduced TCO |
• | Seamless transition from ICE is possible |
• | Increased driving range: 300-mile range depending on duty cycle. This range is greater than the distance advertised by many manufacturers for their heavy-duty BEVs. |
• | Increased payloads: |
• | Faster refueling times: |
• | Lower infrastructure hurdles: build-out is a challenge for both FCEV and BEV HD and MD commercial vehicles, but we believe hydrogen has the infrastructure advantage when considering the required cost and time to build-out the production, distribution and refueling infrastructure capacities to support each. Hydrogen fuel can be produced locally from a wide variety of resources and, when produced with low carbon intensity production methods and used to power fuel cells, results in zero direct GHG emissions. Clean hydrogen infrastructure can likely be built efficiently by building hydrogen production and dispensing in a modular fashion paired with and close to fleet deployments as the market develops from a breadth of locally available feedstocks, in most cases fully independent from major infrastructure constraints like the electricity grid. Comparatively, our analysis shows that any sizable HD and MD commercial truck BEV fleet deployment in many regions of the world will likely require significant electric charging infrastructure and electricity grid investment to bring substantial rapid charging to bear. For instance, charging just 100 Class 8 BEV trucks, each with battery capacity of 500kWh with megawatt chargers, would likely require at least 50 MW of power to support a back-to-base re-charging time. In addition to investing in last-mile charging infrastructure, significant investment would likely also need to be made in transmission and distribution infrastructure to deliver the power needed to charge high-capacity batteries in HD and MD commercial BEV fleets. In summary, we believe that the combination of availability, energy density, and local production will allow low carbon hydrogen to acquire substantial market share for powering HD and many MD commercial vehicles. |
• | Proven hydrogen fuel cell technology and vehicle electrification experience |
• | Highly experienced and proven team. |
• | Strong fit with the comme r cial vehicle market Market Opportunity ” “ Competition |
• | Vertical integration in key FCEV components and targeted assembly capabilities. |
• | Asset-light, first mover approach to vehicle assembly |
• | Partnered approach to bringing competitive hydrogen fuel to market located close to fleet deployments low-to-negative |
• | Upfit of commonly used vehicles – electrifying existing OEM vehicle platforms that our customers operate in their fleets today instead of introducing new cab and chassis designs increases the likelihood that drivers will be comfortable behind the wheel from day one. It further provides entry into international markets, as regional differences in vehicle designs are common, making upfit of existing platforms a faster pathway to putting familiar vehicles into customers’ hands. |
• | Trial programs – before purchase, customers may participate in a paid trial to test our vehicles in daily operations. |
• | Fuel access – during trial and after purchase, Hyzon aims to provide access to fueling infrastructure through a mobile refueler or local hydrogen production plant. |
• | Existing carrier and service partners – thanks to a modular vehicle assembly approach, Hyzon can quickly train technical service providers to perform maintenance on the vehicle. |
• | Leasing service – customers can participate in Hyzon’s leasing service, paying a stable and predictable monthly bundled rate for vehicle, fuel, and service. |
• | the zero-emission vehicle; |
• | scheduled preventative maintenance; and |
• | hydrogen supply. |
• | advanced materials for fuel cell stack, MEA and bipolar plate; |
• | novel solid-state battery for optimizing FCEV performance; |
• | high efficiency multi-motor drive systems with torque vectoring; |
• | advanced driver assistance systems and autonomous driving technology; |
• | purpose-built vehicle platforms with light-weight materials; |
• | advanced production technologies in vehicle electrification components; |
• | green hydrogen hubs with hydrogen and electricity produced from renewable resources; and |
• | on-site energy storage with hydrogen and batteries. |
• | Low Carbon Fuel Standard well-to-wheel |
• | Grant and Subsidy Programs zero-emission vehicles and infrastructure technologies. Federal and state grant and subsidy programs are under evaluation for introduction and/or expansion, such as LCFS structures in Oregon and Washington, and the Federal IIJA which includes significant funding opportunities for hydrogen ecosystem enablement, including $8 billion for the establishment of at least four hydrogen hubs across the U.S. |
• | EPA Smartway |
• | The European Union currently maintains a key funding programme for research and innovation with a total budget of €95.5Bn, including €15.1Bn allocated for Climate, Energy and Mobility, including clean hydrogen and zero-emission road transport. The EU also has an Innovation Fund which provides €10Bn of support through 2030 for the commercial demonstration of innovative low-carbon technologies. |
• | The UK has introduced a Net Zero Hydrogen Fund (“NZHF”) of £240MM to support the commercial deployment of new low carbon hydrogen production projects. The UK additionally created the Department for Transport Zero Emission Road Freight Trials (“ZERFT”) £20MM to demonstrate zero-emission freight and stimulate transition through road freight trials. |
• | Germany introduced various subsidies totaling approximately €3Bn up to 10 years to support the penetration of zero emission vehicles and green hydrogen production. These subsidies will contribute to the EU environmental objectives, in line with the European Green Deal. |
• | China’s central government is initiating a four-year pilot program, and select cities will be elected to carry out research and development and application demonstrations of FCEVs. This pilot program seeks to encourage innovation and to stimulate the development of hydrogen and the FCEV industry in China. The Chinese central government will reward successful pilot cities and details of those benefits and programs are to be published by the government in a separate policy document. |
• | Electronic Stability Control. loss-of-control. |
• | Air Brake Systems. |
• | Electric Vehicle Safety. |
• | Flammability of Interior Materials. |
• | Seat Belt Assemblies and Anchorages. |
• | Tire Pressure Monitoring System. |
• | Roof Crush Resistance. |
• | Minimum Sound Requirements for Hybrid and Electric Vehicles. |
• | Crash Tests for High-Voltage and Hydrogen Fuel System Integrity. |
• | Step, Handhold and Deck Requirements. |
• | Auxiliary Lamps. |
• | Speedometer. |
• | Electromagnetic Compatibility and Interference. |
• | Lane Departure Warning System. |
• | Electric Vehicle Safety. in-use and post-crash. |
• | Hydrogen Fuel Cell Vehicle Safety. in-use and post-crash. |
• | Our business model has yet to be tested and we may fail to commercialize our strategic plans. |
• | We recently completed the Business Combination with Decarbonization Plus Acquisition Corporation (“DCRB”) in which we raised gross proceeds net of redemption and transaction costs totaling approximately $512.9 million. Nevertheless, we may need to raise additional funds, and these funds may not be available on terms favorable to us or our stockholders or at all when needed. |
• | Increases in costs, disruption of supply or shortage of raw materials, could harm our business. |
• | We qualify as an “emerging growth company’ as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act, and we take advantage of certain exemptions from various reporting requirements that are applicable to other public companies, including the auditor attestation requirements with respect to internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act. As a result, our shareholders may not have access to certain information they deem important. |
• | We have identified a material weakness in our internal control over financial reporting which, if not corrected, could affect the reliability of our consolidated financial statements and have other adverse consequences. |
• | Our Class A Common Stock commenced trading on the NASDAQ Global Select Market on July 19, 2021, and we have limited experience operating as a publicly traded company. We need to implement various policies, procedures and controls pertaining to our operations and governance as required by SEC and NASDAQ rules and regulations. |
• | We have a limited number of current customers, and there is no assurance as to whether our sales pipeline will result in sales and revenues, or that we will be able to convert non-binding letters of intent or memoranda of understanding into orders or sales (including because of the current or prospective financial resources of the counterparties to our non-binding memoranda of understanding and letters of intent, the liability accounting for our warrants or customer contractual demands), or that we will be able to identify additional potential customers and convert them to paying customers. |
• | We also face and will continue to face significant competition in all aspects of our business and operations, and many of our current and future competitors have or will have significantly more resources than us, and may outcompete us for customers, employees, and suppliers. |
• | We may not succeed in investing in hydrogen production, distribution and refueling operations critical to supplying our customers with hydrogen to operate our FCEVs either at all or in part, and/or at the cost required to achieve TCO for potential Hyzon FCEV customers to drive their purchases of our trucks. |
• | There is no assurance that there will be, or that we will be able to supply, hydrogen at prices or with an emissions profile that allow our FCEVs to be competitive with commercial vehicles powered by other energy sources. |
• | We may face legal challenges and other resistance attempting to sell our vehicles which could materially adversely affect our sales and costs. Additionally, unfavorable publicity, or a failure to respond effectively to adverse publicity, could harm our reputation and adversely affect our business. |
• | If we engage in mergers or acquisitions, we may assume liabilities – both disclosed and undisclosed – by contract or under operation of law of the target or acquired company which could materially adversely affect our business and financial results. |
• | To date, we have produced only technology validation or evaluation FCEVs and there is no assurance that we will be able to establish and operate facilities capable of producing our FCEVs in appropriate volumes and at competitive costs or at all. |
• | We have limited experience servicing our FCEVs. If we are unable address the service requirements of our customers, our business will be materially and adversely affected. Additionally, insufficient warranty reserves to cover future warranty claims could materially adversely affect our business, prospects, financial condition, and operating results. |
• | Threats to information technology, including unauthorized control of our vehicles or interruption of our systems, could adversely affect our business. |
• | We may be unsuccessful in meeting various local, national and international safety and emissions rules and regulations for our products. |
• | We depend on third parties, including Horizon, for supply of key inputs and components for our products. |
• | We will depend on Horizon as a sole source supplier for our fuel cell systems, until such time we are able to commence manufacturing fuel cell systems inhouse. |
• | the premium in the anticipated initial purchase prices of our commercial vehicles over those of comparable vehicles powered by ICE or other alternative energy sources, both including and excluding the effect of possible government and other subsidies and incentives designed to promote the purchase of vehicles powered by clean energy; |
• | the total cost of ownership of the vehicle over its expected life, which includes the initial purchase price and ongoing operating costs, including hydrogen supply, price, and maintenance costs; |
• | access to hydrogen supply and refueling stations locally and nationally, and related infrastructure costs; |
• | the availability and terms of financing options for our customers to purchase or lease our vehicles; |
• | the availability of tax and other governmental incentives to purchase and operate non-carbon emitting vehicles, and future regulations requiring increased use of non-carbon emitting vehicles; |
• | government regulations and economic incentives promoting or mandating fuel efficiency and alternate forms of energy; |
• | prices for hydrogen, diesel, natural gas, electricity and other sources of power for vehicles, and volatility in the cost of diesel or a prolonged period of low gasoline and natural gas costs that could decrease incentives to transition to vehicles powered by alternative energy sources; |
• | the cost and availability of other alternatives to diesel or natural gas fueled vehicles, such as electric vehicles; |
• | corporate sustainability initiatives and environmental, social and governance (“ESG”) policies; |
• | perceptions about hydrogen, safety, design, performance, reliability and cost, especially if adverse events or accidents occur that are linked to the quality or safety of hydrogen-powered vehicles, or the safety of production, transportation or use of hydrogen generally; |
• | the quality and availability of service for our commercial vehicles, including the availability of replacement parts; |
• | the ability of our customers to purchase adequate insurance for our vehicles; and |
• | macroeconomic factors. |
• | cease development, sales or use of our products that incorporate or are covered by the asserted IP; |
• | pay substantial damages, including through indemnification obligations; |
• | obtain a license from the owner of the asserted IP, which license may not be available on reasonable terms or at all; or |
• | redesign one or more aspects of our hydrogen-powered commercial vehicles or hydrogen fuel cell systems. |
• | any patent applications we submit or currently have pending may not result in the issuance of patents; |
• | the scope of our issued patents, including our patent claims, may not be broad enough to protect our proprietary rights; |
• | our issued patents may be challenged or invalidated; |
• | our employees, customers or business partners may breach their confidentiality, non-disclosure and non-use obligations to us; |
• | We fail or are determined by a court of competent jurisdiction to have failed to make reasonable efforts to protect our trade secrets; |
• | third parties may independently develop technologies that are the same or similar to ours; |
• | we may not be successful in enforcing our IP portfolio against third parties who are infringing or misappropriating such IP, for a number of reasons, including substantive and procedural legal impediments; |
• | our trademarks may not be valid or enforceable, and our efforts to police unauthorized use of our trademarks may be deemed insufficient to satisfy legal requirements throughout the world; |
• | the costs associated with enforcing patents, confidentiality and invention agreements or other IP may make enforcement impracticable; and |
• | current and future competitors may circumvent or design around our IP. |
• | actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us; |
• | changes in the market’s expectations about our operating results; |
• | success of competitors; |
• | our operating results failing to meet the expectation of securities analysts or investors in a particular period; |
• | changes in financial estimates and recommendations by securities analysts concerning us or the market in general; |
• | operating and stock price performance of other companies that investors deem comparable to us; |
• | our ability to market new and enhanced products and technologies on a timely basis; |
• | changes in laws and regulations affecting our business; |
• | our ability to meet compliance requirements; |
• | commencement of, or involvement in, litigation; |
• | changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; |
• | the volume of shares of our Class A Common Stock available for public sale; |
• | any major change in our Board or management; |
• | investors engaged in short selling our Class A Common Stock; |
• | sales of substantial amounts of Class A Common Stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and |
• | general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism. |
• | a limited availability of market quotations for our securities; |
• | reduced liquidity for our securities; |
• | a determination that our Class A Common Stock is a “penny stock” which will require brokers trading in our Class A Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; |
• | a limited amount of news and analyst coverage; and |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | may significantly dilute the equity interests of our investors; |
• | may subordinate the rights of holders of Class A Common Stock if preferred stock is issued with rights senior to those afforded our common stock; |
• | could cause a change in control if a substantial number of shares of our Class A Common Stock are issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present officers and directors; and |
• | may adversely affect prevailing market prices for our units, Class A Common Stock and/or warrants. |
• | our Board is divided into three classes with staggered terms; |
• | the right of our Board to issue preferred stock without stockholder approval; |
• | restrictions on the right of stockholders to remove directors without cause; and |
• | restrictions on the right of stockholders to call special meetings of stockholders. |
Period |
Total Number of Units Purchased (1) |
Average Price Paid per Unit |
Total Number of Units Purchased Under Announced Programs (2) |
Approximate Dollar Value of Units That May Yet be Purchased Under Announced Programs (in thousands) |
||||||||||||
October 1, 2021 through October 31, 2021 |
— | $ | — | — | $ | — | ||||||||||
November 1, 2021 through November 30, 2021 |
40,196 | $ | 2.35 | 40,196 | $ | 4,906 | ||||||||||
December 1, 2021 through December 31, 2021 |
216,781 | $ | 2.05 | 216,781 | $ | 4,460 | ||||||||||
|
|
|
|
|||||||||||||
Total/Average |
256,977 |
$ |
2.10 |
256,977 |
||||||||||||
|
|
|
|
(1) | Units purchased consist of public warrants repurchased in the open market. |
(2) | On November 17, 2021, the Company’s Board of Directors authorized the purchase of up to $5.0 million of its outstanding common stock and/or public warrants. |
• | Our workforce COVID-19, we established protocols to help protect the health and safety of our workforce. We will continue to stay up-to-date |
• | Operations and Supply Chain. zero-emission heavy commercial vehicles despite these challenges. In the future, we may experience supply chain disruptions from related or third-party suppliers and any such supply chain disruptions could cause delays in our development and delivery timelines. We continue to monitor the situation for any potential adverse impacts and execute appropriate countermeasures, where possible. To mitigate the impact of supply chain disruptions that we were experiencing in 2021, which disproportionately impacted our business in Europe, we focused on fulfilling orders for our vehicles in China where supply chain disruptions were not as significant. |
Year Ended December 31, |
For the period January 21, 2020 (Inception) – December 31, |
|||||||||||||||
2021 |
2020 |
$ Change |
% Change |
|||||||||||||
Revenue |
$ |
6,049 |
$ |
— |
$ |
6,049 |
NM |
|||||||||
Operating expense: |
||||||||||||||||
Cost of Revenue |
21,191 | — | 21,191 | NM | ||||||||||||
Research and development |
16,443 | 1,446 | 14,997 | 1037 | % | |||||||||||
Selling, general and administrative |
69,792 | 12,785 | 57,007 | 446 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expense |
107,426 | 14,231 | 93,195 | 655 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from operations |
(101,377 |
) |
(14,231 |
) |
(87,146 |
) |
612 |
% | ||||||||
Other income (expense): |
||||||||||||||||
Change in fair value of private placement warrant liability |
4,167 | — | 4,167 | NM | ||||||||||||
Change in fair value of earnout liability |
84,612 | — | 84,612 | NM | ||||||||||||
Foreign currency exchange loss and other expense |
(1,452 | ) | (108 | ) | (1,344 | ) | 1244 | % | ||||||||
Interest expense, net |
(5,235 | ) | (37 | ) | (5,198 | ) | 14049 | % | ||||||||
Total other income (expense) |
82,092 |
(145 |
) |
82,237 |
-56715 |
% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
$ |
(19,285 |
) |
$ |
(14,376 |
) |
$ |
(4,909 |
) |
34 |
% | |||||
|
|
|
|
|
|
|
|
|||||||||
Less: Net loss attributable to noncontrolling interest |
(5,439 | ) | (105 | ) | (5,334 | ) | 5080 | % | ||||||||
Net loss attributable to Hyzon |
$ |
(13,846 |
) |
$ |
(14,271 |
) |
$ |
425 |
-3 |
% | ||||||
|
|
|
|
|
|
|
|
Year Ended December 31, 2021 |
For the period January 21, 2020 (Inception) – December 31, 2020 |
|||||||
Net loss |
$ | (19,285 | ) | $ | (14,376 | ) | ||
Plus: |
||||||||
Interest expense, net |
5,235 | 37 | ||||||
Income tax expense (benefit) |
— | — | ||||||
Depreciation and amortization |
1,140 | 185 | ||||||
|
|
|
|
|||||
EBITDA |
$ |
(12,910 |
) |
$ |
(14,154 |
) | ||
Adjusted for: |
||||||||
Change in fair value of private placement warrant liability |
(4,167 | ) | — | |||||
Change in fair value of earnout liability |
(84,612 | ) | — | |||||
Stock-based compensation |
15,768 | 9,983 | ||||||
Executive transition charges (1) |
13,860 | — | ||||||
Business combination transaction expenses (2) |
6,533 | — | ||||||
Regulatory and legal matters (3) |
1,147 | — | ||||||
Acquisition-related expenses (4) |
591 | — | ||||||
|
|
|
|
|||||
Adjusted EBITDA |
$ |
(63,790 |
) |
$ |
(4,171) |
|||
|
|
|
|
(1) | Executive transition charges include stock-based compensation costs of $13.4 million and salary expense of $0.5 million related to former CTO’s retirement. |
(2) | Transaction costs of $6.4 million attributable to the liability classified earnout shares and $0.1 million of write-off of debt issuance costs. |
(3) | Regulatory and legal matters include legal, advisory, and other professional service fees incurred in connection with the short-seller analyst article from September 2021, and investigations and litigation related thereto. |
(4) | Acquisition-related expenses incurred for potential and actual acquisitions that are unrelated to the current operations and neither are comparable to the prior period nor predictive of future results. |
Year Ended December 31, 2021 |
For the period January 21, 2020 (Inception) - December 31, 2020 |
|||||||
Net cash used in operating activities |
$ | (95,191 | ) | $ | (1,182 | ) | ||
Net cash used in investing activities |
(23,706 | ) | (553 | ) | ||||
Net cash provided by financing activities |
550,692 | 18,894 |
Total |
2022 |
2023 |
2024 |
2025 |
2026 and thereafter |
|||||||||||||||||||
Horizon IP Agreement (1) |
$ | 3,146 | $ | 3,146 | $ | — | $ | — | $ | — | $ | — | ||||||||||||
Finance Lease Obligation (2) |
688 | 448 | 240 | — | — | — | ||||||||||||||||||
Operating Lease Obligations (3) |
12,160 | 1,978 | 1,894 | 1,806 | 1,745 | 4,737 | ||||||||||||||||||
Purchase Obligations (4) |
33,969 | 29,069 | 4,900 | — | — | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
$ |
49,963 |
$ |
34,641 |
$ |
7,034 |
$ |
1,806 |
$ |
1,745 |
$ |
4,737 |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | The final $3.1 million payment due to Jiangsu Horizon Powertrain, pursuant to the terms of the Horizon IP Agreement. Please see the section below entitled, “ Material Transactions with Related Parties |
(2) | The minimum lease payments for the finance lease obligation. |
(3) | The minimum lease payments for operating lease obligations. The operating leases relate to real estate and vehicles. No asset is leased from any related party. |
(4) | The Company enters into commitments under non-cancellable or partially cancellable purchase orders or vendor agreements in the ordinary course of business for FCEV components. |
• | Fair Value of Common Stock. |
• | Expected Term. |
• | Expected Volatility. |
• | Risk-Free Interest Rate. zero-coupon securities with maturities consistent with the estimated expected term. |
• | Expected Dividend Yield. |
• | Recent arms-length transactions involving the sale or transfer of our common stock; |
• | Our historical financial results and future financial projections; |
• | The market value of equity interests in substantially similar businesses, which equity interests can be valued through nondiscretionary, objective means; |
• | The lack of marketability of our common stock; |
• | The likelihood of achieving a liquidity event, such as the business combination, given prevailing market conditions; |
• | Industry outlook; and |
• | General economic outlook, including economic growth, inflation and unemployment, interest rate environment and global economic trends. |
December 31, 2021 |
December 31, 2020 |
|||||||
ASSETS |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Accounts receivable |
||||||||
Related party receivable |
||||||||
Inventory |
||||||||
Prepaid expenses and other current assets |
||||||||
|
|
|
|
|||||
Total current assets |
||||||||
Property, plant, and equipment, net |
||||||||
Right-of-use assets |
||||||||
Investment s in equity securities |
||||||||
Other assets |
||||||||
|
|
|
|
|||||
Total Assets |
$ |
$ |
||||||
|
|
|
|
|||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
Current liabilities |
||||||||
Accounts payable |
$ | $ | ||||||
Accrued liabilities |
||||||||
Related party payables |
||||||||
Contract liabilities |
||||||||
Current portion of lease liabilities |
||||||||
|
|
|
|
|||||
Total current liabilities |
||||||||
|
|
|
|
|||||
Long term liabilities |
||||||||
Lease liabilities |
||||||||
Private placement warrant liability |
— | |||||||
Earnout liability |
— | |||||||
Other liabilities |
— | |||||||
|
|
|
|
|||||
Total liabilities |
$ |
$ |
||||||
|
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 1 4 ) |
||||||||
Stockholders’ Equity |
||||||||
Common stock, $ . |
||||||||
Additional paid-in capital |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
Accumulated other comprehensive income (loss) |
( |
) | ||||||
|
|
|
|
|||||
Total Hyzon Motors Inc. stockholders’ equity |
||||||||
Noncontrolling interest |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total Stockholders’ Equity |
||||||||
|
|
|
|
|||||
Total Liabilities and Stockholders’ Equity |
$ |
$ |
||||||
|
|
|
|
Year Ended December 31, 2021 |
For the period January 21, 2020 (Inception) – December 31, 2020 |
|||||||
Revenue |
$ |
$ |
— |
|||||
Operating expense: |
||||||||
Cost of revenue |
— | |||||||
Research and development |
||||||||
Selling, general , and administrative |
||||||||
|
|
|
|
|||||
Total operating expenses |
||||||||
|
|
|
|
|||||
Loss from operations |
( |
) |
( |
) | ||||
|
|
|
|
|||||
Other income (expense): |
||||||||
Change in fair value of private placement warrant liability |
— | |||||||
Change in fair value of earnout liability |
— | |||||||
Foreign currency exchange loss and other expense |
( |
) | ( |
) | ||||
Interest expense, net |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total other income (expense) |
( |
) | ||||||
|
|
|
|
|||||
Net loss |
$ |
( |
) |
$ |
( |
) | ||
Less: Net loss attributable to noncontrolling interest |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net loss attributable to Hyzon |
$ |
( |
) |
$ |
( |
) | ||
Comprehensive loss: |
||||||||
Net loss |
$ |
( |
) |
$ |
( |
) | ||
Foreign currency translation adjustment |
( |
) | ||||||
|
|
|
|
|||||
Comprehensive loss |
$ |
( |
) |
$ |
( |
) | ||
|
|
|
|
|||||
Less: Comprehensive loss attributable to noncontrolling interest |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Comprehensive loss attributable to Hyzon |
$ |
( |
) |
$ |
( |
) | ||
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Net loss attributable to Hyzon |
||||||||
Basic |
$ |
( |
) | $ | ( |
) | ||
Diluted |
$ |
( |
) | $ | ( |
) | ||
Weighted average common shares outstanding: |
||||||||
Basic |
||||||||
Diluted |
Legacy Common Stock |
Common Stock Class A |
Additional Paid-in Capital |
Retained Earnings (Accumulated Deficit) |
Accumulated Other Comprehensive Loss |
Total Hyzon Motors Inc. Stockholders’ Equity (Deficit) |
Noncontrolling Interest |
Total Stockholders’ Equity (Deficit) |
|||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||
Balance at January 21, 2020 (Inception) |
$ |
$ |
$ |
|||||||||||||||||||||||||||||||||||||
Retroactive application of recapitalization |
( |
) | ( |
) | — | — | — | — | — | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Adjusted balance, beginning of period |
||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, net of issuance costs of $ (1) |
— | — | — | |||||||||||||||||||||||||||||||||||||
Conversion of convertible notes (1) |
— | — | — | — | ||||||||||||||||||||||||||||||||||||
Stock - |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Noncontrolling interest capital contribution |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Net loss attributable to Hyzon |
— | — | — | — | — | ( |
) | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Net loss attributable to noncontrolling interest |
— | — | — | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Foreign |
— | — | — | — | — | — | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance at December 31, 2020 |
$ |
$ |
( |
) |
( |
) |
( |
) |
$ |
|||||||||||||||||||||||||||||||
Reverse (Note 3) |
— | — | — | — | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock |
— |
— |
( |
) |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||
Exercise of stock options |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Stock - |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Vesting of RSUs |
— | — | — |
— | — | — | — | — | — | |||||||||||||||||||||||||||||||
Common stock issued for the cashless exercise of warrants |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
IP transaction – deemed distribution |
— | — | — |
— | ( |
) | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Repurchase of warrants |
— | — | — | — | ( |
) | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Issuance of Hongyun Warrants |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Net loss attributable to Hyzon |
— | — | — | — | — | ( |
) | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Net loss attributable to noncontrolling interest |
— | — | — | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Foreign currency translation loss |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance at December 31, 2021 |
$ |
$ |
( |
) |
( |
) |
$ |
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Issuance of common stock, net of issuance costs of $1,024 and conversion of convertible notes have been retroactively restated to give effect to the recapitalization transaction. |
Year Ended December 31, 2021 |
For the period January 21, 2020 (Inception) - December 31, 2020 |
|||||||
Cash Flows from Operating Activities: |
||||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation and amortization |
||||||||
Stock-based compensation |
||||||||
Loss on extinguishment of convertible notes |
— | |||||||
Noncash interest expense |
— | |||||||
Issuance of warrants |
— | |||||||
Fair value adjustment of private placement warrant liability |
( |
) | — | |||||
Fair value adjustment of earnout liability |
( |
) | — | |||||
Changes in operating assets and liabilities: |
||||||||
Accounts r eceivable |
( |
) | — | |||||
Inventory |
( |
) | — | |||||
Prepaid expenses and other current assets |
( |
) | ( |
) | ||||
Other assets |
( |
) | ||||||
Accounts payable |
||||||||
Accrued liabilities |
||||||||
Related party payables |
( |
) | ||||||
Contract liabilities |
||||||||
Other liabilities |
— | |||||||
|
|
|
|
|||||
Net cash used in |
( |
) |
( |
) | ||||
|
|
|
|
|||||
Cash Flows from Investing Activities: |
||||||||
Purchases of property and equipment |
( |
) | ( |
) | ||||
Advanced payments for capital expenditures |
( |
) | — | |||||
Investment in equity securities |
( |
) | ( |
) | ||||
Investment in non-consolidated affiliates |
( |
) | — | |||||
|
|
|
|
|||||
Net cash used in investing activities |
( |
) |
( |
) | ||||
|
|
|
|
|||||
Cash Flows from Financing Activities: |
||||||||
Proceeds from issuance of common stock , net of transaction costs |
||||||||
Proceeds from Business Combination, net of redemption and transaction costs (Note 3) |
— | |||||||
Payment f or purchase of Horizon IP |
|
|
( |
) |
|
|
— |
|
Exercise of stock options |
— | |||||||
Payment of finance lease liability |
( |
) | ( |
) | ||||
Debt issuance costs |
( |
) | — | |||||
Repurchase of warrants |
( |
) | — | |||||
Deferred transaction costs |
( |
) | ||||||
Proceeds from issuance of convertible notes |
||||||||
|
|
|
|
|||||
Net cash provided by financing activities |
||||||||
|
|
|
|
|||||
Effect of exchange rate changes on cash |
( |
) | ||||||
|
|
|
|
|||||
Net change in cash and restricted cash |
||||||||
Cash—Beginning |
— | |||||||
|
|
|
|
|||||
Cash and restricted cash—Ending |
$ |
$ |
||||||
|
|
|
|
|||||
Supplemental schedule of non-cash investing activities and financing activities: |
||||||||
Conversion of Legacy Hyzon Common Stock |
— | |||||||
Recognition of earnout liability in Business Combination |
— | |||||||
Recognition of Private Placement Warrant liability in Business Combination |
— | |||||||
Horizon IP Agreement - Fee |
— | |||||||
Conversion of convertible notes for common stock |
— | |||||||
Acquisitions of property and equipment included in current liabilities |
— |
Years | ||
Buildings and improvements |
||
Leasehold improvements |
||
Machinery and equipment |
||
Software |
||
Vehicles |
Shares |
||||
Common Stock of DCRB |
||||
DCRB Founders |
||||
|
|
|||
Total DCRB |
||||
Conversion of Ascent options (Post-Cashless Exercise) |
||||
Conversion of convertible notes |
||||
PIPE shares |
||||
|
|
|||
Reverse recapitalization transaction |
|
|
|
|
Legacy Hyzon Shares after conversion (1) |
|
|
|
|
Total shares of Common Stock immediately after Business Combinati on |
||||
|
|
(1) |
The number of Legacy Hyzon shares was determined from the All fractional shares were rounded down. |
|
Recapitalization |
|||
Cash – DCRB trust and cash, net of redemptions and liabilities recorded by DCRB of $ |
$ | |||
Cash – PIPE Financing, net of transaction costs of $ |
||||
Less: transaction costs allocated to equity |
( |
) | ||
|
|
|||
Effect of Business Combination, net of redemption and transaction costs |
$ |
|||
|
|
|
Recapitalization |
|||
Cash – DCRB trust and cash, net of redemptions and liabilities recorded by DCRB of $ |
$ | |||
Cash – PIPE Financing, net of transaction costs of $ |
||||
Conversion of convertible notes into common stock |
||||
Recognize earnout liability |
( |
) | ||
Recognize Private Placement Warrants liability |
( |
) | ||
Recapitalization of Legacy Hyzon common shares |
||||
Less: transaction costs allocated to equity |
( |
) | ||
|
|
|||
Effect of Business Combination, net of redemption and transaction costs |
$ |
|||
|
|
Year Ended December 31, 2021 |
For the period January 21, 2020 (Inception) – December 31, 2020 |
|||||||
Contract liabilities - beginning of period |
$ |
$ |
||||||
Increases net of amounts recognized as revenue during the period |
||||||||
Revenue recognized, included in the contract liability balance in the beginning of the period |
||||||||
Contract liabilities - end of period |
$ |
$ |
December 31, 2021 |
December 31, 2020 |
|||||||
Raw materials |
$ | $ | ||||||
Work in process |
||||||||
Total inventory |
$ |
$ |
||||||
December 31, 2021 |
December 31, 2020 |
|||||||
Deposit for fuel cell components (see Note 1 7 ) |
$ | $ | ||||||
Vehicle inventory deposits |
||||||||
Production equipment deposits |
||||||||
Other prepaids |
||||||||
Prepaid insurance |
||||||||
VAT receivable from government |
— |
|||||||
VAT receivable from customers |
||||||||
Total prepaid expenses and other current assets |
$ |
$ |
||||||
December 31, 2021 |
December 31, 2020 |
|||||||
Land and building |
$ | $ | — | |||||
Machinery and equipment |
||||||||
Software |
— | |||||||
Leasehold improvements |
— | |||||||
Construction in progress |
||||||||
Total Property, plant, and equipment |
||||||||
Less: Accumulated depreciation and amortization |
( |
) | ( |
) | ||||
Property, plant and equipment, net |
$ |
$ |
||||||
December 31, 2021 |
December 31, 2020 |
|||||||
Payroll and payroll related expenses |
$ |
$ |
||||||
Accrued professional fees |
||||||||
Other accrued expenses |
||||||||
Accrued liabilities |
$ |
$ |
||||||
Year Ended December 31, 2021 |
For the period January 21, 2020 (Inception) – December 31, 2020 |
|||||||
US |
$ | $ | ( |
) | ||||
Non-US |
( |
) | ( |
) | ||||
Total |
$ |
( |
) |
$ |
( |
) | ||
Year Ended December 31, 2021 |
For the period January 21, 2020 (Inception) – December 31, 2020 |
|||||||
Federal tax at a statutory rate |
% | % | ||||||
Earnings taxed at other than Federal statutory rate |
||||||||
Non-deductible interest expense |
( |
) | ||||||
Section 162(m) |
( |
) | ||||||
Change in fair value of earnout liability |
||||||||
Tax basis in acquired IP |
||||||||
Other |
||||||||
Change in valuation allowance |
( |
) |
( |
) | ||||
Income tax provision |
% |
% |
December 31, 2021 |
December 31, 2020 |
|||||||
Deferred income tax assets: |
||||||||
Net operating loss carryforward s |
$ | $ | ||||||
Stock-based compensation |
||||||||
Lease liabilities |
||||||||
Tax basis in acquired IP |
— |
|||||||
Other accrual s |
— |
|||||||
Deferred income tax assets - total |
||||||||
Deferred income tax liabilities: |
||||||||
Property and equipment |
( |
) |
( |
) | ||||
Right of use assets |
( |
) |
( |
) | ||||
Deferred income tax liabilities - total |
( |
) |
( |
) | ||||
Deferred income tax assets, net |
||||||||
Less: Valuation allowance |
||||||||
Deferred income taxes, net |
$ | $ | ||||||
December 31, 2021 |
December 31, 2020 |
|||||||
Valuation Allowances - beginning of period |
$ |
$ |
||||||
Local currency increase in reserve |
||||||||
Valuation Allowances - end of period |
$ |
$ |
||||||
• | Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date. |
• | Level 2 inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. |
• | Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. |
Fair Value Measurements on a Recurring Basis |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Warrant Liability – Private Placement Warrants |
$ | $ | — | $ | — |
$ | ||||||||||
Earnout shares liability |
— | — |
Assumption |
July 16, 2021 |
|||
Stock price |
$ | |||
Exercise price (strike price) |
$ | |||
Risk-free interest rate |
% | |||
Volatility |
% | |||
Remaining term (in years) |
Balance as of July 16, 2021 |
$ | |||
Change in estimated fair value |
( |
) | ||
|
|
|||
Balance as of December 31, 2021 |
$ |
|||
|
|
Assumption |
December 31, 2021 |
July 16, 2021 |
||||||
Stock price |
$ | $ | ||||||
Risk-free interest rate |
% | % | ||||||
Volatility |
% | % | ||||||
Remaining term (in years) |
Balance as of July 16, 2021 |
$ | |||
Change in estimated fair value |
( |
) | ||
|
|
|||
Balance as of December 31, 2021 |
$ |
|||
|
|
Stock Options |
RSUs |
|||||||||||||||||||||||
Number of Options |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual (Years) |
Aggregate Intrinsic Value (in 000s) |
Number of RSUs |
Weighted Average Grant Date Fair Value |
|||||||||||||||||||
Outstanding at December 31, 2020 (1) |
$ | — | $ | — | ||||||||||||||||||||
Granted |
$ | $ | ||||||||||||||||||||||
Exercised or released |
( |
) | $ | ( |
) | ( |
) | $ | ||||||||||||||||
Forfeited/Cancelled |
( |
) | $ | ( |
) | ( |
) | $ | ||||||||||||||||
Outstanding at December 31, 2021 |
$ |
$ |
||||||||||||||||||||||
Vested and expected to vest, December 31, 2021 |
$ | $ | ||||||||||||||||||||||
Exercisable and vested at December 31, 2021 |
$ |
(1) |
Prior period options have been adjusted to give effect to the reverse recapitalization transaction, see Note 3, Business Combination. |
2021 |
2020 |
|||||||
Expected term of options (years) |
||||||||
Risk free interest rate |
% | % | ||||||
Volatility |
% | % | ||||||
Expected dividend |
$ | $ |
Expected volatility |
% | |||||||||||
Expected dividend |
$ | |||||||||||
Weighted average expected term (in years) |
||||||||||||
Risk-free rate |
% |
• | in whole and not in part; |
• | at a price of $ |
• | upon a minimum of 30 days’ prior written notice of redemption, which the Company refers to as the “ |
• | if, and only if, the last reported sale price of the Company’s common stock has been at least $ |
• | in whole and not in part; |
• | at a price of $ |
• | upon a minimum of |
• | if, and only if, the last reported sale price of the Company’s common stock equals or exceeds $ |
• | if the last sale price of the Company’s common stock on the trading day prior to the date on which the notice of redemption is given is less than $ |
Year Ended December 31, |
For the period January 21, 2020 (Inception) – December 31, |
|||||||
2021 |
2020 |
|||||||
Ne t loss attributable to Hyzon |
$ | ( |
) | $ | ( |
) | ||
Weighted average shares outstanding: |
||||||||
Basic |
||||||||
Effect of dilutive securities |
— | |||||||
|
|
|
|
|||||
Diluted |
||||||||
Net loss per share attributable to Hyzon: |
||||||||
Basic |
$ |
( |
) | $ | ( |
) | ||
Diluted |
$ |
( |
) | $ | ( |
) |
Year Ended December 31, |
For the Period January 21, 2020 (Inception) – December 31, |
|||||||
2021 |
2020 |
|||||||
Restricted stock units |
— |
|||||||
Stock options with service conditions |
||||||||
Stock options for former CTO |
|
|
|
|
|
|
|
|
Stock options with market and performance conditions |
||||||||
Private placement warrants |
||||||||
Public w arrants |
||||||||
Earnout shares |
||||||||
Hongyun warrants |
||||||||
Ardour warrants |
December 31, 2021 |
December 31, 2020 |
|||||||
Operating leases: |
||||||||
Operating lease right-of-use assets |
$ | $ | ||||||
Operating lease liabilities |
$ | ( |
) | $ | ( |
) | ||
Finance leases: |
||||||||
s |
$ | $ | ||||||
Finance lease liabilities |
$ | ( |
) | $ | ( |
) | ||
Weighted average remaining lease term: |
||||||||
Operating leases |
||||||||
Finance leases |
||||||||
Weighted average discount rate: |
||||||||
Operating leases |
% |
% | ||||||
Finance leases |
% |
% |
Year Ended December 31, 2021 |
For the period January 21, 2020 (Inception) – December 31, 2020 |
|||||||
Operating lease cost |
$ |
$ | ||||||
Variable lease cost |
||||||||
Finance lease cost: |
||||||||
Amortization of right-of-use assets |
||||||||
Interest on lease liabilities |
||||||||
|
|
|
|
|||||
Total lease cost |
$ |
$ |
||||||
|
|
|
|
Year Ended December 31, 2021 |
For the period January 21, 2020 (Inception) - December 31, 2020 |
|||||||
Cash paid for amount included in the measurement of lease liabilities: |
||||||||
Operating cash flows from operating leases |
$ |
$ | ||||||
Operating cash flows from finance leases |
$ |
$ | ||||||
Financing cash flows from finance leases |
$ |
$ | ||||||
Right-of-use assets obtained in exchange for new lease liabilities: |
||||||||
Operating leases |
$ |
$ | ||||||
Finance leases |
$ |
$ |
As of December 31, 2021 |
||||||||
Operating Leases |
Finance Leases |
|||||||
2022 |
$ |
$ |
||||||
2023 |
||||||||
2024 |
||||||||
2025 |
||||||||
2026 and thereafter |
||||||||
|
|
|
|
|||||
Total minimum lease payments |
||||||||
Less: imputed interest |
||||||||
|
|
|
|
|||||
Present value of lease obligations |
||||||||
n |
||||||||
|
|
|
|
|||||
s |
$ |
$ |
||||||
|
|
|
|
(i) | hiring additional finance and accounting personnel over time to augment our accounting staff and to provide more resources for complex accounting matters and financial reporting; |
(ii) | further developing and implementing formal policies, processes and documentation procedures relating to our financial reporting and consulting with accounting experts; |
(iii) | engaging with external consultants with public company and technical accounting experience to facilitate accurate and timely accounting closes and to accurately prepare and review the consolidated financial statements and related footnote disclosures. We plan to retain these financial consultants, as needed, until such time that the required financial controls have been fully implemented; and |
(iv) | adopting new technological solutions. |
Name |
Age |
Position | ||||
Executive Officers |
||||||
George Gu |
51 | Executive Chairman | ||||
Craig Knight |
53 | Director and Chief Executive Officer | ||||
Mark Gordon |
51 | Director and Chief Financial Officer | ||||
Shinichi Hirano |
62 | Chief Technology Officer | ||||
John Zavoli |
62 | General Counsel & Chief Legal Officer | ||||
Parker Meeks |
40 | Chief Strategy Officer | ||||
Pat Griffin |
57 | President of Vehicle Operations | ||||
Non-Employee Directors |
||||||
Erik Anderson (2) |
62 | Director | ||||
Ivy Brown (1) |
58 | Director | ||||
Dennis Edwards (2)(3) |
50 | Director | ||||
Viktor Meng (2)(3) |
46 | Director | ||||
Ki Deok Park (1) |
52 | Director | ||||
Elaine Wong (1)(3) |
46 | Director; Lead Independent Director |
(1) | Member of the audit committee. |
(2) | Member of the compensation committee. |
(3) | Member of the nominating and corporate governance committee. |
• | the Board to have a majority of independent directors; |
• | that Hyzon establish a compensation committee comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and |
• | that Hyzon have independent director oversight of Hyzon’s director nominations. |
• | evaluating the performance, independence and qualifications of our independent auditors and determining their compensation and whether to retain our existing independent auditors or engage new independent auditors; |
• | reviewing our financial reporting processes and disclosure controls; |
• | reviewing and approving the engagement of our independent auditors to perform audit services and any permissible non-audit services; |
• | reviewing with the independent auditors the annual audit plan, including the scope of audit activities and all critical accounting policies and estimates to be used by us; |
• | obtaining and reviewing at least annually a report by our independent auditors describing the independent auditors’ internal quality control procedures and any material issues raised by the most recent internal quality-control review; |
• | monitoring the rotation of partners of our independent auditors on our engagement team as required by law; |
• | prior to engagement of any independent auditor, and at least annually thereafter, reviewing relationships that may reasonably be thought to bear on their independence, and assessing and otherwise taking the appropriate action to oversee the independence of our independent auditor; |
• | preparing any report of the audit committee required by the rules and regulations of the SEC for inclusion in our annual proxy statement and reviewing our annual and quarterly financial statements and reports, including the disclosures contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and discussing the statements and reports with our independent auditors and management; |
• | reviewing with our independent auditors and management significant issues that arise regarding accounting principles and financial statement presentation and matters concerning the scope, adequacy, and effectiveness of our financial controls and critical accounting policies and estimates; |
• | reviewing with management and our auditors any earnings announcements and other public announcements regarding material developments; |
• | establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters and for the confidential, anonymous submission by our employees or any provider of accounting-related services of concerns regarding questionable accounting and auditing matters and review of submissions and the treatment of any such complaints; |
• | reviewing and approving of any related party transactions that are required to be disclosed under SEC rules that require such approval under our related party transaction policy and reviewing and monitoring compliance with legal and regulatory responsibilities, including our code of ethics; |
• | reviewing our major financial risk exposures, including the guidelines and policies to govern the process by which risk assessment and risk management is implemented; |
• | conducting and reviewing with the Board an annual self-assessment of the performance of the audit committee, and reviewing and assessing the audit committee charter at least annually; and |
• | reporting to the Board on a regular basis. |
• | establishing our general compensation philosophy and, in consultation with management, overseeing the development and implementation of compensation programs; |
• | reviewing and approving the corporate objectives that pertain to the determination of executive compensation; |
• | determining and approving the compensation and other terms of employment of our executive officers; |
• | reviewing and approving performance goals and objectives relevant to the compensation of our executive officers and assessing their performance against these goals and objectives; |
• | making recommendations to the Board regarding the adoption or amendment of equity and cash incentive plans and approving such plans or amendments thereto to the extent authorized by the Board; |
• | overseeing the activities of the committee or committees administering our retirement and benefit plans; |
• | reviewing and making recommendations to the Board regarding the type and amount of compensation to be paid or awarded to non-employee board members; |
• | reviewing and assessing the independence of compensation consultants, legal counsel and other advisors as required by Section 10C of the Exchange Act; |
• | administering our equity incentive plans, to the extent such authority is delegated by the Board; |
• | reviewing and approving the terms of any employment agreements, severance arrangements, change in control protections, indemnification agreements and any other material agreements for our executive officers; |
• | reviewing with management our disclosures under the caption “Compensation Discussion and Analysis” in our periodic reports or proxy statements to be filed with the SEC, to the extent such caption is required to be included in any such report or proxy statement; |
• | preparing an annual report on executive compensation, to the extent such report is required to be included in our annual proxy statement or Form 10-K; |
• | reviewing and evaluating on an annual basis the performance of the compensation committee and recommending such changes as deemed necessary with the Board; and |
• | in consultation with management, overseeing regulatory compliance with respect to compensation matters including overseeing our policies on structuring compensation programs to preserve tax deductibility. |
• | identifying, reviewing and making recommendations of candidates to serve on the Board; |
• | evaluating the performance of the Board, committees of the Board and individual directors and determining whether continued service on the Board is appropriate; |
• | evaluating nominations by stockholders and management of candidates for election to the Board; |
• | evaluating the current size, composition and organization of the Board and its committees and making recommendations to the Board for approvals; |
• | evaluating the “independence” of directors and director nominees against the independence requirements under the NASDAQ Rules and regulations promulgated by the SEC and such other qualifications as may be established by the Board from time to time and make recommendations to the Board as to the independence of directors and nominees; |
• | recommending to the Board directors to serve as members of each committee, as well as candidates to fill vacancies on any committee of the Board; |
• | reviewing annually our corporate governance policies and principles and recommending to the Board any changes to such policies and principles; |
• | advising and making recommendations to the Board on corporate governance matters; and |
• | reviewing annually the nominating and corporate governance committee charter and recommending any proposed changes to the Board, including undertaking an annual review of its own performance. |
• | for any transaction from which the director derives an improper personal benefit; |
• | for any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; |
• | for any unlawful payment of dividends or redemption of shares; or |
• | for any breach of a director’s duty of loyalty to the corporation or its stockholders. |
• | George Gu, Executive Chairman; |
• | Craig Knight, Chief Executive Officer; |
• | Parker Meeks, Chief Strategy Officer; and |
• | Gary Robb, Former Chief Technology Officer |
Name and Position |
Year |
Salary ($) (A) |
Bonus ($) |
Option Awards ($) (B) |
Stock Awards ($) (C) |
All Other Compensation ($) (D) |
Total ($) |
|||||||||||||||||||||
George Gu Executive Chairman |
|
2021 2020 |
|
|
410,577 211,591 |
|
|
— — |
|
|
— 6,140,625 |
|
|
— — |
|
|
18,942 5,493 |
|
|
429,519 6,357,709 |
| |||||||
Craig Knight Chief Executive Officer |
|
2021 2020 |
|
|
378,658 148,090 |
|
|
— — |
|
|
— 4,492,188 |
|
|
— — |
|
|
35,757 — |
|
|
414,415 4,640,278 |
| |||||||
Parker Meeks Chief Strategy Officer (1) |
2021 | 250,961 | — | — | 2,603,997 | 11,133 | 2,866,091 | |||||||||||||||||||||
Gary Robb Former Chief Technology Officer |
|
2021 2020 |
|
|
151,038 120,000 |
|
|
— 7,500 |
|
|
— 1,378,000 |
|
|
2,535,000 — |
|
|
111,530 6,494 |
|
|
2,797,568 1,511,994 |
|
(1) | Parker Meeks became a Named Executive Officer of Hyzon for the first time in 2021. |
(A) |
Base Salary |
(B) |
Option Awards |
(C) |
Stock Awards |
(D) |
All Other Compensation |
Option Awards |
Stock Awards |
|||||||||||||||||||||||||||||
Name |
Award Type |
Grant Date |
Number of Securities Underlying Unexercised Options - Exercisable (#) |
Number of Securities Underlying Unexercised Options - Unexercisable (#) |
Option Exercise Price ($) |
Option Expiration Date |
Number of Shares or Units of Stock that Have Not Vested (#) |
Market Value of Shares or Units of Stock that Have Not Vested (5) ($) |
||||||||||||||||||||||
Craig Knight (1) |
Options | 11/12/2020 | 5,537,500 | — | 1.13 | 1/4/2036 | — | — | ||||||||||||||||||||||
George Gu (2) |
Options | 11/12/2020 | 5,537,500 | 5,537,500 | 1.41 | 1/3/2036 | — | — | ||||||||||||||||||||||
Parker Meeks (3) |
RSUs | 6/9/2021 | — | — | — | — | 372,120 | |
2,415,059 |
| ||||||||||||||||||||
Gary Robb (4) |
Options | 11/12/2020 | 590,666 | 1,181,334 | 1.13 | 11/11/2030 | — | — | ||||||||||||||||||||||
RSUs | — | — | — | — | — | 125,000 | 811,250 |
(1) | The option awards reported in these columns granted to Mr. Knight were fully vested on the grant date. |
(2) | The option awards reported in this column granted to Mr. Gu vest as follows: 50% on the grant date and 50% on the occurrence of a Qualified HFCT Exit Event (as defined therein and described below under “Additional Narrative Disclosure—Potential Payments Upon a Termination or Change in Control”). |
(3) | The RSUs granted to Mr. Meeks vest in four equal annual installments commencing upon the grant date, subject to continued employment. |
(4) | The option awards granted to Mr. Robb on November 20, 2020 will vest in six equal tranches over first years beginning on the grant date such that two tranches are currently vested and exercisable. The 125,000 RSUs reported for Mr. Robb will vest on September 17, 2022. |
(5) | Market value is calculated by multiplying the closing market price of $6.49 for Hyzon common stock, as reported by NASDAQ, by the number of shares or units of stock. |
• | An annual retainer of $60,000; |
• | An annual retainer of $20,000 for the chair of the Audit Committee, $15,000 for the chair of the Compensation Committee and $10,000 for the chair of the Nominating and Corporate Governance Committee; |
• | An annual retainer of $10,000 for members of the Audit Committee, $7,500 for members of the Compensation Committee and $5,000 for members of the Nominating and Corporate Governance Committee; |
• | An initial equity retainer with a value of $225,000 (payable in the form of stock options and restricted stock units, granted in connection with initial election to the Board); |
• | An annual equity retainer with a value of $165,000 in connection with the annual shareholders meeting, split equally between non-qualified stock options and restricted stock units, that vests on the one-year anniversary of the grant; and |
• | An additional annual cash retainer of $30,000 for serving as Lead Director. |
2021 |
Fees Earned or Paid in Cash (1) ($) |
Stock Awards (2) ($) |
Option Awards (2) ($) |
Total ($) |
||||||||||||
Erik Anderson |
37,500 | — | — | 37,500 | ||||||||||||
Ivy Brown |
40,000 | — | — | 40,000 | ||||||||||||
Dennis Edwards |
35,000 | — | — | 35,000 | ||||||||||||
Viktor Meng |
35,000 | — | — | 35,000 | ||||||||||||
Ki Deok Park |
35,000 | — | — | 35,000 | ||||||||||||
Elaine Wong |
70,000 | — | — | 70,000 |
(1) | Amounts reflected a pro-rated annual cash retainer of $30,000 in 2021 for all directors. Fees for service as a committee member and committee chair in 2021 were also prorated. |
(2) | No stock or option awards were granted in 2021. |
• | each person known to the Company to be the beneficial owner of more than 5% of outstanding Class A Common Stock; |
• | each of the Company’s named executive officers and directors; and |
• | all executive officers and directors of the Company as a group. |
Name and Address of Beneficial Owners |
Number of Shares of Class A Common Stock Beneficially Owned |
% of Outstanding Class A Common Stock |
||||||
Five Percent Holders (1) |
155,639,006 | 62.8 | % | |||||
Horizon Fuel Cell Technologies Pte. Ltd. (2) |
||||||||
Directors and Executive Officers |
||||||||
Erik Anderson (3) |
630,947 | * | ||||||
Ivy Brown |
— | * | ||||||
Dennis Edwards |
177,200 | * | ||||||
Viktor Meng (4) |
44,300 | * | ||||||
Ki Deok Park |
— | * | ||||||
Elaine Wong |
781,386 | * | ||||||
Mark Gordon |
2,735,984 | 1.1 | % | |||||
George Gu (5) |
5,759,000 | 2.3 | % | |||||
Craig Knight (6) |
5,880,700 | 2.3 | % | |||||
Parker Meeks |
89,404 | * | ||||||
Gary Robb ( 7) |
1,010,999 | * | ||||||
All Directors and Executive Officers as a group (14 persons, including the foregoing) (8) |
17,146,661 | 6.6 | % |
* | Less than one percent. |
(1) | The Company is permitted to rely on the information reported by each beneficial owner in filings with the SEC and has no reason to believe that the information is incomplete or inaccurate or that the beneficial owner should have filed an amended report and did not. |
(2) | Hymas is the record holder of the shares. Hymas is 79.62% owned indirectly by Horizon, through its subsidiaries, including JS Horizon and Horizon Fuel Cell Technology (Hong Kong) Ltd. (“HFCT HK”). Horizon, by reason of its ownership of the voting securities of JS Horizon, JS Horizon’s ownership of the voting securities of HFCT HK, and HFCT HK’s ownership of the voting securities of Hymas, ultimately has the right to elect or appoint the members of the governing body of Hymas and, therefore, to direct the management and policies of Hymas. As a result, Horizon has voting and investment power over the shares of Class A Common Stock held of record by Hymas. Mr. Gu beneficially owns 17.6% of Horizon, consisting of 119,892 Ordinary Shares of Horizon, which is approximately 46.9% of the outstanding Ordinary Shares of Horizon, and 1 D-1 Preferred Share of Horizon, which is approximately 0.0% of the outstanding D-1 Preferred Shares of Horizon. Mr. Knight beneficially 2.4% of Horizon, consisting of 1,205 Ordinary Shares of Horizon, which is approximately 0.5% of the outstanding Ordinary Shares of Horizon, and 15,257 shares of A Preferred Shares of Horizon, which is approximately 19.9% of the outstanding A Preferred Shares of Horizon. Mr. Gu and Mr. Knight disclaim any beneficial ownership of Class A Common Stock by reason of their beneficial ownership of shares of Horizon. The address for Horizon and Hymas is Enterprise Hub, 48 Toh Guan Road East, Postal 608586, #05-124, Singapore. The address for JS Horizon is 302-309BOT Building A, New Environmental Materials Industrial Park, Huada Road, Jingang Town, Zhangjiagang City, Jiangsu, China. The address for HFCT HK is 11/F., Capital Centre, 151 Gloucester Road, Wanchai, Hong Kong. |
(3) | WRG DCRB Investors, LLC is the record holder of the shares reported herein. WestRiver Management, LLC is the managing member of WRG DCRB Investors, LLC. Erik Anderson is the sole member of WestRiver Management, LLC and has voting and investment discretion with respect to the common stock held of record by WRG DCRB Investors, LLC. As such, each of WestRiver Management, LLC and Erik Anderson may be deemed to have or share beneficial ownership of the Class A Common Stock held directly by WRG. Each such entity or person disclaims any such beneficial ownership. The business address of each of these entities and Erik Anderson is 920 5th Ave, Ste 3450, Seattle, WA 98104. |
(4) | Consists of 26,580 shares of Class A Common Stock, and 17,720 shares of Class A Common Stock issuable upon the exercise of options within 60 days. |
(5) | Consists of 221,500 shares of Class A Common Stock, and 5,537,500 shares of Class A Common Stock issuable upon the exercise of options within 60 days. |
(6) | Consists of 343,200 shares of Class A Common Stock, and 5,537,500 shares of Class A Common Stock issuable upon the exercise of options within 60 days. |
(7) | Consists of 125,000 shares of Class A Common Stock, and 885,999 shares of Class A Common Stock issuable upon the exercise of options or restricted stock units within 60 days. |
(8) | Consists of 5,167,942 shares of Class A Common Stock and 11,978,719 shares of Class A Common Stock issuable upon the exercise of options or restricted stock units within 60 days. |
• | The DCRB Founders Warrant Parties shall not, with respect to an aggregate of 4,885,875 private placement warrants (or shares of Class A Common Stock issued upon exercise of private placement warrants), (a)(i) sell or assign, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of, (ii) agree to dispose of, directly or indirectly, or (iii) establish or increase a “put equivalent position” or liquidation with respect to or decrease of a “call equivalent position” within the meaning of Section 16 of the Exchange Act and the rules and regulations of the SEC promulgated thereunder with respect to, in each case (i), (ii) and (iii), any security, (b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) publicly announce any intention to effect any transaction specified in clause (a) or (b), until the earlier of (i) one year after the Closing and |
(ii) subsequent to the Closing, (x) the date on which the last sale price of the Class A Common Stock quoted on NASDAQ (or the exchange on which the shares of DCRB Class A Common Stock are then listed) equals or exceeds $11.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period or (y) the date on which DCRB completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in the holders of DCRB Class A Common Stock having the right to exchange their shares of Class A Common Stock for cash, securities or other property; |
• | Upon and subject to the Closing, an aggregate of 814,313 private placement warrants (the “$12.00 Warrants”) became subject to potential forfeiture, and each DCRB Founders Warrant Party agreed not to exercise such $12.00 Warrants, unless and until a $12.00 Triggering Event (as defined below) occurs. Prior to the occurrence of a $12.00 Triggering Event, each DCRB Founders Warrant Party shall not Transfer any of the $12.00 Warrants. In the event no $12.00 Triggering Event occurs during the five year period commencing on the one year anniversary of the Closing (the “Earnout Period”), the $12.00 Warrants shall immediately be forfeited to Hyzon for no consideration as a contribution to the capital of Hyzon and immediately cancelled. “$12.00 Triggering Event” means the occurrence of a date on which the last reported sales price of one share of Class A Common Stock quoted on NASDAQ (or the exchange on which the shares of Class A Common Stock are then listed) is greater than or equal to $12.00 (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 consecutive trading day period within the Earnout Period; provided, that, if, during the Earnout Period, there is a change of control pursuant to which the holders of Class A Common Stock have the right to receive consideration implying a value of Class A Common Stock (as determined in good faith by the Board) of (i) less than $12.00 (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like), then the $12.00 Warrants shall immediately be forfeited to us for no consideration and immediately cancelled; or (ii) greater than or equal to $12.00 (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like), then the $12.00 Triggering Event shall be deemed to have occurred. |
• | Upon and subject to the Closing, an aggregate of 814,312 private placement warrants (the “$14.00 Warrants”) became subject to potential forfeiture, and each DCRB Founders Warrant Party agreed not to exercise such $14.00 Warrants, unless and until a $14.00 Triggering Event (as defined below) occurs. Prior to the occurrence of a $14.00 Triggering Event, each DCRB Founders Warrant Party shall not transfer any of the $14.00 Warrants. In the event no $14.00 Triggering Event occurs during the Earnout Period, the $14.00 Warrants shall immediately be forfeited to Hyzon for no consideration as a contribution to the capital of Hyzon and immediately cancelled. “$14.00 Triggering Event” means the occurrence of a date on which the last reported sales price of one share of Class A Common Stock quoted on NASDAQ (or the exchange on which the shares of Class A Common Stock are then listed) is greater than or equal to $14.00 (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 consecutive trading day period within the Earnout Period; provided, that, if, during the Earnout Period, there is a change of control pursuant to which the holders of Class A Common Stock have the right to receive consideration implying a value of Class A Common Stock (as determined in good faith by the Board) (i) less than $14.00 (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like), then the $14.00 Warrants shall immediately be forfeited to us for no consideration and immediately cancelled; or (ii) of greater than or equal to $14.00 (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like), then the $14.00 Triggering Event shall be deemed to have occurred. |
2021 |
2020 |
|||||||
Audit Fees (1) |
$ | 1,441,326 | $ | 1,022,048 | ||||
Audit-Related Fees (2) |
73,465 | 137,952 | ||||||
Tax (3) |
93,000 | — | ||||||
All Other Fees (4) |
— | — | ||||||
|
|
|
|
|||||
Total |
$ |
1,607,791 |
$ |
1,160,000 |
||||
|
|
|
|
(1) |
Audit Fees |
(2) |
Audit-Related Fees |
(3) |
Tax Fees |
(4) |
All Other Fees |
2021 |
2020 |
|||||||
Audit Fees (1) |
$ | 85,125 | $ | 91,820 | ||||
Audit-Related Fees (2) |
— | — | ||||||
Tax (3) |
5,000 | 5,000 | ||||||
All Other Fees (4) |
— | — | ||||||
|
|
|
|
|||||
Total |
$ |
90,125 |
$ |
96,820 |
||||
|
|
|
|
(1) |
Audit Fees 10-Q, the audit of our December 31, 2020 financial statements included in the Original Filing and the audit of our restated financial statements included in this Amendment, and services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings or engagements. |
(2) |
Audit-Related Fees |
(3) |
Tax Fees |
(4) |
All Other Fees |
1. | Financial Statements: The information concerning the consolidated financial statements and Report of Independent Registered Public Accounting Firm required by this Item is incorporated by reference herein to the section of this Annual Report on Form 10-K in Item 8, titled “Financial Statements and Supplementary Data.” |
2. | Financial Statement Schedules: No schedules are required |
Exhibit No. |
Exhibit | |
32.1* | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2022. | |
32.2* | Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2022. | |
101.INS* | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document | |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104.1* | Cover Page Interactive Data File (embedded within the Inline XBRL) |
† | All schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request. |
* | Filed or furnished herewith. |
# | Indicates management contract or compensatory arrangement. |
HYZON MOTORS INC. | ||||||
Date: March 30, 2022 | /s/ Craig Knight | |||||
Craig Knight Chief Executive Officer |
Name |
Title |
Date | ||
/s Craig Knight |
Chief Executive Officer and Director | March 30, 2022 | ||
Craig Knight | (Principal Executive Officer) | |||
/s/ Mark Gordon |
Chief Financial Officer and Director | March 30, 2022 | ||
Mark Gordon | (Principal Financial Officer) | |||
/s/ Jiajia Wu |
Chief Accounting Officer | March 30, 2022 | ||
Jiajia Wu | (Principal Accounting Officer) | |||
/s/ George Gu |
Executive Chairman | March 30, 2022 | ||
George Gu | ||||
/s/ Erik Anderson |
Director | March 30, 2022 | ||
Erik Anderson | ||||
/s/ Ivy Brown |
Director | March 30, 2022 | ||
Ivy Brown | ||||
/s/ Dennis Edwards |
Director | March 30, 2022 | ||
Dennis Edwards | ||||
/s/ Viktor Meng |
Director | March 30, 2022 | ||
Viktor Meng | ||||
/s/ Ki Deok Park |
Director | March 30, 2022 | ||
Ki Deok Park | ||||
/s/ Elaine Wong |
Director | March 30, 2022 | ||
Elaine Wong |