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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 001-38823
HYLIION HOLDINGS CORP.
(Exact Name of Registrant as Specified in Its Charter) | | | | | | | | |
Delaware | | 83-2538002 |
(State or Other Jurisdiction of Incorporation) | | (IRS Employer Identification No.) |
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1202 BMC Drive, Suite 100, Cedar Park, TX | | 78613 |
(Address of Principal Executive Offices) | | (Zip Code) |
(833) 495-4466
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated filer | x | Smaller reporting company | x |
| | Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
Securities registered pursuant to Section 12(b) of the Act: | | | | | | | | | | | | | | |
Title of each class | | Trading symbol(s) | | Name of each exchange on which registered |
Common Stock, par value $0.0001 per share | | HYLN | | The New York Stock Exchange |
As of July 29, 2024, 173,583,438 shares of common stock, par value $0.0001 per share, were issued and outstanding.
HYLIION HOLDINGS CORP.
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024
TABLE OF CONTENTS
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PART I. FINANCIAL INFORMATION | |
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PART II. OTHER INFORMATION | |
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Item 5. | | |
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
HYLIION HOLDINGS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except share data)
| | | | | | | | | | | |
| June 30, 2024 | | December 31, 2023 |
| (Unaudited) | | |
Assets | | | |
Current assets | | | |
Cash and cash equivalents | $ | 19,133 | | | $ | 12,881 | |
Accounts receivable | 373 | | | 40 | |
Prepaid expenses and other current assets | 5,449 | | | 18,483 | |
Short-term investments | 136,091 | | | 150,297 | |
Assets held for sale | 3,573 | | | — | |
Total current assets | 164,619 | | | 181,701 | |
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Property and equipment, net | 15,781 | | | 9,987 | |
Operating lease right-of-use assets | 6,221 | | | 7,070 | |
Other assets | 1,266 | | | 1,439 | |
Long-term investments | 93,476 | | | 128,186 | |
Total assets | $ | 281,363 | | | $ | 328,383 | |
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Liabilities and stockholders’ equity | | | |
Current liabilities | | | |
Accounts payable | $ | 1,043 | | | $ | 4,224 | |
Current portion of operating lease liabilities | 985 | | | 847 | |
Accrued expenses and other current liabilities | 5,485 | | | 10,051 | |
Total current liabilities | 7,513 | | | 15,122 | |
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Operating lease liabilities, net of current portion | 5,610 | | | 6,792 | |
Other liabilities | 400 | | | 203 | |
Total liabilities | 13,523 | | | 22,117 | |
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Commitments and contingencies (Note 9) | | | |
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Stockholders’ equity | | | |
Common stock, $0.0001 par value; 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 | 18 | | | 18 | |
Additional paid-in capital | 406,175 | | | 404,045 | |
Treasury stock, at cost; 10,610,070 and 37,062 shares as of June 30, 2024 and December 31, 2023, respectively | (14,141) | | | (33) | |
Accumulated deficit | (124,212) | | | (97,764) | |
Total stockholders’ equity | 267,840 | | | 306,266 | |
Total liabilities and stockholders’ equity | $ | 281,363 | | | $ | 328,383 | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
HYLIION HOLDINGS CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollar amounts in thousands, except share and per share data)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | Six Months Ended June 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
Revenues | | | | | | | |
Product sales and other | $ | — | | | $ | 266 | | | $ | — | | | $ | 576 | |
Total revenues | — | | | 266 | | | — | | | 576 | |
Cost of revenues | | | | | | | |
Product sales and other | — | | | 307 | | | — | | | 998 | |
Total cost of revenues | — | | | 307 | | | — | | | 998 | |
Gross loss | — | | | (41) | | | — | | | (422) | |
Operating expenses | | | | | | | |
Research and development | 8,311 | | | 27,439 | | | 16,279 | | | 48,357 | |
Selling, general and administrative | 6,262 | | | 11,098 | | | 12,854 | | | 22,079 | |
Exit and termination costs | (556) | | | — | | | 3,875 | | | — | |
Total operating expenses | 14,017 | | | 38,537 | | | 33,008 | | | 70,436 | |
Loss from operations | (14,017) | | | (38,578) | | | (33,008) | | | (70,858) | |
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Interest income | 3,129 | | | 3,349 | | | 6,525 | | | 6,811 | |
Gain (loss) on disposal of assets | — | | | (1) | | | 3 | | | 1 | |
Other income (expense), net | 32 | | | 3 | | | 32 | | | (12) | |
Net loss | $ | (10,856) | | | $ | (35,227) | | | $ | (26,448) | | | $ | (64,058) | |
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Net loss per share, basic and diluted | $ | (0.06) | | | $ | (0.19) | | | $ | (0.15) | | | $ | (0.35) | |
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Weighted-average shares outstanding, basic and diluted | 173,829,107 | | | 180,966,908 | | | 176,156,001 | | | 180,544,821 | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
HYLIION HOLDINGS CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Dollar amounts in thousands, except share data)
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| Six Months Ended June 30, 2024 |
| Common Stock | | Treasury Stock | | Additional Paid-In Capital | | Accumulated Deficit | | Total Stockholders’ Equity |
Shares | | Amount | | Shares | | Amount | | | |
Balance at December 31, 2023 | 183,071,317 | | | $ | 18 | | | (37,062) | | | $ | (33) | | | $ | 404,045 | | | $ | (97,764) | | | $ | 306,266 | |
Exercise of common stock options and vesting of restricted stock units, net | 945,378 | | | — | | | — | | | — | | | (247) | | | — | | | (247) | |
Share-based compensation | — | | | — | | | — | | | — | | | 1,320 | | | — | | | 1,320 | |
Repurchase of treasury stock | — | | | — | | | (8,675,395) | | | (11,337) | | | — | | | — | | | (11,337) | |
Net loss | — | | | — | | | — | | | — | | | — | | | (15,592) | | | (15,592) | |
Balance at March 31, 2024 | 184,016,695 | | | $ | 18 | | | (8,712,457) | | | $ | (11,370) | | | $ | 405,118 | | | $ | (113,356) | | | $ | 280,410 | |
Exercise of common stock options and vesting of restricted stock units, net | 138,419 | | | — | | | — | | | — | | | (68) | | | — | | | (68) | |
Share-based compensation | — | | | — | | | — | | | — | | | 1,125 | | | — | | | 1,125 | |
Repurchase of treasury stock | — | | | — | | | (1,897,613) | | | (2,771) | | | — | | | — | | | (2,771) | |
Net loss | — | | | — | | | — | | | — | | | — | | | (10,856) | | | (10,856) | |
Balance at June 30, 2024 | 184,155,114 | | | $ | 18 | | | (10,610,070) | | | $ | (14,141) | | | $ | 406,175 | | | $ | (124,212) | | | $ | 267,840 | |
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| Six Months Ended June 30, 2023 |
| Common Stock | | Treasury Stock | | Additional Paid-In Capital | | (Accumulated Deficit) Retained Earnings | | Total Stockholders’ Equity |
Shares | | Amount | | Shares | | Amount | | | |
Balance at December 31, 2022 | 179,826,309 | | | $ | 18 | | | — | | | $ | — | | | $ | 397,810 | | | $ | 25,746 | | | $ | 423,574 | |
Exercise of common stock options and vesting of restricted stock units, net | 869,263 | | | — | | | — | | | — | | | (176) | | | — | | | (176) | |
Share-based compensation | — | | | — | | | — | | | — | | | 2,040 | | | — | | | 2,040 | |
Net loss | — | | | — | | | — | | | — | | | — | | | (28,831) | | | (28,831) | |
Balance at March 31, 2023 | 180,695,572 | | | $ | 18 | | | — | | | $ | — | | | $ | 399,674 | | | $ | (3,085) | | | $ | 396,607 | |
Exercise of common stock options and vesting of restricted stock units, net | 456,579 | | | — | | | — | | | — | | | 44 | | | — | | | 44 | |
Share-based compensation | — | | | — | | | — | | | — | | | 1,721 | | | — | | | 1,721 | |
Net loss | — | | | — | | | — | | | — | | | — | | | (35,227) | | | (35,227) | |
Balance at June 30, 2023 | 181,152,151 | | | $ | 18 | | | — | | | $ | — | | | $ | 401,439 | | | $ | (38,312) | | | $ | 363,145 | |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
HYLIION HOLDINGS CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
| | | | | | | | | | | |
| Six Months Ended June 30, |
| 2024 | | 2023 |
Cash flows from operating activities | | | |
Net loss | $ | (26,448) | | | $ | (64,058) | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | |
Depreciation and amortization | 1,285 | | | 1,132 | |
Amortization and accretion of investments, net | (1,839) | | | (789) | |
Noncash lease expense | 849 | | | 658 | |
Inventory write-down | — | | | 231 | |
Gain on disposal of assets | (1,078) | | | (1) | |
Share-based compensation | 2,445 | | | 3,761 | |
Carrying value adjustment to assets held for sale | 5,564 | | | — | |
Changes in operating assets and liabilities: | | | |
Accounts receivable | (333) | | | 332 | |
Inventory | — | | | (1,049) | |
Prepaid expenses and other assets | (5,131) | | | (5,763) | |
Accounts payable | (3,239) | | | (713) | |
Accrued expenses and other liabilities | (4,427) | | | 3,418 | |
Operating lease liabilities | (1,044) | | | (748) | |
Net cash used in operating activities | (33,396) | | | (63,589) | |
| | | |
Cash flows from investing activities | | | |
Purchase of property and equipment and other | (8,054) | | | (3,952) | |
Proceeds from sale of property and equipment | 3,470 | | | 2 | |
| | | |
Payments for security deposit, net | — | | | (45) | |
Purchase of investments | (32,623) | | | (99,193) | |
Proceeds from sale and maturity of investments | 83,234 | | | 95,646 | |
Net cash provided by (used in) investing activities | 46,027 | | | (7,542) | |
| | | |
Cash flows from financing activities | | | |
| | | |
| | | |
Proceeds from exercise of common stock options | 50 | | | 84 | |
Taxes paid related to net share settlement of equity awards | (365) | | | (216) | |
Repurchase of treasury stock | (13,982) | | | — | |
Net cash used in financing activities | (14,297) | | | (132) | |
| | | |
Net decrease in cash and cash equivalents and restricted cash | (1,666) | | | (71,263) | |
Cash and cash equivalents and restricted cash, beginning of period | 21,464 | | | 120,133 | |
Cash and cash equivalents and restricted cash, end of period | $ | 19,798 | | | $ | 48,870 | |
| | | |
Supplemental disclosure of noncash investing and financing activities: | | | |
Repurchase of treasury stock included in accrued expenses | $ | 126 | | | $ | — | |
Acquisitions of property and equipment included in accounts payable and other | $ | 150 | | | $ | 554 | |
Right-of-use assets obtained in exchange for lease obligations | $ | — | | | $ | 2,096 | |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Table of Contents
HYLIION HOLDINGS CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts in thousands, except as separately indicated)
Note 1. Overview
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. and its wholly owned subsidiary, unless expressly indicated or the context otherwise requires.
Note 2. Disposals
Strategic Plan Wind Down
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 historically provided limited assurance-type warranties under our powertrain contracts and plan to continue to service such warranties through their remaining term, with the majority ending in 2024.
Total charges and expenses related to the Plan of ($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 termination costs in the condensed consolidated statements of operations. The change in total liabilities associated with the Plan is included within accrued expenses and other current liabilities as presented in Note 8, and accounts payable, and is summarized as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | March 31, 2024 | | Charged to Expense | | Costs Paid or Settled | | June 30, 2024 | | |
Employee severance and retention | | $ | 0.7 | | | $ | — | | | $ | (0.3) | | | $ | 0.4 | | | |
Contract terminations | | 2.1 | | | — | | | (1.1) | | | 1.0 | | | |
Warranty obligations | | 0.1 | | | — | | | — | | | 0.1 | | | |
| | $ | 2.9 | | | $ | — | | | $ | (1.4) | | | $ | 1.5 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2023 | | Charged to Expense | | Costs Paid or Settled | | March 31, 2024 | | |
Employee severance and retention | | $ | 1.1 | | | $ | — | | | $ | (0.4) | | | $ | 0.7 | | | |
Contract terminations | | 6.5 | | | (0.7) | | | (3.7) | | | 2.1 | | | |
Warranty obligations | | 0.4 | | | (0.3) | | | — | | | 0.1 | | | |
| | $ | 8.0 | | | $ | (1.0) | | | $ | (4.1) | | | $ | 2.9 | | | |
The above estimates of the cash expenditures and charges that the Company expects to incur in connection with the Plan, and the timing thereof, are subject to a number of assumptions and actual amounts may differ materially from estimates. In addition, the Company may incur other cash expenditures or charges not currently contemplated due to unanticipated events.
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. 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 included in exit and termination costs in the condensed consolidated statements of operations in the three and six months, respectively, ended June 30, 2024
Note 3. Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The accompanying condensed consolidated financial statements include the accounts of Hyliion Holdings Corp. and its wholly owned subsidiary. Intercompany transactions and balances have been eliminated upon consolidation. The condensed consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”), which permit reduced disclosure for interim periods. The condensed consolidated balance sheet at December 31, 2023 was derived from audited financial statements for the fiscal year then ended, but does not include all necessary disclosures required with respect to annual financial statements. In the opinion of the Company, these condensed consolidated financial statements include all recurring adjustments and normal accruals necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the dates and periods presented. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s 2023 Annual Report. Results for interim periods are not necessarily indicative of the results to be expected for a full fiscal year or for any future period.
These condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities in the normal course of business. The Company is an early-stage growth company 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. 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. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates, and such differences could be material to the Company’s condensed consolidated financial statements.
Concentration of Supplier Risk
The Company is dependent on certain suppliers, many of which are single source suppliers, and the inability of these suppliers to deliver necessary components of the Company’s products in a timely manner at prices, quality levels and volumes that are acceptable, or the Company’s inability to efficiently manage these components from these suppliers, could have a material adverse effect on the Company’s business, prospects, financial condition and operating results.
Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity date of 90 days or less at the time of purchase to be cash and cash equivalents only if in checking, savings or money market accounts. Cash and cash equivalents include cash held in banks and money market accounts and are carried at cost, which approximates fair value. The Company maintains cash in excess of federally insured limits at financial institutions which it believes are of high credit quality and has not incurred any losses related to these balances to date. The Company believes its credit risk, with respect to these financial institutions to be minimal.
Restricted Cash
The Company provided a supplier with a letter of credit for $7.9 million in the fourth quarter of 2023 to secure the performance of the Company’s obligations to purchase semi-trucks related to the Founders Program, backed by a restricted cash deposit to pay any draws on the letter of credit by the supplier. The Company was released from this letter of credit in the first quarter of 2024.
The Company has provided its corporate headquarters lessor with a letter of credit for $0.7 million to secure the performance of the Company’s lease obligations, backed by a restricted cash deposit to pay any draws on the letter of credit by the lessor. 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 |
Cash and cash equivalents | $ | 19,133 | | | $ | 12,881 | | | $ | 48,205 | | | $ | 119,468 | |
Restricted cash included in prepaid expenses and other current assets | — | | | 7,918 | | | — | | | — | |
Restricted cash included in other assets | 665 | | | 665 | | | 665 | | | 665 | |
| $ | 19,798 | | | $ | 21,464 | | | $ | 48,870 | | | $ | 120,133 | |
Accounts Receivable
Accounts receivable are stated at a gross invoice amount, net of an allowance for doubtful accounts. The allowance for doubtful accounts is maintained at a level considered adequate to provide for potential account losses on the balance based on the Company’s evaluation of the anticipated impact of current economic conditions, changes in the character and size of the balance, past and expected future loss experience and other pertinent factors. At June 30, 2024 and December 31, 2023, there were no accounts receivable due from customers or allowances for doubtful accounts.
Investments
The Company’s investments consist of corporate bonds, U.S. treasury and agency securities, state and local municipal bonds and commercial paper, all of which are classified as held-to-maturity, with a maturity date of 36-months or less at the time of purchase. The Company determines the appropriate classification of investments at the time of purchase and re-evaluates such designation as of each balance sheet date. Investments are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity. Held-to-maturity securities are stated at amortized cost, adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization, along with interest, is included in interest income. The Company uses the specific identification method to determine the cost basis of securities sold.
Investments are impaired when a decline in fair value is judged to be other-than-temporary. The Company evaluates investments for impairment by considering the length of time and extent to which market value has been less than cost or amortized cost, the financial condition and near-term prospects of the issuer as well as specific events or circumstances that may influence the operations of the issuer and the Company’s intent to sell the security or the likelihood that it will be required to sell the security before recovery of the entire amortized cost. Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded to other income (expense) and a new cost basis in the investment is established.
Fair Value Measurements
ASC 820, Fair Value Measurements, clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based upon assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
Level I: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Company can access at the measurement date;
Level II: Significant other observable inputs other than level I prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data; and
Level III: Significant unobservable inputs that reflect the Company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.
An asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
The Company believes its valuation methods are appropriate and consistent with other market participants, however the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
The Company’s financial instruments consist of cash and cash equivalents and restricted cash, accounts receivable, investments, accounts payable and accrued expenses. The carrying value of cash and cash equivalents and restricted cash, accounts receivable, accounts payable and accrued expenses approximate fair value because of the short-term nature of those instruments. The fair value of investments is based on quoted prices for identical or similar instruments in markets that are not active. As a result, investments are classified within Level II of the fair value hierarchy.
Inventories
Through June 30, 2024, we have not yet commercialized the KARNO generator. Costs incurred for components acquired prior to our determination of reaching a commercial stage are expensed as research and development costs, resulting in zero cost basis for those components. As a result, moving-average prices for inventory that is capitalized in future periods may be significantly affected by those zero cost items.
Research and Development Expense
Research and development costs did not meet the requirements to be recognized as an asset as the associated future benefits were at best uncertain and there was no alternative future use at the time the costs were incurred. Research and development costs include, but are not limited to, outsourced engineering services, allocated facilities costs, depreciation on equipment utilized in research and development activities, internal engineering and development expenses, materials, internally developed software and employee related expenses (including salaries, benefits, travel, and share-based compensation) related to development of the Company’s products and services.
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), to enhance transparency and decision usefulness of income tax disclosures. The pronouncement is effective for fiscal years beginning after December 15, 2024 and we expect a material impact to our disclosures as a result of adoption.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): 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.
Note 4. Investments
The amortized cost, unrealized gains and losses, fair value and maturities of our held-to-maturity investments at June 30, 2024 and December 31, 2023 are summarized as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| | | Fair Value Measurements at June 30, 2024 |
| Amortized Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | Fair Value |
Commercial paper | $ | 13,365 | | | $ | — | | | $ | (9) | | | $ | 13,356 | |
U.S. government agency bonds | 27,642 | | | 6 | | | (104) | | | 27,544 | |
State and municipal bonds | 13,346 | | | — | | | (66) | | | 13,280 | |
Corporate bonds and notes | 175,214 | | | 79 | | | (572) | | | 174,721 | |
| $ | 229,567 | | | $ | 85 | | | $ | (751) | | | $ | 228,901 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | Fair Value Measurements at December 31, 2023 |
| Amortized Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | Fair Value |
Commercial paper | $ | 35,218 | | | $ | 18 | | | $ | (10) | | | $ | 35,226 | |
U.S. government agency bonds | 27,602 | | 56 | | | (186) | | | 27,472 |
State and municipal bonds | 15,262 | | 1 | | | (48) | | | 15,215 |
Corporate bonds and notes | 200,401 | | 515 | | | (255) | | | 200,661 |
| $ | 278,483 | | | $ | 590 | | | $ | (499) | | | $ | 278,574 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| June 30, 2024 | | December 31, 2023 |
| Amortized Cost | | Fair Value | | Amortized Cost | | Fair Value |
Due in one year or less | $ | 136,091 | | | $ | 135,722 | | | $ | 150,297 | | | $ | 149,934 | |
Due after one year through five years | 93,476 | | | 93,179 | | | 128,186 | | | 128,640 | |
| $ | 229,567 | | | $ | 228,901 | | | $ | 278,483 | | | $ | 278,574 | |
Note 5. 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 |
| Level I | | Level II | | Level III | | Total |
Cash and cash equivalents | $ | 19,133 | | | $ | — | | | $ | — | | | $ | 19,133 | |
Restricted cash | 665 | | | — | | | — | | | 665 | |
Held-to-maturity investments: | | | | | | | |
Commercial paper | — | | | 13,356 | | | — | | | 13,356 | |
U.S. government agency bonds | — | | | 27,544 | | | — | | | 27,544 | |
State and municipal bonds | — | | | 13,280 | | | — | | | 13,280 | |
Corporate bonds and notes | — | | | 174,721 | | | — | | | 174,721 | |
| $ | 19,798 | | | $ | 228,901 | | | $ | — | | | $ | 248,699 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Fair Value Measurements at December 31, 2023 |
| Level I | | Level II | | Level III | | Total |
Cash and cash equivalents | $ | 12,881 | | | $ | — | | | $ | — | | | $ | 12,881 | |
Restricted cash | 8,583 | | | — | | | — | | | 8,583 | |
Held-to-maturity investments: | | | | | | | |
Commercial paper | — | | | 35,226 | | | — | | | 35,226 | |
U.S. government agency bonds | — | | | 27,472 | | | — | | | 27,472 | |
State and municipal bonds | — | | | 15,215 | | | — | | | 15,215 | |
Corporate bonds and notes | — | | | 200,661 | | | — | | | 200,661 | |
| $ | 21,464 | | | $ | 278,574 | | | $ | — | | | $ | 300,038 | |
Note 6. 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 |
Production machinery and equipment | $ | 17,060 | | | $ | 10,376 | |
Vehicles | 1,040 | | | 2,013 | |
Leasehold improvements | 3,404 | | | 2,236 | |
Office furniture and fixtures | 238 | | | 223 | |
Computers and related equipment | 2,082 | | | 1,963 | |
| 23,824 | | | 16,811 | |
Less: accumulated depreciation | (8,043) | | | (6,824) | |
Total property and equipment, net | $ | 15,781 | | | $ | 9,987 | |
Note 7. 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.
In May 2024, stockholders of the Company approved the Hyliion Holdings Corp. 2024 Equity Incentive Plan which allows issuance of up to 8,000,000 shares, subject to certain adjustments.
Of the restricted stock units granted in the first quarter of 2024, 2.7 million units may vest between February 13, 2025 and December 31, 2026 contingent upon achieving underlying closing stock price thresholds. These awards were valued at $0.83 per unit using fair value hierarchy Level III inputs including an underlying share volatility of 90% and a risk-free rate of 4.35%. There were no market-conditioned awards granted after the first quarter of 2024.
Note 8. 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 professional services and other | $ | 1,332 | | | $ | 2,606 | |
Accrued compensation and related benefits | 2,364 | | | 1,510 | |
Other accrued liabilities | 312 | | | 1,922 | |
Accrued severance, contract termination, and other charges | 1,477 | | | 4,013 | |
| $ | 5,485 | | | $ | 10,051 | |
Note 9. Commitments and Contingencies
Economic Incentive Agreement
During the quarter ended March 31, 2024, in connection with our operations in Cedar Park, Texas, the Company entered into an agreement with the Cedar Park Economic Development Corporation (“EDC”) that superseded prior agreements, whereby the Company would receive cash grants up to $1.1 million from the EDC at various measurement dates during the term of the agreement contingent upon the Company fulfilling and maintaining certain occupancy, investment, and employment requirements. 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. Under the agreement, the EDC has the right to file a security interest to all assets of the Company.
Legal Proceedings
The Company is periodically involved in legal proceedings, legal actions and claims arising in the normal course of business, including proceedings relating to product liability, intellectual property, safety and health, employment and other matters. The Company believes that the outcome of such legal proceedings, legal actions and claims will not have a significant adverse effect on the Company’s financial position, results of operations or cash flows.
Note 10. 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, |
| 2024 | | 2023 | | 2024 | | 2023 |
Numerator: | | | | | | | |
Net loss attributable to common stockholders | $ | (10,856) | | | $ | (35,227) | | | $ | (26,448) | | | $ | (64,058) | |
| | | | | | | |
Denominator: | | | | | | | |
Weighted average shares outstanding, basic and diluted | 173,829,107 | | | 180,966,908 | | | 176,156,001 | | | 180,544,821 | |
| | | | | | | |
Net loss per share, basic and diluted | $ | (0.06) | | | $ | (0.19) | | | $ | (0.15) | | | $ | (0.35) | |
Potential common shares excluded from the computation of diluted net loss per share because including them would have had an anti-dilutive effect for the three and six months ended June 30, 2024 and 2023 are summarized as follows:
| | | | | | | | | | | |
| Three and Six Months Ended June 30, |
| 2024 | | 2023 |
Unexercised stock options | 271,996 | | | 2,053,599 | |
Unvested restricted stock units* | 6,450,052 | | | 4,063,027 | |
| 6,722,048 | | | 6,116,626 | |
* 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.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References to the “Company,” “Hyliion,” “we,” or “us” in this report refer to Hyliion Holdings Corp. and its wholly-owned subsidiary Hyliion Inc., unless expressly indicated or the context otherwise requires. The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this report and our audited consolidated financial statements and related notes thereto in our 2023 Annual Report.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (“Form 10-Q”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical fact, contained in this Quarterly Report on Form 10-Q are forward-looking statements, including, but not limited to, statements regarding our strategy, prospects, plans, objectives, future operations, future revenue and earnings, projected margins and expenses, markets for our services, potential acquisitions or strategic alliances, financial position, and liquidity and anticipated cash needs and availability. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would,” variations of such words and similar expressions or the negatives thereof are intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words. These forward-looking statements represent our management’s expectations as of the date of this filing and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. We cannot guarantee the accuracy of the forward-looking statements, and you should be aware that results and events could differ materially and adversely from those contained in the forward-looking statements due to a number of risks and uncertainties including, but not limited to, those described in the section entitled “Risk Factors” included in our 2023 Annual Report on Form 10-K, this Quarterly Report on Form 10-Q, and in other documents we file from time to time with the U.S. Securities and Exchange Commission (the “Commission” or the “SEC”) that disclose risks and uncertainties that may affect our business. Readers are urged to carefully review and consider the various disclosures made in this Quarterly Report on Form 10-Q and in other documents we file from time to time with the Commission. Furthermore, such forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, we do not undertake, and expressly disclaim any duty, to publicly update or revise these statements, whether as a result of new information, new developments, or otherwise and even if experience or future changes make it clear that any projected results expressed in this Quarterly Report on Form 10-Q or future quarterly reports, press releases or company statements will not be realized. Unless specifically indicated otherwise, the forward-looking statements in this Quarterly Report on Form 10-Q do not reflect the potential impact of any divestitures, mergers, acquisitions or other business combinations that have not been completed as of the date of this filing. In addition, the inclusion of any statement in this Quarterly Report on Form 10-Q does not constitute an admission by us that the events or circumstances described in such statement are material. We qualify all of our forward-looking statements by these cautionary statements. In addition, the industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors including those described in the section entitled “Risk Factors” included in our 2023 Annual Report on Form 10-K and in this Quarterly Report on Form 10-Q. These and other factors could cause our results to differ materially from those expressed in this Quarterly Report on Form 10-Q.
Overview
Hyliion is committed to creating innovative solutions that enable clean, flexible and modular electricity production while contributing positively to the environment in the energy economy. The KARNO generator is a fuel-agnostic power generation solution, enabled by additive manufacturing, that leverages a linear heat engine to generate electricity with significant improvements in efficiency, emissions and cost compared to conventional generators. The Company’s primary focus is to provide distributed power generators that operate on various fuel sources to adapt to an ever-changing energy economy. Hyliion is initially targeting the commercial sector with a locally-deployable generator designed to meet a wide range of power generation needs. This versatile generator can operate on both conventional fuels and waste fuels such as landfill and flare gas. In the future, the Company plans to scale up its generator solution to address larger utility-scale power needs and to develop variants for household use and mobile applications such as vehicles and marine vessels. Additionally, the generator technology is well-suited to provide combined heat and power (“CHP”) in various stationary applications.
Market Opportunity
The U.S. electrical grid is facing a multitude of challenges as it strives to manage the escalating demand for electricity while adapting to evolving generating resources. The electrification of transportation, particularly the growing adoption of electric vehicles, is adding substantial load to the grid. Additionally, the integration of renewable energy sources such as solar and wind
power introduces variability and necessitates grid modernization and storage solutions for stability. Hyliion believes that localized grid generation will become an increasing part of the solution to these challenges.
Hyliion also believes that the KARNO generator is suitable for a wide range of electrical power generating applications and can address many concerns with conventional generators that inhibit consumers from adopting onsite generating systems today, including cost versus grid power, reliability, maintenance needs, noise, inflexibility and emissions. Additionally, the KARNO generator is expected to be able to operate using a wide range of fuel sources including carbon-free fuels such as hydrogen and ammonia.
The planned initial KARNO generator variant is both power dense and easy to deploy. It is expected to consist of a single four-shaft 200 kW generating unit along with essential balance-of-plant components, all arranged within a space-efficient, rectangular configuration occupying approximately three cubic meters. Later planned developments are expected to include a greater-than 2 MW system with multiple KARNO generators inside the footprint of a 20-foot shipping container. Over time, we expect larger and smaller capacity versions of the KARNO generator will be offered with power levels varying based on the number of generator shafts included or the size of component parts. We expect the KARNO generator to initially compete effectively in the market for power applications between 200 kW to 5 MW and later extend to larger and smaller power configurations.
We are currently working with potential customers for initial generator deployments in late 2024. These deployments will test and validate KARNO generator product attributes including efficiency, emissions, maintenance requirements, durability, control systems and other parameters. We expect to receive compensation for these initial deployments as we believe the generator will provide tangible benefits to customers. We also expect that early deployments will demonstrate the effectiveness of the KARNO generator in a wide range of electrical generating applications. Target markets include:
•Prime Power: Most consumers prefer the grid versus generating power locally due to the grid’s inherent advantages of simplicity, convenience, scalability and cost effectiveness. For critical applications such as hospitals, data centers and refrigerated warehouses, local generators are indispensable in case of a grid power failure. The KARNO generator introduces the opportunity for certain power consumers to rethink their primary and secondary power sources. Due to its unique attributes in comparison to conventional generators, including consistently high efficiency across power levels, minimal maintenance requirements, and reduced level of noise and emissions, the KARNO generator stands as a potentially more cost-effective base load power source for consumers, who could then utilize the electric grid as a backup source of power. This arrangement holds particular appeal for consumers facing high grid electrical costs and low fuel costs, such as for natural gas.
•Vehicle Charging: The rapid growth of consumer electric vehicles is increasingly straining grid capacity and reliability, both domestically and internationally. The introduction of commercial EVs, such as buses, delivery vans and large trucks is expected to intensify this challenge in the future given their substantial power requirements during charging. Many commercial operators cite the lack of electrical capacity access as the primary obstacle to expanding their electric vehicle fleets. Here, we believe the KARNO generator offers a unique solution for vehicle charging. Its flexibility in fuel sources, including the ability to use hydrogen, along with its superior environmental performance and low emissions and noise levels offer advantages over internal combustion generators. A KARNO generator can also modulate power with minimal efficiency loss by activating or deactivating individual generators and by regulating the heat input to each generator. Finally, KARNO’s high power density allows it to be deployed as a localized power source for vehicle charging without displacing a large amount of parking space.
•Waste Gas Power Generation: Natural gas sourced from waste sites like landfills, water treatment plants and dairy farms is a growing market as producers seek to capture sources of methane emissions that would otherwise be released into the atmosphere or flared. Also known as renewable natural gas (“RNG”), most sources are typically treated to remove impurities such as carbon dioxide, hydrogen sulfide and moisture before the gas can be utilized or injected into natural gas pipelines. We believe the KARNO generator can compete effectively as a power generator fueled by waste gases.
•Flare Gas: Similarly, natural gas extracted from gas or oil wells frequently requires processing to remove natural gas liquids and impurities. At remote well sites, gas may be flared, or burned, due to insufficient pipeline capacity for transmission to consuming markets. The KARNO generator creates a new opportunity – to transform flare gas into valuable electricity, destined either for integration into the electric grid or for localized consumption. As with RNG, the KARNO generator is anticipated to use flare gas with limited need for pre-treatment at a gas processing facility.
•Peak Shaving: “Peaking charges” also referred to as “demand charges” are fees imposed by utilities on customers based on their highest recorded electricity usage during a billing cycle, often measured over a short interval, such as 15 minutes. These charges serve to recuperate the expenses associated with maintaining grid capacity during periods of peak demand. For customers with substantial peak demand, such as large industrial facilities and data centers, peaking charges can significantly inflate their electric bills. Additionally, time-based electricity rates are now common to
reduce demand on the grid during peak times. Peak rates can be two to three times higher than base rates, increasing electricity charges even further for consumers. In this context, distributed generation sources like the KARNO generator can help to mitigate the financial impact of peaking charges and rates by supplementing grid power during peak consumption periods.
•Backup Power: The market for local backup power generators is well established but also poised for growth due to reduced reliability of the power grid, a greater share of intermittent renewable sources of electricity, the frequency and severity of extreme weather events and the need for continuous power supply in critical applications. Generator emissions are a growing concern in the backup power market due to increased focus on the health impacts of harmful compounds such as nitrogen oxides (“NOx”), carbon monoxide (“CO”), and volatile organic compounds (“VOCs”). To address these concerns, emissions control technologies are often incorporated for conventional generators and alternative sources of fuel like natural gas are replacing diesel, which is also a source of particulate matter emissions if exhaust gases are untreated. The backup power market is another opportunity for the KARNO generator which is particularly attractive for its low level of emissions and low noise level while in operation. The KARNO generator is expected to reduce CO and NOx emissions by over 95% compared to diesel generators, and potentially without the need for exhaust aftertreatment. We therefore believe that KARNO presents an opportunity to provide solutions for end users that desire a lower emissions profile and in the event emissions regulations are further tightened.
•Mobility: We also plan to develop variants for mobile applications such as vehicles including rail (locomotives) and marine vessels. Longer-term, we also believe KARNO can be a viable solution for on-highway applications.
Following initial deployments in late 2024, we expect to ramp up commercialization of the KARNO generator including expansion of production capacity and establishment of sales and distribution channels, potentially including market collaborations and extending our reach outside of the U.S. In the future we intend to develop KARNO generators of different sizes and configurations to capitalize on KARNO’s unique advantages and extend these advantages across a broader range of market opportunities.
KARNO Generator System
The KARNO generator emerged out of GE’s long-running research and development investments in aerospace and metal additive manufacturing across multiple industries and in areas such as generator thermal and performance design. We initially envisioned utilizing the KARNO generator as new range-extending power source for the Hypertruck powertrain system, given its ability to operate on a wide range of fuel sources, including natural gas and hydrogen. After the previously announced wind down of our powertrain operations, we shifted our focus exclusively to the development and commercialization of the KARNO generator. We believe that the unique capabilities of the KARNO generator will make it competitive in the stationary power market, competing favorably against conventional electrical generating systems and opening up potential new markets to enhance grid power availability and reliability. The KARNO generator technology, including the technology that was acquired from GE and the technology developed by Hyliion subsequent to the acquisition, is protected by numerous patents and trademarks which we believe provide Hyliion extensive and lasting protection for its intellectual property.
KARNO Generator Development
Our ongoing efforts with the KARNO generator encompass activities such as its design, development and rigorous testing, along with the development of essential balance-of-plant systems including cooling and controls systems. Notably, we have reached a significant milestone by constructing the 125 kW ALPHA generator which we are currently testing in our development facility. Simultaneously, we are in the final stages of designing and assembling a 200 kW BETA generator, which is expected to serve as our design for initial commercial deployments. We have also showcased KARNO integrated as an on-board generator for our Hypertruck ERX powertrain system and with potential stationary power customers. Moreover, we successfully demonstrated the generator’s capability to feed power back to the electric grid from our Cincinnati, Ohio facility and confirmed through testing the capability of the generator’s oxidation system to be fueled using untreated natural gas from a Permian Basin well site.
As we progress toward our anticipated initial stationary generator deployments, scheduled for late 2024, pivotal development activities are underway, including enhancements to the linear generator system and its controls, rigorous validation of essential operating parameters, including efficiency, emissions and reliability, and build-out of balance-of-plant systems and controls. These initial generator deployments, coupled with our ongoing testing and development endeavors, will play a vital role in the validation of other critical design specifications, including the generator’s projected operating life, maintenance requirements and durability.
We expect to achieve efficiencies over time, leading to a reduction in the manufacturing and assembly costs associated with the KARNO generator. These efficiencies will stem in part from advancements in the speed and capacity of additive manufacturing machines offered by GE and other vendors. The pace of advancements in additive technology are expected to improve over time, with the output of machines we intend to acquire over the next three to four years projected to increase compared to
machines available today. Additionally, we are actively pursuing design modifications that will enable specific components to be produced through conventional manufacturing processes. Moreover, for less critical components, we are exploring utilization of lower-cost and lightweight materials like aluminum. Lastly, we anticipate that economies of scale will reduce system component costs.
The Science of KARNO
The KARNO generator is distinguished from conventional generating systems that rely on reciprocating internal combustion engines or gas turbines to drive a rotating shaft. In contrast, the KARNO generator harnesses the power of a heat engine to propel a linear generating system. This innovative generator derives its linear motion from temperature differences inside the engine. The generation of heat within the system occurs through flameless oxidation of fuels, like natural gas, hydrogen, or propane. This thermal energy causes helium gas enclosed within a sealed cylinder to expand, thereby propelling linear motion in a connected piston-shaft system which includes a sequence of permanent magnets situated on the shaft passing through electrical coils. Subsequently, the counter-motion generated by a piston at the opposite end of the shaft flows the helium gas to the cold side of a piston in an adjacent shaft, where excess heat is efficiently dissipated. This cyclical process continues, resulting in a continuous source of electrical power for so long as heat is supplied to the generator.
Linear generators present several advantages over conventional generators, with key benefits including reduced maintenance, attributable to their simplified design with few moving parts. Additionally, they exhibit high power density and higher efficiency by circumventing the mechanical losses linked to rotating components such as bearings and gears while producing less noise and vibration. In the case of KARNO, each shaft of the generator relies on a single moving part and utilizes a pressurized helium bearing system in place of oil-based lubricants.
Heat engines offer the advantages of fuel flexibility and high operating efficiency. The KARNO generator stands out for its ability to maximize heat transfer between components and working fluids. Enabled by advances in additive manufacturing systems, parts are designed with a large number of intricate flow channels for the movement of heat, cooling water, helium and exhaust gases such that contact surface areas for heat transfer are maximized. This enables the KARNO generator to achieve high levels of efficiency.
The KARNO generator is expected to surpass the efficiency of conventional generating systems when employing various fuel sources and even outperform fuel cells when using hydrogen. Notably, its high efficiency remains consistent across a broad range of output power levels. In contrast, fuel cells reach peak efficiency at low power levels but experience diminishing efficiency as output increase towards full power. Internal combustion engines typically achieve peak efficiency within a limited operational output range and may suffer increased wear at low power levels. The KARNO generator offers a distinct advantage in power adjustment by modulating the rate of heat introduction, enabling seamless power adjustments without compromising the generator’s efficiency.
We anticipate that the KARNO generator will achieve an electrical generating efficiency of nearly 50%, calculated by considering the usable output power in relation to the energy from the fuel source. High efficiency is expected to remain relatively consistent across a wide range of output power levels, spanning from tens of kilowatts to multiple megawatts. In contrast, internal combustion diesel generators typically operate within an efficiency range of 25% to 40% over a similar power spectrum, while the U.S. electrical power grid is estimated to operate at an efficiency between 33% and 40%. Notably, best-in-class grid-level gas turbine powerplants can obtain efficiencies ranging between 45% to 55%. However, they incur transmission and distribution losses between 5% and 10% which the KARNO generator can circumvent by being strategically located near the point of power consumption.
Conventional generators emit pollutants as a result of incomplete combustion of fuel-air mixtures, with the formation of NOx compounds being particularly prominent. Unlike conventional generators, which often employ internal combustion engines operating at high temperatures with rapid and incomplete fuel combustion, the KARNO generator is designed for continuous fuel oxidation at lower temperatures than internal combustion engines and extended burn times. This is achieved partly through the recirculation of exhaust gases, which serves to prolong combustion duration and by pre-heating incoming air. As a result, the KARNO generator is anticipated to achieve low levels of emissions, with CO and NOx emissions expected to be reduced by over 95% compared to best-in-class diesel engines and targeting CARB 2027 standards without the need for aftertreatment.
One of the notable advantages of the KARNO generator, in comparison to traditional generating units, is the expected significant reduction in maintenance requirements and cost. Conventional generators typically incur periodic and usage-based maintenance expense that can range between 5% to 20% of their total operating cost throughout their lifespan, influenced by factors such as utilization and operating parameters. KARNO’s primary advantage arises from having only a single moving linear actuator per shaft (4 shafts per 200 kW generator), which glides linearly on low friction helium bearings. This innovative design significantly mitigates efficiency losses attributed to friction, enhances the system’s operational longevity and eliminates the need for oil-based lubricants commonly found in conventional generators. Furthermore, internal combustion engines require extensive overhauls after specific operating periods which are costly, require specialized expertise, and result in prolonged
downtime. Conversely, the KARNO generator is projected to require less costly and simplified maintenance service than internal combustion engines, translating into both cost savings and reduced downtime.
The KARNO generator, functioning as a heat engine, derives advantages from its expected capability to operate across a diverse spectrum of over 20 available fuel sources and fuel mixtures. These include natural gas, propane, gasoline, jet fuel, and alternative fuels like bio-diesel, hydrogen and ammonia. Moreover, the generator can seamlessly transition between these fuels or fuel blends, requiring few or no physical modifications to its flameless oxidation system. This versatility enables a single generator to adapt to different use cases. For example, the generator may operate on natural gas for prime power generation when a pipeline connection is available and on waste gas near a landfill or dairy farm. Furthermore, as hydrogen becomes more widely available, the KARNO generator will be able to adapt to this cleaner fuel. As the energy landscape evolves, the KARNO generator’s fuel-agnostic nature positions it as a flexible solution to electricity generation needs.
Benefits of the KARNO Generator Versus Conventional Competitors
We believe the versatility and operating characteristics of the KARNO generator make it an effective system for a variety of conventional and emerging electrical generating applications. Key attributes of the KARNO generator distinguish it from its conventional generator counterparts, which may open new market opportunities:
•Generator Efficiency: The anticipated operating efficiency of the KARNO generator results in lower cost of electricity versus conventional generating systems and, in many markets, grid power.
•Low Maintenance: With only a single moving part per shaft, the simplicity of the KARNO generator is expected to reduce both periodic maintenance expenses and expected overhaul costs.
•Fuel Agnostic: While many traditional generators operate on a single fuel source or require system modification to achieve fuel flexibility, the KARNO generator is truly fuel-agnostic, and can switch between fuel choices during operation with few or no modifications.
•Low Noise and Vibration: Unlike conventional generators, the KARNO generator operates without internal combustion, resulting in a significantly lower noise level of approximately 67 decibels at six feet, which is approximately equivalent to a typical conversation.
•Higher Power Density: The unique architecture and features of the KARNO generator that are enabled by advances in additive manufacturing, enable the generator to achieve a high level of power density. For example, a 200 kW generator occupies less than a cubic meter of volume, excluding balance-of-plant systems.
•Modularity: The power output of a KARNO generator can be modulated by changing the level of heat applied to the system. For larger power applications above 200 kW, systems with six or more shafts can be utilized or, multiple KARNO generators can be assembled to operate as a single unit. For megawatt applications, individual generators can be turned on or off to adjust the total power output of the system.
•Fast Startup Time: It is anticipated that the KARNO generator will be able to begin generating electricity from a cold start in approximately 30 to 60 seconds. Additionally, full power can be achieved in a matter of minutes. Conversely, some generating systems, such as solid oxide fuel cells, require a warm-up period of up to 30 minutes.
Key Factors Affecting Operating Results
We believe that our performance and future success depend on several factors that present significant opportunities for us but also pose risks and challenges, including but not limited to economic uncertainties, supply chain disruptions, inflation and high interest rates as well as those discussed below and referenced in Part II, Item 1A “Risk Factors”.
Commercialization of KARNO Generator
Our focus in the first half of 2024 was on continuing development and testing of our fuel-agnostic KARNO stationary generator and planning for the deployment of initial revenue-generating units with customers in late 2024. We anticipate that a substantial portion of our capital resources and efforts in the near future will be focused these activities. The amount and timing of our future funding requirements, if any, will depend on many factors, including but not limited to the pace of completing initial KARNO generator design, testing and validation, the pace at which we introduce initial generator units to the market, our strategies for manufacturing KARNO generator components (whether in-house or through outsourcing to third parties), the range of product offerings we plan to bring to market and external market factors beyond our control.
Key Components of Statements of Operations
Revenue
We historically generated revenues from sales of Hybrid systems for Class 8 semi-trucks and limited quantities of Class 8 semi-trucks outfitted with the Hybrid system. As a result of the discontinuation of the electrified powertrain systems business and the shift to focus exclusively on the development and commercialization of the Company’s fuel-agnostic KARNO generator technology, we do not anticipate generating future revenues until we begin commercialization of our KARNO generators.
Cost of Revenue
Cost of revenue includes all direct costs such as labor and materials, overhead costs, warranty costs and any write-down of inventory to net realizable value.
Research and Development Expense
Research and development expenses consist primarily of costs incurred for the discovery and development of our KARNO stationary generator and, prior to 2024, electrified powertrain solutions, which include:
•personnel-related expenses including salaries, benefits, travel and share-based compensation, for personnel performing research and development activities;
•fees paid to third parties such as contractors for outsourced engineering services and to consultants;
•expenses related to components for development and testing, materials, supplies and other third-party services;
•depreciation for equipment used in research and development activities; and
•allocation of general overhead costs.
We expect to continue to invest in research and development activities to achieve operational and commercial goals.
Selling, General and Administrative Expense
Selling, general and administrative expenses consist of personnel-related expenses for our corporate, executive, finance, sales, marketing and other administrative functions, expenses for outside professional services, including legal, audit and accounting services, as well as expenses for facilities, depreciation, amortization, travel, sales and marketing costs. Personnel-related expenses consist of salaries, benefits and share-based compensation. Factors that also affect selling, general and administrative expense include the total number of employees, costs incurred as a result of operating as a public company, including compliance with the rules and regulations of the U.S. Securities and Exchange Commission, legal, audit, insurance, investor relations activities and other administrative and professional services.
Exit and Termination Costs
Exit and termination costs consist of employee severance and retention payments, accelerated non-cash stock-based compensation expense, contract termination and other cancellation costs, non-cash charges including accelerated depreciation and amortization, and recoveries from resale of assets. These costs are a result of the Plan approved on November 7, 2023 to wind down our powertrain business.
Other Income (Expense)
Other income currently consists primarily of interest income earned on our investments. Since the acquisition of our KARNO generator technology, we have continued to perform as a subcontractor on a contract with the Office of Naval Research (“ONR”). We may reassess the classification of such contracts as revenue based on business strategy.
Results of Operations
Comparison of Three Months Ended June 30, 2024 to Three Months Ended June 30, 2023
Our results of operations for the three months ended June 30, 2024 (the “current quarter”) and 2023 on a consolidated basis are summarized as follows (in thousands, except share and per share data):
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended June 30, | | | | |
| 2024 | | 2023 | | $ Change | | % Change |
Revenues | | | | | | | |
Product sales and other | $ | — | | | $ | 266 | | | $ | (266) | | | (100.0) | % |
Total revenues | — | | | 266 | | | (266) | | | (100.0) | % |
Cost of revenues | | | | | | | |
Product sales and other | — | | | 307 | | | (307) | | | (100.0) | % |
Total cost of revenues | — | | | 307 | | | (307) | | | (100.0) | % |
Gross loss | — | | | (41) | | | 41 | | | (100.0) | % |
Operating expenses | | | | | | | |
Research and development | 8,311 | | | 27,439 | | | (19,128) | | | (69.7) | % |
Selling, general and administrative expenses | 6,262 | | | 11,098 | | | (4,836) | | | (43.6) | % |
Exit and termination costs | (556) | | | — | | | (556) | | | N/A |
Total operating expenses | 14,017 | | | 38,537 | | | (24,520) | | | (63.6) | % |
Loss from operations | (14,017) | | | (38,578) | | | 24,561 | | | (63.7) | % |
| | | | | | | |
Interest income | 3,129 | | | 3,349 | | | (220) | | | (6.6) | % |
Loss on disposal of assets | — | | | (1) | | | 1 | | | (100.0) | % |
Other income, net | 32 | | | 3 | | | 29 | | | 966.7 | % |
Net loss | $ | (10,856) | | | $ | (35,227) | | | $ | 24,371 | | | (69.2) | % |
| | | | | | | |
Net loss per share, basic and diluted | $ | (0.06) | | | $ | (0.19) | | | $ | 0.13 | | | (68.4) | % |
| | | | | | | |
Weighted-average shares outstanding, basic and diluted | 173,829,107 | | | 180,966,908 | | | (7,138) | | | (3.9) | % |
Revenue and Cost of Revenues
Revenue associated with our Hybrid products decreased $0.3 million and associated cost of revenues decreased $0.3 million. As a result of our strategic review and decision to wind down our powertrain business, we do not anticipate further revenue or cost of revenues until we begin commercialization of our KARNO generator.
Research and Development
Research and development expenses decreased $19.1 million due to:
•A decrease of $23.7 million for the design and testing of our Hypertruck ERX system; offset by
•An increase of $4.6 million for the design and testing of our KARNO stationary generator.
Selling, General and Administrative
Selling, general, and administrative expenses decreased $4.8 million primarily due to wind down of our powertrain business:
•A decrease of $2.8 million in personnel and benefits;
•A decrease of $0.8 million in marketing;
•A decrease of $0.6 million in professional services; and
•A decrease of $0.3 million in insurance.
Exit and Termination Costs
Exit and termination benefit was $0.6 million as a result of the adoption of the Plan and items discussed in Note 2 of the notes to the consolidated financial statements, including recoveries from assets sold.
Comparison of Six Months Ended June 30, 2024 to Six Months Ended June 30, 2023
The following table summarizes our results of operations on a consolidated basis for the six months ended June 30, 2024 (the “current six months”) and 2023 (in thousands, except share and per share data):
| | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30, | | | | |
| 2024 | | 2023 | | $ Change | | % Change |
Revenues | | | | | | | |
Product sales and other | $ | — | | | $ | 576 | | | $ | (576) | | | (100.0) | % |
Total revenues | — | | | 576 | | | (576) | | | (100.0) | % |
Cost of revenues | | | | | | | |
Product sales and other | — | | | 998 | | | (998) | | | (100.0) | % |
Total cost of revenues | — | | | 998 | | | (998) | | | (100.0) | % |
Gross loss | — | | | (422) | | | 422 | | | (100.0) | % |
Operating expenses | | | | | | | |
Research and development | 16,279 | | | 48,357 | | | (32,078) | | | (66.3) | % |
Selling, general and administrative expenses | 12,854 | | | 22,079 | | | (9,225) | | | (41.8) | % |
Exit and termination costs | 3,875 | | | — | | | 3,875 | | | N/A |
Total operating expenses | 33,008 | | | 70,436 | | | (37,428) | | | (53.1) | % |
Loss from operations | (33,008) | | | (70,858) | | | 37,850 | | | (53.4) | % |
| | | | | | | |
Interest income | 6,525 | | | 6,811 | | | (286) | | | (4.2) | % |
Gain on disposal of assets | 3 | | | 1 | | | 2 | | | 200.0 | % |
Other income (expense), net | 32 | | | (12) | | | 44 | | | N/A |
Net loss | $ | (26,448) | | | $ | (64,058) | | | $ | 37,610 | | | (58.7) | % |
| | | | | | | |
Net loss per share, basic and diluted | $ | (0.15) | | | $ | (0.35) | | | $ | 0.20 | | | (57.1) | % |
| | | | | | | |
Weighted-average shares outstanding, basic and diluted | 176,156,001 | | | 180,544,821 | | | (4,389) | | | (2.4) | % |
Revenue and Cost of Revenues
Revenue associated with our Hybrid products decreased $0.6 million and associated cost of revenues decreased $1.0 million. As a result of our strategic review and decision to wind down our powertrain business, we do not anticipate further revenue or cost of revenues until we begin commercialization of our KARNO generator.
Research and Development
Research and development expenses decreased $32.1 million due to:
•A decrease of $41.2 million for the design and testing of our Hypertruck ERX system; offset by
•An increase of 9.1 million for the design and testing of our KARNO stationary generator.
Selling, General and Administrative
Selling, general, and administrative expenses decreased $9.2 million primarily due to wind down of our powertrain business:
•A decrease of $5.9 million in personnel and benefits;
•A decrease of $1.7 million in professional services;
•A decrease of $0.8 million in marketing; and
•A decrease of $0.3 million in insurance.
Exit and Termination Costs
Exit and termination costs increased by $3.9 million as a result of the adoption of the Plan and items discussed in Note 2 of the notes to the consolidated financial statements, including recoveries from assets sold.
Liquidity and Capital Resources
At June 30, 2024, our current assets were $164.6 million, consisting primarily of cash and cash equivalents of $19.1 million, short-term investments of $136.1 million and prepaid expenses of $5.4 million. Our current liabilities were $7.5 million primarily comprised of accounts payable, accrued expenses and operating lease liabilities. We also had $93.5 million of investments in longer-term liquid securities which we maintain to generate higher income on capital that we do not expect to spend in the next 12 months.
We believe the credit quality and liquidity of our investment portfolio at June 30, 2024 is strong and will provide sufficient liquidity to satisfy operating requirements, working capital purposes and strategic initiatives. The unrealized gains and losses of the portfolio may remain volatile as changes in the general interest rate environment and supply and demand fluctuations of the securities within our portfolio impact daily market valuations. To mitigate the risk associated with this market volatility, we deploy a relatively conservative investment strategy focused on capital preservation and liquidity whereby no investment security may have a final maturity of more than 36 months from the date of acquisition or a weighted average maturity exceeding 18 months. Eligible investments under the Company’s investment policy bearing a minimum credit rating of A1, A-1, F1 or higher for short-term investments and A2, A, or higher for longer-term investments include money market funds, commercial paper, certificates of deposit and municipal securities. Additionally, all of our debt securities are classified as held-to-maturity as we have the intent and ability to hold these investment securities to maturity, which minimizes any realized losses that we would recognize prior to maturity. However, even with this approach we may incur investment losses as a result of unusual or unpredictable market developments, and we may experience reduced investment earnings if the yields on investments deemed to be low risk remain low or decline further due to unpredictable market developments. In addition, these unusual and unpredictable market developments may also create liquidity challenges for certain of the assets in our investment portfolio.
Based on our past performance, we believe our current and long-term assets will be sufficient to continue and execute on our business strategy and meet our capital requirements for the next twelve months. We do not expect to need to raise additional equity capital for the foreseeable future. Our primary short-term cash needs are costs associated with KARNO generator development and building of our initial deployment units. Longer term, our capital needs will be determined by our go-to-market strategy, which may include development of our own KARNO generator manufacturing capacity or outsourcing this work to third parties or business partners. In December 2023, we announced an authorized share repurchase program to repurchase up to $20 million of our outstanding common stock. We repurchased $14.0 million in common stock during the six months ended June 30, 2024 but have currently paused any additional repurchases under this program. Based on current projections of operating expenses, capital spending, working capital growth and historical share repurchases, we expect to have between $220 and $230 million in cash, short-term and long-term investments remaining on our balance sheet at the end of 2024.
We expect to continue to incur net losses in the short term, as we continue to execute on our strategic initiatives by completing the development and commercialization of the KARNO generator with anticipated initial customer deployments in late 2024. However, actual results could vary materially and adversely as a result of a number of factors including, but not limited to, those discussed in Part II, Item 1A. “Risk Factors.”
The amount and timing of our future funding requirements, if any, will depend on many factors, including the pace and results of our research and development efforts, the breadth of product offerings we plan to commercialize, the pace of sales, and our long-term plan manufacturing plan for the KARNO generator including plans for financing additive printer investments, as well as factors that are outside of our control.
During the periods presented, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities, which were established for the purpose of facilitating off-balance sheet arrangements.
Cash Flows
Net cash, cash equivalents and restricted cash provided by or used in operating activities, investing activities and financing activities for the six months ended June 30, 2024 and 2023 is summarized as follows (in thousands): | | | | | | | | | | | |
| Six Months Ended June 30, |
| 2024 | | 2023 |
Cash from operating activities | $ | (33,396) | | | $ | (63,589) | |
Cash from investing activities | 46,027 | | | (7,542) | |
Cash from financing activities | (14,297) | | | (132) | |
| $ | (1,666) | | | $ | (71,263) | |
Cash from Operating Activities
For the six months ended June 30, 2024, cash flows used in operating activities were $33.4 million. Cash used primarily related to a net loss of $26.4 million, adjusted for a $14.2 million change in working capital accounts and $7.2 million in non-cash expenses (including $7.7 million related to accounts payable, accrued expenses and other liabilities and $5.1 million related to prepaid expenses and other current assets, partially offset by $5.6 million in assets held for sale carrying value adjustments and $2.4 million related to share-based compensation).
For the six months ended June 30, 2023, cash flows used in operating activities were $63.6 million. Cash used primarily related to a net loss of $64.1 million, adjusted for a $4.5 million change in working capital accounts and $5.0 million in certain non-cash expenses (including $2.7 million related to accounts payable, accrued expenses and other liabilities and $3.8 million related to share-based compensation, partially offset by $5.8 million related to prepaid expenses and other assets and $0.8 million related to inventory purchases).
Cash from Investing Activities
For the six months ended June 30, 2024, cash flows provided by investing activities were $46.0 million. Cash provided related to the sale or maturity of investments of $83.2 million and the proceeds from sale of assets of $3.5 million, partially offset by the purchase of investments of $32.6 million and acquired property and equipment of $8.1 million.
For the six months ended June 30, 2023, cash flows used in investing activities were $7.5 million. Cash used related to the purchase of investments of $99.2 million and acquired property and equipment of $4.0 million, partially offset by the sale or maturity of investments of $95.6 million.
Cash from Financing Activities
For the six months ended June 30, 2024, cash flows used in financing activities were $14.3 million, primarily due to treasury stock repurchases.
For the six months ended June 30, 2023, cash flows used in financing activities were $0.1 million. Cash flows were primarily due to payment of taxes related to net share settlement of equity awards of $0.2 million.
Critical Accounting Policies and Estimates
In preparing our condensed consolidated financial statements, we applied the same critical accounting policies as described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, supplemented by those described below, that affect judgments and estimates of amounts recorded for certain assets, liabilities, revenues and expenses.
Share-Based Compensation
We account for share-based payments that involve the issuance of shares of our common stock to employees and nonemployees and meet the criteria for share-based awards as share-based compensation expense based on the grant-date fair value of the award. The Company has elected to recognize the adjustment to share-based compensation expense in the period in which forfeitures occur. We recognize compensation expense for awards with only service conditions on a straight-line basis over the requisite service period for the entire award.
In the first quarter of 2024, we granted 2.7 million market-conditioned restricted stock units that may vest between February 13, 2025 and December 31, 2026 contingent upon achieving underlying closing stock price thresholds. These awards were valued at $0.83 per unit using fair value hierarchy Level III inputs including an underlying share volatility of 90% and a risk-free rate of 4.35%.
If we were to utilize different assumptions including the estimate of underlying share volatility of our market-conditioned awards, share-based compensation cost could be under or overstated. If there are any modifications or cancellations of the
underlying unvested securities, we may be required to accelerate any remaining unearned share-based compensation cost or incur incremental cost. Share-based compensation cost affects our research and development and selling, general and administrative expenses.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined in Rule 12b-2 under the Exchange Act. As a result, pursuant to Item 305(e) of Regulation S-K, we are not required to provide the information required by this Item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Based on our management’s evaluation (with the participation of our Principal Executive Officer and Principal Financial Officer) of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, our Principal Executive Officer and Principal Financial Officer have concluded that, at June 30, 2024, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and to provide reasonable assurance that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time in the ordinary course of business, the Company may be named as a defendant in legal proceedings related to various issues, including workers’ compensation claims, tort claims, or contractual disputes. We are not currently involved in any material legal proceedings.
ITEM 1A. RISK FACTORS
A description of the risk factors associated with our business is contained in the “Risk Factors” section of our 2023 Annual Report. There have been no material changes to our risk factors as therein previously reported.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES
Issuer Purchases of Equity Securities
The following table provides information regarding repurchases of our Common Stock during the quarter ended June 30, 2024:
| | | | | | | | | | | | | | | | | | | | | | | |
| Total Number of Shares Purchased | | Average Price Paid per Share | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) | | Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(2) |
April 1 - 30, 2024 | 1,743,953 | | | $ | 1.42 | | | 10,456,410 | | | $ | 6,388,801 | |
May 1 - 31, 2024 | 153,660 | | | $ | 1.59 | | | 10,610,070 | | | $ | 6,144,349 | |
June 1 - 30, 2024 | — | | | $ | — | | | 10,610,070 | | | $ | 6,144,349 | |
Total | 1,897,613 | | | | | 10,610,070 | | | |
1 Share repurchases are conducted under our share repurchase program announced in December 2023, which has no expiration date, authorizing the repurchase of up to $20 million in shares.
2 This column includes the total value of shares available for repurchase under the Company's share repurchase program at the end of the indicated period. Shares under our share repurchase program may be repurchased in open market transactions, including pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, or through privately negotiated transactions. The timing, manner, price and amount of repurchases will be determined at our discretion and the share repurchase program may be suspended, terminated or modified at any time for any reason.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
| | | | | | | | |
Exhibit Number | | Description |
3.1 | | |
3.2 | | |
10.1* | | |
10.2* | | |
10.3* | | |
10.4* | | |
31.1* | | |
31.2* | | |
32.1** | | |
32.2** | | |
101.INS* | | XBRL Instance Document |
101.SCH* | | XBRL Taxonomy Extension Schema Document |
101.CAL* | | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF* | | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB* | | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE* | | XBRL Taxonomy Extension Presentation Linkbase Document |
104 | | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibits 101) |
* Filed herewith.
** Furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | | | | | | | |
Date: August 6, 2024 | HYLIION HOLDINGS CORP. |
| |
| /s/ Thomas Healy |
| Name: | Thomas Healy |
| Title: | Chief Executive Officer (Principal Executive Officer) |
| |
| /s/ Jon Panzer |
| Name: | Jon Panzer |
| Title: | Chief Financial Officer (Principal Financial Officer) |