Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 10-Q/A
Amendment No. 1
FORM
10-Q
(Mark One)
☒
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021March 31, 2022
OR
☐
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
__________ to
__________
______________________
Hyzon Motors Inc.
(Exact name of registrant as specified in its charter)
______________________
Delaware
001-39632
001-39632
82-2726724
(State or other jurisdiction
of incorporation)
(Commission

File Number)
(I.R.S. Employer

Identification No.)
475 Quaker Meeting House Road

Honeoye Falls, NY
14472
(Address of principal executive offices)
(Zip Code)
(585)-484-9337
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
______________________
Securities registered pursuant to Section 12(b) of
the
Act:
Title of each class
Trading
Symbol(s)
Trading
Symbol(s)
Name of each exchange
on which registered
Common Stock, par value $0.0001 per share
HYZN
NasdaqNASDAQ Capital Market
Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share
HYZNW
NasdaqNASDAQ Capital Market
______________________
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 ☒o    No  ☐
x
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  ☒o    No  ☐x

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.
Large accelerated filero☐Accelerated filer☐o
Non-accelerated
filer		x☒Smaller reporting company☒x
Emerging growth company☒x

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.    ☐
o

Indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2
of the Exchange Act).    Yes  ☐
o    No  ☒
x

As of
August 11, 2021,
247,215,716
March 1, 2023, 244,559,301 shares of Class A Common Stock, par value $0.0001 per share, were issued and outstanding.

1
EXPLANATORY NOTE

Hyzon Motors Inc. (“Hyzon”, the “Company”, ‘we”, “our” or “us”) filed our Quarterly Report on Form 10-Q for the period ended March 31, 2022 (the “Original Filing”) with the Securities and Exchange Commission ("SEC") on May 13, 2022. This Amendment No. 1 on Form 10-Q/A (this "Form 10-Q/A") is being filed to amend and restate certain items contained in the Original Filing (the "Restatement").

Restatement Background

As previously reported in the Company's Current Report on Form 8-K filed with the SEC on August 17, 2022, the Audit Committee of the Board of Directors (the "Board") of the Company (the “Audit Committee”), based on the recommendation of management, determined that the Company's previously issued financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and the Company’s previously issued financial statements included in the Company’s Original Filing should no longer be relied upon and require restatement because of issues regarding revenue recognition and internal controls and procedures, primarily pertaining to our China operations.

As further previously reported in the Company's Current Report on Form 8-K filed with the SEC on February 9, 2023, the Audit Committee, based on the recommendation of management, determined that the Company’s previously issued financial statements included in the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2021 should no longer be relied upon and also require restatement primarily because of issues regarding revenue recognition relating to its European joint venture operations.

For a more detailed discussion of the Restatement, refer to Note 2. Restatement of Previously Issued Financial Statements to the consolidated financial statements of the Company included herein.

Special Committee Investigation

As previously reported in the Company's Current Report on Form 8-K filed with the SEC on August 4, 2022, in connection with the preparation of the Company's financial results for the period ended June 30, 2022, the Board appointed a committee of Board members (the "Special Committee") to investigate, with the assistance of outside counsel and other advisors, the issues described above regarding revenue recognition and internal controls and procedures that were brought to the attention of the Board by management (the "Investigation"). The preliminary findings of the Investigation were completed in January 2023, and the final findings were issued in March 2023 as discussed in this Explanatory Note below.

Investigation with Respect to China Operations

On January 12, 2022, the Company announced the delivery of 87 fuel cell powered heavy-duty vehicles in 2021, which included 82 vehicles delivered to customers in China. In July 2022, management discovered and brought to the attention of the Board that certain vehicles may not have met the criteria necessary to recognize revenue as of December 31, 2021. The Special Committee was formed to conduct an investigation regarding the Company’s revenue recognition timing and internal controls and procedures, primarily pertaining to the Company’s China operations during the second half of 2021 and the first half of 2022.

The Investigation confirmed matters discovered by management in July 2022 that certain vehicles delivered to customers in China in December 2021 were not operable on hydrogen at the time of delivery (i.e., were not commissioned). As part of its internal review, the Company determined that the assembly of those vehicles was complete at the time of initial delivery but they had not undergone final commissioning, which generally consists of injecting hydrogen through the fuel cell powertrain system and conducting other tests necessary to ensure that the hydrogen fuel cell will power the vehicle. Additionally, based on the Investigation’s findings, the Company determined that it did not have an appropriate control environment focused on certain operational processes and procedures such as a formalized commissioning policy and a quality assurance process.

2
Based on the Investigation's findings, the Company concluded that the Company's contractual performance obligation to deliver functioning fuel cell electric vehicles (“FCEVs”) was not fully satisfied for revenue recognition purposes under Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). For additional information regarding the corrections to the financial statements, refer to Note 2. Restatement of Previously Issued Financial Statements to the consolidated financial statements of the Company included herein. Correction of the errors is also reflected in the restated annual financial statements for the year ended December 31, 2021 included in the Company’s amended Annual Report on Form 10-K/A.

Investigation with Respect to European Operations

The Special Committee identified certain issues associated with Hyzon Motors Europe B.V. ("Hyzon Europe"), the Company's European joint venture. The Investigation revealed that certain former members of Hyzon Europe's senior management team created a workplace culture where employees did not feel comfortable raising concerns. Additionally, the Investigation revealed that for five vehicles for which Hyzon Europe recognized revenue in 2021, Hyzon Europe subsequently performed various levels of work and repair efforts on such vehicles after revenue had been recognized.

Consequently, the Company conducted an internal accounting review for its European customer arrangements. This internal accounting review concluded that for the Hyzon Europe customer contracts which were assumed from Holthausen Clean Technology B.V. in July 2021, the Company did not appropriately analyze and record revenue and related balances associated with these arrangements. More specifically, the Company determined that instead of manufacturing or assembling FCEVs that it owned for sale to customers, Hyzon Europe was providing these customers with vehicle retrofit services to convert the customers' internal combustion engine (“ICE”) powered vehicles to hydrogen FCEVs. Therefore, Hyzon Europe should have recognized revenue over time utilizing an input method rather than recording revenue at a point in time. For additional information regarding the corrections to the financial statements, refer to Note 2. Restatement of Previously Issued Financial Statements to the consolidated financial statements of the Company included herein. Correction of errors is also reflected in the restated annual financial statements for the year ended December 31, 2021 included in the Company’s amended Annual Report on Form 10-K/A and the interim financial statements for the period ended September 30, 2021 included in the Company's amended Quarterly Report on Form 10-Q/A.

Transaction Costs

On July 16, 2021, our predecessorlegacy Hyzon Motors Inc. (“Legacy Hyzon”) and now named Hyzon Motors USA Inc. consummated the transactions contemplated by the Business Combination Agreement and Plan of Reorganization (the “Business Combination”), dated February 8, 2021, with Decarbonization Plus Acquisition Corporation a Delaware corporation (“DCRB”), consummated the previously announced to effect a business combination withbetween DCRB and Legacy Hyzon Motors, Inc., a Delaware corporation (“Legacy Hyzon”), pursuant to whichwith DCRB Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of DCRB, (“Merger Sub”) mergedmerging with and into Legacy Hyzon, with Legacy Hyzon surviving the merger (the “Merger”, and togetheras a wholly owned subsidiary of DCRB. The Company has adjusted its prior allocation of transaction costs incurred in connection with the related transactions, the “Business Combination”). Upon consummation of the Business Combination Legacy Hyzon became a direct wholly-owned subsidiaryto reflect the allocation of DCRB,the correct balance of Company incurred transaction costs between the liability classified earnout arrangement and DCRB was renamed Hyzon Motors, Inc. (“New Hyzon” or “Hyzon”). Unless stated otherwise, this report contains information about DCRB beforethe newly issued equity instruments in the Business Combination. ReferencesCombination in the third quarter of 2021. The adjustment resulted in a reduction of amounts previously allocated to the “Company”earnout liability and recognized as expense, offset by an equal increase of transaction costs allocated to the newly issued equity instruments and recorded against additional paid-in capital. For additional information regarding the corrections to the financial statements, refer to Note 2. Restatement of Previously Issued Financial Statements to the consolidated financial statements of the Company included herein. Correction of the error also is reflected in the restated financial statements for the year ended December 31, 2021 included in the Company’s amended Annual Report on Form 10-K/A and the period ended September 30, 2021 included in the Company's amended Quarterly Report on Form 10-Q/A.

Other Immaterial Errors

In addition to the errors described above, the Company’s previously issued financial statements included in the Company’s Original Filing and the Company's previously issued audited annual financial information included in the Company’s Annual Report on Form 10-K for the period ended December 31, 2021 and for the Company’s previously issued unaudited quarterly financial information included in the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2021, have been corrected in the amended filings to include previously unrecorded immaterial adjustments identified in audits or reviews of prior financial statements (the “Other Immaterial Errors”). For additional information regarding the Other Immaterial Errors, refer to Note 2. Restatement of Previously Issued Financial Statements to the consolidated financial statements of the Company included herein.

3
The errors described above and the Other Immaterial Errors in this amended Quarterly Report on Form 10-Q/A did not impact cash or the economics of the Company's existing commercial arrangements.

Internal Control Considerations

In connection with the Restatement, the Company has concluded there were material weaknesses in the Company’s internal control over financial reporting as of March 31, 2022 and its disclosure controls and procedures were not effective as of March 31, 2022. Management is taking steps to remediate the material weaknesses in our internal control over financial reporting.

For a discussion of management’s consideration of our disclosure controls and procedures, internal control over financial reporting, and the material weaknesses identified, see Part I, Item 4. Controls and Procedures of this Form 10-Q/A.

Items Amended in this Form 10-Q/A

This Form 10-Q/A presents the Original Report, amended and restated with modifications as necessary to reflect the correction of Restatement Items and Other Immaterial Errors. The following items have been amended:
•Part I - Item 1. Financial Statements
•Part I - Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
•Part I - Item 4. Controls and Procedures
•Part II - Item 1A. Risk Factors
•Part II - Item 6. Exhibits

Except as described above and in Note 17. Subsequent Events, this Form 10-Q/A does not amend, update or change any other items or disclosures in the Original Filing and does not purport to reflect any information or events subsequent to the filing thereof. As such, this Form 10-Q/A speaks only as of the date the Original Filing was filed, and the Company has not undertaken herein to amend, supplement, or update any information contained in the Original Filing to give effect to any subsequent events. Among other things, forward-looking statements made in the Original Filing have not been revised to reflect events, results or developments that occurred or facts that became known to us after the date of the Original Filing, other than the Restatement. In addition, in accordance with SEC rules, this Form 10-Q/A includes updated certifications from our Chief Executive Officer as Exhibits 31.1 and 32.1dated as of the filing date of this Form 10-Q/A. Accordingly, this Form 10-Q/A should be read in conjunction with our filings made with the SEC subsequent to the filing of the Original Filing, including any amendments to those filings.
4
CAUTIONARY NOTE REGARDING FORWARD- LOOKING STATEMENTS

This Quarterly Report on Form 10-Q/A contains forward-looking statements within the meaning of the Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements include, without limitation, statements regarding the financial position, business strategy, plans and objectives of management for future operations, and any statements that refer to characterizations of future events or circumstances, including any underlying circumstances. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this report, referthe words “could,” “should”, “will,” “may,” “anticipate,” “believe,” “expect,” “estimate,” “intend,” “plan,” “project,” the negative of such terms, and other similar expressions are intended to DCRB beforeidentify forward looking statements, although not all forward-looking statements contain such identifying words. Such forward-looking statements are based on management’s current expectations and assumptions about future events and are based on currently available information as to the consummationoutcome and timing of future events.

Except with respect to statements in this Form 10-Q/A revised or provided to reflect the effects of the Business CombinationRestatement, forward-looking statements herein are as of the Original Filing, filed with the SEC on May 13, 2022, unless specifically stated to be made as of a different date, and the Company has not updated forward-looking statements or New Hyzoninformation to reflect events occurring after the Business Combination,Original Filing.

Forward-looking statements are subject to a number of risks and uncertainties including, but not limited to, those described below and under the section entitled “Risk Factors” included in our Annual Report filed on Form 10-K/A for the year ended December 31, 2021, and in subsequent reports that we file with the SEC, including this Form 10-Q/A for the three months ended March 31, 2022.

•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 and letters of intent into binding orders or sales (including because of 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 context suggests.COVID-19 pandemic and geopolitical events, and shortage 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.

Should one or more of the risks or uncertainties described above, or should underlying assumptions prove incorrect, actual results and plans could differ materially from those expressed in any forward-looking statements.

The forward-looking statements contained in this report are based on our current expectations and beliefs concerning future developments and their potential effects on us and speak only as of the date of this report. Except as otherwise required by applicable law, we disclaim any duty to update any forward looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this report. You should, however, review additional disclosures we make in subsequent filings with the SEC.
5
DECARBONIZATION PLUS ACQUISITION CORPORATION
Hyzon Motors, Inc.
Quarterly Report on Form
10-Q
Table of Contents
Page No.
Item 1.
1
7
Condensed Balance Sheets (unaudited)
1
Condensed Statements of Operations (unaudited)
2
Condensed Statements of Changes in Stockholder’s Equity (unaudited)
3
Condensed Statements of Cash Flows (unaudited)
4
Notes to Condensed Financial Statements (unaudited)
5
Item 2.
19
29
Item 3.
4.
22
Item 4.
Controls and Procedures
22
39
42
Item 1.
1A.
Legal Proceedings42
24
Item 1A.
6.
Risk Factors43
24
Item 2.
SIGNATURE
Unregistered Sales of Equity Securities and Use of Proceeds44
24
Item 3.
Defaults Upon Senior Securities
24
Item 4.
Mine Safety Disclosures
24
Item 5.
Other Information
24
Item 6.
Exhibits.
25
SIGNATURE
26
6
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
HYZON MOTORS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(unaudited)
March 31,
2022		December 31, 2021
(As Restated)
ASSETS
Current assets
Cash$407,333 $445,146 
Accounts receivable812 2,956 
Related party receivable417 264 
Inventory28,397 20,927 
Prepaid expenses and other current assets28,914 26,852 
Total current assets465,873 496,145 
Property, plant, and equipment, net17,345 14,346 
Right-of-use assets10,961 10,265 
Investments in equity securities17,478 4,948 
Other assets5,292 4,575 
Total Assets$516,949 $530,279 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable$7,799 $7,980 
Accrued liabilities10,220 6,770 
Related party payables648 3,695 
Contract liabilities8,178 10,925 
Current portion of lease liabilities2,409 1,886 
Total current liabilities29,254 31,256 
Long term liabilities
Lease liabilities9,308 8,830 
Private placement warrant liability13,705 15,228 
Earnout liability100,520 103,761 
Deferred income taxes526 — 
Other liabilities1,142 1,139 
Total liabilities154,455 160,214 
Commitments and contingencies (Note 12)
Stockholders’ Equity
Common stock, $0.0001 par value; 400,000,000 shares authorized, 247,881,568 and 247,758,412 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively.25 25 
Additional paid-in capital401,862 400,826 
Accumulated deficit(32,935)(26,412)
Accumulated other comprehensive gain463 378 
Total Hyzon Motors Inc. stockholders’ equity369,415 374,817 
Noncontrolling interest(6,921)(4,752)
Total Stockholders’ Equity362,494 370,065 
Total Liabilities and Stockholders’ Equity$516,949 $530,279 
The accompanying notes are an integral part of these unaudited consolidated financial statements
PART I—FINANCIAL INFORMATION
Item 1.
Interim Financial Statements
Decarbonization Plus Acquisition Corporation
BALANCE SHEETS
   
June 30, 2021

(unaudited)
  
December 31,
2020
 
ASSETS:
 
Current assets:
         
Cash
  $167,284  $—   
Investment held in Trust Account
   225,734,427   225,727,721 
Prepaid insurance
   769,425   1,062,000 
   
 
 
  
 
 
 
Total current assets
   226,671,136   226,789,721 
   
 
 
  
 
 
 
Total assets
  $226,671,136  $226,789,721 
   
 
 
  
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
         
Current liabilities:
         
Accrued offering costs
  $175,000  $175,000 
Accounts payable—affiliate
   3,375,977   1,324,257 
Accrued expenses
   3,533,899   3,572,935 
   
 
 
  
 
 
 
Total Current Liabilities
   7,084,876   5,072,192 
Warrant liabilities
   40,763,719   33,600,270 
Deferred underwriting fee payable
   7,900,376   7,900,376 
   
 
 
  
 
 
 
Total liabilities
   55,748,971   46,572,838 
   
 
 
  
 
 
 
COMMITMENTS AND CONTINGENCIES
  0  0   
Class A common stock subject to possible redemption, 16,592,216 and 17,521,688
shares at June 30, 2021 and December 31, 2020,
respectively, at $10.00 per share
   165,922,160   175,216,880 
Stockholders’ equity:
         
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 0ne issued and outstanding
   0—     0—   
Class A common stock, $0.0001 par value, 250,000,000 shares authorized; 5,980,286 and 5,050,814 shares, respectively, issued and outstanding (excluding 16,592,216 and 17,521,688 shares subject to possible redemption) at
June 30
, 2021 and December 31, 2020, respectively
   598   505 
Class B common stock, $0.0001 par value, 20,000,000 shares authorized, 5,643,125
 
s
hares issued and outstanding at
June
 3
0
, 2021 and December 31, 2020
   564   564 
Additional
paid-in
capital
   36,135,858   26,841,231 
Accumulated deficit
   (31,137,015)   (21,842,297) 
   
 
 
  
 
 
 
Total stockholders’ equity
   5,000,005   5,000,003 
   
 
 
  
 
 
 
Total liabilities and stockholders’ equity
  $ 226,671,136  $ 226,789,721 
   
 
 
  
 
 
 
1
7
HYZON MOTORS INC. AND SUBSIDIARIES
Decarbonization Plus Acquisition Corporation
UNAUDITEDCONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
   
For the Three
Months Ended June
30, 2021
  
For the Three
Months Ended June
30, 2020
  
For the Six Months
Ended June 30, 2021
  
For the Six Months
Ended June 30, 2020
 
Operating expenses:
                 
General and administrative expenses
  $1,361,853  $860  $2,137,975  $1,719 
   
 
 
  
 
 
  
 
 
  
 
 
 
Loss from operations
   (1,361,853)   (860)   (2,137,975)   (1,719) 
Other Income
                 
Interest earned on marketable securities held in Trust Account
  $3,372  $—    $6,706  $—   
Change in fair value of warrant liabilities
   (6,824,865)   —     (7,163,449)   —   
   
 
 
  
 
 
  
 
 
  
 
 
 
                  
Net loss
  $ (8,183,346)  $(859)  $ (9,294,718)  $(1,719) 
   
 
 
  
 
 
  
 
 
  
 
 
 
Weighted average shares outstanding of Class A redeemable common stock, basic and diluted
   22,572,502   —     22,572,502   —   
   
 
 
  
 
 
  
 
 
  
 
 
 
Basic and diluted net income per common share, Class A redeemable common stock
  $—    $—    $0.00  $—   
   
 
 
  
 
 
  
 
 
  
 
 
 
Weighted average shares outstanding of Class B non-redeemable common stock, basic and diluted (1) (2)
   5,643,125   5,643,125   5,643,125   5,643,125 
   
 
 
  
 
 
  
 
 
  
 
 
 
Basic and diluted net loss per common share, Class B non-redeemable common stock
  $0    $(0.00)  $(1.65)  $(0.00) 
   
 
 
  
 
 
  
 
 
  
 
 
 
(in thousands, except per share amounts)
(unaudited)
Three Months Ended
March 31,
20222021
(As Restated)
Revenue$2,888 $— 
Operating expense:
Cost of revenue653 — 
Research and development6,936 627 
Selling, general, and administrative19,752 3,146 
Total operating expenses27,341 3,773 
Loss from operations(24,453)(3,773)
Other income (expense):
Change in fair value of private placement warrant liability1,523 — 
Change in fair value of earnout liability3,241 — 
Change in fair value of equity securities12,530 — 
Foreign currency exchange loss and other expense(1,150)(28)
Interest income (expense), net17 (4,588)
Total other income (expense)16,161 (4,616)
Net loss before income taxes(8,292)(8,389)
Income tax expense526 — 
Net loss$(8,818)$(8,389)
Less: Net loss attributable to noncontrolling interest(2,295)(242)
Net loss attributable to Hyzon$(6,523)$(8,147)
Comprehensive loss:
Net loss$(8,818)$(8,389)
Foreign currency translation adjustment211 (29)
Comprehensive loss$(8,607)$(8,418)
Less: Comprehensive loss attributable to noncontrolling interest(2,169)(233)
Comprehensive loss attributable to Hyzon$(6,438)$(8,185)
Net loss per share attributable to Hyzon:
Basic$(0.03)$(0.05)
Diluted$(0.03)$(0.05)
Weighted average common shares outstanding:
Basic247,940 166,201 
Diluted247,940 166,201 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
2
8
HYZON MOTORS INC. AND SUBSIDIARIES
Decarbonization Plus Acquisition Corporation
UNAUDITEDCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(in thousands, except share data)
(unaudited)
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)
SharesAmountSharesAmount
Balance as of December 31, 2021— $— 247,758,412 $25 $400,826 $(26,412)$378 $374,817 $(4,752)$370,065 
Exercise of stock options— — 30,008 — 34 — — 34 — 34 
Stock-based compensation— — — — 1,193 — — 1,193 — 1,193 
Vesting of RSUs— — 64,815 — — — — — — — 
Net share settlement of equity awards— — — — (160)— — (160)— (160)
Common stock issued for the cashless exercise of warrants— — 28,333 — — — — — — — 
Repurchase of warrants— — — — (31)— — (31)— (31)
Net loss attributable to Hyzon— — — — — (6,523)— (6,523)— (6,523)
Net loss attributable to noncontrolling interest— — — — — — — — (2,295)(2,295)
Foreign currency translation loss— — — — — — 85 85 126 211 
Balance at March 31, 2022 (As Restated)— $— 247,881,568 $25 $401,862 $(32,935)$463 $369,415 $(6,921)$362,494 
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)
SharesAmountSharesAmount
Balance as of December 31, 202093,750,000 $94 — $— $29,045 $(14,271)$(16)$14,852 $(91)$14,761 
Retroactive application of recapitalization(93,750,000)(94)166,125,000 17 77 — — — — — 
Adjusted balance, beginning of period— — 166,125,000 17 29,122 (14,271)(16)14,852 (91)14,761 
Exercise of stock options— — 115,189 — 187 — — 187 — 187 
Stock-based compensation— — — — 290 — — 290 — 290 
IP transaction - deemed distribution— — — — (10,000)— — (10,000)— (10,000)
Net loss attributable to Hyzon— — — — — (8,147)— (8,147)— (8,147)
Net loss attributable to noncontrolling interest— — — — — — — — (242)(242)
Foreign currency translation loss— — — — — — (38)(38)9 (29)
Balance at March 31, 2021— $— 166,240,189 $17 $19,599 $(22,418)$(54)$(2,856)$(324)$(3,180)

The accompanying notes are an integral part of these unaudited consolidated financial statements.
For the period from January 1,
2021
to June 30,
2021
                                                                                                                                                    
   
Class A Common Stock
   
Class B Common Stock
   
Additional
Paid-in
  
Accumulated
  
 
Stockholders’ 
 
   
Shares
   
Amount
   
Shares (1) (2)
   
Amount
   
Capital
  
Deficit
  
Equity
 
Balances
 as of
January 1, 202
1
   5,050,814   $
505
    5,643,125   $564   $26,841,231   $(21,842,297) $5,000,003 
Common stock subject to possible redemptio
n
  
111,137
   
11
   
—
 
 
   
—
 
 
   
1,111,359
   
—
 
 
   
1,111,370
 
Net loss
   —      —      —      —      —      (1,111,372)   (1,111,372) 
Balances
 as of
March 31, 202
1
  
 
5,161,951
 
  
$
516
 
  
 
5,643,125
 
  
$
564
 
  
$
27,952,590
 
 
$
(22,953,669
) 
 
$
5,000,001
 
Common stock subject to possible redemptio
n
  
818,335
   
82
   
—  
   
—
 
 
   
8,183,268
  
—
 
 
   
8,183,350
 
Net loss
  
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
—  
 
 
 
(8,183,346
) 
 
 
(8,183,346
) 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
  
 
 
 
Balances as of June 30, 202
1
   
 5,980,286
   $
  
598
    5,643,125   $564   $36,135,858  $(31,137,015)  $5,000,005 
For the period from January 1,
2020
to June 30,
2020
                                                                                                                                                    
   
Class A Common Stock
   
Class B Common Stock
   
Additional
Paid-in
   
Accumulated
  
Stockholder’s
 
 
   
Shares
   
Amount
   
Shares (1) (2)
   
Amount
   
Capital
   
Deficit
  
Equity
 
Balances
 as of
January 1, 202
0
   —     $—      5,750,000   $575   $243,447   $(219,422)  $24,600 
Net loss
   —      —      —      —      —      (859)   (859) 
Balances as of March 31, 202
0
  
 
—  
 
  
$
—  
 
  
 
5,750,000
 
  
$
575
 
  
$
243,447
 
  
(220,281
) 
 
23,741
 
Net loss
  
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
—  
 
  
 
(860
) 
 
 
(860
) 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
   
 
 
  
 
 
 
Balances as of June 30, 202
0
   —     $—      5,750,000   $575   $243,447   $(221,141)  $22,881 
3
9
HYZON MOTORS INC. AND SUBSIDIARIES
Decarbonization Plus Acquisition Corporation
UNAUDITEDCONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
   
For the Six
Months Ended
June 30, 2021
  
For the Six
Months Ended
June 30, 2020
 
Cash flow from operating activities:
         
Net loss
  $(9,294,718)  $(1,719) 
Adjustments to reconcile net loss to net cash used in operating activities:
         
Change in fair value of warrant liabilities
   7,163,449     
Interest
earned on marketable securities held in Trust Account
   (6,706)   —   
Changes in operating assets and liabilities:
         
Accounts payable
   2,051,720   1,719 
Accrued expenses
   (39,036)   —   
Prepaid insurance
   292,575   —   
   
 
 
  
 
 
 
Net cash used in operating activities
   167,284   —   
   
 
 
  
 
 
 
          
Net increase in cash
   167,284   —   
Cash at beginning of period
   —     315,600 
   
 
 
  
 
 
 
Cash at end of period
  $167,284  $315,600 
   
 
 
  
 
 
 
          
Supplemental disclosure of
non-cash
financing activities:
         
Change in value of Class A common stock subject to possible redemption
  $(9,294,720)  $—   
   
 
 
  
 
 
 
(unaudited)
Three Months Ended
March 31,
20222021
(As Restated)
Cash Flows from Operating Activities:
Net loss$(8,818)$(8,389)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization904 129 
Stock-based compensation1,193 290 
Deferred income tax expense526 — 
Noncash interest expense— 4,500 
Fair value adjustment of private placement warrant liability(1,523)— 
Fair value adjustment of earnout liability(3,241)— 
Fair value adjustment of value of equity securities(12,530)— 
Changes in operating assets and liabilities:
Accounts receivable2,164 (191)
Inventory(7,494)(626)
Prepaid expenses and other current assets(1,749)(6,982)
Other assets(68)— 
Accounts payable(180)375 
Accrued liabilities3,404 316 
Related party payables, net(56)811 
Contract liabilities(2,637)297 
Other liabilities9 — 
Net cash used in operating activities(30,096)(9,470)
Cash Flows from Investing Activities:
Purchases of property and equipment(3,575)(3,950)
Advanced payments for capital expenditures(320)— 
Investment in equity securities— (123)
Net cash used in investing activities(3,895)(4,073)
Cash Flows from Financing Activities:
Exercise of stock options34 187 
Payment of finance lease liability(86)(38)
Debt issuance costs— (59)
Proceeds from issuance of convertible notes— 45,000 
Net share settlement of equity awards
(160)— 
Payment for purchase of Horizon IP(3,146)— 
Repurchase of warrants(31)— 
Deferred transaction costs— (487)
Net cash (used in) provided by financing activities(3,389)44,603 
Effect of exchange rate changes on cash216 (26)
Net change in cash and restricted cash(37,164)31,034 
Cash and restricted cash — Beginning449,365 17,139 
Cash and restricted cash — Ending$412,201 $48,173 
Supplemental schedule of non-cash investing activities and financing activities:
Horizon license agreement payable— 10,000 
Transaction costs included in accrued expenses— 2,978 
The accompanying notes are an integral part of these unaudited consolidated financial statements.
4
10
HYZON MOTORS INC. AND SUBSIDIARIES
Dearbonization Plus Acquisition Corporation
NOTES TO THE UNAUDITEDCONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 — 1. Nature of Business and Basis of Presentation

Description of OrganizationBusiness

Hyzon Motors Inc. (“Hyzon” or the “Company”), headquartered in Honeoye Falls, New York, assembles and Business Operations
Organizationsupplies hydrogen fuel cell-powered commercial vehicles across North America, Europe, China, and General
Silver Run Acquisition Corporation III was incorporated in Delaware on September 7, 2017. The Company was formed for the purpose of effectingAustralasia. In addition, Hyzon builds and fosters a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combinationclean hydrogen supply ecosystem with one or more businesses (the “Initial Business Combination”).leading partners from feedstocks through production, dispensing, and financing. The Company is an “emerging growthmajority-owned by Hymas Pte. Ltd. (“Hymas”), a Singapore company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, or the “Securities Act,” as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). On August 18, 2020, the Company changed its name from Silver Run Acquisition Corporation III to Decarbonization Plus Acquisition Corporation (the “Company”
 o
r “DCRB”). Following the consummation of the Business Combination on July 16, 2021, DCRB changed its name to Hyzon Motors Inc.
At June 30, 2021, the Company had not commenced an
y
 operations. All activity through June 30, 2021 relates to the Company’s formation and initial public offering (“Initial Public Offering”), which is described below, as well as the identification and evaluation of prospective acquisition targets for an Initial majority-owned but indirectly controlled by Horizon Fuel Cell Technologies PTE Ltd., a Singapore company (“Horizon”).

Business Combination and ongoing administrative and compliance matters. The Company will not generate any operating revenues until after completion of its Initial Business Combination, at the earliest which is discussed in Note 8. The Company will generate
non-operating
income in the form of interest income from the proceeds derived from the Initial Public Offering.
The registration statement for the Initial Public Offering was declared effective on October 19, 2020. On October 22, 2020, the Company consummated the Initial Public Offering of 22,572,502 units (the “Units” and, with respect to the Class A common stock included in the Units sold, the “Public Shares”), which includes the partial exercise by the underwriters of their over-allotment option in the amount of 2,572,502 units (the “Over-allotment Units”) on November 12, 2020, at $10.00 per Unit, generating gross proceeds of $225,725,020, which is described in Note 3.
Simultaneously with the closing of the Initial Public Offering, the Company consummated the private sale of 6,514,500 warrants (the “Private Placement Warrants”), including 514,500 warrants as a result of the underwriters’ partial exercise of their over-allotment option on November 12, 2020, at a price of $1.00 per Private Placement Warrant in a private placement to Decarbonization Plus Acquisition Sponsor, LLC (the “Sponsor”), the Company’s independent directors and an affiliate of the Company’s chief executive officer, generating gross proceeds of $6,514,500, which is described in Note 4.
Transaction costs amounted to $12,969,969, consisting of $4,514,500 of underwriting fees, $7,900,376 of deferred underwriting fees and $555,093 of
other offering costs. In addition, at June 30, 2021, there was $167,284 of cash held outside of the Trust Account (as defined below) available for working capital purposes, but the Company has access to working capital loans from the Sponsor, which is described in Note 4.
Following the closing of the Initial Public Offering on October 22, 2020 and the partial exercise of the underwriters’ over-allotment option on November 12, 2020, an amount of $225,725,020 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”) located in the United States. The proceeds held in the Trust Account will be invested only in U.S. government treasury bills with a maturity of 185 days or less or in money market funds that meet certain conditions under Rule
2a-7
under the Investment Company Act of 1940 and that invest only in direct U.S. government obligations. Funds will remain in the Trust Account until the earlier of (i) the consummation of the Initial Business Combination or (ii) the distribution of the Trust Account proceeds as described below. The remaining proceeds outside the Trust Account may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses.
The Company’s amended and restated certificate of incorporation prior to the Business Combination provides that, other than the withdrawal of interest to pay taxes, if any, none of the funds held in the Trust Account will be released until the earlier of: 
(i) the completion of the Initial Business Combination; (ii) the redemption of any Public Shares being sold in the Initial Public Offering that have been properly submitted in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation (A) to modify the substance or timing of its obligation to redeem 100% of Public Shares if it does not complete the Initial Business Combination within 24 months from the closing of the Initial Public Offering or (B) with respect to any other provision relating to the rights of holders of Public Shares or
pre-Initial
Business Combination activity; and (iii) the redemption of 100% of the Public Shares if the Company is unable to complete an Initial Business Combination within 24 months from the closing of the Initial Public Offering (subject to the requirements of law). The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Company’s public stockholders.
5
Table of Contents
Dearbonization Plus Acquisition Corporation
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
Initial Business Combination
The following description relates to the Company prior to the consummation of the Business Combination.
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering, although substantially all of the net proceeds of the Initial Public Offering are intended to be generally applied toward consummating an Initial Business Combination. The Initial Business Combination must occur with one or more target businesses that together have an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on income earned on the Trust Account) at the time of the agreement to enter into the Initial Business Combination. 
The Company, after signing a definitive agreement for an Initial Business Combination, will either (i) seek stockholder approval of the Initial Business Combination at a meeting called for such purpose in connection with which stockholders may seek to redeem their shares, regardless of whether they vote for or against the Initial Business Combination, for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Initial Business Combination, including interest but less taxes payable, or (ii) provide stockholders with the opportunity to sell their Public Shares to the Company by means of a tender offer (and thereby avoid the need for a stockholder vote) for an amount in cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Initial Business Combination, including interest but less taxes payable. The decision as to whether the Company will seek stockholder approval of the Initial Business Combination or will allow stockholders to sell their Public Shares in a tender offer will be made by the Company, solely in its discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require the Company to seek stockholder approval, unless a vote is required by law or under the Nasdaq Capital Market rules. If the Company seeks stockholder approval, it will complete its Initial Business Combination only if a majority of the outstanding shares of common stock voted are voted in favor of the Initial Business Combination. However, in no event will the Company redeem its Public Shares in an amount that would cause its net tangible assets to be less than $5,000,001. In such case, the Company would not proceed with the redemption of its Public Shares and the related Initial Business Combination, and instead may search for an alternate Initial Business Combination.
If the Company holds a stockholder vote or there is a tender offer for shares in connection with an Initial Business Combination, a public stockholder will have the right to redeem its shares for an amount in cash equal to its pro rata share of the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Initial Business Combination, including interest but less taxes payable. As a result, such shares of Class A common stock will be recorded at redemption amount and classified as temporary equity upon the completion of the Initial Public Offering, in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from Equity”(“ASC 480”).
Pursuant to the Company’s amended and restated certificate of incorporation prior to the Business Combination, if the Company is unable to complete
the Initial Business Combination within 24 months from the closing of the Initial Public Offering, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than ten business days thereafter subject to lawfully available funds therefor, redeem the Public Shares, at a
per-share
price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to us to pay the Company’s franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholder’s rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. The Sponsor and the Company’s independent directors and an affiliate of the Company’s chief executive officer have entered into a letter agreement with the Company, pursuant to which they have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares (as defined below) held by them if the Company fails to complete the Initial Business Combination within 24 months of the closing of the Initial Public Offering. However, if the Sponsor or any of the Company’s directors, officers or affiliates acquires shares of Class A common stock in or after the Initial Public Offering, they will be entitled to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete the Initial Business Combination within the prescribed time period.
6
Table of Contents
Dearbonization Plus Acquisition Corporation
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
In the event of a liquidation, dissolution or winding up of the Company after an Initial Business Combination, the Company’s stockholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the common stock. The Company’s stockholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the common stock, except that the Company will provide its stockholders with the opportunity to redeem their Public Shares for cash equal to their pro rata share of the aggregate amount then on deposit in the Trust Account, upon the completion of the Initial Business Combination, subject to the limitations described herein.
Going Concern and Liquidity
As of June 30, 2021, the Company had a cash balance of $167,284, but the Company h
a
d
 access to working capital loans from the Sponsor, which is described in Note 4, to partially cover the working capital deficit of $6.9 million as of June 30, 2021. This excludes interest income of approximately $6,706 from the Company’s investment in the Trust Account which is available to the Company for tax obligations. Through June 30, 2021, the Company has not withdrawn any interest income from the Trust Account t
o
 pay its income and franchise taxes.
Prior to the consummation of an Initial Business Combination (which was consummated on July 16, 2021, as discussed in Note 8), the Company used funds held outside of the Trust Account for paying existing accounts payable, identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Initial Business Combination.
As discussed in Note 8, the Company consummated a business combination that was approved by shareholders of the Company on July 16, 2021.
Note 2 — Summary of Significant Accounting Policies
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiary since its formation. All material intercompany balances and transactions have been eliminated in consolidation.
7
Table of Contents
Dearbonization Plus Acquisition Corporation
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
Basis of Presentation

The accompanying unaudited condensed consolidated financial statements and related disclosures have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rulesrequirements and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP. In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair presentation have been included. Operating results for the three and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021 or any future period.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a)rules of the Securities Act, as modified by the JOBS Act, and it may take advantage of certain exemptions from various reporting requirementsExchange Commission (“SEC”) regarding interim reporting. Certain notes or other information that are applicable to other public companies that are not emerging growth companies including, but not limited to, not beingnormally required to comply withby U.S. GAAP have been omitted if they substantially duplicate the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensationdisclosures contained in the Company’s periodic reports and proxy statements, and exemptions fromannual audited consolidated financial statements. Accordingly, the requirements of holding a
non-binding
advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to
non-emerging
growth companies but any such an election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
The accompanying unaudited consolidated financial statements should be read in conjunctionconnection with the Company’s audited consolidated financial statements and related notes thereto included in the Amendment No. 1Company’s amended Annual Report filed on Form 10-K/A for the year ended December 31, 2021.

The Company’s unaudited consolidated financial statements include the accounts and operations of the FormCompany and its wholly owned subsidiaries including variable interest entity arrangements in which the Company is the primary beneficiary. All intercompany accounts and transactions are eliminated in consolidation. In the opinion of management, the accompanying unaudited consolidated financial statements include all normal and recurring adjustments necessary for a fair presentation for the periods presented. Results of operations reported for interim periods presented are not necessarily indicative of results for the entire year or any other periods.
10-K/A
filed
On July 16, 2021 (the “Closing Date”), legacy Hyzon Motors Inc. and now named Hyzon Motors USA Inc., (“Legacy Hyzon”), consummated the transactions contemplated by the CompanyBusiness Combination Agreement and Plan of Reorganization (the “Business Combination”), dated February 8, 2021, with Decarbonization Plus Acquisition Corporation (“DCRB”) to effect a business combination between DCRB and Legacy Hyzon with DCRB Merger Sub Inc., a wholly owned subsidiary of DCRB, merging with and into Legacy Hyzon, with Legacy Hyzon surviving the SEC on May 13, 2021.merger as a wholly owned subsidiary of DCRB. On the Closing Date, DCRB changed its name to “Hyzon Motors Inc.” and Legacy Hyzon changed its name to “Hyzon Motors USA Inc.”
Net Loss Per Common Share

Net loss per common shareThe Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP, with no goodwill or other intangible assets recorded and the net assets of Legacy Hyzon consolidated with DCRB at historical cost. Under this method of accounting, DCRB is computed by dividing net loss applicable to common stockholders bytreated as the weighted average number of common shares outstanding during“acquired” company for financial reporting purposes.

Accordingly, the period, excluding shares of common stock subject to forfeiture, plus,equity structure has been retrospectively adjusted in all comparative periods up to the extent dilutive,Closing Date, to reflect the incremental number of shares of the Company's common stock, $0.0001 par value per share issued to settle warrants,Legacy Hyzon's stockholders in connection with the reverse recapitalization. As such, the shares and corresponding capital amounts and earnings per share related to Legacy Hyzon common stock prior to the Business Combination have been retroactively restated as calculated using the treasury stock method. Forshares reflecting an exchange ratio of 1.772 (the “Exchange Ratio”).

Liquidity and Capital Resources

The Company has incurred losses from operations since inception. The Company incurred net losses of $8.8 million and $8.4 million for the three months ended March 31, 2022 and six2021, respectively, and accumulated deficit amounted to $32.9 million and $26.4 million as of March 31, 2022 and December 31, 2021, respectively. Net cash used in operating activities was $30.1 million and $9.5 million for the three months ended June 30,March 31, 2022 and 2021, respectively.

11
On July 16, 2021, the Company received $509.0 million in cash, net of redemption and transaction costs as a result of the Business Combination. As of March 31, 2022, the Company has $407.3 million in unrestricted cash. Management expects that the Company’s cash, after taking consideration of the current projections of cash flows used in operating and investing activities, will be sufficient to meet its liquidity requirements for at least one year from the issuance date of these unaudited consolidated financial statements. Based on the above considerations, the Company’s unaudited consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities during the normal course of operations.

Risks and Uncertainties

The Company is subject to a variety of risks and uncertainties common to early-stage companies with a history of losses and are expected to incur significant expenses and continuing losses for the foreseeable future. The risks and uncertainties include, but not consideredlimited to, further development of its technology, marketing and distribution channels, further development of its supply chain and manufacturing, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, and the ability to secure additional capital to fund operations.

Note 2. Restatement of Previously Issued Financial Statements

Management, in concurrence with the Company’s Audit Committee, concluded that the Company's previously issued financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and the Company's previously issued unaudited interim financial information included in the Company’s Quarterly Report on Form 10-Q for the quarterly periods ended September 30, 2021 and March 31, 2022 (collectively the “the Affected Financial Statements”) should no longer be relied upon. Details of the restated consolidated financial statements as of and for the period ended March 31, 2022 are provided below (“Restatement Items”). The Company evaluated the materiality of these errors both qualitatively and quantitatively in accordance with Staff Accounting Bulletin (“SAB”) No. 99, Materiality and SAB No. 108, Considering the Effects of Prior Year Misstatements in Current Year Financial Statements, and determined the effect of warrants soldthese corrections were material to the Affected Financial Statements. As a result of the material misstatements, the Company has restated our Affected Financial Statements, in accordance with ASC 250, Accounting Changes and Error Corrections.

The Restatement Items primarily reflect adjustments to correct errors related to the recognition of revenue and associated balances for China FCEV transactions, and adjustments to correct errors related to the recognition of revenue and associated balances for European FCEV transactions. In addition to the correction of the errors discussed above, the Company has corrected for Other Immaterial Errors in all Affected Financial Statements.

The Company has also updated all accompanying footnotes and disclosures affected by the Restatement Items and Other Immaterial Errors, respectively, within Note 1. Nature of Business and Basis of Presentation, Note 4. Revenue, Note 5. Inventory, Note 6. Prepaid Expenses and Other Current Assets, Note 7. Property, Plant, and Equipment, net, Note 8. Accrued liabilities, Note 10. Income Taxes, Note 11. Fair Value Measurements, Note 14. Stockholders' Equity, and Note 16. Loss per share.

12
Restatement Items

A.Hyzon China revenue transactions - In July 2022, management discovered and brought to the attention of the Board that certain vehicles in China may not have met the criteria necessary to recognize revenue as of December 31, 2021. The Special Committee was formed to conduct an investigation regarding the Company’s revenue recognition timing and internal controls and procedures for both China and Europe operations. The Company determined that it incorrectly recorded revenue and cost of revenue related to certain FCEVs delivered to customers in China in the Initial Public Offering and private placement in the calculationfourth quarter of diluted income (loss) per share since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive. For the three months and six months ended June 30, 2020,2021, as the Company did not meet all relevant revenue recognition requirements under U.S. GAAP related to these vehicles. The Company determined that for all Hyzon China revenue transactions an alternative method for revenue recognition was appropriate because the contract existence criteria were not met. For 62 FCEVs, while control of such FCEVs was transferred to the customer prior to December 31, 2021, the Company's obligation to deliver functioning FCEVs was not fully satisfied for revenue recognition purposes until the first first quarter of 2022, as certain of the FCEVs were not commissioned prior to December 31, 2021. For the other 20 FCEVs, the Company concluded it incorrectly recorded revenue in the fourth quarter of 2021, as it had not yet transferred control of the FCEVs to the customer, nor fully satisfied the obligation to deliver fully functioning FCEVs until the third quarter of 2022. Additionally, for both of the Hyzon China revenue transactions, the Company incorrectly recorded VAT receivable from customers totaling $1.8 million as of December 31, 2021. The Company determined that consideration received from those customers should have first been applied against any dilutive securitiesVAT receivables and then recorded within contract liabilities until the applicable revenue recognition criteria are met. Correction of the errors increased Revenue by $2.5 million, decreased Prepaid expenses and other current assets by $0.9 million, Other long-term assets by $0.9 million, and Other long-term liabilities by $0.9 million, increased Inventory by $2.9 million, Accrued liabilities by $0.7 million, and Accumulated deficit by $1.2 million.

B.Hyzon Europe revenue transactions - The Investigation revealed that for five vehicles for which Hyzon Europe recognized revenue in 2021, Hyzon Europe subsequently performed various levels of work and repair efforts on such vehicles after revenue had been recognized. Consequently, the Company conducted an internal accounting review for its European customer arrangements. The Company determined that the accounting analysis previously applied to certain Hyzon Europe customer contracts, which were assumed from Holthausen Clean Technology B.V. in July 2021, was incorrect. More specifically, the Company previously determined that could, potentially, be exercised or converted into common stockHyzon Europe had acquired title to work-in-process vehicles from Holthausen Clean Technology B.V and then sharehad been manufacturing and assembling these FCEVs for subsequent sale to customers. Hyzon Europe had instead assumed service contracts related to the retrofit services to convert the customers' own ICE powered vehicles to hydrogen FCEVs. Therefore, the Company revised its revenue recognition analysis and concluded that Hyzon Europe should not have recorded the assumption of these contracts as inventory and associated contract liabilities, and also should have recognized revenue related to these service contract arrangements on an over-time basis utilizing an input method rather than recording revenue at a point in time. Correction of the error increased Cost of revenue by $0.1 million and decreased Inventory by $1.0 million, Accrued liabilities by $0.1 million, Contract liabilities by $1.8 million, and Accumulated deficit by $1.0 million.

C.Transaction costs - The Company has adjusted its prior allocation of transaction costs incurred in connection with the Business Combination to reflect the allocation of the correct balance of Company incurred transaction costs between the liability classified earnout arrangement and the newly issued equity instruments in the earningsBusiness Combination in the third quarter of 2021. The adjustment resulted in a reduction of amounts previously allocated to the earnout liability and recognized as expense, offset by an equal increase of transaction costs allocated to the newly issued equity instruments and recorded against additional paid-in capital. Correction of the error decreased Additional paid-in capital by $3.1 million with a corresponding increase to accumulated deficit.

13
Other Immaterial Errors

In addition to the Restatement Items, the Company underhas corrected Other Immaterial Errors. While these Other Immaterial Errors are quantitatively and qualitatively immaterial, individually and in the treasury stock method. As a result, diluted loss per common shareaggregate, because the Company is the same as basic loss per common sharecorrecting for the periods.material errors, we have decided to correct these Other Immaterial Errors as well. Correction of miscellaneous immaterial errors increased Cost of revenue by $0.1 million, Research and development expenses by $0.7 million, Foreign currency exchange loss and other expenses by $0.1 million. decreased Selling, general and administrative expenses by $0.7 million, Prepaid expenses and other current assets by $0.1 million, Property, plant, and equipment, net by $0.9 million, Accounts payable by $0.2 million, Contract liabilities by $1.0 million, increased Inventory by $0.4 million, , Accrued liabilities by $0.6 million, Lease liabilities by $0.1 million, Other long-term liabilities by $0.8 million, and Accumulated deficit by $0.7 million.


14
Summary Impact of Restatement Items and Other Immaterial Errors

The Company’s statementsfollowing tables present the effect of operations include a presentation of income (loss) per share for common stock in a manner similar to the
two-class
method of income per share. Net income per common share, basic and diluted for Class A redeemable common stock is calculated by dividing the interest income earnedRestatement Items, as well as Other Immaterial Errors, on the Trust Account (net of applicable franchise and income taxes for the periods ended June 30, 2021), by the weighted average number of Class A redeemable common stock outstandingCompany’s consolidated balance sheet for the period or since original issuance. Net lossindicated (in thousands, except per common share, basic and diluted for Class B
non-redeemable
common stock is calculated by dividing the net income (loss), less income attributable to Class A redeemable common stock, by the weighted average number of Class B non-redeemable common stock outstanding for the period. Class B
Non-redeemable
common stock includes the Founder Shares (as defined below) as these shares do not have any redemption features and do not participate in the income earned on the Trust Account.
share):
As of March 31, 2022
As Previously ReportedRestatement AdjustmentRestatement ReferencesAs Restated
ASSETS
Current assets
Cash$407,333 $— $407,333 
Accounts receivable774 38 812 
Related party receivable417 — 417 
Inventory26,082 2,315 (A) , (B)28,397 
Prepaid expenses and other current assets29,951 (1,037)(A)28,914 
Total current assets464,557 1,316 465,873 
Property, plant, and equipment, net18,249 (904)17,345 
Right-of-use assets10,970 (9)10,961 
Investments in equity securities17,478 — 17,478 
Other assets6,146 (854)(A)5,292 
Total Assets$517,400 $(451)$516,949 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable$7,938 $(139)$7,799 
Accrued liabilities9,034 1,186 (A) , (B)10,220 
Related party payables648 — 648 
Contract liabilities11,063 (2,885)(B)8,178 
Current portion of lease liabilities2,409 — 2,409 
Total current liabilities31,092 (1,838)29,254 
Long term liabilities
Lease liabilities9,249 59 9,308 
Private placement warrant liability13,705 — 13,705 
Earnout liability100,520 — 100,520 
Deferred income taxes526 — 526 
Other liabilities1,243 (101)(A)1,142 
Total liabilities$156,335 $(1,880)$154,455 
Commitments and contingencies
Stockholders’ Equity
Common stock, $0.0001 par value; 400,000,000 shares authorized, 247,881,568 and 247,758,412 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively.25 — 25 
Additional paid-in capital404,992 (3,130)(C)401,862 
Accumulated deficit(37,182)4,247 (32,935)
Accumulated other comprehensive gain486 (23)463 
Total Hyzon Motors Inc. stockholders’ equity368,321 1,094 369,415 
Noncontrolling interest(7,256)335 (6,921)
Total Stockholders’ Equity361,065 1,429 362,494 
Total Liabilities and Stockholders’ Equity$517,400 $(451)$516,949 

815
Dearbonization Plus Acquisition Corporation
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
The following table reflectstables present the calculationeffect of basicthe Restatement Items, as well as Other Immaterial Errors, on the Company’s consolidated statement of operations and diluted netcomprehensive loss per common sharefor the period indicated (in dollars,thousands, except per share amounts):
Three Months Ended March 31, 2022
As Previously ReportedRestatement AdjustmentRestatement ReferencesAs Restated
Revenue$356 $2,532 (A)$2,888 
Operating expense:
Cost of revenue424 229 (B)653 
Research and development6,212 724 6,936 
Selling, general, and administrative20,470 (718)19,752 
Total operating expenses27,106 235 27,341 
Loss from operations(26,750)2,297 (24,453)
Other income (expense):
Change in fair value of private placement warrant liability1,523 — 1,523 
Change in fair value of earnout liability3,241 — 3,241 
Change in fair value of equity securities12,530 — 12,530 
Foreign currency exchange loss and other expense(1,057)(93)(1,150)
Interest income (expense), net17 — 17 
Total other income (expense)16,254 (93)16,161 
Net loss before income taxes$(10,496)$2,204 $(8,292)
Income tax expense526 — 526 
Net loss(11,022)2,204 (8,818)
Less: Net loss attributable to noncontrolling interest(1,957)(338)(2,295)
Net loss attributable to Hyzon$(9,065)$2,542 $(6,523)
Comprehensive loss:
Net loss$(11,022)$2,204 $(8,818)
Foreign currency translation adjustment254 (43)211 
Comprehensive loss$(10,768)$2,161 $(8,607)
Less: Comprehensive loss attributable to noncontrolling interest(1,816)(353)(2,169)
Comprehensive loss attributable to Hyzon$(8,952)$2,514 $(6,438)
Net loss per share attributable to Hyzon:
Basic(0.04)$0.01 (0.03)
Diluted(0.04)$0.01 (0.03)
Weighted average common shares outstanding:
Basic247,940 — 247,940 
Diluted247,940 — 247,940 








16
The following tables present the effect of the Restatement Items, as well as Other Immaterial Errors, on the Company’s consolidated statement of stockholders' equity (in thousands, except share and per share amounts):

Common Stock Class ARetained Earnings (Accumulated Deficit)Accumulative Other Comprehensive IncomeTotal Hyzon Motors Inc. Stockholders' Equity (Deficit)Noncontrolling InterestTotal Stockholders' Equity
        Shares          Amount    Additional Paid-in Capital
BALANCE - March 31, 2022 (As Previously Reported)247,881,568$25 404,992$(37,182)$486 $368,321 $(7,256)$361,065 
Cumulative adjustments— — (3,130)4,247 (23)1,094 335 1,429 
BALANCE - March 31, 2022 (As Restated)247,881,568 $25 401,862 $(32,935)$463 $369,415 $(6,921)$362,494 



17
   
Three Months Ended
   
Three Months Ended
   
Six Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
   
June 30,
   
June 30,
 
   
2021
   
2020
   
2021
   
2020
 
Class A Redeemable Common Stock
                    
Numerator: Earnings allocable to Class A Redeemable Common Stock
                    
Interest Income
   3,372    —      6,706    —   
Income and Franchise Tax
   (3,372)    —      (6,706)    —   
Redeemable 
Net Loss
   0      0      0      0   
Denominator: Weighted Average Class A Redeemable Common Stock
                    
Class A Redeemable Common Stock, Basic and Diluted
   22,572,502    —      22,572,502    —   
Income (Loss)/Basic and Diluted Class A Redeemable Common Stock
             0      —   
Class B Non-Redeemable Common Stock
                    
Numerator: Net Loss minus Class A Redeemable Net Loss
                    
Net Loss
   (8,183,346)    (860)    (9,294,718)    (1,719) 
Class A Redeemable Net Loss
 
   0—      0—      —      —   
Class B Non-Redeemable Net Loss
   (8,183,346)    (860)    (9,294,718)    (1,719) 
Denominator: Weighted Average Class B Non-Redeemable Common Stock
                    
Class B Non-Redeemable Common Stock, Basic and Diluted
   5,643,125    5,000,000    5,643,125    5,000,000 
Loss/Basic and Diluted Class B Non-Redeemable Common Stock
   (1.45)    (0.00)    (1.65)    (0.00) 
The following tables present the effect of the Restatement Items, as well as Other Immaterial Errors, on the Company’s consolidated statement of cash flows (in thousands):

Three Months Ended March 31, 2022
As Previously ReportedRestatement Adjustments***As Restated
Cash Flows from Operating Activities:
Net loss$(11,022)$2,204 $(8,818)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization912 (8)904 
Stock-based compensation2,133 (940)1,193 
Deferred income tax expense526 — 526 
Fair value adjustment of private placement warrant liability(1,523)— (1,523)
Fair value adjustment of earnout liability(3,241)— (3,241)
Fair value adjustment of value of equity securities(12,530)— (12,530)
Changes in operating assets and liabilities:
Accounts receivable1,839 325 2,164 
Inventory(6,864)(630)(7,494)
Prepaid expenses and other current assets(1,599)(150)(1,749)
Other assets(65)(3)(68)
Accounts payable(568)388 (180)
Accrued liabilities3,003 401 3,404 
Related party payables, net8 (64)(56)
Contract liabilities(165)(2,472)(2,637)
Other liabilities(92)101 9 
Net cash used in operating activities(29,248)(848)(30,096)
Cash Flows from Investing Activities:
Purchases of property and equipment(4,440)865 (3,575)
Advanced payments for capital expenditures(387)67 (320)
Investment in equity securities— — — 
Net cash used in investing activities(4,827)932 (3,895)
Cash Flows from Financing Activities:
Exercise of stock options34 — 34 
Payment of finance lease liability(86)— (86)
Net share settlement of equity awards(160)— (160)
Payment for purchase of Horizon IP(3,146)— (3,146)
Repurchase of warrants(31)— (31)
Net cash (used in) provided by financing activities(3,389)— (3,389)
Effect of exchange rate changes on cash300 (84)216 
Net change in cash and restricted cash(37,164)— (37,164)
Cash and restricted cash — Beginning449,365 — 449,365 
Cash and restricted cash — Ending$412,201 $— $412,201 

*** The adjustments within the consolidated statement of cash flows for the three months ended March 31, 2022 were due to the reconciliation of the changes in account balances used in preparing the statement of cash flows resulting from the various error corrections included in the above financial statements.

18
Note 3. Summary of Significant Accounting Policies

The Company’s significant accounting policies are described in Note 3. Summary of Significant Accounting Policies, in the Company’s consolidated financial statements included in the Company’s Annual Report filed on Form 10-K/A for the year ended December 31, 2021.

There have been no material changes to the significant accounting policies during the three-month period ended March 31, 2022.

Recent Accounting Pronouncements

Recently issued accounting pronouncements not yet adopted

In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2021-08, Business Combination (Topic 805): Accounting for Contract Assets and sixContract Liabilities from Contracts with Customers. This ASU requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities (deferred revenue) from acquired contracts using the revenue recognition guidance in ASC 606. At the acquisition date, the acquirer applies the revenue model as if it had originated the acquired contracts. The ASU is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. Adoption of the ASU should be applied prospectively to business combinations occurring on or after the effective date of the amendments. Early adoption is permitted, including adoption in an interim period. The Company is in the process of assessing the impact of this guidance on its financial position, results of operations, or cash flows.

The Company considers the applicability and impact of all ASUs. The Company assessed ASUs not listed above and determined that they either were not applicable or were not expected to have a material impact on the unaudited consolidated financial statements.

Note 4. Revenue

The company recognized $2.9 million in sales of hydrogen fuel cell systems in the United States and sales of FCEVs in China for the three months ended June 30, 2021 and 2020, basic and diluted shares are the same as there are no securities that are dilutive to the Company’s common stockholders under the treasury method.​​​​​​​
Concentration of Credit Risk
Financial instruments that potentially subject th
e
 Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance Corporation coverag
e of $250,000.March 31, 2022. The Company hasdid not experienced losses on these accounts and management believesrecognize any revenue for the three months ended March 31, 2021.

In accordance with ASC 606, the Company is not exposedrequired to significant risks on such accounts.
Warrant Liabilities
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific termsevaluate customers’ ability and applicable authoritative guidance in ASC 480 and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuantintent to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meetpay substantially all of the requirementsconsideration to which the Company is entitled in exchange for equity classificationthe vehicles transferred to the customer, i.e., collectability of contracts with customers. The customer in China, to which the Company delivered 62 FCEVs, is a special purpose entity established in response to China’s national hydrogen fuel cell vehicle pilot program. While in the Company’s estimation the customer has strong business plans and management teams, in consideration of the customer’s limited operating history and extended payment terms in their contracts, the Company determined the collectability criterion is not met with respect to contract existence under ASC 815, including whether the warrants are indexed606, and therefore, an alternative method of revenue recognition has been applied to the Company’s own common stock, among other conditions for equity classification. This assessment,arrangement. The $2.5 million of revenue recognized under this arrangement is equal to the remaining consideration received as of December 31, 2021 after satisfying local government VAT obligations, as such amounts are non-refundable and the Company has transferred control of the 62 FCEVs to which requires the use of professional judgment, is conducted atconsideration relates and has stopped transferring goods or services to the time of warrant issuancecustomer. The Company will continue to monitor the customer and evaluate the collectability criterion as of each subsequent quarterly period end date whilereporting period. The total cost of FCEVs delivered to the warrantscustomer in China was recorded within Cost of revenue in the Consolidated Statements of Operations and Comprehensive Loss in 2021 since control of such FCEVs was transferred to the customer prior to December 31, 2021.

19
Contract Balances

Contract liabilities relate to the advance consideration invoiced or received from customers for products and services prior to satisfying a performance obligation or in excess of amounts allocated to a previously satisfied performance obligation. These amounts are outstanding.
included within Contract liabilities in the accompanying Consolidated Balance Sheets.
For issued or modified warrants that meet all
The current portion of contract liabilities are recorded within Contract liabilities in the Consolidated Balance Sheets and totaled $8.2 million and $10.9 million as of March 31, 2022, and December 31, 2021, respectively. The long term portion of contract liabilities are recorded within Other liabilities in the Consolidated Balance Sheets and totaled $1.0 million and $1.0 million as of March 31, 2022 and December 31, 2021, respectively.

Remaining Performance Obligations

The transaction price associated with remaining performance obligations for commercial vehicles and other contracts with customers was $20.0 million and $19.7 million as of March 31, 2022 and December 31, 2021, respectively. The Company expects to recognize approximately 87% of its remaining performance obligations as revenue over the next 12 months and the remainder thereafter.

Note 5. Inventory     

Inventory consisted of the criteriafollowing (in thousands):
March 31,
2022		December 31,
2021
Raw materials$21,201 $16,099 
Work in process7,196 4,828 
Total inventory$28,397 $20,927 

Note 6. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):

March 31,
2022		December 31,
2021
Deposit for fuel cell components (Note 15)$5,905 $5,008 
Vehicle inventory deposits10,021 10,171 
Production equipment deposits1,484 1,169 
Other prepaid expenses5,136 3,266 
Prepaid Insurance2,744 5,079 
VAT receivable from government3,624 2,159 
Total prepaid expenses and other current assets$28,914 $26,852 

20
Note 7. Property, Plant, and Equipment, net

Property, plant, and equipment, net consisted of the following (in thousands):
March 31,
2022		December 31, 2021
Land and building$2,818 $2,818 
Machinery and equipment10,755 8,827 
Software1,087 507 
Leasehold improvements909 746 
Construction in progress3,038 2,139 
Total Property, plant, and equipment18,607 15,037 
Less: Accumulated depreciation and amortization(1,262)(691)
Property, plant and equipment, net$17,345 $14,346 

Depreciation and amortization expense totaled $0.5 million and $0.1 million for equity classification, the warrants are requiredthree months ended March 31, 2022 and 2021, respectively. The Company capitalized $1.4 million in Machinery and equipment for vehicles deployed under a trial lease in China as of March 31, 2022 and December 31, 2021, respectively.

Note 8. Accrued liabilities

Accrued liabilities consisted of the following (in thousands):

March 31,
2022		December 31,
2021
Payroll and payroll related expenses$3,835 $2,250 
Accrued professional fees4,093 2,450 
Other accrued expenses2,292 2,070 
Accrued liabilities$10,220 $6,770 

Note 9. Investments in Equity Securities

The Company owns common shares, participation rights, and options to be recorded aspurchase additional common shares in certain private companies. On a component of additional
paid-in
capital atnon-recurring basis, the time of issuance. For issuedcarrying value is adjusted for changes resulting from observable price changes in orderly transactions for identical or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changessimilar investments in the estimatedsame issuer.

Included in Change in fair value of the warrants are recognized as a
non-cash
gain or loss on the statements of operations. The Company utilized a Monte Carlo simulation model to value the Public Warrant liabilities at the date of the Initial Public Offering and then the unadjusted, quoted price listed on the NASDAQ Capital Market for each subsequent reporting period, and utilizes a Black-Scholes model to value the Private Warrant liabilities that are categorized within Level 3 at each reporting period, with changes in fair value recognizedequity securities in the unaudited Consolidated Statements of Operations (see Note 7)and Comprehensive Loss for the three months ended March 31, 2022 is a $12.5 million gain from the equity investment in Raven SR, LLC (“Raven”).
9
Table The investment in Raven’s common shares and options were initially accounted for at cost of Contents
Dearbonization Plus Acquisition Corporation
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
Financial Instruments
$2.5 million. Subsequently in March 2022, there was an observable change in price of Raven’s common shares. The change in observable price of Raven’s common shares also results in a remeasurement of the investment in Raven’s options as of the date that the observable transaction took place. The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, approximates the carrying amounts representedinvestment in the
condensed
consolidated balance sheets, primarily due to their short term nature. ASC 820 defines fair value as an exit price, which is the price that would be received for an asset or paid to transfer a liability in the Company’s principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value hierarchy established in ASC 820 generally requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect the assumptions that market participants would use in pricing the asset or liability and are developedRaven’s common shares was determined based on observable market data obtained from sources independentprices of the reporting entity. Unobservable inputs reflect the entity’s own assumptions based on market dataidentical instruments in less active markets and the entity’s judgments about the assumptions that market participants would useis classified accordingly as Level 2 in pricing the asset or liability and are to be developed based on the best information available in the circumstances.
The valuation hierarchy is composed of three levels. The classification within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. See hierarchy. Due to certain anti-dilution rights included in the options held by the Company, the fair value was determined utilizing a Monte-Carlo simulation model. Accordingly, this was determined to be a Level 3 measurement in the fair value hierarchy. The most significant assumptions in the model included the transaction price of the underlying common shares at the transaction date, expected volatility, risk free rate, and certain assumptions around the likelihood, size, and timing of potential future equity raises by Raven. As of March 31, 2022, the Company determined the fair value of the investment in Raven’s common shares and options to be $6.5 million and $8.5 million, respectively.

21
The following table summarizes the total carrying value of held securities, measured as the total initial cost plus cumulative net gain (loss) (in thousands):

March 31,
2022		December 31,
2021
Total initial cost basis$4,948 $4,948 
Adjustment:
Cumulative unrealized gain12,530 — 
Carrying amount, end of period$17,478 $4,948 
Note 710. Income Taxes

During the three months ended March 31, 2022, the Company recorded a net discrete tax expense of $0.5 million primarily associated with the establishment of a deferred tax liability that is not expected to offset available deferred tax assets. The Company did not record a provision for income taxes for the levels withinthree months ended March 31, 2021 because the valuation hierarchy, as well as additional information on assets and liabilities measured at fair value.
Company generated tax losses.

UseDeferred income taxes reflect the net tax effects of Estimates
The preparation of these Condensed consolidated financial statements in conformity with GAAP requirestemporary differences between the Company’s management to make estimates and assumptions that affect the reportedcarrying amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of thesefor financial statementsreporting purposes and the reported amounts used for income tax purposes. The Company assesses all available evidence, both positive and negative, to determine the amount of expenses duringany required valuation allowance within each taxing jurisdiction. Full valuation allowances have been established for the reporting periods. Accordingly, the actual results could differ from those estimates.
Cash and cash equivalents
Cash includes amounts held at banks with an original maturity of less than three months.Company’s operations in all jurisdictions. As of June 30, 2021,March 31, 2022, and December 31, 2020,2021, the Company held $167,284had net deferred tax assets of approximately $25.7 million and $0,$23.0 million, respectively, in cash. The Company held 0 cash equivalents at June 30, 2021 or Decembereach of which was fully offset by a valuation allowance.

There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2020.
Common stock subject to possible redemption
The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC 480. Common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at June 30, 2021 and December 31,
2020, 16,592,216 and 17,521,688 shares of
Class
A common stock subject to possible redemption is presented as temporary equity, outside of the stockholders’ equity section of the Company’s condensed consolidated balance sheets.
Offering Costs
Offering costs consist of legal, accounting, underwriting fees and other costs incurred through the Initial Public Offering that are directly related to the Initial Public Offering. The Company incurred offering costs amounting to $11,555,093 upon the completion of the Initial Public Offering. In connection with the sale of the Over-allotment Units, the Company incurred an additional $514,500 of underwriting fees and $900,376 of deferred underwriting fees.
The Company complies with the requirements of ASC
340-10-S99-1
and SEC Staff Accounting Bulletin Topic 5A—Expenses of Offering. Offering costs directly attributable to the issuance of an equity contract to be classified in equity are recorded as a reduction in equity. Offering costs for equity contracts that are classified as assets and liabilities are expensed immediately. The Company recorded $12,315,313 of offering costs as a reduction of equity in connection with the Public Shares included in the Units. The Company immediately expensed $654,656 of offering costs in connection with the Public Warrants included in the Units that were classified as liabilities.
10
Table of Contents
Dearbonization Plus Acquisition Corporation
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
As of June 30, 20212022 and December 31, 2020, the Company had 0
deferred offering costs on the accompanying
condensed
consolidated balance sheets.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between these financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to b
e
 realized.
FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were 0 unrecognized tax benefits, deferred tax assets or valuations against them as of June 30, 2021 and December 31, 2020, respectively. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. NaN
 amounts were accrued for the payment of interest and penalties for the three months ended and six months ended June 30, 2021 and 2020, respectively.2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.positions. The Company is subject to income tax examinations by major taxing authorities in the countries in which it operates since inception.

Note 11. Fair Value Measurements

The Company had 0 tax liability as of June 30, 2021 and December 31, 2020, respectively.
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.
Note 3 — Public Offering
Pursuant to the Initial Public Offering, the Company sold 22,572,502 Units, at a purchase price of $10.00 per Unit, which includes the partial exercise by the underwriters of their over-allotment option in the amount of 2,572,502 Over-allotment Units at $10.00 per Unit. Each Unit consists of one share of Class A common stock and
one-half
of one Public Warrant. Each whole Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 6).
Note 4 — Related Party Transactions
Founder Shares
On September 12, 2017, the Sponsor purchased 11,500,000 shares of Class B common stock (the “Founder Shares”) for an aggregate price of $25,000, or approximately $0.002 per share. As used herein, unless the context otherwise requires, “Founder Shares” shall be deemed to include the shares of Class A common stock issuable upon conversion thereof. The Founder Shares are identical to the Public Shares except that the Founder Shares automatically convert into shares of Class A common stock at the time of the Company’s Initial Business Combination and are subject to certain transfer restrictions, as described in more detail below. Holders of Founder Shares may also elect to convert their shares of Class B common stock into an equal number of shares of Class A common stock, subject to adjustment as provided above, at any time. On September 18, 2020, the Sponsor agreed to return 2,875,000 Founder Shares to the Company at no cost. In October 2020, the Sponsor agreed to return an additional 2,875,000 Founder Shares to the Company at no cost. The Sponsor and an affiliate of the Company’s chief executive officer agreed to forfeit up to an aggregate of 750,000 Founder Shares to the extent that the over-allotment option was not exercised in full by the underwriters. The forfeiture would be adjusted to the extent that the over-allotment option was not exercised in full by the underwriters so that the Founder Shares will represent 20.0% of the Company’s issued and outstanding shares after the Initial Public Offering. As a result of the underwriters’ partial exercise their over-allotment option on November 12, 2020, 643,125 Founder Shares are no longer subject to forfeiture. The over-allotment option expired on December 3, 2020, resulting in the forfeiture of 106,875 Founder Shares to the Company at no cost.
11
Table of Contents
Dearbonization Plus Acquisition Corporation
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
The Sponsor and the Company’s officers, directors and an affiliate of the Company’s chief executive officer have waived their redemption rights with respect to any Founder Shares and any Public Shares held by them in connection with the completion of an Initial Business Combination. If the Initial Business Combination is not completed within 24 months from the closing of the Initial Public Offering, the Sponsor and the Company’s officers, directors and an affiliate of the Company’s chief executive officer have agreed to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them.
The Company’s initial stockholders have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Founder Shares until the earlier to occur of: (A) one year after the completion of the Initial Business Combination or (B) subsequent to the Initial Business Combination, (x) if the last sale price of the Company’s Class A common stock equals or exceeds $12.00 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 commencing at least 150 days after the Initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, stock exchange or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.
Private Placement Warrants
Simultaneously with the closing of the Initial Public Offering, the Sponsor and the Company’s independent directors and an affiliate of the Company’s chief executive officer purchased 6,000,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, for an aggregate purchase price of $6,000,000. The Sponsor and an affiliate of the Company’s chief executive officer agreed to purchase up to an additional 600,000 Private Placement Warrants, at a price of $1.00 per Private Placement Warrant, or an aggregate additional $600,000, to the extent the underwriter’s over-allotment option was exercised in full. Simultaneously with the closing of the sale of the Over-allotment Units, the Sponsor and the affiliate of the Company’s chief executive officer purchased an additional 514,500 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, generating gross proceeds of approximately $514,500 (see Note 2 for further information regarding the accounting treatment of the Private Placement Warrants).
Each Private Placement Warrant is exercisable to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment. A portion of the proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within 24 months from the closing of the Initial Public Offering, the proceeds of the sale of the Private Placement Warrants held in the Trust Account will be used to partially fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Private Placement Warrants and all underlying securities will expire worthless. The Private Placement Warrants will be
non-redeemable
and exercisable on a cashless basis so long as they are held by the initial purchasers of the Private Placement Warrants or their permitted transferees.
The Sponsor and the Company’s officers, directors and an affiliate of the Company’s chief executive officer have agreed, subject to limited exceptions, not to transfer, assign or sell any of their Private Placement Warrants until 30 days after the completion of the Initial Business Combination.
Registration Rights
Pursuant to a Registration Rights Agreements entered into on October 19, 2020, the holders of Founder Shares, Private Placement Warrants and Warrants that may be issued upon conversion of Working Capital Loans (as defined below), if any, are entitled to registration rights (in the case of the Founder Shares, only after conversion of such shares to shares of Class A common stock). These holders are entitled to certain demand and “piggyback” registration rights. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
12
Table of Contents
Dearbonization Plus Acquisition Corporation
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
Related Party Loans
On September 12, 2017, the Company and the Sponsor entered into a loan agreement, whereby the Sponsor agreed to loan the Company an aggregate of $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the “Note”). This loan is
non-interest
bearing and payable on the earlier of December 31, 2020 (as amended) or the completion of the Initial Public Offering (the “Maturity Date”). On September 13, 2017, the Company drew down $300,000 on this Note. On October 21, 2020, the Company paid back the Sponsor for the full amount of the outstanding
Note. The Note is no longer available to the Company.
In addition to the Note, the Sponsor paid certain costs related to formation and offering for the Company. Costs in the amount of $219,022 were forgiven by the Sponsor in December 2019 and have been recorded within additional
paid-in
capital.
As of June 30, 2021, and December 31, 2020, the Company owe
d
 the Sponsor $3,375,977 and $1,324,257, respectively, for additional expenses paid on its behalf, of which $0 and $0 at June 30, 2021 and
December 31, 2020, respectively are related to the Working Capital Loans.
Related Party Note
On July 16, 2021, the Company and the Sponsor entered into a note agreement, whereby the Sponsor agreed to loan the Company an aggregate of $1,500,000 to cover working capital requirements. The note agreement c
o
nverted at the business combination date into 1,500,000 additional private placement warrants.
Advance from Related Party
As of October 22, 2020, the Sponsor and affiliate of the Company’s chief executive officer advanced $600,000 to the Company to cover the purchase of additional Private Placement Warrants if the over-allotment is exercised in full. Simultaneously with the closing of the sale of the Over-allotment Units, the Company utilized the advance from the Sponsor and the affiliate of the Company’s chief executive officer to issue an additional 514,500 Private Placement Warrants at a price of $1.00 per Private Placement Warrant (see Note 2 for further information regarding the accounting treatment of the Private Placement Warrants). The over-allotment option expired on December 3, 2020, resulting in the return of $85,500 of the advancement not utilized. As of June 30, 2021 and December 31, 2020, there were 0 advances outstanding.
Administrative Support Agreement
The Company has agreed to pay an affiliate of the Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support. Upon completion of the Initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. For the three months ended and six months ended June 30, 2021,
the Company
incurred
$30,000 and $60,000,
respectively, of monthly fees to the affiliate of the Sponsor, of which $60,000 remained outstanding at June 30, 2021. There were 0 such fees for the three and six months ended June 30, 2020, and 0 amounts due at December 31, 2020.
Working Capital Loans
In addition, in order to finance transaction costs in connection with an Initial Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes an Initial Business Combination, the Company would repay the Working Capital Loans. In the event that an Initial Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. If the Sponsor makes any working capital loans, up to $1,500,000 of such loans may be converted into warrants of the post business combination entity at the price of $1.00 per warrant at the option of the lender. Such warrants would be identical to the Private Placement Warrants, including as to exercise price, exercisability and exercise period. As of June 30, 2021 and December 31, 2020, the Company had $0 and $0 borrowings under the Working Capital Loans.
13
Table of Contents
Dearbonization Plus Acquisition Corporation
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
Note 5 — Commitments and Contingencies
Underwriting Agreement
The underwriters are entitled to a deferred fee of $0.35 per Unit, or $7,900,376 in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes an Initial Business Combination, subject to the terms of the underwriting agreement.
Business Combination Agreement
On February 8, 2021, the Company entered into a business combination agreement and plan of reorganization (the “Business Combination Agreement”) with DCRB Merger Sub Inc., a Delaware corporation and our wholly owned subsidiary (“Merger Sub”), and Hyzon Motors, Inc., a Delaware corporation (“Legacy Hyzon”), pursuant to which Merger Sub will be merged with and into Legacy Hyzon (the “Merger,” together with the other transactions related thereto, the “Proposed Transactions”), with Legacy Hyzon surviving the Merger as our wholly owned subsidiary. The parties completed the Proposed Transactions on July 16, 2021 following the Company’s stockholders approval of the Proposed Transactions on July 15, 2021.
Please see the Form
8-K
filed with the SEC on July 16, 2021 for additional information.
In connection with the Business Combination, certain of DCRB’s purported stockholders filed lawsuits against DCRB and its directors asserting claims for breaches of fiduciary duty:
Lanctot v. Decarbonization Plus Acquisition Corp. et al
., Index No. 652070/2021 (N.Y. Sup. Ct., N.Y. Cnty.) and
Pham v. Decarbonization Plus Acquisition Corp. et al
., Case No. 21-CIV-01928 (Cal. Sup. Ct., San Mateo Cnty.). These complaints allege that the DCRB board members breached their fiduciary duties by in connection with the merger by allegedly agreeing to the transaction following an inadequate process and at an unfair price, and by allegedly disseminating inaccurate or incomplete information concerning the transaction. These complaints seek, among other things, injunctive relief and an award of attorneys’ fees. The defendants in these cases have not yet answered these complaints and we believe that these pending and threatened lawsuits are without merit.
Risks and Uncertainties
The Company continues to evaluate the impact of the
COVID-19
pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of operations and/or search for a target company, the specific impact was not readily determinable as of the date of these condensed consolidated financial statements. These condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Note 6 — Stockholders’ Equity
Common Stock
On October 19, 2020, the Company amended and restated its certificate of incorporation to, among other things, increase the number of authorized shares of Class A common stock from 200,000,000 to 250,000,000. The authorized common stock of the Company includes up to 250,000,000 shares of Class A common stock with a par value of $0.0001 per share and 20,000,000 shares of Class B common stock with a par value of $0.0001 per share. If the Company enters into an Initial Business Combination, it may (depending on the terms of such an Initial Business Combination) be required to increase the number of shares of Class A common stock which the Company is authorized to issue at the same time as the Company’s stockholders vote on the Initial Business Combination to the extent the Company seeks stockholder approval in connection with the Initial Business Combination. Holders of the Company’s common stock are entitled to one vote for each share of common stock. At June 30, 2021, and December 31, 2020, there were 22,572,502 and 22,572,502 shares, respectively, of Class A common stock issued and outstanding, of which 17,410,551 and 17,521,688 shares, respectively, were subject to possible redemption. At June 30, 2021 and December 31, 2020, there were 5,643,125 shares of Class B common stock issued and outstanding, which reflects that on September 18, 2020, October 7, 2020, October 8, 2020 and December 3, 2020, the Sponsor returned 2,875,000, 1,437,500, 1,437,500 and 106,875 Founder Shares, respectively, to the Company at no cost.
The Sponsor and an affiliate of the Company’s chief executive officer agreed to forfeit up to an aggregate of 750,000 Founder Shares to the extent that the over-allotment option is not exercised in full by the underwriters. The forfeiture would be adjusted to the extent that the over-allotment option was not exercised in full by the underwriters so that the Founder Shares would represent 20.0% of the Company’s issued and outstanding shares after the Initial Public Offering. As a result of the underwriters’ election to partially exercise their over-allotment option, 106,875 Founder Shares were forfeited.
14
Table of Contents
Dearbonization Plus Acquisition Corporation
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
Preferred Stock
The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At June 30, 2021 and December 31, 2020, there were 0 shares of preferred stock issued or outstanding.
Warrants
Each whole Warrant entitles the holder thereof to purchase one share of the Company’s Class A common stock at a price of $11.50 per share, subject to adjustment as described in the prospectus for the Initial Public Offering. Only whole Warrants are exercisable. The Warrants will become exercisable on the later of 30 days after the completion of an Initial Business Combination or 12 months from the closing of the Initial Public Offering, and will expire five years after the completion of the Initial Business Combination or earlier upon redemption or liquidation, as described in the prospectus for the Initial Public Offering. No fractional Warrants will be issued upon separation of the units and only whole Warrants will trade.
The exercise price of each Warrant is $11.50 per share, subject to adjustment as described in the prospectus for the Initial Public Offering. In addition, if the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of an Initial Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by th
e
 Company’s board of directors and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance) (the “newly issued price”), the exercise price of the Warrants will be adjusted (to the nearest cent) to be equal to 115% of the newly issued price.
The Warrants will become exercisable on the later of:
30 days after the completion of the Initial Business Combination or,
12 months from the closing of the Initial Public Offering.
provided in each case that we have an effective registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the Warrants and a current prospectus relating to them is available and such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of the holder (or the Company permits holders to exercise their Warrants on a cashless basis under the circumstances specified in the Warrant agreement).
As of June 30, 2021, the Company had not registered the shares of Class A common stock issuable upon exercise of the Warrants. However, the Company has agreed that as soon as practicable, but in no event later than 15 business days, after the closing of an Initial Business Combination, the Company will use its best efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the shares of Class A common stock issuable upon exercise of the Warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the Warrants in accordance with the provisions of the Warrant agreement. Notwithstanding the above, if the Company’s Class A common stock is at the time of any exercise of a Warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at the Company’s option, require holders of the Public Warrants who exercise their Warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but the Company will be required to use its best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.
The Warrants will expire at 5:00 p.m., New York City time, five years after the completion of an Initial Business Combination or earlier upon redemption or liquidation. On the exercise of any Warrant, the Warrant exercise price will be paid directly to the Company and not placed in the Trust Account.
Once the Warrants become exercisable, the Company may redeem the outstanding Warrants for cash (except as described in the prospectus for the Initial Public Offering with respect to the Private Placement Warrants):
15
Table of Contents
Dearbonization Plus Acquisition Corporation
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
In whole and not in part;
At a price of $0.01 per Warrant;
Upon a minimum of 30 days’ prior written notice of redemption, referred to as the
30-day
redemption period; and
if, and only if, the last sale price of the Company’s Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a
30-trading
day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrantholders.
The Company will not redeem the Warrants for cash unless a registration statement under the Securities Act covering the shares of Class A common stock issuable upon exercise of the Warrants is effective and a current prospectus relating to those shares of Class A common stock is available throughout the
30-day
redemption period. If and when the Warrants become redeemable by the Company, the Company may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Except as described in the prospectus for the Initial Public Offering, none of the Private Placement Warrants will be redeemable by the Company so long as they are held by the initial purchasers of the Private Placement Warrants or their permitted transferees.
Once the warrants become exercisable, the Company may redeem the outstanding warrants (except as described in the prospectus for the Initial Public Offering with respect to the Private Placement Warrants):
in whole and not in part;
at a price of $0.10 per Warrant, provided that holders will be able to exercise their Warrants on a cashless basis prior to redemption and receive that number of shares of Class A common stock determined by reference to the table set forth in the warrant agreement based on the redemption date and the “fair market value” of the Company’s Class A common stock (as defined below) except as otherwise described in the warrant agreement;
upon a minimum of 30 days’ prior written notice of redemption;
if, and only if, the last sale price of the Company’s Class A common stock equals or exceeds $10.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) on the trading day prior to the date on which the Company sends the notice of redemption to the warrantholders; and
if the last sale price of the Company’s Class A common stock on the trading day prior to the date on which the Company sends the notice of redemption to the warrantholders is less than $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Warrants, as described above.
The “fair market value” of the Company’s Class A common stock shall mean the average reported last sale price of the Company’s Class A common stock for the 10 trading days immediately following the date on which the notice of redemption is sent to the holders of Warrants.
No fractional shares of Class A common stock will be issued upon redemption. If, upon redemption, a holder would be entitled to receive a fractional interest in a share, the Company will round down to the nearest whole number the number of shares of Class A common stock to be issued to the holder.
As of June 30, 2021 and December 31, 2020, there
were 11,286,251 Public Warrants and 6,514,500 Private Placement Warrants outstanding. The Company classifies the outstanding Public Warrants and Private Placement Warrants as warrant liabilities on the Balance Sheet in accordance withfollows the guidance contained in ASC
815-40.
The Warrant 820, Fair Value Measurement. For assets and liabilities are initially measured at fair value on a recurring and nonrecurring basis, a three-level hierarchy of measurements based upon the closing of the Initial Public Offeringobservable and subsequently
re-measured
at each reporting period using a Monte-Carlo model. The Public Warrants were recorded as a liabilityunobservable inputs is used to arrive at fair value. The Company recognized gains (losses) in connection with changes in the fair value of Warrant liabilities
of $6,824,865 and $7,163,449
within change in fair value of Warrant liabilities in the condensed consolidated Statements of Operations during the three months ended and six months ended June 30, 2021, respectively.
The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, exceptuses valuation approaches that the Private Placement Warrants, and the common shares issuable upon the exercise of the Private Placement Warrants are not, transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants will be exercisable on a cashless basis and will be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants.
16
Table of Contents
Dearbonization Plus Acquisition Corporation
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
Note 7 — Fair Value Measurements
At June 30, 2021 and December 31, 2020, assets held in the Trust Account were comprised
of $225,734,427
and $225,727,721, respectively, in money market funds which are invested in U.S. Treasury Securities. Through June 30, 2021, the Company has not withdrawn any interest earned on the Trust Account to pay its franchise and income tax obligations.
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring th
e
 fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internalto the extent possible. The Company determines fair value based on assumptions about howthat market participants would price assets and liabilities). Theuse in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy is used to classify assets and liabilities based on thedistinguishes between observable inputs and unobservable inputs, usedwhich are categorized in order to valueone of the assets an
d
 liabilities:
following levels:
•Level 1:
Quoted1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a marketliabilities accessible to the reporting entity at the measurement date.

•Level 2 inputs: Other than quoted prices included in which transactionsLevel 1 inputs that are observable for the asset or liability, occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2:
Observable inputs other than Level 1 inputs. Exampleseither directly or indirectly, for substantially the full term of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
Level 3:
Unobservable inputs based on our assessment of the assumptions that market participants would use in    pricing 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.

As of March 31, 2022, and December 31, 2021, the carrying amount of accounts receivable, other current assets, other assets, accounts payable, and accrued and other current liabilities approximated their estimated fair value due to their relatively short maturities.
22

The following table presentstables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at June 30, 2021 and December 31, 2020 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
value (in thousands):

As of March 31, 2022
Level 1Level 2Level 3Total
Warrant liability – Private Placement Warrants$— $13,705 $— $13,705 
Earnout shares liability— — 100,520 100,520 
As of December 31, 2021
Level 1Level 2Level 3Total
Warrant liability – Private Placement Warrants$— $15,228 $— $15,228 
Earnout shares liability— — 103,761 103,761 
Description
  
Amount at
Fair Value
   
Level 1
   
Level 2
   
Level 3
 
June 30, 2021
                    
Assets:
                    
Marketable securities held in Trust Account—U.S. Treasury Securities Money Market Fund
   225,734,427    225,734,427    —      —   
Liabilities:
                    
Warrant Liability—Public Warrants
   25,845,515    25,845,515    —        
Warrant Liability—Private Placement Warrants
   14,918,205    —      —      14,918,205 
December 31, 2020
                    
Assets:
                    
Marketable securities held in Trust Account—U.S. Treasury Securities Money Market Fund
   225,727,721    225,727,721    —        
Liabilities:
                    
Warrant Liability—Public Warrants
   20,766,705    20,766,705    —        
Warrant Liability—Private Placement Warrants
   12,833,565    —      —      12,833,565 

The Company utilized a Monte Carlo simulation modelPrivate Placement Warrants

Following the lapsing of certain transferability restrictions subsequent to valuethe Business Combination, the features of the Private Placement Warrants became identical to the Public Warrant liabilities atWarrants, except that so long as they are held by the datesponsor of the Initial Public Offering and then the unadjusted, quoted price listed on the NASDAQ Capital Market for each subsequent reporting period, and utilizes a Black-Scholes model to valueBusiness Combination, the Private Warrant liabilities thatPlacement Warrants are categorized within Level 3 at each reporting period, with changes in fair value recognized innot redeemable by the Statements of Operations. TheCompany. Due to these similarities, the estimated fair value of the warrant liability on the Private Placement Warrants is determined using Level 3 inputs. Inherent in a binomial options pricing model are assumptions relatedwas equal to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury
zero-coupon
yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero.
17
Table of Contents
Dearbonization Plus Acquisition Corporation
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
The significant unobservable inputs used in the Black-Scholes model to measure the warrant liabilities that are categorized within Level 3 of the fair value hierarchy are as follows:
of the Public Warrants at March 31, 2022.

Earnout to Common Stockholders

   
As of
June 30,
2021
  
As of
December 31,
2020
 
Stock price
   10.31   10.60 
Strike price
   11.50   11.50 
Term (in years)
   5.1   5.4 
Volatility
   30.0%   27.8% 
Risk-free rate
   0.9%   0.4% 
Dividend yield
   0.0%   0.0% 
Fair value of warrants
   2.29   1.97 
The fair value of the earnout shares was estimated by utilizing a Monte-Carlo simulation model. The inputs into the Monte-Carlo pricing model included significant unobservable inputs. The following table provides a summary ofquantitative information regarding Level 3 fair value measurement inputs:
March 31,
2022		December 31, 2021
Stock price$6.39 $6.49 
Risk-free interest rate2.4 %1.2 %
Volatility90.00 %90.00 %
Remaining term (in years)4.294.54

The following table presents the changes in fair value of the warrant liabilities that are measured at fair value on a recurring basis:
Private
Placement
(Level 3)
Public
(Level 1)
Warrant
Liabilities
Fair value as of December 31, 2020
   12,833,565    20,766,705    33,600,270 
Change in valuation inputs or other assumptions
   2,084,640    5,078,810    7,163,449 
   
 
 
   
 
 
   
 
 
 
Fair value as of June 30, 2021
   14,918,205    25,845,515    40,763,719 
   
 
 
   
 
 
   
 
 
 
There were 0 transfers between Levels 1, 2 or 3for Private Placement Warrants and Earnout during the three months ended March 31, 2022 (in thousands):
Private Placement WarrantsEarnout
Balance as of December 31, 2021$15,228 $103,761 
Change in estimated fair value(1,523)(3,241)
Balance as of March 31, 2022$13,705 $100,520 

The Company performs routine procedures such as comparing prices obtained from independent sources to ensure that appropriate fair values are recorded.

23
Note 12. Commitments and sixContingencies

Legal Proceedings

The Company is subject to, and may become a party to, a variety of litigation, other claims, suits, indemnity demands, regulatory actions, and government investigations and inquiries in the ordinary course of business. The Company is party to current legal proceedings as discussed more fully below.

Three related putative securities class action lawsuits were filed between September 30, 2021 and November 15, 2021, in the U.S. District Court for the Western District of New York against the Company, certain of the Company’s current officers and directors and certain officers and directors of DCRB: (Kauffmann v. Hyzon Motors Inc., et al. (No. 21-cv-06612-CJS), Brennan v. Hyzon Motors Inc., et al. (No. 21-cv-06636- CJS), and Miller v. Hyzon Motors Inc. et al. (No. 21-cv-06695-CJS)), asserting violations of federal securities laws. The complaints generally allege that the Company and individual defendants made materially false and misleading statements relating to the nature of the Company’s customer contracts, vehicle orders, and sales and earnings projections, based on allegations in a report released on September 28, 2021, by Blue Orca Capital, an investment firm that indicated that it held a short position in our stock and which has made numerous allegations about the Company. These lawsuits have been consolidated under the caption In re Hyzon Motors Inc. Securities Litigation (Case No. 6:21-cv-06612-CJSMWP), and on March 21, 2022, the court-appointed lead plaintiff filed a consolidated amended complaint seeking monetary damages.

Between December 16, 2021 and January 14, 2022, three related shareholder derivative lawsuits were filed in the U.S. District Court for the Western District of New York: (Lee v. Anderson et al. (No. 21-cv-06744-CJS); Révész v. Anderson et al. (No. 22-cv-06012-CJS); and Shorab v. Anderson et al. (No. 22-cv-06023CJS)). On February 2, 2022, a similar shareholder derivative lawsuit was filed in the U.S. District Court for the District of Delaware (Yellets v. Gu et al. (No. 22-cv-00156), and on February 3, 2022, another similar shareholder derivative lawsuit was filed in the Supreme Court of the State of New York, Kings County (Ruddiman v. Anderson et al. (No. 503402/2022)). These lawsuits name as defendants the Company’s current directors and certain former directors of DCRB, along with the Company as a nominal defendant, and generally allege that the individual defendants breached their fiduciary duties by making or failing to prevent the misrepresentations alleged in the consolidated securities class action, and assert claims for violations of federal securities laws, breach of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets. These lawsuits generally seek equitable relief and monetary damages.

On March 18, 2022, a putative class action complaint, Malork v. Anderson et al. (C.A. No. 2022-0260- KSJM), was filed in the Delaware Court of Chancery against certain officers and directors of DCRB, DCRB’s sponsor, and certain investors in DCRB’s sponsor, alleging that the director defendants and controlling shareholders of DCRB’s sponsor breached their fiduciary duties in connection with the merger between DCRB and Legacy Hyzon. The complaint seeks equitable relief and monetary damages.

Between January 26, 2022 and March 28, 2022, Hyzon received four demands for books and records pursuant to Section 220 of the Delaware General Corporation Law from stockholders who state they are investigating whether to file similar derivative or stockholder lawsuits, among other purposes. The proceedings are subject to uncertainties inherent in the litigation process. The Company cannot predict the outcome of these matters or estimate the possible loss or range of possible loss, if any.

On January 12, 2022, the Company announced that it had received a subpoena from the SEC for production of documents and information, including documents and information related to the allegations made in the September 28, 2021 report issued by Blue Orca Capital. The Company is cooperating with the SEC.

Regardless of outcome, such proceedings or claims can have an adverse impact on the Company because of legal defense and settlement costs, the Company’s obligations to indemnify third parties, diversion of resources, and other factors, and there can be no assurances that favorable outcomes will be obtained. Based on the early-stage nature of these cases, the Company cannot predict the outcome of these matters or estimate the possible loss or range of possible loss, if any.

24
Note 13. Stock-based Compensation Plans

The following table summarizes the Company’s stock option and Restricted Stock Unit (“RSU”) activity:
Stock OptionsRSUs
Number of OptionsWeighted Average Exercise PriceWeighted Average Remaining Contractual (Years)Aggregate Intrinsic Value
(in 000s)		Number of RSUsWeighted Average Grant Date Fair Value
Outstanding at December 31, 202119,311,140 $1.29 13.07100,885 1,852,685 $6.14 
Granted188,232 $6.29 — — 107,310 $5.22 
Exercised or released(30,008)$1.13 — — (95,576)$3.53 
Forfeited/Cancelled(38,984)$1.13 — — — $— 
Outstanding at March 31, 202219,430,380 $1.30 12.7899,280 1,864,419 $6.22 
Vested and expected to vest, March 31, 202213,892,880 $1.15 12.3973,271 1,864,419 $6.22 
Exercisable and vested at March 31, 202212,116,476 $1.13 13.1563,749 — 

As of March 31, 2022, there was $2.5 million of unrecognized stock-based compensation expense related to unvested stock options, which is expected to be recognized over a weighted-average period of 4.46 years.

RSUs granted under the Company’s equity incentive plans typically vest over a four or five-year period beginning on the date of grant. RSUs will be settled through the issuance of an equivalent number of shares of the Company’s common stock and are equity classified. The fair value of restricted shares is determined based upon the stock price on the date of grant. As of March 31, 2022, unrecognized compensation costs related to unvested RSUs of $9.6 million is expected to be recognized over a remaining weighted average period of 3.42 years.

Earnout to Other Equity Holders
Earnout awards to other equity holders are accounted for under ASC 718 were vested at the time of grant, and therefore recognized immediately as compensation expense. Total compensation expense recorded in the three months ended June 30, 2021. ThereMarch 31, 2022 related to these earnout awards was $1.0 million. Certain earnout awards to other equity holders contained performance and market-based vesting conditions, and as the performance conditions are not deemed probable at March 31, 2022, no compensation expense has been recorded related to these awards.

Note 14. Stockholders' Equity

Common Stock

The Company is authorized to issue 400,000,000 shares of common stock with a par value of $0.0001 per share. Holders of Class A common stock are entitled to one vote for each share. At March 31, 2022 and December 31, 2021, there were no247,881,568 and 247,758,412 shares of Class A common stock issued and outstanding, respectively.

Warrants

As of March 31, 2022 and December 31, 2021, there were 11,286,242 Public Warrants and 8,014,500 Private Placement Warrants, for a total of 19,300,742 warrants outstanding.

Ardour Subscription Agreement

As of March 31, 2022 and December 31, 2021, there were 230,048 and 275,048 Ardour Warrants outstanding, respectively. In the three months ended March 31, 2022, the Company issued 28,333 shares of common stock for the cashless exercise of certain Ardour Warrants.

25
Equity Repurchase Program

On November 17, 2021, the Company’s board of directors authorized the repurchase of up to $5.0 million of its outstanding common stock and/or Public Warrants. The timing and amount of any share repurchases under the Company’s share repurchase authorization will be determined by management based on market conditions and other considerations. Such repurchases may be executed in the open market. As of December 31, 2021, the Company had repurchased 256,977 public warrants for $0.5 million. In the three months ended March 31, 2022, the Company repurchased an additional 15,600 public warrants for $31 thousand. The Company suspended the share repurchase program as of January 5, 2022.


Note 15. Related Party Transactions

Horizon IP Agreement

In January 2021, the Company entered into an intellectual property agreement (the “Horizon IP Agreement”) with Jiangsu Qingneng New Energy Technologies Co., Ltd. and Shanghai Qingneng Horizon New Energy Ltd. (together, “JS Horizon”) both of which are affiliates of the Company’s ultimate parent, Horizon. In September 2021, Jiangsu Horizon Powertrain Technologies Co. Ltd. (“JS Powertrain”) was an added party to the agreement. Pursuant to the agreement the parties convey to each other certain rights in intellectual property relating to Hyzon’s core fuel cell and mobility product technologies, under which Hyzon was to pay JS Horizon and JS Powertrain a total fixed payment of $10.0 million. As of March 31, 2022, the full $10.0 million has been paid, $6.9 million was paid in 2021 and the remaining $3.1 million was paid in February 2022.
Related Party Payables and Receivables

Horizon Fuel Cell Technologies and Related Subsidiaries

Hyzon utilizes Horizon to supply certain fuel cell components. In March 2021, the Company made a deposit payment to Horizon in the amount of $5.0 million to secure fuel cell components. This payment is included in prepaid expenses as none of the components have yet been received. In addition, the Company made other deposit payments to purchase fuel cell systems and components from Horizon and its affiliates. For the three months ended March 31, 2022, Cost of revenue of $0.1 million for fuel cell components purchased from Horizon and its affiliates were recorded in the Company’s unaudited Consolidated Statements of Operations and Comprehensive Loss.

Certain employees of Horizon and its affiliates provide services to the Company. Based on an analysis of the compensation costs incurred by Horizon and an estimate of the proportion of effort spent by such employees on each entity, an allocation of approximately $0.3 million and $0.1 million was recorded in the Company’s unaudited Consolidated Statements of Operations and Comprehensive Loss related to such services for the three months ended March 31, 2022, and 2021, respectively.

The related party liability to Horizon and sixits affiliates is $0.6 million and $3.7 million as of March 31, 2022 and December 31, 2021, respectively.

Holthausen and Affiliates

The Company entered into a joint venture agreement in October 2020 to create Hyzon Motors Europe B.V. (“Hyzon Europe”) with Holthausen Clean Technology Investments B.V. (“Holthausen”). As Hyzon Europe builds out its production facilities, it relies on Holthausen and its affiliates for certain production resources that result in related party transactions. In addition, both companies rely on certain suppliers, including Horizon.

The Company currently owns 50.5% of the equity interests of Hyzon Europe. On December 31, 2021, Hyzon executed a non-binding Letter of Intent (“LOI”) with Holthausen to increase its stake to 75% in Hyzon Europe. Concurrent with the signing of this LOI, a €1.0 million refundable deposit was paid to Holthausen, approximately $1.1 million in U.S. dollars (“USD”). This deposit is recorded in the unaudited Consolidated Balance Sheets in Prepaid expenses and other current assets.

26
On May 5, 2022, the Company entered into a Stock Purchase Agreement (“SPA”) with Holthausen, whereby the Company agreed to purchase 735,000 shares Holthausen holds in Hyzon Europe. When the transaction closes, the Company will own 75% of the issued and outstanding shares of Hyzon Europe, and Holthausen will own 25%. As part of the SPA, Holthausen agreed to transfer to Hyzon Europe all of its shares of stock in Holthausen Clean Technology B.V, private limited liability company registered in the Netherlands. The Company agreed to a total purchase price of €27.0 million, approximately $28.5 million in USD, in a combination of cash and equity of the Company.

For the three months ended March 31, 2022, the Company paid $0.1 million to Carl Holthausen and Max Holthausen as managing directors of Hyzon Europe.

As of March 31, 2022 and December 31, 2021, the Company has a net related party receivable in the amount of $0.4 million and $0.3 million, respectively from Holthausen.

Note 16. Loss per share

The following table presents the information used in the calculation of the Company’s basic and diluted loss per share attributable to Hyzon common stockholders (in thousands, except per share data):
Three Months Ended
March 31,
20222021
Net loss attributable to Hyzon$(6,523)$(8,147)
Weighted average shares outstanding:
Basic247,940 166,201 
Effect of dilutive securities— — 
Diluted247,940 166,201 
Loss per share attributable to Hyzon:
Basic$(0.03)$(0.05)
Diluted$(0.03)$(0.05)

The weighted average number of shares outstanding prior to Business Combination were converted at the Exchange Ratio.

Potentially dilutive shares are excluded from the computation of diluted net loss when their effect was antidilutive. The following outstanding common stock equivalents (in thousands) were excluded from the computation of diluted net loss per share for the periods presented because including them would have been anti-dilutive.
Three Months Ended
March 31,
20222021
Restricted stock units1,864 872 
Stock options with service conditions12,121 12,525 
Stock options for former CTO1,772 1,772 
Stock options with market and performance conditions5,538 5,538 
Private placement warrants8,015 — 
Public Warrants11,286 — 
Earnout shares23,250 — 
Hongyun warrants31 — 
Ardour warrants230 326 

27
Note 17. Subsequent Events

Global NRG H2 Limited

The Company owns common shares, participation rights, and options to purchase additional common shares in Global NRG H2 Limited (“NRG”). The Company does not have control and does not have the ability to exercise significant influence over the operating and financial policies of this entity. The Company’s investment in NRG was $2.5 million as of December 31, 2021, which was fully impaired during the quarter ended June 30, 2020.
2022.
Note 8 — Subsequent Events

Holthausen and Affiliates

Management has evaluatedIn December 2022, the impactCompany acquired the remaining 49.5% stake, or 1,485,000 A Shares par value €0.01 in Hyzon Europe from Holthausen. The Company now holds 100% ownership in Hyzon Europe. The consideration paid by the Company to Holthausen was €5.52 million (approximately $5.84 million in USD), consisting of subsequent events through€4.50 million (approximately $4.76 million in USD) in cash, including prepaid balances, and €1.02 million (approximately $1.08 million in USD) (excluding any VAT) of certain inventory. In addition, Hyzon Europe transferred all of the date these condensed consolidated financial statements were availableassumed retrofit service contracts including after-sales obligations back to be issued. All subsequent events required to be disclosed are included in these condensed consolidated financial statements.
Holthausen Clean Technology B.V. upon closing of the transaction.

Business Combination
Delaware Court of Chancery Section 205

On July 16, 2021 (the “Closing Date”)February 13, 2023, the Company filed a petition under the caption In re Hyzon Motors Inc., we consummatedC.A. No. 2023-0177-LWW (Del. Ch) in the previously announced business combination (the “Business Combination”)Delaware Court of Chancery pursuant to that certain business combination agreement, dated February 8, 2021 (the “Business Combination Agreement”), with Merger Sub and Legacy Hyzon, pursuant to which Merger Sub was merged with and into Legacy Hyzon, with Legacy Hyzon surviving the Merger as a wholly owned subsidiary of DCRB. On the Closing Date, the DCRB changed its name from Decarbonization Plus Acquisition Corporation to Hyzon Motors, Inc. (“New Hyzon”).
At the effective timeSection 205 of the Merger (the “Effective Time”Delaware General Corporation Law (“DGCL”), each sharewhich permits the Court of Legacy Hyzon’s Common Stock, par value $0.001 per share (“Legacy Hyzon Common Stock”) issued and outstanding immediately priorChancery, in its discretion, to validate potentially defective corporate acts due to developments regarding potential interpretations of the Effective Time (including any shares of Legacy Hyzon Common Stock resultingDGCL stemming from the conversionCourt’s recent decision in Garfield v. Boxed, Inc., 2022 WL 17959766 (Del. Ch. Dec. 27, 2022). On March 6, 2023, the Court of the options to purchase outstanding shares of Legacy Hyzon Common Stock (“Ascent Option”), but excludingChancery granted our petition, holding that any shares of Legacy Hyzon Common Stock resulting from the conversion of Legacy Hyzon’s outstanding convertible notes (the “Convertible Notes”)) was converted into the right to receive 1.7720 shares of Class A Common Stock, par value $0.0001 per share, of New Hyzon (“New Hyzon Class A Common Stock”) (the “Exchange Ratio”) and the contingent right to receive additional shares of New Hyzon Class A Common Stock as additional consideration upon the occurrence of certain triggering events (“Earnout Shares”). Additionally, each share of common stock, par value $0.001 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time was converted and exchanged for one validly issued, fully paid and nonassessable share of common stock, par value $0.001 per share, of Legacy Hyzon.
Earnout
During the five-year period following the Closing Date (the “Earnout Period”), the Company will issue to eligible holders of securities of New Hyzon up to 23,250,000 Earnout Shares, in three tranches of 9,000,000, 9,000,000 and 5,250,000 Earnout Shares, respectively, upon the Company achieving $18, $20 or $35 as its last reported sales price per share for any twenty (20) trading days within any thirty (30) consecutive trading day period within the Earnout Period; provided,defects that in no event will the issuance of the 5,250,000 Earnout Shares occur prior to July 16, 2022, which is the one year anniversary of the date of the Closing Date.
PIPE Financing
On July 16, 2021, a number of purchasers (each, a “Subscriber”) purchased an aggregate of 35,500,000 shares of DCRB Class A Common Stock (the “PIPE Shares”), for a purchase price of $10.00 per share and an aggregate purchase price of $355,500,000 (the “PIPE Financing”), pursuant to separate subscription agreements (each, a “Subscription Agreement”) entered into on February 8, 2021. Pursuant to the Subscription Agreements, we gave certain registration rights to the Subscribersmay have existed with respect to the PIPE shares. The purposeconduct of the PIPE Financing wasSpecial Meeting of Shareholders held on July 15, 2021 to raise additionalapprove the increase in the Company’s authorized share capital for use by the combined company following the Closing Date. Concurrently with the closingwere ratified as of the PIPE Financing,meeting.

The Company continues to believe that, notwithstanding the Convertible Notes automatically converted to approximately 5.02 million sharesrelief the Delaware Court of New Hyzon Class A Common Stock.
In July 2021, the Sponsor transferred $1,332,715 of working capital loansChancery granted to the Company to reimburse costsunder Section 205, at the time of an affiliate.DCRB Shareholder Meeting on July 16, 2021, the increase in the Company’s authorized share capital was validly approved by DCRB’s shareholders under Delaware law.

28
18
Table of Contents
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

References to the “Company,” “our,” “us” or “we” refer to Hyzon Motors, Inc. (f/k/a Decarbonization Plus Acquisition Corporation), except where the context requires otherwise. The following discussion and analysis provide information that management believes is relevant to an assessment and understanding of the Company’s financial condition andour consolidated results of operations and financial condition. This discussion is intended to supplement, and should be read in conjunction with the unaudited condensed consolidated financial statements“Management’s Discussion and the notes thereto containedAnalysis of Financial Condition and Results of Operations” included in Item 1. of this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors.
Cautionary Note Regarding Forward-Looking Statements
This Quarterlyour 2021 Annual Report filed on Form
10-Q
includes forward-looking statements within 10-K/A. Unless the meaningcontext otherwise requires, all references in this section to “Hyzon,” “we,” “us,” and “our” are intended to mean the business and operations 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”). We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission (“SEC”) filings.
Overview
We are a former blank check company incorporated as a Delaware corporation and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. On July 16, 2021, we consummated our Business Combination with Legacy Hyzon.
Recent Developments
Business Combination
On July 16, 2021 (the “Closing Date”), we consummated the previously announced business combination (the “Business Combination”) pursuant to that certain business combination agreement, dated February 8, 2021 (the “Business Combination Agreement”),with Merger Sub and Legacy Hyzon, pursuant to which Merger Sub was merged with and into Legacy Hyzon, with Legacy Hyzon surviving the Merger as a wholly owned subsidiary of DCRB. On the Closing Date, the DCRB changed its name from Decarbonization Plus Acquisition Corporation to Hyzon Motors Inc. (“New Hyzon”).
At the effective time of the Merger (the “Effective Time”), each share of Legacy Hyzon’s Common Stock, par value $0.001 per share (“Legacy Hyzon Common Stock”) issued and outstanding immediately prior to the Effective Time (including any shares of Legacy Hyzon Common Stock resulting from the conversion of the options to purchase outstanding shares of Legacy Hyzon Common Stock (“Ascent Option”), but excluding any shares of Legacy Hyzon Common Stock resulting from the conversion of Legacy Hyzon’s outstanding convertible notes (the “Convertible Notes”)) was converted into the right to receive 1.7720 shares of Class A Common Stock, par value $0.0001 per share, of New Hyzon (“New Hyzon Class A Common Stock”) (the “Exchange Ratio”) and the contingent right to receive additional shares of New Hyzon Class A Common Stock as additional consideration upon the occurrence of certain triggering events (“Earnout Shares”). Additionally, each share of common stock, par value $0.001 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time was converted and exchanged for one validly issued, fully paid and nonassessable share of common stock, par value $0.001 per share, of Legacy Hyzon.
Earnout
During the five-year periodits consolidated subsidiaries following the Closing Date (the “Earnout Period”), the Company will issue to eligible holders of securities of New Hyzon up to 23,250,000 Earnout Shares, in three tranches of 9,000,000, 9,000,000 and 5,250,000 Earnout Shares, respectively, upon the Company achieving $18, $20 or $35 as its last reported sales price per share for any twenty (20) trading days within any thirty (30) consecutive trading day period within the Earnout Period; provided, that in no event will the issuance of the 5,250,000 Earnout Shares occur prior to July 16, 2022, which is the one year anniversary of the date of the Closing Date.
19
Table of Contents
PIPE Financing
On July 16, 2021, a number of purchasers (each, a “Subscriber”) purchased an aggregate of 35,500,000 shares of DCRB Class A Common Stock (the “PIPE Shares”), for a purchase price of $10.00 per share and an aggregate purchase price of $355,500,000 (the “PIPE Financing”), pursuant to separate subscription agreements (each, a “Subscription Agreement”) entered into on February 8, 2021. Pursuant to the Subscription Agreements, we gave certain registration rights to the Subscribers with respect to the PIPE shares. The purpose of the PIPE Financing was to raise additional capital for use by the combined company following the Closing Date. Concurrently with the closing of the PIPE Financing, the Convertible Notes automatically converted to approximately 5.02 million shares of New Hyzon Class A Common Stock.
Results of Operations
Prior to the completionconsummation of the Business Combination we neither engaged in any significant operations nor generated any operating revenue. Our only activities from inception throughand to Legacy Hyzon and its consolidated subsidiaries prior to the closingBusiness Combination.

Restatement

The accompanying Management’s Discussion and Analysis of Financial Condition and Results of Operations (this “MD&A”) has been adjusted to give effect to the Restatement of the Business Combinationunauditedconsolidated financial statements for the period ended March 31, 2022. For additional information and a detailed discussion of the Restatement, refer to the Explanatory Note and Note 2. Restatement of Previously Issued Financial Statements to the consolidated financial statements.

Overview

Headquartered in Rochester, New York, with operations in North America, Europe, China, and Australasia, Hyzon provides decarbonized solutions primarily for commercial vehicles market and hydrogen supply infrastructure.

Vehicles and Vehicle Platforms

Our commercial vehicle business is focused primarily on assembling and supplying hydrogen-powered fuel cell electric vehicles (“FCEVs”), including heavy-duty (Class 8) trucks, medium-duty (Class 6) trucks, light-duty (Class 3 and 4) trucks, and 40 and 60-foot (12 and18-meter) city and coach buses to commercial vehicle operators. We also provide services that retrofit ICE vehicles to FCEVs.

On-road, our potential customers include shipping and logistics companies and retail customers with large distribution networks, such as grocery retailers, food and beverage companies, waste management companies, and municipality and government agencies around the world. Off-road, our potential customers include mining, material handling and port equipment manufacturers and operators. Initial strategic customer groups often employ a ‘back-to-base’ model where their vehicles return to a central base or depot between operations, thereby allowing operators to have fueling independence as the necessary hydrogen can be produced locally at or proximate to the central base and dispensed at optimally-configured hydrogen refueling stations. Hyzon may expand its range of products and hydrogen solutions as the transportation sector increasingly adopts hydrogen propulsion and investments are made in hydrogen production and related infrastructure in accordance with our expectations.

In addition, we perform integration for rail and aviation customers and plan to expand our formationintegration activities across maritime and other applications in the future. We expect the opportunities in these sectors to continue to expand with the rapid technological advances in hydrogen fuel cells and the initial public offering,increasing investments in hydrogen production, storage and refueling infrastructure around the world.

Fuel and Infrastructure

Our hydrogen supply infrastructure business is focused on building and fostering a clean hydrogen supply ecosystem with leading partners from feedstock through hydrogen production, dispensing and financing. We collaborate with strategic partners on development, construction, operation, and ownership of hydrogen production facilities and refueling stations in each major region of our operations, which we intend to complement our back-to-base model and near-term fleet deployment opportunities.
29

COVID-19 Pandemic

The COVID-19 pandemic is currently impacting countries, communities, supply chains, and the global financial markets. Governments have imposed laws requiring social distancing, travel restrictions, shutdowns of businesses and quarantines, among others, and these laws may limit our ability to meet with potential customers or partners, or affect the ability of our personnel, suppliers, partners and customers to operate in the ordinary course of business. Although the economy has begun to recover, the severity and duration of the related global economic crisis is not fully known. The COVID-19 pandemic is expected to continue to have residual negative impacts, in particular the supply chain continues to face disruptions. Rebounding demand in key components challenge the supply base and supply chain with short notice and increasing volume levels. The supply constraints include overseas freight congestion causing extended lead times, semiconductor allocation, other raw/component material shortages and supplier staffing challenges.

The COVID-19 pandemic and measures to prevent its spread have had the following impact on our business:

•Our workforce. Employee health and safety is our priority. In response to COVID-19, we established protocols to help protect the health and safety of our workforce. We will continue to stay up-to-date and follow local, Centers for Disease Control and Prevention (“CDC”), or World Health Organization (“WHO”) guidelines regarding safe work environment requirements.

•Operations and Supply Chain. We continue to experience supply chain disruptions, which may temporarily limit our ability to outfit vehicles and fuel cell systems with key components. However, our global footprint has allowed us to leverage our strategic partnerships and to meet customer demands for 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.

While we have experienced some operational challenges, the long-term implications of the COVID-19 pandemic on our workforce, operations and supply chain, as well as due diligence costs incurred. Asdemand remain uncertain. These factors may in turn have a resultmaterial adverse effect on our results of operations, financial position, and cash flows.

Key Trends and Uncertainties

We believe that our performance and future success depends on several factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in the closingsection entitled “Risk Factors” included in our Annual Report filed on Form 10-K/A for the year ended December 31, 2021.

Commercial Launch of Hyzon-branded commercial vehicles and other hydrogen solutions

We reported $2.9 million of revenue from hydrogen fuel cell system sales in the Business Combination, our business has substantially changedUnited States and is now that of New Hyzon. Accordingly, we expect to incur increased expenses as a result of being a public operating company.
ForFCEVs in China for the three months ended June 30, 2020,March 31, 2022; however, our business model has yet to be proven. Prior to full commercialization of our commercial vehicle business at scale, we hadmust complete the construction of required manufacturing facilities and achieve research and development milestones. We must establish and operate facilities capable of producing our hydrogen fuel cell systems or assembling our hydrogen-powered commercial vehicles in appropriate volumes and at competitive costs.

Until we can generate sufficient additional revenue from our commercial vehicle business, we expect to finance our operations through equity and/or debt financing. The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our development efforts. We expect that any delays in the successful completion of our manufacturing facilities, availability of critical parts, and/or validation and testing will impact our ability to generate revenue.
30

Hydrogen Production & Supply Infrastructure

We continue to develop an end-to-end hydrogen ecosystem delivery model, with a net losspartner-driven approach to design, build, own and operate hydrogen production hubs and downstream dispensing infrastructure expected to provide zero-to-negative carbon intensity hydrogen at below diesel-parity cost structures supporting Hyzon vehicle fleet deployments. We intend to continue forming additional partnerships across the full hydrogen feedstock, production and dispensing value chain in each major region in which we operate, that will be designed to ensure that the hydrogen fuel required is available at the cost and carbon intensity requirements to drive fleet conversions to Hyzon hydrogen FCEVs. Because we have a partner-driven approach, we are naturally reliant upon our partners’ performance in fulfilling the obligations that we depend on for delivery of approximately $1,000each segment of that value chain. Additionally, consistent with other construction projects, there are risks related to realized construction cost and schedule that can impact final cost to produce and deliver hydrogen and timing of that delivery, along with the availability of feedstock near our vehicle fleet deployments. We intend to manage these risks by partnering with high quality and high performing partners with a track record of timely delivery and instituting commercial agreements to drive down construction cost and achieve on-time scheduled performance.

Continued Investment in Innovation

We believe that we are the industry-leading hydrogen technology company with the most efficient and reliable fuel cell powertrain technologies and an unmatched product and service offering. Our financial performance will be significantly dependent on our ability to maintain this leading position. We expect to incur substantial and increasing research and development expenses and stock-based compensation expenses as a result. We dedicate significant resources towards research and development and invest heavily in recruiting talent, especially for vehicle design, vehicle software, fuel cell system, and electric powertrain. We will continue to recruit and retain talented personnel to grow our strength in our core technologies. We expect to incur additional stock-based compensation expenses as we support our growth and status as a publicly traded company. We expect our strategic focus on innovation will further solidify our leadership position.

Customer Demand

We are continually seeking to expand our customer base; however we depend on a few major customers and we expect this will continue for the next several years. These customers will mostly employ a back-to-base model in the early adoption phase of FCEVs. Vehicles will return to a central “base” between operations, allowing them to refuel onsite and/or nearby, where hydrogen can be produced locally at or proximate to the central base. While we focus on back-to-base or regional customers, we expect to expand our target customer focus to include longer-haul truck and bus segments, additional vehicle classes, stationary power, and incremental mobility applications (e.g., rail, marine, aviation) for customers around the world.

Supplier Relationships

We depend on third parties, including our majority beneficial shareholder and parent company Horizon for supply of key inputs and components for our products, such as fuel cells and automotive parts. We intend to negotiate potential relationships with industry-leading OEMs to supply chassis for our Hyzon-branded vehicles but do not yet have any binding agreements and there is no guarantee that definitive agreements will be reached. Even if we reach such agreements, such suppliers, including Horizon, may be unable to deliver the inputs and components necessary for us to produce our hydrogen-powered commercial vehicles or hydrogen fuel cell systems at prices, volumes, and specifications acceptable to us. If we are unable to source required inputs and other components from third parties on acceptable terms, it could have a material adverse effect on our business and results of operations.
The automotive industry continues to face many supply chain disruptions. We are experiencing increases in both the cost of and time to receive raw materials, such as semiconductors or chassis. Any such increase or supply interruptions could materially negatively impact our business, prospects, financial condition, and operating results. Many of the parts for our products are sourced from suppliers in China, and the manufacturing situation in China remains uncertain.

Market Trends and Competition

The last ten years have seen the rapid development of alternative energy solutions in the transportation space. We believe this growth will continue to accelerate as increased product offerings, technological developments, reduced costs, additional supporting infrastructure, and increased global focus on climate goals drive broader adoption.
31

We believe that commercial vehicle operators, one of our initial target markets, will be driven towards hydrogen-powered commercial vehicles predominantly by the need to decarbonize activities, but also by the potential for lower total cost of ownership in comparison to the cost of ownership associated with traditional gasoline and diesel internal combustion engines. Our fuel cell technology can be deployed across a broad range of mobility applications, including on-road, off-road, rail, maritime and aviation.

The competitive landscape for our commercial vehicles ranges from vehicles relying on legacy internal combustion engines, to extended range electric and battery electric engines, to other hydrogen fuel cell and alternative low-to-no carbon emission propulsion vehicles. Competitors include well established vehicle companies already deploying vehicles with internal fuel cell technology and other heavy vehicle companies that have announced their plans to offer fuel cell trucks in the future. We also face competition from other fuel cell manufacturers. We believe that our company is well positioned to capitalize on growth in demand for alternative low-to-no carbon emission propulsion vehicles due to the numerous benefits of hydrogen power, including hydrogen’s abundance and ability to be produced locally and the generally faster refueling times for hydrogen-powered commercial vehicles, as compared to electricity-powered vehicles. However, in order to successfully execute on our business plan, we must continue to innovate and convert successful research and development efforts into differentiated products, including new commercial vehicle models.

Our current and potential competitors have greater financial, technical, manufacturing, marketing and other resources. Our competitors may be able to deploy greater resources to the design, development, manufacturing, distribution, promotion, sales, marketing, and support of their internal combustion, alternative fuel and electric truck programs.

Regulatory Landscape

We operate in a highly regulated industry. The failure to comply with laws or regulations, including but limited to rules and regulations covering vehicle safety, emissions, dealerships, and distributors, could subject us to significant regulatory risk and changing laws and regulations and changing enforcement policies and priorities could adversely affect our business, prospects, financial condition and operating results. We may be also required to obtain and comply with the terms and conditions of multiple environmental permits, many of which consistedare difficult and costly to obtain and could be subject to legal challenges. We depend on global customers and suppliers, and adverse changes in governmental policy or trade regimes could significantly impact the competitiveness of approximately $1,000our products. Changes to applicable tax laws and regulations or exposure to additional income tax liabilities could affect our business and future profitability. See the section entitled “Government Regulations” in our Annual Report filed on Form 10-K for the year ended December 31, 2021.

32

Results of Operations

The following table sets forth our historical operating results for the periods indicated (in thousands):

Three Months Ended
March 31,
20222021$ Change% Change
Revenue$2,888 $— $2,888 N/M
Operating expense:
Cost of revenue653 — 653 N/M
Research and development6,936 627 6,309 1006 %
Selling, general, and administrative19,752 3,146 16,606 528 %
Total operating expenses27,341 3,773 23,568 625 %
Loss from operations(24,453)(3,773)(20,680)548 %
Other income (expense):
Change in fair value of private placement warrant liability1,523 — 1,523 N/M
Change in fair value of earnout liability3,241 — 3,241 N/M
Change in fair value of equity securities12,530 — 12,530 N/M
Foreign currency exchange loss and other expense(1,150)(28)(1,122)4007 %
Interest income (expense), net17 (4,588)4,605 (100)%
Total other income (expense)16,161 (4,616)20,777 (450)%
Net loss before income taxes(8,292)(8,389)97 (1)%
Income tax expense526 — 526 N/M
Net loss$(8,818)$(8,389)$(429)5 %
Less: Net loss attributable to noncontrolling interest(2,295)(242)(2,053)848 %
Net loss attributable to Hyzon$(6,523)$(8,147)$1,624 (20)%

33
Three Months Ended March 31, 2022 and 2021

Hyzon was formed and commenced operations on January 21, 2020. As a result, we have a very limited operating history from inception and limited prior period comparable information available to be presented in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Hyzon.”
Revenue. Revenue for the three months ended March 31, 2022 was $2.9 million, and represents sales of fuel cell systems in the United States and FCEVs in China. We did not generate revenue for the three months ended March 31, 2021.

Operating Expenses. Operating expenses for the three months ended March 31, 2022 were $27.3 million compared to $3.8 million for the three months ended March 31, 2021. Operating expenses consist of cost of revenue, research and development expenses and selling, general and administrative expenses.

ForCost of Revenue. Cost of revenue includes direct materials, labor costs, allocated overhead costs related to the manufacturing and retrofitting of hydrogen FCEVs, fuel cell systems, and estimated warranty costs. Cost of revenue for the three months ended June 30,March 31, 2022 was $0.7 million. The total cost of FCEVs delivered to the customer in China was recorded within Cost of revenue in the Consolidated Statements of Operations and Comprehensive Loss in 2021 wesince control of such FCEVs was transferred to the customer prior to December 31, 2021. We did not generate revenue for the three months ended March 31, 2021 and therefore had a net lossno cost of approximately $8.2revenue for the three months ended March 31, 2021.

Research and Development Expenses. Research and development expenses represent costs incurred to support activities that advance the development of current and next generation hydrogen powered fuel cell systems, the design and development of electric powertrain, and the integration of those systems into various mobility applications. Our research and development expenses consist primarily of employee-related personnel expenses, prototype materials and tooling, design expenses, consulting and contractor costs and an allocated portion of overhead costs.

Research and development expenses were $6.9 million which consisted of approximately $1.4and $0.6 million in the three months ended March 31, 2022 and 2021, respectively. The increase was primarily due to $3.5 million in higher personnel costs in developing our research and development expertise in vehicle design, vehicle software, fuel cell system, and electric powertrain. The remaining increase of $2.8 million was primarily due to the advancing development of current and next generation hydrogen powered fuel cell systems, the design and development of electric powertrain, and the integration of those systems into various mobility applications. We expect research and development expenses to continue to increase significantly going forward as we build out our research facilities and organization.

Selling, General, and Administrative Expenses. Selling expenses consist primarily of employee-related costs for individuals working in our sales and marketing departments, third party commissions, and related outreach activities. General and administrative expenses consist primarily of personnel-related expenses associated with our executive, finance, legal, information technology and human resources functions, as well as professional fees for legal, audit, accounting and other consulting services, and an allocated portion of overhead costs.

Selling, general, and administrative expenses including due diligence costs incurredwere $19.8 million and $3.1 million in the pursuit of our acquisition plans, $6.8 millionthree months ended March 31, 2022 and 2021, respectively. The increase was primarily due to $5.1 million in higher legal, accounting and consulting fees, $4.5 million in higher salary and related expenses, $2.6 million in higher insurance expense and $0.9 million in higher stock compensation expense. In addition, we incurred additional $2.0 million in IT, rent, travel and other office related expenses to support business growth. We incurred greater selling, general, and administrative expense in the changefirst quarter of 2022 as the Company continues to build out its corporate infrastructure, including accounting, audit, legal, regulatory and tax-related services. The increase in selling, general and administrative costs also resulted from director and officer insurance costs, investor and public relations costs.

Change in Fair Value. Change in fair value represents non-cash gains or losses in estimated fair values of the private placement warrant liability, earnout liability, and investments in equity securities. Private placement warrant and earnout liabilities are remeasured at each balance sheet date. Equity securities are remeasured when there is an observable price adjustment in an orderly transaction for an identical or similar investment in the same issuer. Changes in estimated fair values of private placement warrant liability, earnout liability, and investments in equity securities for the three months ended March 31, 2022, were $1.5 million, $3.2 million, and $12.5 million, respectively. There were no equivalent instruments requiring fair value remeasurement for the three months ended March 31, 2021.

34
Foreign Currency Exchange Loss. Foreign currency exchange loss represents exchange rate gains and losses related to all transactions denominated in a currency other than our or our subsidiary’s functional currencies. Foreign currency exchange loss was $1.2 million in the three months ended March 31, 2022 compared to negligible expense in the three months ended March 31, 2021, as there were few transactions in foreign currencies in the prior period. We are subject to foreign currency risk as we continue to expand our geographic footprint.

Interest Income (Expense), net. Interest income was negligible in the three months ended March 31, 2022, compared to interest expense of $4.6 million in the three months ended March 31, 2021. Interest expense relates primarily to the convertible debt issued in February 2021 and is comprised primarily of changes in the fair value of warrant liabilities, offset bythe embedded derivative associated with the automatic conversion provision of the convertible notes. Upon close of the Business Combination in July 2021, the convertible debt and accrued interest earned on marketable securities held in DCRB’s trust account with Continental Stock and Transfer & Trust Company acting as trustee (the “Trust Account”)converted into shares of $3,000.
Forcommon stock of the sixCompany. There was no debt outstanding during the three months ended June 30, 2020, we hadMarch 31, 2022.

Income Tax Expense (Benefits). During the three months ended March 31, 2022, the Company recorded a net lossdiscrete tax expense of approximately $2,000 which consisted$0.5 million primarily associated with the establishment of approximately $2,000 in generala deferred tax liability that is not expected to offset available deferred tax assets. The Company has cumulative net operating losses at the federal and administrative expenses.
Forstate level and maintains a full valuation allowance against its net deferred tax assets. We had no income tax expense for the sixthree months ended June 30,March 31, 2021.

Net Loss Attributable to Noncontrolling Interests. Net loss attributable to noncontrolling interests represents results attributable to third parties in our operating subsidiaries. Net loss is generally allocated based on such ownership interests held by third parties with respect to each of these entities.

Net loss attributable to noncontrolling interests was $2.3 million and $0.2 million for the three months ended March 31, 2022 and 2021, we had a net loss of approximately $9.2 million, which consisted of approximately $2.1 million in general and administrative expenses, including due diligence costs incurred in the pursuit of our acquisition plans, $7.2 million due to therespectively. The change in the fair valuecomparative periods is the result of warrant liabilities, offset by interest earned on marketable securities heldincreased activities in our Netherlands joint venture and the Trust Accountcreation of $7,000.
a joint venture in Foshan, China in October 2021.
Liquidity and Capital Resources

Following the consummation of our initial public offering, our liquidity needs have been satisfied through the net proceeds of approximately $2.0 million from the sale of equity securities held outside of the Trust Account as well as a $1.5 million proceeds from a unsecured promissory note (the “Note”) issued by DCRB to Decarbonization Plus Acquisition Sponsor, LLC (the “Sponsor”) which was converted into warrants of New Hyzon at Closing.
Non-GAAP Financial Measures

In addition to our results determined in the short term and the long term, in order to finance transaction costs in connection with a business combination, the Sponsor or an affiliate of the Sponsor, or certain of our officers and directors could have, but were not obligated to, loan us additional funds as may be required. As of June 30, 2020, $1.5 million was outstanding under the Note.
20
Table of Contents
On February 8, 2021, we entered into the Business Combination Agreement with Merger Sub and Legacy Hyzon and on July 16, 2021, we closed the Business Combination. Approximately $20.89 million of funds held in the Trust Account were also used to fund the redemption of 2,089,323 shares of DCRB Class A Common Stock.
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformityaccordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), we believe the following non-GAAP measures are useful in evaluating our operational performance. We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors in assessing our operating performance.

EBITDA and Adjusted EBITDA

“EBITDA” is defined as net loss before interest income or expense, income tax expense or benefit, and depreciation and amortization. “Adjusted EBITDA” is defined as EBITDA adjusted for stock-based compensation expense, change in fair value of private placement warrant liability, change in fair value of earnout liability, change in fair value of equity securities and other special items determined by management, if applicable. EBITDA and Adjusted EBITDA are intended as supplemental measures of our performance that are neither required by, nor presented in accordance with, U.S. GAAP. We believe that the use of EBITDA and Adjusted EBITDA provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. However, you should be aware that when evaluating EBITDA and Adjusted EBITDA we may incur future expenses similar to those excluded when calculating these measures. In addition, our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate Adjusted EBITDA in the same fashion.

Because of these limitations, EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for performance measures calculated in accordance with U.S. GAAP. We compensate for these limitations by relying primarily on our U.S. GAAP results and using EBITDA and Adjusted EBITDA on a supplemental basis. You should review the reconciliation of net loss to EBITDA and Adjusted EBITDA below and not rely on any single financial measure to evaluate our business.

35
The following table reconciles net loss to EBITDA and Adjusted EBITDA (in thousands):
Three Months Ended
March 31,
 2022 2021
Net loss$(8,818)$(8,389)
Interest (income) expense, net(17)4,588 
Income tax expense526 — 
Depreciation and amortization904 129 
EBITDA$(7,405)$(3,672)
Adjusted for:
Change in fair value of private placement warrant liability(1,523)— 
Change in fair value of earnout liability(3,241)— 
Change in fair value of equity securities(12,530)— 
Stock-based compensation1,193 290 
Regulatory and legal matters (1)
2,730 — 
Adjusted EBITDA$(20,776)$(3,382)
(1)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.

Liquidity and Capital Resources

The Company has incurred losses from operations since inception. The Company incurred net losses of $8.8 million and $8.4 million for the three months ended March 31, 2022 and 2021, respectively. Net cash used in operating activities was $30.1 million and $9.5 million for the three months ended March 31, 2022 and 2021, respectively. As of March 31, 2022, we had $407.3 million in unrestricted cash and positive working capital of $436.6 million. The Business Combination closed on July 16, 2021, generated proceeds of approximately $509.0 million of cash, net of transaction costs and redemptions. We believe that our current cash balance will provide adequate liquidity during the 12-month period from the issuance of these unaudited consolidated financial statements.

Our future capital requirements will depend on many factors, including, but not limited to, the rate of our growth, our ability to generate sufficient revenue from commercial vehicle sales and leases to cover operating expenses, working capital expenditures, and additional cash resources due to changed business conditions or other developments, including supply chain challenges, disruptions due to COVID-19, competitive pressures, and regulatory developments, among other developments. Further, we may enter into future arrangements to acquire or invest in businesses, products, services, strategic partnerships, and technologies. As such, we may be required to seek additional equity and/or debt financing. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of common stockholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations. If we are unable to maintain sufficient financial resources, our business, financial condition and results of operations may be materially and adversely affected.

Debt

As of March 31, 2022 we have no debt. The convertible notes and accrued interest in the comparative period, were converted to 5,022,052 shares of common stock upon close of the Business Combination.
36

Cash Flows
Three Months Ended
March 31,
 2022 2021
Net cash used in operating activities$(30,096)$(9,470)
Net cash used in investing activities(3,895)(4,073)
Net cash (used in) provided by financing activities(3,389)44,603 

Cash Flows for the Three Months Ended March 31, 2022 and March 31, 2021

Cash Flows from Operating Activities

Net cash used in operating activities was $30.1 million for the three months ended March 31, 2022, as compared to $9.5 million for the three months ended March 31, 2021. The cash flows used in operating activities for the three months ended March 31, 2022 was primarily driven by a net loss of $8.8 million and adjusted for certain non-cash items and changes in operating assets and liabilities. Non-cash gain adjustments consisted of changes in fair value of the private placement warrant liability of $1.5 million, earnout liability of $3.2 million, and equity securities of $12.5 million. These non-cash gain adjustments were partially offset by $1.2 million stock-based compensation expense and $0.9 million in depreciation and amortization. Changes in operating assets and liabilities were primarily driven by $1.7 million in prepayments for vehicle inventory, production equipment, other supplier deposits and D&O insurance, and a change of $7.5 million in inventory balances, offset by an increase in accrued liabilities of $3.4 million and accounts receivable of $2.2 million. Net cash used in operating activities for the three months ended March 31, 2021 was primarily driven by recording a net loss of $8.4 million and adjusted for certain non-cash items and changes in operating assets and liabilities. Non-cash loss adjustments primarily consisted of a noncash interest expense of $4.5 million. These non-cash loss adjustments were partially offset by $7.0 million for prepayments for vehicle inventory, production equipment, and other supplier deposits and $1.5 million in payables and accrued liabilities.

Cash Flows from Investing Activities

Net cash used in investing activities was $3.9 million for the three months ended March 31, 2022, as compared to $4.1 million for the three months ended March 31, 2021. The decrease of the cash flows used in investing activities for the three months ended March 31, 2022 were primarily driven by $0.4 million cash paid for property and equipment and offset by $0.3 million deposit paid in advance for capital expenditures.

Cash Flows from Financing Activities

Net cash used in financing activities was $3.4 million for the three months ended March 31, 2022, as compared to $44.6 million net cash provided by financing activities for the three months ended March 31, 2021. The cash flows used in financing activities for the three months ended March 31, 2022 was driven primarily by $3.1 million payment towards the Horizon IP Agreement. The cash flows provided by financing activities for the three months ended March 31, 2021 was driven primarily by $45.0 million in proceeds from issuance of convertible notes.

Contractual Obligations and Commitments

For the three months ended March 31, 2022, there were no material changes outside the ordinary course of business within the Contractual Obligations table as previously disclosed in our Annual Report filed on Form 10-K/A for the year ended December 31, 2021.

Off-Balance Sheet Arrangements
We do not maintain any off-balance sheet arrangements, transactions, obligations or other relationships with unconsolidated entities that would be expected to have a material current or future effect upon our financial condition or results of operations.

37
Critical Accounting Policies and Estimates
Our unaudited consolidated financial statements and accompanying notes are prepared in accordance with U.S. GAAP. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:
Principles of Consolidation
The consolidated financial statements include the accounts of DCRB and its wholly owned subsidiary since its formation. All material intercompany balances and transactions have been eliminated.
Basis of Presentation
The preparation of condensed consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to makeexpenses. These estimates and assumptions that affectare affected by management’s applications of accounting policies. Certain policies are particularly important to the reported amountsportrayal of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and expenses during the periods reported. Actual results could materially differ from those estimates.
Warrant Liabilities
We account for the warrants issued in connection with our initial public offering in accordance with Accounting Standards Codification (“ASC”)
815-40,
Derivatives and Hedging—Contracts in Entity’s Own Equity
(“ASC 815”), under which the warrants do not meet the criteria for equity classification and must be recorded as liabilities. As the warrants meet the definition of a derivative as contemplated in ASC 815, the DCRB’s warrants are measured at fair value at inception and at each reporting date in accordance with ASC 820,
Fair Value Measurement
, with changes in fair value recognized in the Statements of Operations in the period of change.
Impact of
COVID-19
We continue to evaluate the impact of the
COVID-19
pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on our financial position and/orand results of operations and require the specific impact is not readily determinableapplication of significant judgment by management to determine appropriate assumptions to be used in certain estimates; as a result, they are subject to an inherent degree of uncertainty and are considered critical. Accordingly, we believe the balance date.
Recent Accounting Pronouncements
We do not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material impact onfollowing policies are the most critical to aid in fully understanding and evaluating our financial statements.
condition and results of operations.
Off-Balance
Sheet Arrangements

AsThere have been no substantial changes to these estimates, or the policies related to them during the three months ended March 31, 2022. For a full discussion of the date of this Quarterly Report, we did not have any
off-balance
sheet arrangements as definedthese estimates and policies, see "Critical Accounting Policies and Estimates" in Item 303(a)(4)(ii)7 of Regulation
S-K.
our Annual Report filed on Form 10-K/A for the year ended December 31, 2021.
JOBS Act

On April 5, 2012, the Jumpstart Our Business Startups Act
Emerging Growth Company Status

Section 102(b)(1) of 2012 (the “JOBS Act”) was signed into law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies. We qualify as an “emerging growth company” under the JOBS Act and are allowedexempts emerging growth companies from being required to comply with new or revised financial accounting pronouncements based onstandards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the effective date for private (not publicly traded) companies. We electedExchange Act) are required to delaycomply with the adoption of new or revised financial accounting standards,standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and as a result, we may not comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. Hyzon elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, Hyzon, as an emerging growth company, can adopt the new or revised accounting standards onstandard at the relevant dates on which adoption of such standards is required for
non-emerging
growth companies. As a result, our financial statements may not be comparable totime private companies that comply withadopt the new or revised accounting pronouncementsstandard, until such time Hyzon is no longer considered to be an emerging growth company. At times, Hyzon may elect to early adopt a new or revised standard.
In addition, Hyzon intends to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as of publican emerging growth company, effective dates.
21
Table of Contents
As an “emerging growth company,” we areHyzon intends to rely on such exemptions, Hyzon is not required to, among other things, (i)things: (a) provide an auditor’s attestation report on ourHyzon’s system of internal controlscontrol over financial reporting (ii)pursuant to Section 404(b) of the Sarbanes-Oxley Act; (b) provide all of the compensation disclosure that may be required of
non-emerging
growth public companies (iii)under the Dodd-Frank Wall Street Reform and Consumer Protection Act; (c) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis),; and (iv)(d) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the CEO’sChief Executive Officer’s compensation to median employee compensation. These exemptions

Hyzon will apply for a periodremain an emerging growth company under the JOBS Act until the earliest of five years(a) the last day of Hyzon’s first fiscal year following the completionfifth anniversary of our Public Offeringthe closing of DCRB’s initial public offering, (b) the last date of Hyzon’s fiscal year in which Hyzon has total annual gross revenue of at least $1.07 billion, (c) the date on which Hyzon is deemed to be a “large accelerated filer” under the rules of the SEC with at least $700.0 million of outstanding securities held by non-affiliates or until we otherwise no longer qualify as(d) the date on which Hyzon has issued more than $1.0 billion in non-convertible debt securities during the previous three years.

Material Transactions with Related Parties

Horizon IP Agreement

In January 2021, Hyzon entered into the Horizon IP Agreement with JS Horizon, part of the Horizon group of companies, and in September 2021 JS Powertrain was an “emerging growth company.”added party to the agreement. Pursuant to the agreement the parties convey to each other certain rights in intellectual property relating to Hyzon’s core fuel cell and mobility product technologies, under which Hyzon was to pay JS Horizon and JS Powertrain a total fixed payment of $10 million. As of March 31, 2022, the full $10 million has been paid, $6.9 million was paid in 2021 and the remaining $3.1 million was paid in February 2022.
Item 3. Quantitative38

Horizon Supply Agreement

In January 2021, Hyzon entered into a supply agreement with Jiangsu Horizon New Energy Technologies Co. Ltd, a wholly owned subsidiary of Horizon, to supply certain fuel cell components. In March 31, 2021, the Company made a deposit payment to Horizon in the amount of $5.0 million for long lead time components. This payment is included in prepaid expenses as none of the components have yet been received. In addition, the Company made other deposit payments to purchase fuel cell systems and Qualitative Disclosures About Market Risk
components from Horizon and its affiliates.For the three months ended March 31, 2022, Cost of revenue of $0.1 million for fuel cell components purchased from Horizon and its affiliates were recorded in the Company’s unaudited Consolidated Statements of Operations and Comprehensive Loss.
We are
Holthausen and Affiliates

The Company entered into a smaller reportingjoint venture agreement in October 2020 to create Hyzon Europe with Holthausen. As Hyzon Europe builds out its production facilities, it relies on Holthausen and its affiliates for certain production resources that result in related party transactions. In addition, both companies rely on certain suppliers including Horizon.

The Company currently owns 50.5% of the equity interests of Hyzon Europe. On December 31, 2021, Hyzon executed a non-binding Letter of Intent (“LOI”) with Holthausen to increase its stake to 75% in Hyzon Europe. Concurrent with the signing of this LOI, a €1 million refundable deposit was paid to Holthausen, approximately $1.1 million in USD. This deposit is recorded in the unaudited Consolidated Balance Sheets in Prepaid expenses and other current assets.

On May 5, 2022, the Company entered into a Stock Purchase Agreement (“SPA”) with Holthausen, whereby the Company agreed to purchase 735,000 shares Holthausen holds in Hyzon Europe. When the transaction closes, the Company will own 75% of the issued and outstanding shares of Hyzon Europe, and Holthausen will own 25%. As part of the SPA, Holthausen agreed to transfer to Hyzon Europe all of its shares of stock in Holthausen Clean Technology B.V, private limited liability company registered in the Netherlands. The Company agreed to a total purchase price of €27.0 million, approximately $28.5 million in USD, in a combination of cash and equity of the Company.

For the three months ended March 31, 2022, the Company paid $0.1 million to Carl Holthausen and Max Holthausen as definedmanaging directors of Hyzon Europe.

As of March 31, 2022 and December 31, 2021, the Company has a net related party receivable in Rule
12b-2
under the Exchange Act. As a result, pursuant to Item 305(e)amount of Regulation
S-K,
we are not required to provide the information required by this Item.$0.4 million and $0.3 million, respectively from Holthausen.

Item 4.    Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

DisclosureThe term disclosure controls and procedures aremeans controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

As requiredWe do not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all instances of fraud due to inherent limitation of internal controls. Because of these inherent limitations there is a risk that material misstatements will not be prevented or detected on a timely basis by Rules
13a-15
and
15d-15
underinternal control over financial reporting. However, these inherent limitations are known features of the Exchange Act, ourfinancial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

Our Chief Executive Officer and Chief Financial Officer carried out an evaluation ofhas evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of June 30, 2021.March 31, 2022. Based upon thison such evaluation, our Chief Executive Officer and Chief Financial Officerhas concluded that as of March 31, 2022 our disclosure controls and procedures (as defined in Rules
13a-15(e)
and
15d-15(e)
under the Exchange Act) were not effective asbecause of June 30, 2021 due solely tothe material weaknesses in internal control over financial reporting described below.

39
In light of the material weaknesses described below, our restatementmanagement has performed additional analyses, reconciliations, and other post-closing procedures and has concluded that, notwithstanding the ineffectiveness of our financial statements to reclassify our warrants as described under “Restatement of Previously Issued Financial Statements”.
We do not expect that our disclosure controls and procedures as well as material weaknesses in our internal control over financial reporting as of March 31, 2022, the consolidated financial statements for the periods covered by and included in this Form 10-Q/A fairly present, in all material respects, our financial position, results of operations and cash flows as of and for the periods presented in conformity with U.S. GAAP.

(b) Material Weaknesses in Internal Control over Financial Reporting

While preparing the Company’s consolidated financial statements, our management identified the following material weaknesses in internal control over financial reporting:

•The Company did not demonstrate a commitment to attract, develop, and retain competent individuals in alignment with objectives and accordingly did not have sufficient qualified resources.

•The Company did not have an effective risk assessment process that successfully identified and assessed risks of material misstatement to ensure controls were designed and implemented to respond to those risks.

•The Company did not have an effective internal information and communication process to ensure that relevant and reliable information was communicated on a timely basis across the organization, to enable financial personnel to effectively carry out their financial reporting and internal control roles and responsibilities.

•The Company did not sufficiently establish structures, reporting lines and appropriate authorities and responsibilities in the pursuit of objectives.

As a consequence, the Company did not effectively design, implement and operate process-level control activities related to revenue recognition, complex accounting transactions, and the financial close process to mitigate risks to an acceptable level.

Those control deficiencies resulted in material misstatements that were identified and corrected in the consolidated financial statements as of and for the period ended March 31, 2022 primarily affecting revenue, cost of revenue, inventory, contract liabilities, and selling, general, and administrative expenses, as further described in Note 2. Restatement of Previously Issued Financial Statements to the consolidated financial statements. Because there is a reasonable possibility that material misstatement of the consolidated financial statements will prevent all errorsnot be prevented or detected on a timely basis, we concluded that these deficiencies represent material weaknesses in our internal control over financial reporting and all instancesthat our internal control over financial reporting was not effective as of fraud.March 31, 2022.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. These deficiencies could result in misstatements to our financial statements that would be material and would not be prevented or detected on a timely basis.

(c) Remediation Plan and Status

With oversight from the Audit Committee and input from the Board of Directors, management has begun designing and implementing changes in processes and controls to remediate the material weaknesses described above. Management and the Board of Directors, including the Audit Committee, are working to remediate the material weaknesses identified herein. While the Company expects to take other remedial actions, actions taken to date include:

•appointed new Chief Executive Officer and created a new role of President of International Operations;

•hired additional finance and accounting personnel over time to augment our accounting staff, including third-party resources with the appropriate technical accounting expertise;

•engaged 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;

40
•enhanced existing Disclosure Committee responsibilities through a formal review and sign off process; and

•implemented a formal regional general manager financial statement review and certification process for each SEC filing.

In addition to the remedial actions taken to date, the Company is taking, or plans to take, the following actions to remediate the material weaknesses identified herein:

•designing and implementing a comprehensive and continuous risk assessment process to identify and assess risks of material misstatements and to ensure that the impacted financial reporting processes and related internal controls are properly designed, maintained, and documented to respond to those risks in our financial reporting;

•further developing and implementing formal policies, processes and documentation procedures relating to financial reporting, including revenue recognition and other complex accounting matters, and consulting with independent accounting experts and advisors;

•formalizing the design of the processes and controls related to sales of our products and services, as well as vendor contracting, fuel cell acceptance, transfer of control of our products to customers, tracking our vehicles' post-sale performance, and archiving documentation in a central system; and

•completing ethics training globally and in addition, providing general public company periodic training for Company personnel, including on potential topics such as the responsibilities of a public company, the core values of the Company’s accounting and finance function, and best practices to implement those values.

As we work to improve our internal control over financial reporting, we will report regularly to the Company’s Audit Committee on the progress and results of the remediation plan, including the identification, status, and resolution of internal control deficiencies. We may modify our remediation plan and may implement additional measures as we continue to review, optimize and enhance our financial reporting controls and procedures no matter how well conceivedin the ordinary course. We will not be able to fully remediate these material weaknesses until these steps have been completed and operated, can provide only reasonable,have been operating effectively for a sufficient period of time. If we are unable to successfully remediate the material weaknesses, or if in the future, we identify further material weaknesses in our internal control over financial reporting, we may not absolute, assurance that the objectives of the disclosure controlsdetect errors on a timely basis and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits mustour consolidated financial statements may be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
materially misstated.

(d) Changes in Internal Control over Financial Reporting
Due solely
There have not been any 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 March 31, 2022, that have materially affected, or are reasonably likely to the events that led toaffect, our restatement of ourinternal control over financial statements on Form
10-K/A
filed with the SEC on May 13, 2021 (the “Restatement”), management identified a material weakness in internal controls related to the accounting for Warrants issued in connection with our Public Offering, as described below under “Restatement of Previously Issued Financial Statements.”reporting.
22
41
In light of the Restatement of our financial statements, we enhanced our processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards that apply to our financial statements. We have provided enhanced access to accounting literature, research materials and documents, performed an analysis to ensure that our financial statements are in accordance with generally accepted accounting principles and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. The elements of our remediation plan continue to be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.
Restatement of Previously Issued Financial Statements
On May 13, 2021, we revised our prior position on accounting for Warrants and restated our financial statements as of December 31, 2020 and for the period ended December 31, 2020 to reclassify the Company’s warrants as described in the Restatement. However, the non-cash adjustments to the financial statements did not impact the amounts previously reported for our cash and cash equivalents, total assets, revenue or cash flows.
23
Table of Contents
PART II – OTHER INFORMATION
Item 1.
Legal Proceedings
Item 1A.    Risk Factors
From time to time, we may become involved in legal proceedings or be subject to claims in the ordinary course of business. We are not currently a party to any material legal proceedings. Regardless of outcome, such proceeding or claims can have an adverse impact on us because of defense and settlement costs, diversion of resources and other factors and there can be no assurances that favorable outcomes will be obtained.

In connection with the Business Combination, certain of DCRB’s purported stockholders filed lawsuits against DCRB and its directors asserting claims for breaches of fiduciary duty:
Lanctot
 v. Decarbonization Plus Acquisition Corp. et al.,
Index No. 652070/2021 (N.Y. Sup. Ct., N.Y. Cnty.);
Pham
 v. Decarbonization Plus Acquisition Corp. et al.,
Case No.
21-CIV-01928
(Cal. Sup., San Mateo Cnty.). These complaints allege that the DCRB board members breached their fiduciary duties by in connection with the merger by allegedly agreeingaddition to the transaction following an inadequate process and at an unfair price, and by allegedly disseminating inaccurate or incompleteother information concerningdiscussed in this report, please consider the transaction. These complaints seek, among other things, injunctive relief and an award of attorneys’ fees. The defendants in these cases have not yet answered these complaints and we believe that these pending and threatened lawsuits are without merit.
Item 1A.
Risk Factors
As a result of the closing of the Business Combination on July 16, 2021, the risk factors previously discloseddescribed in Part I, Item 1A of1A., “Risk Factors” in our Annual Report filed on Form
10-K/A
10-K for the fiscal year ended December 31, 2020 no longer apply. For2021, as amended by Amendment No. 1 on Form 10-K/A, that could materially affect our business, financial condition or future results. There have not been any material changes to the risk factors relatingdescribed in our 2021 Form 10-K as amended, but these are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may adversely affect our business, following the Business Combination, please refer to the section entitled “financial condition or operating results.
Risk Factors
” in our Definitive Proxy Statement (file
No. 001-39632)
filed with the SEC on June 21, 2021.
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3.
Defaults Upon Senior Securities
None.
Item 4.
Mine Safety Disclosures
Not applicable.
Item 5.
Other Information
None.
24
42
Table of Contents
Item 6.Exhibits
Exhibit
Item 6.
Number
Exhibits.
Description
Exhibit
Number
Description
3.1
3.2
10.14.1
10.1
10.210.2#
10.310.3#
10.410.4#
10.510.5#
31.110.6#
10.7#†
31.1
31.232.1*
32.1Certification of Chief Executive Officer and Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350
32.2Certification of Chief Executive Officer and Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350
101.INSInline 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.SCHInline XBRL Taxonomy Extension Schema Document
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
101.LABInline XBRL Taxonomy Extension Label Linkbase Document
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (embedded within the Inline XBRL document)
_________________________
*    This information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act.
#    Indicates management contract or compensatory arrangement.
†Filed or furnished herewith.
25
43
SIGNATURE

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.
Hyzon Motors Inc.
Date: August 13, 2021March 14, 2023By:By:
/s/ Mark Gordon
Parker Meeks
Name:Name:Mark GordonParker Meeks
Title:Title:
Chief FinancialExecutive Officer
(Principal Financial Officer)
2644