2023 (Registrant’s telephone number, including area code) AND COMPREHENSIVE INCOME (LOSS) CHANGES IN STOCKHOLDERS’ EQUITY Basis of Presentation 2023. The Company recognized negligible revenue and $2.9 million in sales of hydrogen fuel cell systems in the United States, sales of FCEVs in China, and upfit services in Europe for the three and six months ended June 30, 2022, respectively. used for income tax purposes. The Company specifications acceptable to us. If we are unable to year ended December 31, 2022. which $7.0 million is recorded as current liabilities and $15.0 million in other long-term liabilities. In addition, we incurred $1.7 million in higher salary and related expenses and $1.1 million in other office related expenses to support business growth. As of the date of this Quarterly Report on Form 10-Q, management believes that the Company’s existing financial resources will be sufficient to execute its operating priorities for the next 12 months following the issuance date of these unaudited interim consolidated financial statements. As of July 31, 2023, unrestricted cash, cash equivalents, and short-term investments were approximately $158 million. business prospects. ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 SeptemberJune 30,, 2020☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 001-39632Decarbonization Plus Acquisition CorporationNamename of Registrantregistrant as Specifiedspecified in its Charter)charter)Delaware82-2726724Delaware 001-39632 82-2726724 Other Jurisdiction other jurisdictionIncorporation or Organization) incorporation)(Commission
File Number)(I.R.S. Employer
Identification Number)No.)475 Quaker Meeting House Road
Honeoye Falls, NY14472 2744 Sand Hill RoadMenlo Park, CA94025(Address of Principal Executive Offices)principal executive offices)(Zip Code) (212) 993-0076Telephone Number, Including Area Code)Title of each class Units, each consisting of one share of Class A common stock and one-half of one warrantDCRBUNasdaq Capital MarketClass A common stock,Common Stock, par value $0.0001 per shareDCRBHYZNNasdaqNASDAQ Capital MarketWarrants, each whole warrant exercisable for one share of Class A common stockCommon Stock at an exercise price of $11.50 per shareDCRBWHYZNWNasdaqNASDAQ Capital Market☐x No ☒o☒x No ☐oLarge accelerated filer ☐oAccelerated filer ☐oNon-accelerated filer ☒xSmaller reporting company ☒xEmerging growth company ☒x☐o☒o No ☐xDecember 2, 2020, 22,572,502July 31, 2023, there were approximately 244,853,005 shares of Class A Common Stock,the registrant’s common stock outstanding, par value $0.0001 per share, and 5,750,000 shares of Class B Common Stock, par value $0.0001 per share, were outstanding.TABLE OF CONTENTSPagei September 30,
2020
(unaudited) December 31,
2019
(audited) ASSETS: Current asset: cash $ 315,251 $ 315,600 Prepaid expenses - franchise tax 860 - Deferred offering costs 354,650 23,000 Total assets $ 670,761 $ 338,600 LIABILITIES AND STOCKHOLDER’S EQUITY Current liabilities: Accounts payable - offering costs $ 345,650 $ 14,000 Accounts payable - affiliate 3,089 - Promissory note - related party 300,000 300,000 Total liabilities 648,739 314,000 COMMITMENTS AND CONTINGENCIES Stockholder’s equity: Preferred shares, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding - - Class A common stock, $0.0001 par value, 200,000,000 shares authorized; none issued and outstanding - - Class B common stock, $0.0001 par value, 20,000,000 shares authorized, 5,750,000 shares issued and outstanding (1) (2) 575 575 Additional paid-in capital 243,447 243,447 Accumulated deficit (222,000 ) (219,422 ) Total stockholder’s equity 22,022 24,600 Total liabilities and stockholder’s equity $ 670,761 $ 338,600 (1)This number includes an aggregate of up to 106,875 shares of the Company’s Class B common stock subject to forfeiture if the over-allotment option for the Company’s initial public offering is not exercised in full by the underwriters. (See Note 4 and Note 6)(2)On September 18, 2020, the Company’s sponsor returned 2,875,000 shares of the Company’s Class B common stock to the Company at no cost. In October 2020, the Company’s sponsor returned an additional 2,875,000 shares of the Company’s Class B common stock to the Company at no cost. All shares and associated amounts have been retroactively restated to reflect the return of the shares (See Note 4)June 30,
2023December 31,
2022ASSETS Current assets Cash and cash equivalents $ 140,536 $ 60,554 Short-term investments 31,879 194,775 Accounts receivable 950 29 Related party receivable 324 6,578 Inventory 44,008 35,553 Prepaid expenses and other current assets 8,542 15,365 Total current assets 226,239 312,854 Property, plant, and equipment, net 21,893 22,420 Right-of-use assets 8,536 9,181 Investments in equity securities 15,030 15,030 Other assets 13,351 15,411 Total Assets $ 285,049 $ 374,896 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable $ 7,743 $ 13,798 Accrued liabilities 23,564 25,587 Related party payables 424 433 Contract liabilities 6,836 3,919 Current portion of lease liabilities 1,899 2,132 Total current liabilities 40,466 45,869 Long term liabilities Lease liabilities 6,727 7,492 Private placement warrant liability 321 1,122 Earnout liability 3,591 10,927 Deferred income taxes 526 526 Other liabilities 16,719 1,901 Total Liabilities $ 68,350 $ 67,837 Commitments and contingencies (Note 12) Stockholders’ Equity Common stock, $0.0001 par value; 400,000,000 shares authorized, 244,708,119 and 244,509,208 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively. 25 25 Treasury stock, at cost; 3,769,592 shares as of June 30, 2023 and December 31, 2022, respectively. (6,446) (6,446) Additional paid-in capital 375,818 372,942 Accumulated deficit (149,094) (58,598) Accumulated other comprehensive loss (2,898) (153) Total Hyzon Motors Inc. stockholders’ equity 217,405 307,770 Noncontrolling interest (706) (711) Total Stockholders’ Equity 216,699 307,059 Total Liabilities and Stockholders’ Equity $ 285,049 $ 374,896 the condensedthese unaudited consolidated financial statements.DECARBONIZATION PLUS ACQUISITION CORPORATIONCONDENSED(UNAUDITED) Three Months Ended
September 30, Nine Months Ended
September 30, 2020 2019 2020 2019 Revenue $ - $ - $ - $ - Operating expenses: Franchise tax expense 859 945 2,578 2,836 Net loss $ (859 ) $ (945 ) $ (2,578 ) $ (2,836 ) Weighted average number of shares outstanding: Basic and diluted (excluding shares subject to redemption) (1) (2) 5,643,125 5,643,125 5,643,125 5,643,125 Net loss per common share - basic and diluted $ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.00 ) (1)This number excludes an aggregate of up to 106,875 shares of the Company’s Class B common stock subject to forfeiture if the over-allotment option for the Company’s initial public offering is not exercised in full by the underwriters. (See Note 4 and Note 6)(2)On September 18, 2020, the Company’s sponsor returned 2,875,000 shares of the Company’s Class B common stock to the Company at no cost. In October 2020, the Company’s sponsor returned an additional 2,875,000 shares of the Company’s Class B common stock to the Company at no cost. All shares and associated amounts have been retroactively restated to reflect the return of the shares (See Note 4)Three Months Ended
June 30,Six Months Ended
June 30,2023 2022 2023 2022 Revenue $ — $ 46 $ — $ 2,934 Operating expense: Cost of revenue 2,410 1,370 3,248 2,023 Research and development 12,597 10,483 21,937 17,419 Selling, general, and administrative 49,098 20,065 79,955 39,817 Total operating expenses 64,105 31,918 105,140 59,259 Loss from operations (64,105) (31,872) (105,140) (56,325) Other income (expense): Change in fair value of private placement warrant liability 160 8,415 801 9,938 Change in fair value of earnout liability 916 66,096 7,336 69,337 Gain (loss) on equity securities — (2,448) — 10,082 Foreign currency exchange gain (loss) and other expense, net 280 (1,454) 1,430 (2,604) Investment income and interest income, net 2,494 54 5,060 71 Total other income (expense) 3,850 70,663 14,627 86,824 Net income (loss) before income taxes $ (60,255) $ 38,791 $ (90,513) $ 30,499 Income tax expense — — — 526 Net income (loss) $ (60,255) $ 38,791 (90,513) 29,973 Less: Net loss attributable to noncontrolling interest (7) (3,208) (17) (5,503) Net income (loss) attributable to Hyzon $ (60,248) $ 41,999 $ (90,496) $ 35,476 Comprehensive income (loss): Net income (loss) $ (60,255) $ 38,791 $ (90,513) $ 29,973 Foreign currency translation adjustment (931) (235) (1,735) (24) Net change in unrealized gain (loss) on short-term investments (691) $ — (988) — Comprehensive income (loss) $ (61,877) $ 38,556 $ (93,236) $ 29,949 Less: Comprehensive income (loss) attributable to noncontrolling interest 22 (2,840) 5 (5,009) Comprehensive income (loss) attributable to Hyzon $ (61,899) $ 41,396 $ (93,241) $ 34,958 Net income (loss) per share attributable to Hyzon: Basic $ (0.25) $ 0.17 $ (0.37) $ 0.14 Diluted $ (0.25) $ 0.16 $ (0.37) $ 0.14 Weighted average common shares outstanding: Basic 244,628 248,056 244,585 247,999 Diluted 244,628 258,265 244,585 258,772 the condensedthese unaudited consolidated financial statements.DECARBONIZATION PLUS ACQUISITION CORPORATIONCONDENSED STATEMENTSTOCKHOLDER’SSTOCKHOLDERS’ EQUITYFOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020(UNAUDITED) Additional Class A Common Stock Class B Common Stock Paid-in Accumulated Stockholder’s Shares Amount Shares (1) (2) Amount Capital Deficit Equity Balances, January 1, 2020 - $ - 5,750,000 $ 575 $ 243,447 $ (219,422 ) $ 24,600 Net loss - - - - - (1,719 ) (1,719 ) Balances as of June 30, 2020 - $ - 5,750,000 $ 575 $ 243,447 $ (221,141 ) $ 22,881 Net loss - - - - - (859 ) (859 ) Balances as of September 30, 2020 - $ - 5,750,000 $ 575 $ 243,447 $ (222,000 ) $ 22,022 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019(UNAUDITED) Additional Class A Common Stock Class B Common Stock Paid-in Accumulated Stockholder’s Shares Amount Shares (1) (2) Amount Capital Deficit Equity Balances, January 1, 2019 - $ - 5,750,000 $ 575 $ 24,425 $ (2,462 ) $ 22,538 Net loss - - - - - (1,891 ) (1,891 ) Balances as of June 30, 2019 - $ - 5,750,000 $ 575 $ 24,425 $ (4,353 ) $ 20,648 Net loss - - - - - (945 ) (945 ) Balances as of September 30, 2019 - $ - 5,750,000 $ 575 $ 24,425 $ (5,298 ) $ 19,702 (1)This number includes an aggregate of up to 106,875 shares of the Company’s Class B common stock subject to forfeiture if the over-allotment option for the Company’s initial public offering is not exercised in full by the underwriters. (See Note 4 and Note 6)(2)On September 18, 2020, the Company’s sponsor returned 2,875,000 shares of the Company’s Class B common stock to the Company at no cost. In October 2020, the Company’s sponsor returned an additional 2,875,000 shares of the Company’s Class B common stock to the Company at no cost. All shares and associated amounts have been retroactively restated to reflect the return of the shares (See Note 4)Common Stock
Class ATreasury Stock Additional
Paid-in
Capital
Accumulated
DeficitAccumulated
Other
Comprehensive
LossTotal Hyzon
Motors Inc.
Stockholders’
EquityNoncontrolling
InterestTotal
Stockholders’
EquityShares Amount Shares Amount Balance as of December 31, 2022 244,509,208 $ 25 3,769,592 $ (6,446) $ 372,942 $ (58,598) $ (153) $ 307,770 $ (711) $ 307,059 Stock-based compensation — — — — 1,359 — — 1,359 — 1,359 Vesting of RSUs 51,863 — — — — — — — — — Net share settlement of equity awards — — — — (58) — — (58) — (58) Available-for-sale short-term investments: Unrealized net gain on short-term investments — — — — — — 462 462 — 462 Reclassification to net loss — — — — — — (759) (759) — (759) Net loss attributable to Hyzon — — — — — (30,248) — (30,248) — (30,248) Net loss attributable to noncontrolling interest — — — — — — — — (10) (10) Foreign currency translation loss — — — — — — (797) (797) (7) (804) Balance as of March 31, 2023 244,561,071 $ 25 3,769,592 $ (6,446) $ 374,243 $ (88,846) $ (1,247) $ 277,729 $ (728) $ 277,001 Stock-based compensation — — — — 1,628 — — 1,628 — 1,628 Vesting of RSUs 147,048 — — — — — — — — — Net share settlement of equity awards — — — — (53) — — (53) — (53) Available-for-sale short-term investments: — — Unrealized net gain on short-term investments — — — — — — 154 154 — 154 Reclassification to net loss — — — — — — (845) (845) — (845) Net loss attributable to Hyzon — — — — — (60,248) — (60,248) — (60,248) Net loss attributable to noncontrolling interest — — — — — — — — (7) (7) Foreign currency translation loss — — — — — — (960) (960) 29 (931) Balance as of June 30, 2023 244,708,119 $ 25 3,769,592 $ (6,446) $ 375,818 $ (149,094) $ (2,898) $ 217,405 $ (706) $ 216,699 the condensedthese unaudited consolidated financial statements.DECARBONIZATION PLUS ACQUISITION CORPORATIONCONDENSEDCASH FLOWS(UNAUDITED) Nine Months Ended
September 30, 2020 2019 Cash flow from operating activities: Net loss $ (2,578 ) $ (2,836 ) Changes in operating assets and liabilities: Increase/(decrease) in accounts payable/affiliate 3,089 (1,164 ) Increase/(decrease) in prepaid expenses - franchise taxes (860 ) - Net cash used in operating activities (349 ) (4,000 ) Net decrease in cash (349 ) (4,000 ) Cash at beginning of period 315,600 319,600 Cash at end of period $ 315,251 $ 315,600 Supplemental disclosure of non-cash financing activities: Accrued offering costs $ 331,650 $ 205,735 Common Stock
Class ATreasury Stock Additional
Paid-in
CapitalRetained
Earnings
(Accumulated
Deficit)Accumulated
Other
Comprehensive
Income (Loss)Total Hyzon
Motors Inc.
Stockholders’
EquityNoncontrolling
InterestTotal
Stockholders’
EquityShares Amount Shares Amount 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 income — — — — — — 85 85 126 211 Balance as of March 31, 2022 247,881,568 $ 25 — $ — $ 401,862 $ (32,935) $ 463 $ 369,415 $ (6,921) $ 362,494 Exercise of stock options 5,316 — — — 6 — — 6 — 6 Stock-based compensation — — — — 1,859 — — 1,859 — 1,859 Vesting of RSUs 103,957 — — — — — — — — — Net share settlement of equity awards — — — — (303) — — (303) — (303) Common stock issued for the cashless exercise of warrants 16,016 — — — — — — — — — Net income attributable to Hyzon — — — — — 41,999 — 41,999 — 41,999 Net loss attributable to noncontrolling interest — — — — — — — — (3,208) (3,208) Foreign currency translation income (loss) — — — — — — (603) (603) 368 (235) Balance as of June 30, 2022 248,006,857 $ 25 — $ — $ 403,424 $ 9,064 $ (140) $ 412,373 $ (9,761) $ 402,612 the condensedthese unaudited consolidated financial statements.DECARBONIZATION PLUS ACQUISITION CORPORATIONSix Months Ended
June 30,2023 2022 Cash Flows from Operating Activities: Net income (loss) $ (90,513) $ 29,973 Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 2,193 1,606 Stock-based compensation 2,987 3,052 Deferred income tax expense — 526 Fair value adjustment of private placement warrant liability (801) (9,938) Fair value adjustment of earnout liability (7,336) (69,337) Fair value adjustment of value in equity securities — (10,082) Accretion of discount on available-for-sale debt securities (1,424) — Write down of inventory 2,106 — Loss on equity method investment 7 30 Foreign currency transaction gain (1,620) — Impairment of property and equipment 1,090 — Changes in operating assets and liabilities: Accounts receivable (919) 2,920 Inventory (10,500) (19,009) Prepaid expenses and other current assets 6,764 1,794 Other assets 305 (430) Accounts payable (5,995) (214) Accrued liabilities (1,986) 4,424 Related party payables, net 5,988 (118) Contract liabilities 2,711 (3,762) Other liabilities 14,885 (315) Net cash used in operating activities (82,058) (68,880) Cash Flows from Investing Activities: Purchases of property and equipment (2,684) (7,652) Purchases of short-term investments (16,594) — Proceeds from sale of short-term investments 50,021 — Proceeds from maturities of short-term investments 129,905 — Net cash provided by (used in) investing activities 160,648 (7,652) Cash Flows from Financing Activities: Exercise of stock options — 40 Payment of finance lease liability (237) (181) Net share settlement of equity awards (111) (463) Payment for purchase of Horizon IP — (3,146) Repurchase of warrants — (31) Net cash used in financing activities (348) (3,781) Effect of exchange rate changes on cash (2) (140) Net change in cash, cash equivalents, and restricted cash 78,240 (80,453) Cash, cash equivalents, and restricted cash — Beginning 66,790 449,365 Cash, cash equivalents, and restricted cash — Ending $ 145,030 $ 368,912 CONDENSEDCONSOLIDATED FINANCIAL STATEMENTSSEPTEMBER 30, 20201 — 1. Nature of Business and Basis of PresentationOrganizationBusinessBusiness OperationsOrganizationupfitting HD hydrogen fuel cell electric vehicles (“FCEVs”) in the United States, Europe, and GeneralSilver Run Acquisition Corporation III was incorporated in Delaware on September 7, 2017. The Company was formed for the purpose of effectingAustralia. 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”).At September 30, 2020, the Company had not commenced any operations. All activity through September 30, 2020 relates to the Company’s formation and initial public offering (“Initial Public Offering”), which is described below. The Company will not generate any operating revenues until after completion of its Initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents 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 20,000,000 units (the “Units” and, with respect to the Class A common stock included in the Units sold, the “Public Shares”)majority-owned but indirectly controlled by Horizon Fuel Cell Technologies PTE Ltd., generating gross proceeds of $200,000,000, which is described in Note 3.Simultaneously with the closing of the Initial Public Offering, the Company consummated the private sale of 6,000,000 warrants (the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to Decarbonization Plus Acquisition Sponsor, LLC (the “Sponsor”Singapore company (“Horizon”), the Company’s independent directors and an affiliate of the Company’s chief executive officer, generating gross proceeds of $6,000,000, which is described in Note 4.Transaction costs amounted to $11,654,536, consisting of $4,000,000 of underwriting fees, $7,000,000 of deferred underwriting fees and $654,536 of other offering costs. In addition, at October 22, 2020, cash of $2,577,151 was held outside of the Trust Account (as defined below) and is available for working capital purposes.The underwriters were granted a 45-day option from the date of the final prospectus relating to the Initial Public Offering to purchase up to 3,000,000 additional Units to cover over-allotments, if any, at $10.00 per Unit, less underwriting discounts and commissions. On November 9, 2020, the underwriters partially exercised the over-allotment option and, on November 12, 2020, the underwriters purchased an additional 2,572,502 units (the “Over-allotment Units”), generating gross proceeds of $25,725,020. 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 over-allotment option will expire on December 3, 2020.Following the closing of the Initial Public Offering on October 22, 2020, an amount of $200,000,000 ($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 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 shares of Class A common stock included in the Units (the “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.Initial Business CombinationThe 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. Furthermore, there is no assurance that the Company will be able to successfully effect an 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 NASDAQ 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.”Pursuant to the Company’s amended and restated certificate of incorporation, 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.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.Note 2 — Summary of Significant Accounting Policiescondensed interim consolidated financial statements and related disclosures have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”U.S. GAAP”) for interim financial informationpursuant to the requirements and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-Xrules of the Securities and Exchange Commission (the “SEC”(“SEC”). Any reference in these notes to applicable guidance refers to U.S. GAAP as found in U.S. Accounting Standards Codification ("ASC") and Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB"). Certain notes or other information or footnote disclosuresthat are normally included in financial statements prepared in accordance withrequired by U.S. GAAP have been condensed or omitted pursuant toif they substantially duplicate the rulesdisclosures contained in the Company’s annual audited consolidated financial statements. Accordingly, the unaudited interim consolidated financial statements should be read in connection with the Company’s audited consolidated financial statements and regulationsrelated notes included in the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2022.SEC for interim financial reporting. Accordingly, they do not include allCompany and its wholly owned subsidiaries including variable interest entity arrangements in which the informationCompany is the primary beneficiary. All intercompany accounts and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows.transactions are eliminated in consolidation. In the opinion of management, the accompanying unaudited condensed interim consolidated financial statements include all adjustments, consisting of a normal and recurring nature, which areadjustments necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.The accompanying unaudited condensed Results of operations reported for interim financial statements should be read in conjunction with the Company’s prospectus for its Initial Public Offering as filed with the SEC on October 21, 2020, as well as the Company’s Current Reports on Form 8-K, as filed with the SEC on October 28, 2020 and November 18, 2020. The interim results for the periods from January 1, 2020 through September 30, 2020 and January 1, 2019 through September 30, 2019presented are not necessarily indicative of results for the entire year or any other periods.endingended December 31, 2020 or any future periods. 2022.incurred $2,578 and $2,836 of expensesdid not recognize revenue for the period from January 1, 2020 through Septemberthree and six months ended June 30, 2020 and January 1, 2019 through September 30, 2019, respectively. Emerging Growth Companyan “emerging growth company,” as defined in Section 2(a)required to evaluate customers’ ability and intent to pay substantially all of the Securities Actconsideration to which the Company is entitled in exchange for the vehicles transferred to the customer, i.e., collectability of 1933, as amended (the “Securities Act”), as modified by the Jumpstart our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements thatcontracts with customers. The Company’s two customers in China are applicablespecial purpose entities established in response to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404China’s national hydrogen fuel cell vehicle pilot program. In consideration of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensationcustomers’ 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 606 for these customers, and therefore, an alternative method of revenue recognition has been applied to each arrangement.Company’s periodic reportssix months ended June 30, 2022. This amount, $2.5 million, is equal to the remaining consideration received after satisfying local government VAT obligations, as such amounts are non-refundable and proxy statements, and exemptions from 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)Company has transferred control of the JOBS Act exempts emerging growth companies62 FCEVs to which the consideration relates and has stopped transferring goods or services to the customer. The Company will continue to monitor the customer and evaluate the collectability criterion as of each reporting period. The total cost of the 62 FCEVs delivered 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.being requiredcustomers for products and services prior to complysatisfying a performance obligation or in excess of amounts allocated to a previously satisfied performance obligation.newremaining performance obligations for commercial vehicles and other contracts with customers was $15.1 million as of June 30, 2023. The Company expects to recognize approximately 79% of its remaining performance obligations as revenue over the twelve months after June 30, 2023.June 30,
2023December 31,
2022Raw materials $ 28,419 $ 24,862 Work in process 14,052 10,691 Finished Goods 1,537 — Total inventory $ 44,008 $ 35,553 revised financial accounting standards untilobsolescence, or when the Company believes that the net realizable value of inventories is less than the carrying value. A total of $1.8 million and $2.1 million in inventory write-downs was recognized for the three and six months ended June 30, 2023. recorded in Cost of revenue in the unaudited interim Consolidated Statements of Operations and Comprehensive Income (Loss). The Company did not write down any inventory for the three and six months ended June 30, 2022.June 30,
2023December 31,
2022Deposit for fuel cell components (Note 15) $ 4,443 $ 6,092 Vehicle inventory deposits 357 2,074 Production equipment deposits 141 235 Other prepaid expenses 1,473 1,877 Prepaid insurance 641 3,201 VAT receivable from government 1,487 1,886 Total prepaid expenses and other current assets $ 8,542 $ 15,365 June 30,
2023December 31,
2022Land and building $ 2,824 $ 2,818 Machinery and equipment 16,314 15,832 Software 3,205 2,350 Leasehold improvements 3,601 2,123 Construction in progress 1,309 2,499 Total Property, plant, and equipment 27,253 25,622 Less: Accumulated depreciation and amortization (5,360) (3,202) Property, plant and equipment, net $ 21,893 $ 22,420 June 30,
2023December 31,
2022Payroll and payroll related expenses $ 5,874 $ 4,638 Accrued professional fees 4,620 10,016 Accrued product warranty costs 912 942 Accrued contract manufacturer costs 1,383 1,409 Accrued contract termination costs 465 2,688 Accrued Orten cancellation costs — 1,192 Legal loss contingency (Note 12) 7,000 — Other accrued expenses 3,310 4,702 Accrued liabilities $ 23,564 $ 25,587 companies (thatcompanies. On a non-recurring basis, the carrying value is those that have not hadadjusted for changes resulting from observable price changes in orderly transactions for identical or similar investments in the same issuer or an impairment. Act registration statement declared effective or do, the investment in NRG does not have a class of securities registered underreadily determinable fair value and is measured at cost minus impairment, which requires the Exchange Act) are requiredCompany 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 suchevaluate on an election to opt out is irrevocable.ongoing basis whether an investment has been impaired based on qualitative factors. 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.Net Loss Per Common ShareNet loss per common share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding during the period, excluding shares of common stock subject to forfeiture, plus,impaired NRG due to the extent dilutive,investee’s lack of progress in developing its plans and operating performance.incremental numbertotal carrying value of sharesheld securities, measured as the total initial cost plus cumulative net gain (loss) (in thousands):June 30,
2023December 31,
2022Total initial cost basis $ 4,948 $ 4,948 Adjustments: Cumulative unrealized gain 12,530 12,530 Cumulative impairment (2,448) (2,448) Carrying amount, end of period $ 15,030 $ 15,030 common stockOperations and Comprehensive Income (Loss), which are included as adjustments to settle warrants,the carrying value of equity securities (in thousands):Three Months Ended
June 30,Six Months Ended
June 30,2023 2022 2023 2022 Unrealized gain on equity securities $ — $ — $ — $ 12,530 Impairment — (2,448) — (2,448) Total unrealized gain and impairment on equity securities $ — $ (2,448) $ — $ 10,082 calculated usingof June 30, 2023 and December 31, 2022 (in thousands):As of June 30, 2023 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Short-term investments Corporate debt securities 7,202 28 (8) 7,222 U.S. Treasury bills 24,363 294 — 24,657 Total short-term investments $ 31,565 $ 322 $ (8) $ 31,879 As of December 31, 2022 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Short-term investments Certificates of deposit $ 38,703 $ 194 $ — $ 38,897 Commercial paper 26,198 205 — 26,403 Corporate debt securities 46,826 189 (33) 46,982 Foreign government bonds 37,453 348 — 37,801 U.S. Treasury bills 44,333 359 — 44,692 Total short-term investments $ 193,513 $ 1,295 $ (33) $ 194,775 treasury stock method. Weighted average shares were reduced for the effect of an aggregate of 106,875 of Class B shares of common stock that were subject to forfeiture if the over-allotment option for the Initial Public Offering was not exercised in full or in part by the underwriters (see Note 3). At Septemberthree and six months ended June 30, 2020,2023 the Company did not haverecord any dilutive securitiestax expense. During the three and other contracts that could, potentially, be exercised or converted into common stocksix months ended June 30, 2022, the Company recorded a zero tax expense and then sharea discrete tax expense of $0.5 million, respectively. The discrete item in the earningssix months ended June 30, 2022 was primarily associated with the establishment of the Company under the treasury stock method. As a result, diluted loss per common share is the same as basic loss per common share for the periods.Concentration of Credit RiskFinancial instrumentsdeferred tax liability that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposedexpected to significant risks on such accounts.Financial InstrumentsThe fair valueoffset available deferred tax assets.the Company’s assets and liabilities, which qualify as financial instruments under the FASB ASC 820, “Fair Value Measurements and Disclosures,” approximatestemporary differences between the carrying amounts represented in the balance sheets, primarily due to their short term nature.Use of EstimatesThe preparation of unaudited condensed interim financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed interimfor financial statementsreporting purposes and the reported amounts of expenses during the reporting periods. Accordingly, the actual results could differ from those estimates.CashCash includes amounts held at banks with an original maturity of less than three months. As of September 30, 2020 and December 31, 2019, the Company held $315,251 and $315,600, respectively, in cash.Offering CostsOffering 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. Offering costs amounting to $11,654,536 were charged to stockholders’ equity 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. As of September 30, 2020 and December 31, 2019, the Company had $354,650 and $23,000, respectively, of deferred offering costs on the accompanying balance sheets.Income Taxesfollowsassesses all available evidence, both positive and negative, to determine the amount of any required valuation allowance within each taxing jurisdiction. The Company continues to be in a net operating loss and net deferred tax asset and liability method of accounting for income taxes under FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognizedposition, before valuation allowances. Full valuation allowances, but for the estimated future tax consequences attributable to differences between the unaudited condensed interim 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 areliability described above, have been established when necessary, to reduce deferred tax assets to the amount expected to be 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 takenCompany’s operations 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. all jurisdictions.deferred tax assets or valuations against themand no amounts accrued for interest and penalties as of SeptemberJune 30, 20202023 and December 31, 2019, respectively. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties at September 30, 2020 and December 31, 2019, respectively.2022. 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.had no taxfollows the guidance in ASC 820, Fair Value Measurement. For assets and liabilities measured at fair value on a recurring and nonrecurring basis, a three-level hierarchy of measurements based upon observable and unobservable inputs is used to arrive at fair value. The Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability asin the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of Septemberthe following levels:20202023, and December 31, 2019, respectively. Deferred tax2022, the carrying amounts of accounts receivable, prepaid expenses and other current assets, accounts payable, and accrued liabilities approximate estimated fair value due to their relatively short maturities.As of June 30, 2023 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: $ 71,129 $ — $ — $ 71,129 Short-term investments: Corporate debt securities — 7,222 — 7,222 U.S. Treasury bills 24,657 — — 24,657 Liabilities: Warrant liability – Private Placement Warrants $ — $ 321 $ — $ 321 Earnout shares liability — — 3,591 3,591 As of December 31, 2022 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: $ 23,113 $ 4,992 $ — $ 28,105 Short-term investments: Certificates of deposit — 38,897 — 38,897 Commercial paper — 26,403 — 26,403 Corporate debt securities — 46,982 — 46,982 Foreign government bonds — 37,801 — 37,801 U.S. Treasury bills 44,692 — — 44,692 Liabilities: Warrant liability – Private Placement Warrants $ — $ 1,122 $ — $ 1,122 Earnout shares liability — — 10,927 10,927 June 30,
2023December 31,
2022Stock price $ 0.96 $ 1.55 Risk-free interest rate 4.5 % 4.2 % Volatility 93.0 % 92.0 % Remaining term (in years) 3.04 3.54 Private Placement Warrants Earnout Balance as of December 31, 2022 $ 1,122 $ 10,927 Change in estimated fair value (801) (7,336) Balance as of June 30, 2023 $ 321 $ 3,591 immaterial as offiled between September 30, 20202021 and December 31, 2019November 15, 2021, in the U.S. District Court for the Western District of New York against the Company, certain of the Company’s current and former officers and directors and certain former 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 the Company’s 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-CJS-MWP), and on March 21, 2022, the court-appointed lead plaintiff filed a consolidated amended complaint seeking monetary damages. The Company and individual defendants moved to dismiss the consolidated amended complaint on May 20, 2022, and the provision for income taxescourt-appointed lead plaintiff filed its opposition to the motion on July 19, 2022. The court-appointed lead plaintiff filed an amended complaint on March 21, 2022, and a second amended complaint on September 16, 2022. Briefing regarding the Company and individual defendants’ anticipated motion to dismiss the second amended complaint was immaterialstayed pending a non-binding mediation among the parties, which took place on May 9, 2023. The parties did not reach a settlement during the May 9, 2023 mediation. On June 20, 2023, the court granted the lead plaintiff leave to file a third amended complaint, which was filed on June 23, 2023.The Company and the individual defendants intend to file a motion to dismiss the third amended complaint.The motion to dismiss currently is due on August 25, 2023.nine months endedWestern 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-06023-CJS)). These three lawsuits have been consolidated under the caption In re Hyzon Motors Inc. Derivative Litigation (Case No. 6:21-cv-06744-CJS). On February 2, 2022, a similar stockholder derivative lawsuit was filed in the U.S. District Court for the District of Delaware (Yellets v. Gu et al. (No. 22-cv-00156)). On February 3, 2022, a 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)). On February 13, 2023, a similar stockholder derivative lawsuit was filed in the Delaware Court of Chancery (Kelley v. Knight et al. (C.A. No. 2023-0173)). These lawsuits name as defendants the Company’s current and former 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/or waste of corporate assets. These lawsuits generally seek equitable relief and monetary damages. Each of the shareholder derivative actions has been stayed or the parties have jointly requested that the actions be stayed pending a decision regarding the anticipated motion to dismiss in the consolidated securities class action.30, 202028, 2021 report issued by Blue Orca Capital. The Company received two additional subpoenas in connection with the SEC’s investigation on August 5, 2022 and 2019, respectively.Recent Accounting PronouncementsManagement doesAugust 10, 2022. On October 31, 2022, the U.S. Attorney’s Office for the Southern District of New York (“SDNY”) notified the Company that it is also investigating these matters. The Company is cooperating and will continue to cooperate with these and any other regulatory or governmental investigations or inquiries, and has commenced preliminary discussions with the SEC related to a potential resolution of their investigation. On June 13, 2023, the Company received a “Wells Notice” from the SEC Staff, informing the Company that the SEC Staff had made a preliminary determination to recommend that the SEC file a civil enforcement action against the Company alleging violations of certain provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.believea formal allegation or a finding of wrongdoing, but is a preliminary determination by the SEC Staff to recommend to the SEC that a civil enforcement action or administrative proceeding be brought against the recipient. Discussions with the SEC Staff regarding a potential resolution of the SEC investigation have been and remain ongoing. Based upon management’s assessment of the SEC investigation, the Company has accrued a $22.0 million loss contingency in the second quarter of 2023, of which $7.0 million is recorded in Accrued liabilities and $15.0 million in Other liabilities in the unaudited interim Consolidated Balance Sheets. There is no assurance that this $22.0 million loss contingency will be adequate to resolve matters covered by the SEC investigation. Further, the Company cannot predict the ultimate outcome or timing of the SEC and the SDNY investigations or inquiries, what if any recently issued, but not yet effective, accounting pronouncements, if currently adopted, wouldactions may be taken by the SEC or the SDNY, or the effect that such actions may have on the business, prospects, operating results and financial condition. The resolution of the SEC investigation or other regulatory proceedings could have a material effectimpact on the Company’s unaudited condensed interim financial statements.Note 3 — Public OfferingPursuantliquidity and the Company’s ability to continue as a going concern if a significant monetary payment is agreed and paid or if the matter proceeds to litigation and a judgment is rendered against the Company.Initial Public Offering,conduct of the Special Meeting of Shareholders held on July 15, 2021, to approve the increase in the Company’s authorized share capital were ratified as of the meeting.sold 20,000,000 Units,under Section 205, at the time of 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.purchaselien on the assets of Hyzon Europe. Following the attachments, Duurzaam Transport B.V. and H2 Transport B.V. initiated proceedings on the merits in February 2023. The dispute was settled without any party admitting liability, and the Company made a payment of €2.1 million (approximately $2.3 million in USD) in April 2023, which was recorded in Accrued liabilities in the Consolidated Balance Sheets as of December 31, 2022.of $10.00 per Unit. Each Unit consists of one share of Class Afor its common stock and one-half of one redeemable warrant (“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).The underwriters were granted a 45-day option fromwas below $1.00 for 30 consecutive business days preceding the date of the final prospectus relatingNotice, the Company did not meet the $1.00 per share minimum bid price requirement set forth in Nasdaq Listing Rule 5450(a)(1).Stock Options RSUs & PSUs Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual (Years) Aggregate Intrinsic Value (in 000s) Number of RSUs & PSUs Weighted Average Grant Date Fair Value Outstanding at December 31, 2022 19,536,904 $ 1.51 12.00 5,972 6,268,193 $ 2.81 Granted — $ — — — 9,169,694 $ 0.92 Exercised or released — $ — — — (315,367) $ 4.62 Forfeited/Cancelled (370,567) $ 1.98 — — (1,099,778) $ 3.16 19,166,337 $ 1.67 11.68 — 14,022,742 $ 1.51 Vested and expected to vest, June 30, 2023 13,628,837 $ 1.20 11.34 — 14,022,742 $ 1.51 Exercisable and vested at June 30, 2023 12,555,643 $ 1.14 11.81 — — Initial Public Offeringachievement of performance goals during a performance period outlined by the Compensation Committee of the Board of Directors, upon vesting, the PSUs are exchanged for a number of shares of common stock equal to purchase up to 3,000,000 additional Units to cover over-allotments, if any, at $10.00 per Unit,the target number of PSUs multiplied by a factor between 0% and 150%. The actual number of units that ultimately vest may equal, exceed, or be less underwriting discountsthan the targeted number of shares based on the level of achievement of performance goals over the performance period and commissions. On November 9, 2020, the underwriters partially exercised the over-allotment option and, on November 12, 2020, the underwriters purchased the Over-allotment Units, generating gross proceeds of $25,725,020. In connectioncontinued employment with the saleCompany. Performance goals are based on a combination of internal company, functional and individual employee performance metrics. The Company adjusts the expense recognized based on the likelihood of future achievement of the Over-allotment Units,performance metric. If the Company incurred an additional $514,500performance metrics are not achieved by the outlined performance period, the awards are forfeited.underwriting feesRSUs and $900,376PSUs is determined based upon the stock price on the date of deferred underwriting fees. The over-allotment option will expire on December 3, 2020.Note 4 — Related Party TransactionsFounder SharesOn September 12, 2017, the Sponsor purchased 11,500,000 sharesgrant. As of Class B common stock (the “Founder Shares”)June 30, 2023, unrecognized compensation costs related to unvested RSUs and PSUs of $18.0 million is expected to be recognized over a remaining weighted average period of 2.68 years.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 stockunder ASC 718, Compensation - Stock Compensation were vested at the time of grant, and therefore recognized immediately as compensation expense, and certain earnout awards vest over future periods. Total compensation expense related to these awards was $0.1 million for the Company’s Initial Business Combinationthree and six months ended June 30, 2023. Total compensation expense related to these awards was $0.8 million and $0.9 million for the three and six months ended and June 30, 2022, respectively. Certain earnout awards to other equity holders contained performance and market-based vesting conditions, and as the performance conditions are subjectnot deemed probable at June 30, 2023, no compensation expense has been recorded related to certain transfer restrictions, as described in more detail below. Holders of Founder Shares may also electthese awards.convert theirissue 400,000,000 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 is not exercised in full by the underwriters. The forfeiture will be adjusted to the extent that the over-allotment option is 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’ election to partially exercise their over-allotment option, 643,125 Founder Shares are no longer subject to forfeiture, resulting in 106,875 Founder Shares remaining subject to forfeiture. The over-allotment option will expire on December 3, 2020.The Sponsor and the Company’s officers and 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 and 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 WarrantsSimultaneously 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 is 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.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 RightsPursuant 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, 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.Related Party LoansOn 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.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 October 22, 2020, the Company owed the Sponsor $135,941 for additional offering costs, which were subsequently paid back in November 2020.Advance from Related PartyAs 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. As of October 22, 2020, advances amounting to $600,000 were outstanding. 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.Administrative Support AgreementThe 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.Working Capital LoansIn 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 a Business Combination, the Company would repay the Working Capital Loans. In the event that a 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 September 30, 2020 and December 31, 2019, the Company had no borrowings under the Working Capital Loans.Note 5 — Commitments and ContingenciesUnderwriting AgreementThe Company granted the underwriters a 45-day option from the date of the Initial Public Offering to purchase up to 3,000,000 additional Units to cover over-allotments, if any, at the Initial Public Offering price less applicable underwriting discounts and commissions. On November 9, 2020, the underwriters partially exercised the over-allotment option and, on November 12, 2020, the underwriters purchased the Over-allotment Units, generating gross proceeds of $25,725,020. 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 over-allotment option will expire on December 3, 2020.The underwriters are entitled to a deferred fee of $0.35 per Unit, or $7,000,000 in the aggregate (or $8,050,000 in the aggregate if the underwriters’ over-allotment option to purchase additional Units is exercised in full). 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.Risks and UncertaintiesThe Sponsor 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 is not readily determinable as of the date of these unaudited condensed interim financial statements. The unaudited condensed interim financial statements do not include any adjustments that might result from the outcome of this uncertainty.Note 6 — Stockholder’s EquityCommon StockOn 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 sharesHolders 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.share. At SeptemberJune 30, 2020,2023 and December 31, 2022, there were no244,708,119 and 244,509,208 shares of Class A common stock issued or outstanding. and outstanding, respectively.SeptemberJune 30, 20202023 and December 31, 2019,2022, there were 5,750,000 shares11,013,665 Public Warrants and 8,014,500 Private Placement Warrants, for a total of Class B common stock issued19,028,165 warrants outstanding. At June 30, 2023 and outstanding, which reflects that on September 18, 2020, October 7, 2020 and October 8, 2020, the Sponsor agreed to return 2,875,000, 1,437,500 and 1,437,500 Founder Shares, respectively, toDecember 31, 2022, there were 170,048 Ardour Warrants outstanding.at no cost.The Sponsorentered into an intellectual property agreement (the “Horizon IP Agreement”) with Jiangsu Qingneng New Energy Technologies Co., Ltd. and an affiliateShanghai Qingneng Horizon New Energy Ltd. (together, “JS Horizon”) both of which are subsidiaries of the Company’s chief executive officer agreed to forfeit up toultimate parent, Horizon. In September 2021, Jiangsu Horizon Powertrain Technologies Co. Ltd. (“JS Powertrain”) was an aggregate of 750,000 Founder Sharesadded party to the extent that the over-allotment option is not exercised in full by the underwriters. The forfeiture will be adjustedagreement. Pursuant to the extent thatagreement the over-allotment optionparties 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. 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.not exercised$0.1 million. The related party receivable, net from Horizon and its subsidiaries was $6.1 million as of December 31, 2022. The related party receivable, net at December 31, 2022 primarily relates to the divestiture of Hyzon Motors Technology (Guangdong) Co., Ltd. (“Hyzon Guangdong”), which was subsequently renamed to Guangdong Qingyun Technology Co. Ltd. (“Guangdong Qingyun”). In April 2023, the Company received $6.4 million to settle the related party receivable associated with the divestiture of Hyzon Guangdong.full by the underwriters so that the Founder Shares will represent 20.0%calculation of the Company’s issuedbasic and outstanding shares after the Initial Public Offering. As a result of the underwriters’ election to partially exercise their over-allotment option, 643,125 Founder Shares are no longer subject to forfeiture, resulting in 106,875 Founder Shares remaining subject to forfeiture. The over-allotment option will expire on December 3, 2020.Preferred StockThe Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001diluted net income (loss) per share with such designations, voting and other rights and preferences as may be determined from timeattributable to time by the Company’s board of directors. At September 30, 2020 and December 31, 2019, there were no shares of preferred stock issued or outstanding.WarrantsEach whole warrant entitles the holder thereof to purchase one share of the Company’s Class AHyzon common stock at a price of $11.50stockholders (in thousands, except per share subject to adjustment as described in the prospectus for the Initial Public Offering. Only whole warrantsdata):Three Months Ended
June 30,Six Months Ended
June 30,2023 2022 2023 2022 Net income (loss) attributable to Hyzon $ (60,248) $ 41,999 $ (90,496) $ 35,476 Weighted average shares outstanding: Basic 244,628 248,056 244,585 247,999 Effect of dilutive securities — 10,209 — 10,773 Diluted 244,628 258,265 244,585 258,772 Net income (loss) per share attributable to Hyzon: Basic $ (0.25) $ 0.17 $ (0.37) $ 0.14 Diluted $ (0.25) $ 0.16 $ (0.37) $ 0.14 exercisable. The warrants will become exercisable on the later of 30 days after the completion of an Initial Business Combination or 12 monthsexcluded from the closingcomputation 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 $11.50diluted net income (loss) per share subject to adjustmentwhen their effect is antidilutive. The potential dilutive securities are summarized 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 the 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).The Company has 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 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)follows (in thousands):●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.Three Months Ended
June 30,Six Months Ended
June 30,2023 2022 2023 2022 Restricted stock units & Performance stock units 14,023 1,591 14,023 965 Stock options with service conditions 11,857 188 11,857 188 Stock options for former CTO 1,772 — 1,772 — Stock options with market and performance conditions 5,538 5,538 5,538 5,538 Private placement warrants 8,015 8,015 8,015 8,015 Public warrants 11,014 11,014 11,014 11,014 Earnout shares 23,250 23,250 23,250 23,250 Hongyun warrants 31 31 31 31 Ardour warrants 170 — 170 — 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.Note 7 — Subsequent EventsManagement has evaluated the impact of subsequent events through the date the unaudited condensed interim financial statements were available to be issued. All subsequent events required to be disclosed are included in the unaudited condensed interim financial statements.References to the “Company,” “our,” “us” or “we” refer to Decarbonization Plus Acquisition Corporation. 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 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2022 Annual Report filed on Form 10-K. Unless the unaudited condensed financial statements and the notes thereto contained elsewherecontext otherwise requires, all references in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.Cautionary Note Regarding Forward-Looking StatementsThis Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”)section to “Hyzon”, “we”, “us”, and Section 21E“our” are intended to mean the business and operations of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectationsHyzon Motors Inc. 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. Such statements include, but are not limited to, possible business combinations and the financing thereof, and related matters, as well as all other statements other than statements of historical fact includedits consolidated subsidiaries.this Quarterly Report on Form 10-Q. 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.OverviewWe are a 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 combinationHoneoye Falls, New York, with one or more businesses (the “Business Combination”). Our sponsor (our “Sponsor”) is Decarbonization Plus Acquisition Sponsor, LLC, a Delaware limited liability company and an affiliate of Riverstone Investment Group LLC, a Delaware limited liability company that manages a family of private equity funds in the energy and power industry (“Riverstone”). Although we may pursue an acquisition opportunity in any business or industry, we intend to capitalize on the Riverstone platform to identify, acquire and operate a business in industries that may provide opportunities for attractive risk-adjusted returns in one of the multiple sectors that may advance the objectives of global decarbonization. This includes the energy and agriculture, industrials, transportation and commercial and residential sectors.Our registration statement for our initial public offering (the “Initial Public Offering”) was declared effective on October 19, 2020. On October 22, 2020, we consummated the Initial Public Offering of 20,000,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units, the “Public Shares”) at $10.00 per Unit, generating gross proceeds of $200.0 million, and incurring transaction costs of approximately $11.7 million, consisting of $4.0 million of underwriting fees, $7.0 million of deferred underwriting fees and approximately $700,000 of other offering costs. The underwriters were granted a 45-day option from the date of the final prospectus relating to the Initial Public Offering to purchase up to 3,000,000 additional Units to cover over-allotments, if any, at $10.00 per Unit, less underwriting discounts and commissions. On November 9, 2020, the underwriters partially exercised the over-allotment option and, on November 12, 2020, the underwriters purchased an additional 2,572,502 units (the “Over-allotment Units”), generating gross proceeds of $25,725,020. In connection with the sale of the Over-allotment Units, we incurred an additional $514,500 of underwriting fees and $900,376 of deferred underwriting fees. The over-allotment option will expire on December 3, 2020.Simultaneously with the closing of the Initial Public Offering, we consummated the sale (the “Private Placement”) of 6,000,000 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to the Sponsor, our independent directors and an affiliate of our chief executive officer, generating gross proceeds of $6.0 million. Simultaneously with the closing of the sale of the Over-allotment Units, our Sponsor and an affiliate of our 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.Approximately $225.7 million ($10.00 per Unit) of the net proceeds of the Initial Public Offering (including the Over-allotment Units) and certain of the proceeds of the private placements of the Private Placement Warrants was placed in a trust account (the “Trust Account”) locatedmajor operations in the United States, the Netherlands, and Australia. We provide decarbonized solutions primarily for the commercial vehicle market and hydrogen supply infrastructure. We are commercializing our proprietary fuel cell technology through assembling and upfitting heavy duty (“HD”) hydrogen fuel cell electric vehicles (“FCEVs”). When we refer to “assembling” or “converting” our FCEVs, we generally mean integrating our fuel cells and fuel cell stacks with Continental Stock Transferbatteries, electric motors, and other components into a chassis to form a completed FCEV that we sell. When we “upfit” a vehicle, we generally mean that we provide services to transform a customer's internal combustion engine (“ICE”) vehicle into a FCEV.Trust Company acting as trustee, and invested only in U.S. “government securities,” within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”),Supply Infrastructurematuritypartner-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 spectrum with 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’ and other industry participants' performance in fulfilling the obligations that we depend on for delivery of 185 dayseach 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 or less,collaborating with our partners and industry participants to drive down construction cost and achieve on-time scheduled performance.in money market funds meetingregional customers, we expect to expand our target customer focus to include longer-haul truck and bus segments, additional vehicle classes, mobile power, and incremental mobility applications (e.g., rail, aviation) for customers around the conditionsworld.paragraphs (d)(1), (d)(2), (d)(3)key inputs and (d)(4) of Rule 2a-7 undercomponents 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 Investment Company Act, which invest only in direct U.S. government treasury obligations, as determined by the Company, until the earlier of: (i) the completion of a Business Combinationinputs and (ii) the distribution of the Trust Account as otherwise permitted undercomponents necessary for us to produce our amendedhydrogen-powered commercial vehicles or hydrogen fuel cell systems at prices, volumes, and restated certificate of incorporation.completesource required inputs and other components from third parties on acceptable terms, it could have a Business Combination within 24 months frommaterial adverse effect on our business and results of operations.closingcost of and time to receive raw materials, such as semiconductors and chassis. Any such increase or supply interruptions could materially negatively impact our business, prospects, financial condition and operating results. Many of the Initial Public Offering,parts for our products are sourced from suppliers in China and the manufacturing situation in China remains uncertain.October 22, 2022 (theregulations, including but not 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 also be required to obtain and comply with the terms and conditions of multiple environmental permits, many of which are 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 our 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 “Combination PeriodGovernment Regulations”), we will (i) cease all operations except in Part I, Item 1. “Business” in our Annual Report filed on Form 10-K for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, 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 our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses and net of taxes payable), divided by the number of then-outstanding Public Shares, which redemption will completely extinguish public stockholders’ 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 our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.Our only activities from inception through October 22, 2020 related toformationhistorical operating results for the periods indicated (in thousands):Three Months Ended
June 30,Six Months Ended
June 30,2023 2022 $ Change % Change 2023 2022 $ Change % Change Revenue $ — $ 46 $ (46) (100) % $ — $ 2,934 $ (2,934) (100) % Operating expense: Cost of revenue 2,410 1,370 1,040 76 3,248 2,023 1,225 61 Research and development 12,597 10,483 2,114 20 21,937 17,419 4,518 26 Selling, general, and administrative 49,098 20,065 29,033 145 79,955 39,817 40,138 101 Total operating expenses 64,105 31,918 32,187 101 105,140 59,259 45,881 77 Loss from operations (64,105) (31,872) (32,233) 101 (105,140) (56,325) (48,815) 87 Other income (expense): Change in fair value of private placement warrant liability 160 8,415 (8,255) (98) 801 9,938 (9,137) (92) Change in fair value of earnout liability 916 66,096 (65,180) (99) 7,336 69,337 (62,001) (89) Gain (loss) on equity securities — (2,448) 2,448 (100) — 10,082 (10,082) (100) Foreign currency exchange gain (loss) and other expense, net 280 (1,454) 1,734 (119) 1,430 (2,604) 4,034 (155) Investment income and interest income, net 2,494 54 2,440 4519 5,060 71 4,989 7027 Total other income (expense) 3,850 70,663 (66,813) (95) 14,627 86,824 (72,197) (83) Net income (loss) before income taxes $ (60,255) $ 38,791 $ (99,046) (255) % $ (90,513) $ 30,499 $ (121,012) (397) % Income tax expense — — — — — 526 (526) (100) Net income (loss) $ (60,255) $ 38,791 $ (99,046) (255) % $ (90,513) $ 29,973 $ (120,486) (402) % Less: Net loss attributable to noncontrolling interest (7) (3,208) 3,201 (100) (17) (5,503) 5,486 (100) Net income (loss) attributable to Hyzon $ (60,248) $ 41,999 $ (102,247) (243) % $ (90,496) $ 35,476 (125,972) (355) % the Initial Public Offering. 2022expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as costs in the pursuit of our acquisition plans.Fordid not generate revenue for the three months ended SeptemberJune 30, 2020 and 2019, respectively, we had no reportable activity.For2023. Revenue for the ninethree months ended SeptemberJune 30, 2020, we had a net loss2022 was negligible, and represents revenue from upfit services in Europe.$2,578, which consistedCost of franchise tax expense.Forrevenue, Research and development expenses and Selling, general and administrative expenses.ninethree months ended SeptemberJune 30, 2019, we had a net loss of $2,836, which consisted of franchise tax expense.Liquidity and Capital ResourcesOur liquidity needs up2023 were $64.1 million compared to October 22, 2020 were satisfied through receipt of a $25,000 capital contribution from our Sponsor in exchange$31.9 million for the issuancethree months ended June 30, 2022.sharesRevenue. Cost of our Class B common stock to our Sponsor and a loan from our Sponsor for an aggregate amount of $300,000 to cover organizational expenses and expensesrevenue includes direct materials, labor costs, allocated overhead costs related to the Initial Public Offering pursuantassembly and upfitting of hydrogen FCEVs, fuel cell systems, estimated warranty costs, and inventory write-downs.a promissory note (the “Note”). On September 13, 2017, we drew down $300,000 oncost provisions accrued for customer contract activities and inventory write-downs in Europe. Cost of revenue for the Note. We repaid this Notethree months ended June 30, 2022 totaled $1.4 million primarily related to cost provisions accrued for customer contract activities in fullEurope.our Sponsor on October 21, 2020. Subsequentsupport 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.the consummation of our Initial Public Offering, our liquidity needs have been satisfied through the net proceeds of approximately $2.0$1.9 million from the Private Placement held outside of the Trust Account.In addition,in higher personnel costs, which were incurred in order to enhance our research and development expertise in vehicle design, vehicle software, fuel cell systems, and electric powertrain. The remaining increase of $0.2 million was primarily related to materials used in research and development.transaction costslegal, 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.connection with a Business Combination, our Sponsor or an affiliate of our Sponsor, or certain of our officershigher legal, accounting and directors may, but are not obligated to, loan us funds as may be required (“Working Capital Loans”). As of September 30, 2020, there were no amounts outstanding under any Working Capital Loan.Contractual ObligationsRegistration RightsThe holders of our outstanding shares of Class B common stock (the “Founder Shares”), Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans, if any, (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans and upon conversion of the Founder Shares) will be entitled to registration rights pursuant to a registration rights agreement. These holders will be entitled to certain demand and “piggyback” registration rights. We will bear the expensesconsulting fees incurred in connection with regulatory and legal matters, the filingSEC and regulatory investigations and other litigation. The increase includes a $22.0 million legal loss contingency accrual related to the SEC investigation, of any such registration statements.Underwriting Agreementunderwriterschange in the estimated fair values of the private placement warrant liability and earnout liability were entitledindirectly affected by the period over period decrease in the Company’s share price. The 2022 $2.4 million decrease in equity securities represents the impairment of NRG. There were no equivalent observable price changes or impairments in equity securities requiring fair value remeasurement for the three months ended June 30, 2023.an underwriting discountall transactions denominated in a currency other than our or our subsidiary’s functional currencies.$0.20 per unit, or $4.0$1.5 million in the aggregate, paid upon closingthree months ended June 30, 2022. The $0.4 million foreign currency exchange gain was partially offset by $0.1 million of other expense.Initial Public Offering. An additional feethree months ended June 30, 2023, compared to interest income of approximately $514,500$0.1 million for the three months ended June 30, 2022. Investment income for the three months ended June 30, 2023 relates to realized gains on short-term investments.aggregateUnited States, FCEVs in China, and upfit services in Europe.closingSpecial Committee investigation, the SEC and regulatory investigations and other litigation. The increase includes a $22.0 million legal loss contingency accrual related to the SEC investigation, of which $7.0 million is recorded as current liabilities and $15.0 million in other long-term liabilities. In addition, we incurred $3.2 million in higher salary and related expenses, and $2.5 million in higher office expenses to support business growth. The increased expense is partially offset by $1.2 million in lower director and officer (“D&O”) insurance.saleprivate placement warrant liability and earnout liability were indirectly affected by the period over period decrease in the Company’s share price. The 2022 $10.1 million increase in the estimated fair value in investments in equity securities represents a $12.5 million gain related to our equity investment in Raven SR offset by a $2.4 million impairment of our equity investment in NRG. There were no equivalent observable price changes or impairments in equity securities requiring fair value remeasurement for the Over-allotment Units.In addition, $0.35 per unit, or approximately $7.97six months ended June 30, 2023.aggregate, will be payablesix months ended June 30, 2022. The $1.6 million foreign currency exchange gain was partially offset by $0.2 million of other expense.underwriterssix months ended June 30, 2022. Investment income for the six months ended June 30, 2023 primarily relates to realized gains on short-term investments.underwriting commissions.tax liability that is not expected to offset available deferred tax assets. The Company has cumulative net operating losses at the federal, foreign, and state levels and maintains a full valuation allowance, but for the deferred fee will become payabletax liability described above, against its deferred tax assets.underwriterssix months ended June 30, 2023 and 2022, respectively. The decrease is primarily because the Company acquired the remaining equity interests of Hyzon Europe from the amounts heldHolthausen in the Trust Account solelyDecember 2022. The Company now holds 100% ownership in the event that we complete a Business Combination, subjectHyzon Europe.the terms of the underwriting agreement.Critical Accounting Policies; Impact of COVID-19The preparation of condensed financial statements and related disclosuresour results determined in conformityaccordance with accounting principles generally accepted in the United States of America requires(“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.make estimatesuse in evaluating ongoing operating results and assumptionstrends 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 affectwhen 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 EBITDA and Adjusted EBITDA may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate in the same fashion.Three Months Ended
June 30,Six Months Ended
June 30, 2023 2022 2023 2022 Net income (loss) $ (60,255) $ 38,791 $ (90,513) $ 29,973 Interest (income) expense, net (304) (54) (439) (71) Income tax expense — — — 526 Depreciation and amortization 1,111 702 2,193 1,606 EBITDA $ (59,448) $ 39,439 $ (88,759) $ 32,034 Adjusted for: Change in fair value of private placement warrant liability (160) (8,415) (801) (9,938) Change in fair value of earnout liability (916) (66,096) (7,336) (69,337) (Gain) loss on equity securities — 2,448 — (10,082) Stock-based compensation 1,628 1,859 2,987 3,052 25,894 2,773 33,636 5,503 Adjusted EBITDA $ (33,002) $ (27,992) $ (60,273) $ (48,768) Three Months Ended
June 30,Six Months Ended
June 30,2023 2022 2023 2022 Cash flow used in operating activities $ (36,045) $ (38,784) $ (82,058) $ (68,880) Less: Capital expenditures (1,223) (3,757) (2,684) (7,652) Free cash flow $ (37,268) $ (42,541) $ (84,742) $ (76,532) amountsnet income of $38.8 million and $30.0 million for the three and six months ended June 30, 2022, respectively. Net cash used in operating activities was $82.1 million and $68.9 million for the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, we had $140.5 million in unrestricted cash and cash equivalents, $31.9 million in short-term investments, and positive net working capital of $185.8 million. We believe that our current cash balance, including cash equivalents and short term investments, will provide adequate liquidity during the 12-month period from the issuance date of these unaudited interim consolidated financial statements.disclosureand commitments in the normal course 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. We have not identified any critical accounting policies.Our Sponsor continues 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, results of operations and/or search for a target company, the specific impact is not readily determinable as of the date of the balance sheet. Thebusiness. These unaudited condensed interim consolidated financial statements do not include any adjustments that mightmay result from the outcome of this uncertainty.Recent Accounting Pronouncementsbelievehave any committed sources of financing at this time, and it is uncertain whether additional funding will be available when we need it on terms that any recently issued, butwill be acceptable to us, or at all. There is no assurance that our plan to raise additional capital will be successful or successful within the time frame we projected.yet effective, accounting pronouncements, if currently adopted, wouldavailable, we will need to reevaluate our expansion plans or limit our research and development activities, which could have a material effectadverse impact on our financial statements.Six Months Ended
June 30, 2023 2022 Net cash used in operating activities $ (82,058) $ (68,880) Net cash provided by (used in) investing activities 160,648 (7,652) Net cash used in financing activities (348) (3,781) As of September 30, 2020, we didhavemaintain any off-balance sheet arrangements, as definedtransactions, 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.303(a)(4)(ii)7 of Regulation S-K.JOBS ActOn April 5, 2012,our Annual Report filed on Form 10-K for the Jumpstart Our Business Startups Actyear ended December 31, 2022. 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” and, under the JOBS Act we 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. WeExchange Act) are electingrequired 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 standardsstandard at the time private companies adopt the new or revised standard, 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.relevant datesother exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an emerging growth company, Hyzon intends to rely on such exemptions, Hyzon is not required to, among other things: (a) provide an auditor’s attestation report on Hyzon’s system of internal control over financial reporting 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 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 (d) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation to median employee compensation.adoptionHyzon 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 (d) the date on which Hyzon has issued more than $1.0 billion in non-convertible debt securities during the previous three years.standardsemployees on each entity, an allocation of $0.2 million and $0.5 million in the Company’s unaudited interim Consolidated Statements of Operations and Comprehensive Income (Loss) related to such services for the three and six months ended June 30, 2022, respectively. There were no such activities for the three and six months ended June 30, 2023.required for non-emerging growth companies. As such, our financial statements may not be comparable$0.1 million. The related party receivable, net from Horizon and its subsidiaries was $6.1 million as of December 31, 2022. The related party receivable, net at December 31, 2022 primarily relates to companies that complythe divestiture of Hyzon Motors Technology (Guangdong) Co., Ltd. (“Hyzon Guangdong”), which was subsequently renamed to Guangdong Qingyun Technology Co. Ltd. (“Guangdong Qingyun”). In April 2023, the Company received $6.4 million to settle the related party receivable associated with public company effective dates.the divestiture of Hyzon Guangdong.Item 10(f)(1) of Regulation S-K.Rule 12b-2 under the Exchange Act. As a result, pursuant to Item 305(e) of Regulation S-K, we are not required to provide the information required by this Item.Disclosurearemeans 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 Interim Chief Financial Officer to allow timely decisions regarding required disclosure.As requiredRules 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.carried out an evaluation ofhave evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2020. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of June 30, 2023. Based on such evaluation, our Chief Executive Officer and Interim Chief Financial Officer have concluded that as of June 30, 2023 our disclosure controls and procedures were effective.Changesnot effective because of the material weaknesses in Internal Controlinternal control over Financial ReportingDuringfinancial reporting described below.most recently completed fiscal quarter, therematerial weaknesses described below, our management has been no changeperformed additional analyses, reconciliations, and other post-closing procedures and has concluded that, notwithstanding the ineffectiveness of our disclosure controls and procedures as well as material weaknesses in our internal control over financial reporting as of June 30, 2023, the unaudited interim consolidated financial statements for the periods covered by and included in this Form 10-Q 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.isare reasonably likely to materially affect, our internal control over financial reporting.None.As ofdate ofother information discussed in this Quarterlyreport, please consider the factors described in Part I, Item 1A. “Risk Factors” in our Annual Report filed on Form 10-Q, there10-K for the year ended December 31, 2022 that could materially affect our business, financial condition or future results. There have not been noany material changes to the risk factors discloseddescribed in our final prospectus filed with2022 Form 10-K, but these are not the SEC on October 21, 2020.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, financial condition or operating results.Unregistered SalesIn September 2017, the Sponsor purchased an aggregate of 11,500,000 Founder Shares for $25,000, or approximately $0.002 per share. In September and October 2020, the Sponsor returned to us at cost an aggregate of 5,750,000 Founder Shares, which we cancelled. The Founder Shares will automatically convert into shares of our Class A common stock at the time of the initial Business Combination, or at any time prior thereto at the option of the holder, on a one-for-one basis, subject to adjustment pursuant to certain anti-dilution rights. In October 2020, the Sponsor transferred an aggregate of 1,042,198 Founder Shares to our independent directors and an affiliate of our chief executive officer at their original purchase price. In November 2020, the Sponsor transferred an additional 22,130 Founder Shares to one of our independent directors. The Founder Shares were issued in connection with our organization pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 6,000,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant in a private placement to our Sponsor, our independent directors and an affiliate of our chief executive officer generating gross proceeds of $6.0 million. In addition, simultaneously with the closing of the sale of the Over-allotment Units, we consummated the sale of an additional 514,500 Private Placement Warrants in a private placement to our Sponsor and an affiliate of our chief executive officer, generating gross proceeds of approximately $514,500. Each Private Placement Warrant entitles the holder thereof to purchase one share of our Class A common stock at an exercise price of $11.50 per share. The sales of the Private Placement Warrants were made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.Use of ProceedsOn October 22, 2020, we consummated the Initial Public Offering of 20,000,000 Units. The Units were sold at a price of $10.00 per Unit, generating gross proceeds of $200.0 million. The underwriters were granted a 45-day option from the date of the final prospectus relating to the Initial Public Offering to purchase up to 3,000,000 additional Units to cover over-allotments, if any, at $10.00 per Unit, less underwriting discounts and commissions. On November 9, 2020, the underwriters partially exercised the over-allotment option and, on November 12, 2020, the underwriters purchased the Over-allotment Units, generating gross proceeds of $25,725,020. The over-allotment option will expire on December 3, 2020.On October 22, 2020, simultaneously with the closing of the Initial Public Offering, we completed the private sale of 6,000,000 Private Placement Warrants at a purchase price of $1.00 per Private Placement Warrant to our Sponsor, our independent directors and an affiliate of our chief executive officer, generating gross proceeds of $6.0 million. Simultaneously with the closing of the sale of the Over-allotment Units, we completed the private sale of an additional 514,500 Private Placement Warrants at a purchase price of $1.00 per Private Placement Warrant to our Sponsor, generating gross proceeds of approximately $514,500.Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC served as underwritersequity securities for the Initial Public Offering. The securities sold in the Initial Public Offeringsix months ended June 30, 2023 that were not registered under the Securities Act on a registration statement on Form S-1 (File No. 333-248958) (the “Registration Statement”). The SEC declared the Registration Statement effective on October 19, 2020.From September 7, 2017 (inception) through September 30, 2020, we incurred approximately $354,650 for costs and expenses related to the Initial Public Offering. In connection with the closing of the Initial Public Offering, we paid a total of approximately $4.51 million in underwriting discounts and commissions. In addition, the underwriters agreed to defer approximately $7.90 million in underwriting discounts and commissions, which amount will be payable upon consummation of the initial Business Combination. Prior to the closing of the Initial Public Offering, the Sponsor loaned us $300,000 under the Note. We repaid this Note to our Sponsor on October 21, 2020. There has been no material change in the planned use of proceeds from the Initial Public Offering as described in our final prospectus filed with the SEC on October 21, 2020.After deducting the underwriting discounts and commissions (excluding the deferred portion of approximately $7.90 million, which amount will be payable upon consummation of the initial Business Combination) and offering expenses, the total net proceeds from the Initial Public Offering and the sale of the Private Placement Warrants were approximately $226.3 million, of which approximately $225.7 million (or $10.00 per share sold in the Initial Public Offering) was placed in the Trust Account.Exhibits designated by an asterisk (*) are filed herewith and those designated with asterisks (**) are furnished herewith.EXHIBIT INDEXExhibit No.Description 31.1*3.1 3.2 10.2# 10.3# 10.4# 10.5# 10.6# 10.7# 31.1 31.2*31.232.1* *32.2* *101.INS*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.SCH*101.SCHInline XBRL Taxonomy Extension Schema Document 101.CAL*101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF*101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB*101.LABInline XBRL Taxonomy Extension Label Linkbase Document 101.PRE*101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
_________________________DECARBONIZATION PLUS ACQUISITION CORPORATION(Registrant)Hyzon Motors Inc.Date: December 2, 2020August 8, 2023By: /s/ Erik AndersonParker MeeksName: Erik AndersonParker MeeksTitle: Chief Executive Officer
(Principal Executive Officer)Date: December 2, 2020August 8, 2023By: /s/ Peter HaskopoulosJiajia WuName: Peter HaskopoulosJiajia WuTitle: Interim Chief Financial Officer and Chief Accounting Officer and Secretary
(Principal Financial Officer and Principal Accounting Officer)22