Hyzon Motors (HYZN) - 2022 Q2 - Quarterly Report

Revenue Performance - Revenue for the three months ended June 30, 2022, was $46,000, a significant increase from negligible revenue in the same period of 2021[123]. - The company reported $2.9 million in revenue from hydrogen fuel cell systems and retrofit services for the six months ended June 30, 2022[110]. - Revenue for the six months ended June 30, 2022, was $2.9 million, representing sales of fuel cell systems in the U.S., FCEVs in China, and retrofit services in Europe, compared to no revenue for the same period in 2021[136]. Operating Expenses - Operating expenses for the three months ended June 30, 2022, totaled $31.9 million, up 244% from $9.3 million in the same period of 2021[125]. - Operating expenses for the six months ended June 30, 2022, were $59.3 million, significantly higher than $13.0 million for the same period in 2021[137]. - Selling, general, and administrative expenses rose by 246% to $20.1 million for the three months ended June 30, 2022, compared to $5.8 million in 2021[123]. - Selling, general, and administrative expenses rose to $39.8 million for the six months ended June 30, 2022, compared to $8.9 million in 2021, driven by higher legal, accounting, and consulting fees totaling $8.2 million[142]. - Research and development expenses increased by 202% to $10.5 million for the three months ended June 30, 2022, compared to $3.5 million in 2021[123]. - Research and development expenses increased to $17.4 million for the six months ended June 30, 2022, from $4.1 million in 2021, primarily due to $7.1 million in higher personnel costs and $6.2 million for materials[140]. Net Loss - The net loss attributable to Hyzon for the three months ended June 30, 2022, was $42.0 million, compared to a loss of $9.4 million in the same period of 2021, representing a 546% increase in loss[123]. - Net loss attributable to noncontrolling interests was $5.5 million for the six months ended June 30, 2022, up from $0.5 million in 2021, due to increased activities in joint ventures[149]. - The company expects to continue incurring net losses in the near term while focusing on advancing its proprietary fuel cell technology and commercializing heavy-duty vehicle platforms[156]. Cash Flow and Financial Position - Net cash used in operating activities was $68.9 million for the six months ended June 30, 2022, up from $19.5 million in the same period of 2021[164]. - As of June 30, 2022, the company had $363.9 million in unrestricted cash and cash equivalents, with positive working capital of $405.3 million[155]. - The company has no debt as of June 30, 2022, following the conversion of convertible notes into common stock[162]. - Net cash used in investing activities was $7.7 million for the six months ended June 30, 2022, primarily for property and equipment[166]. Strategic Plans and Business Model - Hyzon plans to expand its integration activities across rail, aviation, and mobile power applications, anticipating growth in these sectors due to technological advances in hydrogen fuel cells[107]. - The company is focused on building a clean hydrogen supply ecosystem and collaborating with strategic partners for hydrogen production and refueling stations[108]. - Hyzon's business model relies on third-party vehicle assemblers to maintain an asset-light approach and lower production costs[106]. - The company aims to achieve cash flow breakeven during the last two quarters of 2022 and the first quarter of 2023[159]. - The company has identified optimizations in its business model to reduce working capital requirements for fuel cell system manufacturing[159]. Internal Control and Governance - Material weaknesses in internal control over financial reporting were identified, including ineffective risk assessment and insufficient qualified resources[190]. - The company has appointed a new Chief Executive Officer and Interim Chief Financial Officer as part of its remediation plan for internal control weaknesses[193]. - A comprehensive risk assessment process is being designed to identify and assess risks of material misstatements in financial reporting[193]. - The company plans to implement formal policies and documentation procedures related to financial reporting and revenue recognition[193]. - There have been no changes in internal control over financial reporting that materially affected the company during the quarter ended June 30, 2022[195].