Hyzon Motors (US:HYZN)2021-08-14 00:44PART I—FINANCIAL INFORMATION This section provides interim financial statements, management's analysis, market risk disclosures, and details on internal controls and procedures Interim Financial Statements This section presents the unaudited condensed financial statements for Decarbonization Plus Acquisition Corporation (DCRB) for the period ended June 30, 2021, prior to its business combination with Legacy Hyzon, reflecting its status as a blank check company Condensed Balance Sheets As of June 30, 2021, DCRB's total assets were approximately $226.7 million, primarily investments in the Trust Account, with significant warrant liabilities Condensed Balance Sheet Data (unaudited) | Balance Sheet Item | June 30, 2021 (USD) | December 31, 2020 (USD) | | :--- | :--- | :--- | | Total Assets | $226,671,136 | $226,789,721 | | Investment held in Trust Account | $225,734,427 | $225,727,721 | | Total Liabilities | $55,748,971 | $46,572,838 | | Warrant liabilities | $40,763,719 | $33,600,270 | | Deferred underwriting fee payable | $7,900,376 | $7,900,376 | | Class A common stock subject to possible redemption | $165,922,160 | $175,216,880 | | Total Stockholders' Equity | $5,000,005 | $5,000,003 | Condensed Statements of Operations For the three and six months ended June 30, 2021, DCRB reported net losses primarily driven by administrative expenses and changes in warrant liability fair value Statement of Operations Highlights (unaudited) | Metric | Three Months Ended June 30, 2021 (USD) | Six Months Ended June 30, 2021 (USD) | | :--- | :--- | :--- | | General and administrative expenses | $1,361,853 | $2,137,975 | | Change in fair value of warrant liabilities | ($6,824,865) | ($7,163,449) | | Interest earned on marketable securities | $3,372 | $6,706 | | Net Loss | ($8,183,346) | ($9,294,718) | Condensed Statements of Changes in Stockholders' Equity For the six months ended June 30, 2021, total stockholders' equity remained stable at approximately $5.0 million, with the accumulated deficit increasing due to net loss - The accumulated deficit increased by $9,294,718 during the first six months of 2021, reflecting the net loss for the period16 Condensed Statements of Cash Flows For the six months ended June 30, 2021, net cash used in operating activities was positive, primarily due to non-cash adjustments for warrant liabilities and increased accounts payable Cash Flow from Operating Activities (unaudited) | Metric | Six Months Ended June 30, 2021 (USD) | | :--- | :--- | | Net loss | ($9,294,718) | | Change in fair value of warrant liabilities | $7,163,449 | | Changes in operating assets and liabilities | $2,305,259 | | Net cash used in operating activities | $167,284 | Notes to Condensed Financial Statements The notes detail DCRB's nature as a SPAC, IPO and trust account specifics, accounting policies for warrants, related-party transactions, and the subsequent business combination with Legacy Hyzon - On July 16, 2021, the company consummated its business combination with Legacy Hyzon, changing its name to Hyzon Motors Inc. This was a significant event that occurred after the reporting period128 - The company accounts for public and private warrants as liabilities, measured at fair value at each reporting period, with changes in fair value recognized in the statement of operations5354 - The Sponsor and related parties engaged in several transactions, including purchasing Founder Shares and Private Placement Warrants, providing loans, and an administrative support agreement72788489 Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on DCRB's financial condition and operations as a blank check company prior to the Legacy Hyzon business combination - The company was a blank check company whose activities were related to its formation, IPO, and search for a business combination target until the merger with Legacy Hyzon on July 16, 2021135141 Net Loss Summary | Period | Net Loss (USD) | Key Drivers | | :--- | :--- | :--- | | Three months ended June 30, 2021 | ~$8.2 million | $1.4M G&A expenses, $6.8M change in warrant liability value | | Six months ended June 30, 2021 | ~$9.2 million | $2.1M G&A expenses, $7.2M change in warrant liability value | - Liquidity needs were met through IPO proceeds held outside the Trust Account and a $1.5 million promissory note from the Sponsor, which converted into warrants at the business combination closing146 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, DCRB is not required to provide quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is therefore not required to provide quantitative and qualitative disclosures about market risk159 Controls and Procedures Management concluded that DCRB's disclosure controls were ineffective as of June 30, 2021, due to a material weakness in warrant accounting, necessitating a restatement - Management concluded that disclosure controls and procedures were not effective as of June 30, 2021161 - The ineffectiveness was due to a material weakness in internal controls related to the accounting for warrants, which required the company to reclassify them as liabilities and led to a restatement of prior financial statements161163165 - Remediation efforts include enhancing processes to apply accounting requirements, providing better access to accounting literature, and increasing communication with third-party professionals164 PART II – OTHER INFORMATION This section details legal proceedings, updated risk factors, equity sales, defaults, and a list of filed exhibits Legal Proceedings DCRB is not a party to material legal proceedings but faces two stockholder lawsuits related to the business combination, which it believes are without merit - The company is not currently a party to any material legal proceedings168 - Two lawsuits were filed by purported stockholders against DCRB and its directors related to the business combination, alleging breaches of fiduciary duty. The company believes these claims are without merit169 Risk Factors Following the business combination, prior risk factors are obsolete, and current risks are detailed in the Definitive Proxy Statement filed June 21, 2021 - Due to the closing of the Business Combination, prior risk factors are obsolete. For current risk factors, the company refers to its Definitive Proxy Statement (file No. 001-39632) filed on June 21, 2021170 Unregistered Sales of Equity Securities and Use of Proceeds DCRB reports no unregistered sales of equity securities or use of proceeds for the reporting period - None171 Defaults Upon Senior Securities DCRB reports no defaults upon senior securities - None172 Mine Safety Disclosures This item is not applicable to DCRB - Not applicable173 Other Information DCRB reports no other information - None173 Exhibits This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, agreements, and required certifications - Exhibits filed include key corporate governance documents, registration rights agreements, employment agreements for executives Craig Knight, George Gu, and Mark Gordon, and required CEO/CFO certifications175