Hydrogen truck firm Hyzon Motors facing compliance woes

Problems are mounting for US-based hydrogen truck startup Hyzon Motors after failing to file its third-quarter financial report by deadline, threatening its Nasdaq listing and possibly adding to further delivery delays here.  

It’s the second consecutive quarter that the firm has missed financial filing deadlines after missing second-quarter deadlines for the period to June 30. 

Hyzon is of special interest to the transport industry in Australia and New Zealand with our local markets identified as a key target for the brand. This includes signing deals with New Plymouth-based Hiringa Energy along with local fleet partners TR Group and Move Logistics (previously named TIL). The first fleet of its hydrogen trucks were originally meant to arrive in New Zealand by the end of 2021.

According to Move’s recent annual report, the hydrogen trucks were delayed due to pandemic and supply chain disruption and it now hopes the first two vehicles arrive by mid-2023.

Meanwhile, Hyzon remains in non-compliance with Nasdaq listing rules which requires listed companies to timely file all required periodic reports with the Securities and Exchange Commission (SEC).

Hyzon has until December 1 to update the market on its plan to regain compliance, provide an internal investigation summary by January 16 and file delinquent forms by February 13. 

In an earlier statement, Hyzon said its management had become aware of revenue recognition timing issues in China.

Its board appointed a special committee to work with external advisors and is conducting an independent investigation to address the governance and compliance issues.  

The company says it also identified “operational inefficiencies” at Hyzon Motors Europe B.V. – the company’s European joint venture with clean technology company Holthausen.  

“The board of directors has retained a third-party consulting firm to assist the board and management with reassessing Hyzon’s global strategy and operations. 

“We acknowledge the serious nature of this development and are working diligently with the assistance of outside legal and financial advisors to resolve this matter as quickly as possible. 

“Hyzon remains dedicated to our mission of delivering zero emission hydrogen-powered commercial vehicles and accelerating clean transport across the globe. We affirm our unwavering commitment to our customers, employees, partners, shareholders and suppliers – and are determined to resolve these issues as soon as possible,” the company says. 

The company also announced leadership transitions in August with the ousting of chief executive and co-founder Craig Knight who also departed from his role as a director of the company.

Knight, Australian born, was replaced with Hyzon’s former chief strategy officer Parker Meeks who stepped in as president and interim chief executive.  

Additionally, George Gu moved from his executive role to non-executive chairman of the board. In his role as non-executive chairman, Gu will remain available to provide strategic counsel to Meeks specifically related to R&D initiatives, the company says. 

Hyzon began trading on the Nasdaq in July last year after being formed through a special purpose acquisition company (SPAC) as part of a $US2.7 billion merger agreement with Decarbonization Plus Acquisition Corporation.  

The company had stated the deal would provide gross proceeds of around US$626 million, including a US$400m fully committed common stock PIPE at US$10 per share. 

Hyzon was among hundreds of companies chasing investor interest through what was dubbed a ‘SPAC mania’. In 2021, there were more than 600 SPACs which raised more than US$170 billion – both record-breaking figures.

Hyzon’s reported institutional investors included funds and accounts managed by BlackRock, the Federated Hermes Kaufmann Funds, Fidelity Management & Research Company LLC, Wellington Management and Riverstone Energy Limited. 

In September last year, Hyzon also found itself the target of short seller Blue Orca Capital which accused the hydrogen truck startup of lying about a 500-truck deal with a China-based customer. It also called into question the 1500 truck deal with New Zealand firm Hiringa.

Hyzon rejected the allegations as “inaccurate and misleading” and said they were “intended solely to generate profits on Blue Orca’s short position at the expense of Hyzon’s long-term shareholders”. 

The company received a subpoena from the Securities and Exchange Commission in January this year in response to the short seller allegations. It required Hyzon to produce documents and information regarding the claims. 

Hyzon Motors was launched in March 2020 as a subsidiary of Singapore-based Horizon Fuel Cell Group. Horizon was founded in 2003 and operates five international subsidiaries in the development of hydrogen technology.

Hyzon currently has a market cap of US$409 million and a share price of $1.65.