Hyzon Contemplates Fuel Cell Business Sale to Generate Capital

Hyzon Contemplates Fuel Cell Business Sale to Generate Capital

Hyzon Motors is waiting for the results of a Securities and Exchange Commission investigation. They are also considering selling or merging their fuel cell system company worldwide.

The Singaporean offshoot of Horizon Fuel Cell Technologies, Decarbonization Plus Acquisition Corp., went public in July 2021. They removed most of the overgrowth that had hindered their operations. Nasdaq threatened to delist Hyzon for late financial reports. Hyzon submitted the missed reports promptly.

Hyzon recorded a loss of $60.2 million, compared to last year’s profit of $38.8 million. In Q2 2022, the adjusted profits before interest, taxes, depreciation, and amortization were negative $28 million. This quarter, they were negative $33 million.

Waiting on the SEC

But its near future isn’t clear because it doesn’t have enough money and people are worried about SEC fines. The company Hyzon has set aside $22 million in case it has to pay a fine. It had to spend $25.9 million on lawyers because of the investigation.

CEO Parker Meeks stated during the company’s second-quarter earnings call that the outcome or actions by the SEC cannot be predicted.

At the end of July, Hyzon had $158 million in cash on hand. It thinks that it will spend between $65 million and $73 million in cash in the second part of the year, which is about $12 million per month. It says that the cash loss for the whole year of 2024 will be between $110 and 120 million. That’s a lot more than what it can do right now.

The marketing conditions continue to be volatile. Meeks stated that they are currently reviewing all available options to raise additional capital, including full merger and acquisitions.

Hyzon’s Recent Developments and Collaborations

Hyzon and Hyliion Holdings are collaborating on a fuel cell project. However, the CEOs of both companies declined the suggestion of a merger.

During the quarter, Hyzon:

  • After putting 10 fuel cell electric cars (FCEVs) on the road, they have made $2.9 million.
  • After a good test run, it has started making a lot of its 110-kilowatt car.
  • Performance Food Group has put in an order for five 110kW FCEV trucks. The trucks are expected to be delivered in late 2023.
  • GM is selling the building where its fuel cell operations used to be based in the Rochester area of upstate New York.
  • A total of nine samples, including three completed in the first quarter of 2023 and an additional six single-stack Fuel Cell System B samples with a power output of 200kW each, have been finalized.

Fontaine Modifications is hired to make Hyzon’s Freightliner Cascadia-based trucks. Hyzon can stand out from competitors that make power by joining two stacks because of its asset-lite manufacturing process. This lets the company put more resources into its single-stack 200kW fuel cell system.

Hyzon shares closed Tuesday at $1.19, down 17.93%.

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