CEO and cofounder Craig Knight is out at Hyzon Motors Inc.
The move comes less than two weeks after the Honeoye Falls-based firm disclosed possible accounting irregularities and said it would not meet the Aug. 15 deadline for its second-quarter financial filings with the Securities and Exchange Commission.
The company’s board of directors appointed Parker Meeks, who joined Hyzon as chief strategy officer in June 2021, as president and interim CEO. Knight also is exiting from his role as a Hyzon director.
Additionally, the board said late Wednesday that Chairman George Gu no longer would have an executive role with the company, which supplies zero-emissions commercial vehicles fueled by hydrogen fuel cells. He will serve as non-executive chairman and “will remain available to provide strategic counsel” to Meeks on research and development initiatives.
“The board is confident Mr. Meeks brings the right skillset that we need at this time,” said Elaine Wong, Hyzon’s lead independent director, in the Aug. 17 release announcing the executive leadership changes.
Before joining Hyzon, Meeks served as infrastructure sector president for TRC Cos., a design and construction management business in transportation, renewable energy and water resources end markets. Prior to that, he held positions with McKinsey & Co.
On Tuesday, Hyzon received a notice of noncompliance from the Nasdaq Listing Qualifications Department. Hyzon has until Oct. 14 to submit a plan outlining how it intends to regain compliance with Nasdaq’s listing rules.
Hyzon’s shares plummeted on Aug. 5 after the company disclosed the possible accounting irregularities, said it would miss the deadline for its second-quarter financial filings and told investors that “financial statements and guidance previously issued by the company can no longer be relied upon.”
Its stock that day fell to $2.79 a share, down 38 percent. Today, it closed at $1.99 a share—down more than 85 percent from its peak in early 2021.
In the statement issued Aug. 4 after the market close, Hyzon said “revenue recognition timing issues in China” were under investigation. In addition, it had identified “operational inefficiencies” at Hyzon Motors Europe B.V., the company’s European joint venture with Holthausen Clean Technology Investments. It also said the two companies have been unable to finalize the terms of a transaction announced in May, and that deal now is “not expected to close on the terms originally agreed.” The companies are currently working to renegotiate the transaction.
A board-appointed special committee, working with external advisers, was created to conduct an independent investigation into Hyzon’s governance and compliance issues. The board also retained a third-party consulting firm to “assist the board and management with reassessing Hyzon’s global strategy and operations.”
“Due to these findings, financial statements and guidance previously issued by the company can no longer be relied upon,” Hyzon said in its statement.
Hyzon has lost tens of millions of dollars. On May 6, Hyzon reported a first-quarter operating loss of nearly $27 million on $356,000 in revenues. In its Aug. 4 statement, however, Hyzon said that due to the accounting issues under investigation, the first-quarter financial report—as well as the company’s annual report for 2021—“should no longer be relied upon.”
Launched in 2020, Hyzon opened its headquarters in Honeoye Falls at the former General Motors facility that closed in 2012. The following February, it unveiled plans for a nearly $8 million expansion there—a project assisted by Empire State Development, Monroe County and Greater Rochester Enterprise.
At that time, Knight described Hyzon as “the realization of the vision that our Chairman George Gu and I had almost 20 years ago. We’ve worked together pursuing the commercialization of hydrogen fuel cell technologies for many years.”
As previously reported by the Beacon, Hyzon has been targeted in class-action shareholder litigation and is the subject of a Securities and Exchange Commission inquiry into allegations against it.
An amended class-action complaint filed in March describes the company as a “repackaging of a flailing Chinese hydrogen-fuel-cell business covered in a glittering new wrapper of misleading deal announcements, illusory customer contracts, and fantastical financial projections.” Hyzon, Knight, Gu and other current and former top executives also have been accused of “misrepresenting the nature of … ‘customer’ contracts and severely embellish(ing) its ‘deals’ and ‘partnerships’ with customers.”
In response, Hyzon has said it would “vigorously defend the company and its shareholders.”
For now, Meeks will assume full responsibility for day-to-day management of all business lines and functions at Hyzon. The board plans to initiate a CEO search to identify potential external and internal candidates.
Paul Ericson is Rochester Beacon executive editor. The Beacon welcomes comments from readers who adhere to our comment policy including use of their full, real name.