The clouds surrounding Hyzon Motors Inc. have darkened.
Nasdaq informed Hyzon that it plans to delist the company’s stock by tomorrow. The troubled Honeoye Falls-based maker of hydrogen fuel cell heavy-duty vehicles plans to appeal the delisting, it said in a Securities and Exchange Commission filing Thursday.
An appeal would keep the company’s stock (Nasdaq: HYZN) trading on the exchange while it is pending. According to Hyzon, Nasdaq appeals typically take 30 to 45 days.
Hyzon shares closed Friday at $1.55, down from roughly $5.50 a year ago and nearly $16 in February 2021.
The delisting warning followed on the heels of Hyzon’s Feb. 1 announcement it had fired former CEO Craig Knight for cause. The company last August said Knight had been replaced as CEO and had given up his board seat. His exit came as a series of cascading ills beset the firm.
Headquartered in a former General Motors hydrogen fuel cell facility, Hyzon makes electric semi-trailer trucks and buses. For its nearly $8 million expansion there, the company received assistance from Empire State Development, Monroe County and Greater Rochester Enterprise.
Problems for the firm began to surface in 2021 as a short seller questioned the veracity of Hyzon’s financial statements and claims of vehicle sales in China.
In a September 2021 report, the short seller, Blue Orca Capital, called Knight’s optimistic statements of Hyzon’s prospects “fantasy,” alleging that vehicle sales the firm claimed to have lined up in China and elsewhere in Asia were wildly overblown and, in some cases, appeared likely to be mostly or entirely fictional.
Three months earlier, Hyzon investor Jan Kaufman filed a suit against the Honeoye Falls firm in the federal Western District of New York’s Rochester Division. Kaufman’s court complaint, which seeks class action status, accuses Hyzon of vastly overstating its prospects, “hyp(ing) purported big-name customers, contracts, and memorandums of understanding in high revenue areas to support its $2.7 billion valuation and lofty projections.”
Nasdaq’s delisting notice came after Hyzon’s Jan. 30 announcement that it would not meet a promised deadline to belatedly file second- and third-quarter 2022 financial statements with the SEC. Hyzon had earlier asked the SEC for an extension, telling the federal agency that it would file the delayed quarterlies by Feb. 13.
An amended complaint filed in the class action last year naming retired Texas physician Alfred Miller M.D. as the action’s lead plaintiff along with three other plaintiffs purports to show that Asian customers Hyzon said it had lined up were sham companies.
A recent court filing indicates that Hyzon and the class-action plaintiffs have agreed to delay the start of a trial while they seek to work out their differences in mediation. The parties say they will update the court on the mediation’s progress by April 30.
Will Astor is Rochester Beacon senior writer. The Beacon welcomes comments and letters from readers who adhere to our comment policy including use of their full, real name. Submissions to the Letters page should be sent to [email protected].