Hydrogen truck maker Hyzon Motors no longer in danger of Nasdaq delisting
The company’s share price has trended above $1 for ten days and overdue reports have been filed — but fraud investigation remains open
Hydrogen fuel-cell truck firm Hyzon Motors has received a notice from stock exchange Nasdaq that it is no longer in danger of being delisted due to its low share price.
Nasdaq requires all listed companies to trade above $1 per share for 30 consecutive trading days. Once a company is warned that it will be delisted, it has 180 days to trade at or above $1 per share for ten consecutive days or be taken off the exchange.
Between 23 March and 11 July, the embattled truck maker’s shares consistently traded below $1 (except on 3 July). And on 8 May, Nasdaq notified Hyzon that it would delist the company by 6 November due to this breach of the minimum bid price requirement.
However, since 12 July, its shares have traded at or above $1, meaning Hyzon has successfully regained complaince.
The recent bump in stock may be due to Hyzon announcing this week that it will publish its Q2 results for this year on 8 August.
While a timely announcement of results would be par for the course with most companies, Hyzon has this year also faced separate threats of delisting due to late filings.
In February, Nasdaq notified Hyzon that it would take the company off the exchange that month after the truck maker admitted that it would be unable to file the reports from 2022’s second and third quarters on time.
Hyzon was able to successfully stay delisting on this matter after a series of appeals. And according to a notice on 16 May to the Securities and Exchange Commission (SEC), the firm filed both delayed reports on 1 May this year.
However, Hyzon also said in this notice that it would be late filing its Q1 report for 2023 as “previously reported material weaknesses in the Company’s internal control over financial reporting have not been fully remediated”, which prompted a further warning from Nasdaq. The delayed Q1 report was finally published on 7 June.
Hyzon was also late to file its annual report for 2022, only publishing this document on 31 May.
But while the company may be out of the woods with Nasdaq, it is still subject to an SEC investigation launched in January 2022 following allegations by short-seller Blue Orca that Hyzon Motors was pumping its stock by portraying agreements with third parties to sell or market their trucks as firm orders or direct sales — and even announcing sales to fake customers.
Blue Orca alleged that Shanghai HongYun Automobile, which had placed a 500-truck order in September 2021, was a Chinese shell company set up by Hyzon.
The fuel-cell truck company set up an investigation committee in August 2022 to look into “revenue recognition timing” as well as other “controls and procedures”, with a major focus on to its business activities in China.
Preliminary results from this internal investigation, released in March, uncovered that many of the trucks it had sold had actually been inoperable or required repairs post-delivery — throwing previously reported revenue from these orders into question. This prompted the delays to the company’s financial statements.