Hyliion Holdings Corp 10-Q for FY2026 Q3
Hyliion Holdings Corp. (HYLN)
10-Q
2026-11-10
For: 2026-09-30
View Original
Added on
November 10, 2026
About this 10-Q
Hyliion Holdings Corp filed this 10-Q on November 10, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $7.45M
- up 881.8% from $759K a year earlier
- Net loss
- $11.06M
- compared with a net loss of $13.34M a year earlier
- Diluted EPS
- -$0.06
- compared with -$0.08 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
For the quarterly period ended September 30, 2026
OR
For the transition period from to
Commission File No. 001-38823
(Exact Name of Registrant as Specified in Its Charter)
| (State or Other Jurisdiction of Incorporation) | (IRS Employer Identification No.) | |||||||
| (Address of Principal Executive Offices) | (Zip Code) | |||||||
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | ||||||||
x | Smaller reporting company | ||||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||||||||
| NYSE Texas, Inc. | ||||||||||||||
As of November 6, 2026, 178,923,821 shares of common stock, par value $0.0001 per share, were outstanding.
HYLIION HOLDINGS CORP.
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2026
TABLE OF CONTENTS
| Page | ||||||||
| PART I. FINANCIAL INFORMATION | ||||||||
| PART II. OTHER INFORMATION | ||||||||
Item 5. | ||||||||
i
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
HYLIION HOLDINGS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands, except share data)
| September 30, 2026 | December 31, 2025 | ||||||||||
| (Unaudited) | |||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Accounts receivable, net | |||||||||||
| Inventory | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Short-term investments | |||||||||||
| Assets held for sale | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Other assets | |||||||||||
| Long-term investments | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and stockholders’ equity | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Current portion of operating lease liabilities | |||||||||||
| Accrued expenses and other current liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Operating lease liabilities, net of current portion | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
Commitments and contingencies (Note 11) | |||||||||||
| Stockholders’ equity | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Treasury stock, at cost | ( | ||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
HYLIION HOLDINGS CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollar amounts in thousands, except share and per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
| Total revenues | |||||||||||||||||||||||
| Cost of revenues | |||||||||||||||||||||||
| Research and development services | |||||||||||||||||||||||
| Total cost of revenues | |||||||||||||||||||||||
| Gross profit (loss) | ( | ||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| Selling, general and administrative | |||||||||||||||||||||||
| Exit and termination (benefits) costs | ( | ( | |||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| Loss from operations | ( | ( | ( | ( | |||||||||||||||||||
| Interest income | |||||||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Net loss per share, basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Weighted-average shares outstanding, basic and diluted | |||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
HYLIION HOLDINGS CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Dollar amounts in thousands, except share data)
| Nine Months Ended September 30, 2026 | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | ( | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Exercise of common stock options and vesting of restricted stock units, net | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | ( | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Exercise of common stock options and vesting of restricted stock units, net | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | ( | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Exercise of common stock options and vesting of restricted stock units, net | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Retirement of treasury stock | ( | ( | ( | — | |||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2025 | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | ( | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Exercise of common stock options and vesting of restricted stock units, net | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | ( | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Exercise of common stock options and vesting of restricted stock units, net | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | ( | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
| Exercise of common stock options and vesting of restricted stock units, net | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||
| Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | ( | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
HYLIION HOLDINGS CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollar amounts in thousands)
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities | |||||||||||
| Net loss | $ | ( | $ | ( | |||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Amortization and accretion of investments, net | ( | ( | |||||||||
| Noncash lease expense | |||||||||||
| Gain on disposal of assets, including assets held for sale | ( | ( | |||||||||
| Share-based compensation | |||||||||||
| Carrying value adjustment to assets held for sale | |||||||||||
| Other | |||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | ( | ||||||||||
| Inventory | ( | ||||||||||
| Prepaid expenses and other assets | |||||||||||
| Accounts payable | |||||||||||
| Accrued expenses and other liabilities | ( | ||||||||||
| Operating lease liabilities | ( | ( | |||||||||
| Net cash used in operating activities | ( | ( | |||||||||
| Cash flows from investing activities | |||||||||||
| Purchase of property and equipment | ( | ( | |||||||||
| Proceeds from sale of property and equipment | |||||||||||
| Receipt of security deposit | |||||||||||
| Purchase of investments | ( | ( | |||||||||
| Proceeds from sale and maturity of investments | |||||||||||
| Net cash provided by investing activities | |||||||||||
| Cash flows from financing activities | |||||||||||
| Payments of deferred equity offering costs | ( | ||||||||||
| Proceeds from exercise of common stock options | |||||||||||
| Taxes paid related to net share settlement of equity awards | ( | ||||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Net (decrease) increase in cash and cash equivalents and restricted cash | ( | ||||||||||
| Cash and cash equivalents and restricted cash, beginning of period | |||||||||||
| Cash and cash equivalents and restricted cash, end of period | $ | $ | |||||||||
| Supplemental disclosure of noncash investing and financing activities: | |||||||||||
| Acquisitions of property and equipment in accounts payable and accrued expenses | $ | $ | |||||||||
| Property and equipment recorded through recognition of asset retirement obligation | $ | $ | |||||||||
| Vendor tariff credits recorded as reduction of property and equipment cost | $ | $ | |||||||||
| Right-of-use assets obtained in exchange for lease obligations | $ | $ | |||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
Table of Contents
HYLIION HOLDINGS CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollar amounts in thousands, except as separately indicated)
Note 1. Overview
Hyliion Holdings Corp. is a Delaware corporation headquartered in Cedar Park, Texas, that designs and develops the KARNOTM Power Module for stationary and mobile applications and provides research and development (“R&D”) services. References to the “Company,” “Hyliion,” “we,” “our,” or “us” in this report refer to Hyliion Holdings Corp. and its wholly owned subsidiary, unless expressly indicated or the context otherwise requires.
The KARNO Power Module is a complete, fully integrated, enclosed, fuel-agnostic power generating solution, including balance of plant systems such as cooling, controls, fuel, and air handling, that generates electricity on command in stationary power generation applications powered by KARNO Cores. The KARNO Core is a heat-powered generator that uses linear motors in a four-shaft system to generate electricity. Heat is generated through the flameless oxidation of fuels while achieving near zero emissions without aftertreatment systems.
Note 2. Disposals
In November 2023, the Company initiated the wind-down of its powertrain business (the “Plan”), the majority of which activities were completed in 2025. See Note 2 to the consolidated financial statements in our 2025 Annual Report for additional information. The Company has not accounted for the impacts of the Plan as a discontinued operation as the underlying intellectual property has not been abandoned or sold. The Company recognized net (benefits) costs related to the Plan, consisting primarily of recoveries from sales of assets, of nil and $(0.1 ) million during the three months ended September 30, 2026 and 2025, respectively, and $(0.7 ) million and $1.0 million during the nine months ended September 30, 2026 and 2025, respectively, which are included in exit and termination (benefits) costs in the condensed consolidated statements of operations. Remaining accrued liabilities associated with the Plan were immaterial at September 30, 2026.
Note 3. Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The accompanying condensed consolidated financial statements include the accounts of Hyliion Holdings Corp. and its wholly owned subsidiary. Intercompany transactions and balances have been eliminated upon consolidation. The condensed consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”), which permit reduced disclosure for interim periods. The condensed consolidated balance sheet at December 31, 2025 was derived from audited financial statements for the fiscal year then ended, but does not include all necessary disclosures required with respect to annual financial statements. In the opinion of the Company, these condensed consolidated financial statements include all recurring adjustments and normal accruals necessary for a fair presentation of the Company’s financial position, results of operations and cash flows for the dates and periods presented. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s 2025 Annual Report. Results for interim periods are not necessarily indicative of the results to be expected for a full fiscal year or for any future period.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the balance sheet date, as well as reported amounts of expenses during the reporting period. The Company’s most significant estimates and judgments involve revenue, inventory, income taxes and valuation of share-based compensation. Management bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates, and such differences could be material to the Company’s condensed consolidated financial statements.
5
Segment Information
ASC 280, Segment Reporting, defines operating segments as components of an enterprise where discrete financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company operates as a single operating segment from which all revenue and net income (loss) are derived and for which all assets are attributed. The Company’s CODM is the chief executive officer, who has ultimate responsibility for the operating performance of the Company and the allocation of resources. The CODM assesses performance for the single operating segment and decides how to allocate resources based on consolidated net income (loss), which is reported on the condensed consolidated statements of operations, and does not segment the business for internal reporting or decision making. The CODM uses net income (loss), including the significant expense categories presented below, in the annual budgeting and forecasting process and monitors actual results against the budget and forecast on a quarterly basis. The CODM considers budget-to-actual variances in net income (loss) when making decisions about the allocation of operating and capital resources, including the level of investment in research and development activities related to the KARNO Power Module, spending on commercialization efforts, and resources devoted to performance under the Company’s government contracts. The CODM also uses net income (loss) to monitor the Company’s operating cash requirements and to evaluate the sufficiency of the Company’s liquidity to fund planned operations.
The significant expense categories and amounts that are regularly provided to the CODM and included in the reported measure of segment loss for the three and nine months ended September 30, 2026 and 2025 are summarized as follows (in millions):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Total revenues | $ | $ | $ | $ | |||||||||||||||||||
| Total cost of revenues | |||||||||||||||||||||||
| Gross profit (loss) | |||||||||||||||||||||||
| Administrative and office | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Facilities | |||||||||||||||||||||||
| Personnel | |||||||||||||||||||||||
| Product development, exclusive of other costs presented | |||||||||||||||||||||||
| Professional services | |||||||||||||||||||||||
| Exit and termination (benefits) costs | ( | ( | |||||||||||||||||||||
| Other operating expense | |||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| Other income, net | |||||||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Note: Amounts may not sum due to rounding.
Concentration of Supplier Risk
The Company is dependent on certain suppliers, many of which are single source suppliers, and the inability of these suppliers to deliver necessary components of the Company’s products in a timely manner at prices, quality levels and volumes that are acceptable, or the Company’s inability to efficiently manage these components from these suppliers, could have a material adverse effect on the Company’s business, prospects, financial condition and operating results.
Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity date of 90 days or less at the time of purchase to be cash and cash equivalents only if in checking, savings or money market accounts. Cash and cash equivalents include cash held in banks and money market accounts and are carried at cost, which approximates fair value. The Company maintains cash in excess of federally insured limits at financial institutions, which it believes are of high credit quality, and has not incurred any losses related to these balances to date. The Company believes its credit risk, with respect to these financial institutions, to be minimal.
6
Restricted Cash
| September 30, 2026 | December 31, 2025 | September 30, 2025 | December 31, 2024 | ||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
| Restricted cash included in other assets | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
Accounts Receivable, Net
The Company adopted ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, during the quarter ended March 31, 2026, applying the practical expedient under which the Company assumes that current conditions as of the balance sheet date do not change for the remaining life of its current accounts receivable in estimating expected credit losses. There was no material impact as a result of the adoption of this ASU.
Investments
The Company’s investments consist of corporate bonds, U.S. treasury and agency securities, state and local municipal bonds and commercial paper, all of which are classified as held-to-maturity, with a maturity date of 36 months or less at the time of purchase. The Company determines the appropriate classification of investments at the time of purchase and re-evaluates such designation as of each balance sheet date. Investments are classified as held-to-maturity when the Company has the positive intent and ability to hold the securities to maturity.
Held-to-maturity securities are stated at amortized cost, adjusted for amortization of premiums and accretion of discounts to maturity, and any expected credit losses. Such amortization, along with interest, is included in interest income. The Company estimates expected credit losses for held-to-maturity investments by considering relevant available information and assessing the risk of loss over the assets’ contractual life. The Company’s portfolio of held-to-maturity investments is of a high credit quality with minimal expected credit losses. The Company uses the specific identification method to determine the cost basis of securities sold.
Fair Value Measurements
ASC 820, Fair Value Measurements, clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based upon assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
Level I: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Company can access at the measurement date;
Level II: Significant other observable inputs other than level I prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data; and
Level III: Significant unobservable inputs that reflect the Company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.
7
An asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
The Company believes its valuation methods are appropriate and consistent with other market participants. However, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
The Company’s financial instruments consist of cash and cash equivalents and restricted cash, accounts receivable, investments, accounts payable and accrued expenses. The carrying value of cash and cash equivalents and restricted cash, accounts receivable, accounts payable and accrued expenses approximate fair value because of the short-term nature of those instruments. The fair value of investments is based on quoted prices for identical or similar instruments in markets that are not active. As a result, investments are classified within Level II of the fair value hierarchy.
Inventory
As of September 30, 2026, we have not yet commercialized the KARNO Power Module. Unless such components are capitalizable, costs incurred for components acquired prior to our determination of reaching a commercial stage are expensed as R&D costs, resulting in zero cost basis for those components. As a result, certain components on hand have a zero cost basis, and inventory capitalized in future periods that incorporates these components will reflect carrying amounts, and related cost of revenue upon sale, that are lower than would result had those components been initially capitalized.
When inventory may be utilized in performance of our contracts with the United States Department of the Navy’s Office of Naval Research (“ONR”), we capitalize that inventory including certain allocations of overhead, labor, and other direct costs and classify it as work-in-process inventory. When this inventory is designated to and utilized in an activity, we record either an R&D or a cost of revenue charge in the period in which the utilization occurs.
All inventory recorded on the balance sheet at September 30, 2026 is classified as work-in-process. Inventory is valued using the specific identification cost method and is stated at the lower of cost or net realizable value. We review our inventory to determine whether its carrying value exceeds the net amount we expect to realize upon the ultimate sale of the inventory.
Revenue
The Company follows five steps to recognize revenue from contracts with customers under ASC 606, Revenue from Contracts with Customers, which are:
•Step 1: Identify the contract(s) with a customer;
•Step 2: Identify the performance obligations in the contract;
•Step 3: Determine the transaction price;
•Step 4: Allocate the transaction price to the performance obligations in the contract; and
•Step 5: Recognize revenue when (or as) a performance obligation is satisfied.
U.S. Government Contracts
In September 2024, the Company was awarded a best effort cost-plus-fixed-fee contract of up to $16.0 million by the ONR to research the suitability of its KARNO Power Module for Navy ships and stationary power generation applications. Under the agreement, the Company will provide R&D services through February 2027, including delivery of up to seven KARNO Cores and testing of power module systems. The ONR contract represented a significant change in business strategy toward providing R&D activities in the ordinary course of business in addition to developing Power Modules for stationary and mobile applications. In September 2026, the ONR contract awarded in September 2024 was modified to increase the contract value to $21.6 million to fund the cost of completing the remaining deliverables, including an option of up to $2.5 million that the ONR may exercise in the future.
In July 2025, the Company was awarded a Phase II best effort cost-plus-fixed-fee contract of up to $1.5 million by the ONR to demonstrate the conceptual feasibility of the Phase I effort contract awarded in July 2024 for up to $0.2 million and to show development progress towards successful application. Under the Phase II agreement, including the exercised option and amendments, the Company will provide R&D services through July 2027, including design reviews, simulations, and reporting.
8
In July 2026, the Company was awarded a best effort cost-plus-fixed-fee contract of up to $41.7 million by the ONR. This contract provides for the design, development, construction, testing and delivery of 2-megawatt and 3-megawatt KARNO power generation systems at locations identified by ONR. The Company began performance on this contract in the third quarter of 2026, and expects to increase performance in the second and third quarters of 2027, continuing through mid-2029. During the three months ended September 30, 2026, deposits of $1.2 million previously made on equipment expected to be used in production were charged to cost of revenues, as the related equipment was instead procured as a direct cost reimbursable under the Company’s contracts with the ONR.
There is a single research and development services performance obligation in each of these contracts that is measured over time as the services are performed. The Company generally invoices monthly, which corresponds directly with the value to the customers of the performance completed to date based on the cost of labor and materials utilized, and recognizes revenue in the amount that it has a right to invoice. Payment is ordinarily due within 90 days of invoice submission. Cost of R&D services revenue includes labor, allocated fringe and overhead, inventory, and equipment.
All revenue during the three and nine months ended September 30, 2026 and 2025 was recognized over time. The portion of our revenues from significant customers is summarized as follows and is attributable to customers located in the U.S.:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Customer A | % | % | % | % | |||||||||||||||||||
| Customer B | |||||||||||||||||||||||
| % | % | % | % | ||||||||||||||||||||
Research and Development Expense
R&D costs did not meet the requirements to be recognized as an asset as the associated future benefits were at best uncertain and there was no alternative future use at the time the costs were incurred. R&D costs include, but are not limited to, outsourced engineering services, allocated facilities costs, depreciation on equipment utilized in R&D activities, internal engineering and development expenses, materials, internally-developed software and employee-related expenses (including salaries, benefits, travel, and share-based compensation) related to development of the Company’s products and services.
Recent Accounting Pronouncements
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, to improve the guidance in Topic 270, Interim Reporting, by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable, including additional guidance on what disclosures should be provided in interim reporting periods. The pronouncement is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. We are currently evaluating the impact of adoption.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, to modernize the accounting for software costs that are accounted for under Subtopic 350-40, Intangibles—Goodwill and Other—Internal-Use Software. The pronouncement is effective for fiscal years beginning after December 15, 2027 and interim periods within that fiscal year. We are currently evaluating the impact of adoption.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), and clarified by ASU 2025-01, to enable investors to better understand the major components of an entity’s income statement. The pronouncement is effective for fiscal years beginning after December 15, 2026 and interim periods beginning after December 15, 2027, and we expect a material impact to our disclosures as a result of adoption.
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Note 4. Investments
The amortized cost, unrealized gains and losses, fair value and maturities of our held-to-maturity investments at September 30, 2026 and December 31, 2025 are summarized as follows:
September 30, 2026 | |||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||
| Corporate bonds and notes | $ | $ | $ | ( | $ | ||||||||||||||||||
| $ | $ | $ | ( | $ | |||||||||||||||||||
December 31, 2025 | |||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||
| Commercial paper | $ | $ | $ | $ | |||||||||||||||||||
| U.S. government agency bonds | |||||||||||||||||||||||
| State and municipal bonds | |||||||||||||||||||||||
| Corporate bonds and notes | ( | ||||||||||||||||||||||
| $ | $ | $ | ( | $ | |||||||||||||||||||
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
| Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||||||||||
| Due in one year or less | $ | $ | $ | $ | |||||||||||||||||||
| Due after one year through five years | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
Note 5. Fair Value Measurements
The fair value measurements of our financial assets at September 30, 2026 and December 31, 2025 are summarized as follows:
Fair Value Measurements at September 30, 2026 | |||||||||||||||||||||||
| Level I | Level II | Level III | Total | ||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
| Restricted cash | |||||||||||||||||||||||
| Held-to-maturity investments: | |||||||||||||||||||||||
| Corporate bonds and notes | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
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Fair Value Measurements at December 31, 2025 | |||||||||||||||||||||||
| Level I | Level II | Level III | Total | ||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
| Restricted cash | |||||||||||||||||||||||
| Held-to-maturity investments: | |||||||||||||||||||||||
| Commercial paper | |||||||||||||||||||||||
| U.S. government agency bonds | |||||||||||||||||||||||
| State and municipal bonds | |||||||||||||||||||||||
| Corporate bonds and notes | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
Note 6. Leases
In July 2026, the Company entered into an amendment to the lease of its Cedar Park, Texas headquarters facilities. The amendment extended the lease term for the Company’s approximately 125,000 square foot facility by 63 months, through July 2032, and provides for total base rent of $9.8 million over the extension period, inclusive of a three-month rent abatement, and a tenant improvement allowance of up to $0.6 million. The Company retains two options to further extend the lease term by five years each which are not included in the revised lease term as they are not reasonably certain to be exercised. The lease term for the subleased approximately 27,000 square foot facility was not extended and will expire in April 2027.
The Company accounted for the amendment as a modification of the existing lease rather than as a new lease. At the amendment date, the Company reassessed the lease and concluded it remains an operating lease, and remeasured the lease liability using the revised lease payments and an updated incremental borrowing rate. The remeasurement increased the operating lease right-of-use asset and operating lease liabilities by $6.2 million. The rent abatement and tenant improvement allowance are reflected in the remeasured lease liability and right-of-use asset, and the Company continues to recognize lease cost on a straight-line basis over the remaining lease term. The tenant improvement allowance, which had not yet been received as of September 30, 2026, allows for reimbursement of improvements made to the facility. The improvements are owned by the Company and are recorded in property and equipment as leasehold improvements, depreciated over the shorter of their useful lives or the remaining lease term.
In February 2025, the Company executed a sublease for a portion of its corporate office through April 2027. Sublease operating income which is included as reductions to R&D and selling, general and administrative expense in the condensed consolidated statements of operations for the three months ended September 30, 2026 and 2025 was $0.1 million and $0.1 million, respectively, and $0.3 million and $0.2 million, respectively, for the nine months ended September 30, 2026 and 2025.
Note 7. Property and Equipment, Net
Property and equipment, net at September 30, 2026 and December 31, 2025 is summarized as follows:
| September 30, 2026 | December 31, 2025 | ||||||||||
| Production machinery and equipment | $ | $ | |||||||||
| Vehicles | |||||||||||
| Leasehold improvements | |||||||||||
| Office furniture and fixtures | |||||||||||
| Computers and related equipment | |||||||||||
| Less: accumulated depreciation | ( | ( | |||||||||
| Total property and equipment, net | $ | $ | |||||||||
During the three months ended September 30, 2026, the Company received credits against future purchases of $1.2 million from an equipment vendor for tariffs previously included in the purchase price of production machinery and equipment, which were recorded as a reduction of the cost of the related property and equipment.
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During the three months ended September 30, 2026, the Company applied $1.2 million in deposits previously made toward purchase of property and equipment to equipment purchased for and reimbursed under contracts described in Note 3. These amounts are included as an “other” adjustment to reconcile net loss to net cash used in operating activities in the condensed consolidated statements of cash flows for the nine months ended September 30, 2026.
Note 8. Share-Based Compensation
During the nine months ended September 30, 2026 and 2025, the Company granted 4.1 million and 4.4 million restricted stock units, respectively, which will vest over a period of to three years , inclusive of the units described below with underlying closing stock price thresholds. During the nine months ended September 30, 2026 and 2025, 1.4 million and 0.1 million restricted stock units, respectively, were forfeited. Share-based compensation expense for the three months ended September 30, 2026 and 2025 was $1.7 million and $1.4 million, respectively. Share-based compensation expense for the nine months ended September 30, 2026 and 2025 was $4.8 million and $4.1 million, respectively.
The Company granted 2.3 million restricted stock units in the nine months ended September 30, 2026 that are subject to vest between February 11, 2026 and December 31, 2028 contingent upon achieving underlying closing stock price thresholds. Through September 30, 2026, there was achievement of underlying closing stock price thresholds on 25 % of these awards which will vest December 31, 2028. These awards were valued at $1.57 per unit using a Monte Carlo simulation including a blend of historical and implied share volatility of 105 % and a risk-free rate of 3.48 %.
Through September 30, 2026, there was achievement of underlying closing stock price thresholds on 20 % of restricted stock units granted in 2025 which will vest between September 2027 and December 2027.
Note 9. Stockholders’ Equity
At-the-Market Offering Program
In August 2026, the Company entered into an at-the-market sales agreement with Needham & Company, LLC and Northland Securities, Inc., under which the Company may offer and sell, from time to time at its sole discretion, shares of its common stock having an aggregate offering price of up to $100 million. The Company pays the applicable sales agent a commission of up to 3.0 % of the gross proceeds from each sale. The Company is not obligated to sell any shares under the agreement. No shares were sold under the agreement during the three months ended September 30, 2026, and $100 million remained available as of that date.
Treasury Stock Retirement
In the third quarter of 2026, the Company retired 10,610,070 shares of common stock held in treasury. The excess of the cost of the treasury shares over their par value was charged to additional paid-in capital and the retirement had no effect on total stockholders’ equity or on the number of shares outstanding.
Note 10. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities at September 30, 2026 and December 31, 2025 are summarized as follows:
| September 30, 2026 | December 31, 2025 | ||||||||||
| Accrued professional services and other | $ | $ | |||||||||
| Accrued compensation and related benefits | |||||||||||
| Other accrued liabilities | |||||||||||
| $ | $ | ||||||||||
Note 11. Commitments and Contingencies
Legal Proceedings
On August 28, 2026, two putative securities class action lawsuits captioned John Draftz v. Hyliion Holdings Corp., et al., Case No. 1:26-cv-02369 and Gustavo Olmeta v. Hyliion Holdings Corp., et al., Case No. 1:26-cv-02375, were filed in the United States District Court for the Western District of Texas against the Company, its Chief Executive Officer, and its Chief Financial Officer. The complaints, brought on behalf of a putative class of purchasers of the Company’s securities between May 12, 2026 and June 23, 2026, assert claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, alleging that the defendants made materially false or misleading statements or omissions concerning, among other things, a non-binding letter of intent with VFG Holdings, LLC, a data center counterparty. On September 11, 2026, the plaintiff
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in the Draftz action voluntarily dismissed the lawsuit without prejudice against all defendants. The Olmeta action remains pending and seeks unspecified compensatory damages, interest, and attorneys’ fees and costs. On October 27, 2026, three individuals filed separate motions each asking to be appointed as lead plaintiff and for their respective counsel to be appointed as lead counsel. The court has not yet appointed a lead plaintiff or lead counsel. Pursuant to a stipulation among the parties and court order, the defendants are not required to respond to the complaint until a time to be agreed following the court’s appointment of lead plaintiff and lead counsel. Additional lawsuits asserting similar allegations may be filed. The Company believes the claims are without merit and intends to defend against them vigorously.
On October 7, 2026, a shareholder derivative action captioned Jonathan Clark v. Thomas Healy, et al., Case No. 1:26-cv-02847, was filed in the United States District Court for the Western District of Texas purportedly on behalf of the Company against certain of its directors and officers, naming the Company as a nominal defendant. The complaint alleges, among other things, breaches of fiduciary duty, waste of corporate assets, unjust enrichment, and violations of Section 14(a) of the Securities Exchange Act of 1934. These claims arise principally from the same underlying events described in the securities class actions above, including allegedly misleading statements concerning the Company’s non-binding letter of intent with VFG Holdings, LLC and alleged deficiencies in oversight and internal controls. The complaint also alleges materially misleading statements and omissions in the Company’s 2026 proxy statement concerning risk oversight and internal controls. The plaintiff seeks unspecified damages on behalf of the Company, restitution and disgorgement from the individual defendants, corporate governance reforms and other equitable relief, and attorneys’ and expert fees and expenses. This action is also at an early stage and other lawsuits asserting similar allegations may be filed.
Economic Incentive Agreement
During the quarter ended March 31, 2024, in connection with our operations in Cedar Park, Texas, the Company entered into an agreement with the Cedar Park Economic Development Corporation (“EDC”) that superseded prior agreements, whereby the Company would receive cash grants up to $1.1 million from the EDC at various measurement dates during the term of the agreement contingent upon the Company fulfilling and maintaining certain occupancy, investment, and employment requirements. The requirements must be met on or before specific measurement dates and maintained throughout the term of the agreement, which expires effective December 31, 2029. The Company has received payments to date of $0.4 million which are refundable as applicable performance requirements were not met and are included within accrued expenses and other current liabilities at September 30, 2026. Under the agreement, the EDC has the right to file a security interest to all assets of the Company.
Other Legal Proceedings
In addition to the matters described above, the Company is periodically involved in other legal proceedings, legal actions and claims arising in the normal course of business, including proceedings relating to product liability, intellectual property, safety and health, employment and other matters. Based on currently available information, the Company does not believe that the outcome of such other legal proceedings, legal actions and claims will have a significant adverse effect on the Company’s financial position, results of operations or cash flows.
Note 12. Net Loss Per Share
The computation of basic and diluted net loss per share for the three and nine months ended September 30, 2026 and 2025 is summarized as follows (in thousands, except share and per share data):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net loss attributable to common stockholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average shares outstanding, basic and diluted | |||||||||||||||||||||||
| Net loss per share, basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
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Potential common shares excluded from the computation of diluted net loss per share because including them would have had an anti-dilutive effect for the three and nine months ended September 30, 2026 and 2025 are summarized as follows:
| Three and Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Unexercised stock options | |||||||||||
| Unvested restricted stock units | |||||||||||
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Note 13. Related Party Transactions
In August 2026, the Company entered into a consulting agreement with Gustanski Technical Services LLC, an entity controlled by Mary Gustanski, a member of the Company’s Board of Directors. Under the agreement, the director provides technical and strategic advisory services relating to engineering, product commercialization, and the expansion of the Company’s manufacturing capabilities to support increased production. The agreement provides for fees of $25.0 thousand per month and reimbursement of reasonable expenses, has a twelve-month term, and may be terminated by either party upon thirty days ’ notice. The fees are in addition to the compensation the director receives for service on the Board of Directors. The agreement was reviewed and approved by the Audit Committee in accordance with the Company’s related person transaction policy. The Company recognized an expense of $25.0 thousand under the agreement during the three months ended September 30, 2026, which is included in research and development and selling, general and administrative expenses in the condensed consolidated statements of operations.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References to the “Company,” “Hyliion,” “we,” “our,” or “us” in this report refer to Hyliion Holdings Corp. and its wholly owned subsidiary Hyliion Inc., unless expressly indicated or the context otherwise requires. The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this report and our audited consolidated financial statements and related notes thereto in our 2025 Annual Report.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (“Form 10-Q”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical fact, contained in this Form 10-Q are forward-looking statements, including, but not limited to, statements regarding our strategy, prospects, plans, objectives, future operations, future revenue and earnings, projected margins and expenses, markets for our services, potential acquisitions or strategic alliances, financial position, and liquidity and anticipated cash needs and availability. The words “anticipates,” “believes,” “targets,” “should,” “contemplates,” “estimates,” “expects,” “intends,” “may,” “could,” “plans,” “projects,” “will,” “would,” “potential,” “remains,” “continues,” “likely,” or variations of such words and similar expressions or the negatives thereof are intended to identify forward-looking statements. However, not all forward-looking statements contain these identifying words. These forward-looking statements represent our management’s expectations as of the date of this filing and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. We cannot guarantee the accuracy of the forward-looking statements, and you should be aware that results and events could differ materially and adversely from those contained in the forward-looking statements due to a number of risks and uncertainties including, but not limited to, those described in the section entitled “Risk Factors” included in our 2025 Annual Report on Form 10-K, this Form 10-Q, and in other documents we file from time to time with the U.S. Securities and Exchange Commission (the “Commission” or the “SEC”) that disclose risks and uncertainties that may affect our business. Readers are urged to carefully review and consider the various disclosures made in this Form 10-Q and in other documents we file from time to time with the Commission. Furthermore, such forward-looking statements speak only as of the date of this Form 10-Q. Except as required by law, we do not undertake, and expressly disclaim any duty, to publicly update or revise these statements, whether as a result of new information, new developments, or otherwise and even if experience or future changes make it clear that any projected results expressed in this Form 10-Q or future quarterly reports, press releases or company statements will not be realized. Unless specifically indicated otherwise, the forward-looking statements in this Form 10-Q do not reflect the potential impact of any investments, divestitures, mergers, acquisitions or other business combinations that have not been completed as of the date of this filing. In addition, the inclusion of any statement in this Form 10-Q does not constitute an admission by us that the events or circumstances described in such statement are material. We qualify all of our forward-looking statements by these cautionary statements. In addition, the industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors including those described in the section entitled “Risk Factors” included in our 2025 Annual Report on Form 10-K and in this Form 10-Q. These and other factors could cause our results to differ materially from those expressed in this Form 10-Q.
Overview
Hyliion is committed to creating innovative solutions that enable clean, efficient, and flexible electricity production while contributing positively to the environment in the energy economy. Hyliion’s primary product offering, the KARNO Power Module, is a modular, fully enclosed, fuel-agnostic and fully integrated power generating solution. The KARNO Power Module is powered by the KARNO Core, a heat powered linear generator, to produce electricity with significant improvements in efficiency, emissions and lifecycle cost compared to conventional generation technologies. Hyliion’s KARNO Power Modules enable effective power generation using a wide range of fuel sources, including conventional fuels such as natural gas, propane
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or diesel, waste fuels such as landfill gas, wellhead gas, and zero carbon fuels such as renewable hydrogen and ammonia. Hyliion is initially targeting the data center, defense, commercial, and industrial sectors with a locally-deployable generator designed to meet a wide range of power generation needs. The Company intends to scale up its KARNO Power Module solution to address larger utility-scale power needs and plans to develop future variants for industrial waste heat, nuclear, household use and e-mobility applications such as vehicles and marine vessels. Additionally, the KARNO Power Module technology is well-suited to provide combined heat and power in various stationary applications.
KARNO Power Modules
The KARNO technology emerged out of General Electric’s long-running R&D investments in aerospace and metal additive manufacturing across multiple industries and in areas such as generator thermal and performance design. Originally envisioned as a range-extending power source for our Hypertruck powertrain system, we now intend to commercialize the KARNO Power Module as a standalone product targeting power generation, defense, and e-mobility markets, as well as related R&D services that we have undertaken pursuant to contracts with the United States government. We believe that the unique capabilities of the KARNO Power Module will make it competitive in the market for distributed power systems, competing favorably against conventional generating systems and new alternative power systems such as fuel cells and other linear generators. The KARNO Power Module and KARNO Core technology, including the technology that we acquired from General Electric, and the technology developed by Hyliion subsequent to the acquisition, is protected by numerous patents and trademarks which we believe provide us with extensive and lasting protection for our intellectual property.
The Science of the KARNO Power Module
The KARNO Power Module is distinguished from conventional generating systems that rely on reciprocating internal combustion engines or gas turbines to drive a rotating shaft. Instead, the KARNO Core that powers the KARNO Power Module uses an innovative thermal converter to power a linear electricity generating system. The KARNO Core produces linear motion from temperature differences within the system. Heat is generated through flameless oxidation of fuels, such as natural gas, hydrogen, or propane. The thermal energy heats helium gas enclosed within a sealed cylinder, causing it to expand and drive linear motion in a connected piston-shaft system. The shaft includes a sequence of permanent magnets that pass through electrical coils as the system oscillates, generating electricity. Subsequently, the countermotion generated by a piston at the opposite end of the shaft flows the helium gas to the cold side of a piston in an adjacent shaft, where excess heat is efficiently dissipated. This cyclical process continues, resulting in a continuous source of electrical power as long as heat is supplied to the KARNO Core.
Linear generators present several advantages over conventional generators, including higher thermal efficiency, lower emissions and reduced maintenance, benefits that are partly attributable to the generator’s simplified design with few moving parts. Additionally, they exhibit high power density and higher efficiency by circumventing the mechanical losses linked to rotating components such as bearings and gears while producing less noise and vibration. In the case of the KARNO Core, each shaft relies on a single moving part and utilizes a pressurized helium bearing system in place of oil-based lubricants.
Thermal converters offer the advantages of fuel flexibility and high operating efficiency. The KARNO Core stands out for its ability to maximize heat transfer between components and working fluids. Enabled by advances in additive manufacturing systems, parts are designed with many intricate flow channels for the movement of heat, coolant, helium and exhaust gases such that contact surface areas for heat transfer are maximized. This enables the KARNO Power Module to achieve high levels of efficiency.
The KARNO Power Module is expected to surpass the efficiency of many conventional generating systems when employing various fuel sources and its high efficiency is expected to remain consistent across a broad range of output power levels. In comparison, fuel cells reach peak efficiency at low power levels but experience diminishing efficiency as output increases towards full power. Internal combustion engines typically achieve peak efficiency within a limited operational output range and may suffer increased wear at low power levels. The KARNO Power Module offers a distinct advantage in power adjustment by modulating the rate of heat introduction, enabling seamless power adjustments without compromising efficiency.
We anticipate that the KARNO Power Module will initially achieve an electrical generating efficiency of approximately 45%, calculated by considering the usable power output in relation to the energy from the fuel source. We believe that ongoing engineering improvements are expected to increase the KARNO Power Module’s efficiency to 50% or higher in future design iterations. High efficiency is expected to remain relatively consistent across a wide range of output power levels, spanning from tens of kilowatts to multiple megawatts. In contrast, internal combustion diesel or natural gas generators typically operate within an efficiency range of 25% to 40% over a similar power spectrum, while the U.S. electrical power grid is estimated to operate at an efficiency between 33% and 40%. Notably, best-in-class grid-level combined cycle gas turbine powerplants can
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obtain efficiencies above 50% but often incur transmission and distribution losses between 5% and 10% which the KARNO Power Module is expected to circumvent by being located near the point of power consumption.
Conventional generators emit pollutants because of incomplete combustion of fuel-air mixtures and sub-optimal operating conditions, with the formation of nitrous-oxide (“NOx”) and carbon monoxide (“CO”) compounds being particularly prominent. Unlike conventional generators, the KARNO Power Module is designed for continuous flameless oxidation of the fuel at lower temperatures and extended reaction times. This is achieved partly through the recirculation of exhaust gases, which serves to prolong oxidation, and by pre-heating incoming air. As a result, the KARNO Power Module is anticipated to achieve ultra-low levels of emissions, with NOx and CO emissions expected to be reduced by over 95% compared to best-in-class diesel or natural gas engines and meeting South Coast Air Quality Management District (“SCAQMD”) Rule 1110.3 emission standards without the need for aftertreatment.
One of the notable advantages of the KARNO Power Module in comparison to traditional generating units is the expected reduction in maintenance requirements and cost. Conventional generators typically incur periodic and usage-based maintenance expense that can range between 5% to 20% of their total operating cost throughout their lifespan, influenced by factors such as utilization and operating parameters. The KARNO Power Module’s primary advantage arises from having only a single moving part per shaft (4 shafts per 200 kW KARNO Core), which glides on low friction helium bearings. This innovative design mitigates efficiency losses attributed to friction, enhancing the system’s operational longevity and eliminating the need for oil-based lubricants.
The KARNO Power Module derives advantages from its expected capability to operate across a diverse spectrum of over 20 available fuel sources and fuel blends. These include natural gas, propane, gasoline, jet fuel, and alternative fuels like biodiesel, hydrogen and ammonia. Moreover, the KARNO Power Module can seamlessly transition between these fuels or fuel blends. This versatility enables a single KARNO Power Module to adapt to different use cases. For example, the KARNO Power Module may operate on natural gas for prime power generation when a pipeline connection is available, on waste gas near a landfill or dairy farm, and switch to locally stored diesel fuel for continuous generation if its primary fuel supply is interrupted. Furthermore, we expect that as hydrogen becomes more widely available, the KARNO Power Module will be able to adapt to this cleaner fuel. As the energy landscape evolves, we believe that the KARNO Power Module’s fuel-agnostic nature positions it as a flexible solution to electricity generation needs, enhancing energy security.
Benefits of the KARNO Power Module Versus Conventional Competitors
We believe the versatility and operating characteristics of the KARNO Power Module make it an effective system for a variety of conventional and emerging electricity generating applications. Key attributes of the KARNO Power Module distinguish it from its conventional generator counterparts:
•Efficiency: The anticipated operating efficiency of the KARNO Power Module could result in lower marginal cost of electricity generation versus conventional generating systems and, in some markets, grid power.
•Low Maintenance: With only a single moving part per shaft, the simplicity of the KARNO Power Module is expected to reduce both periodic maintenance expenses and overhaul costs and deliver longer uptime.
•Fuel Agnostic: While many traditional generators operate on a single fuel source or require system modification to achieve fuel flexibility, the KARNO Power Module is designed to be fuel-agnostic and can switch between fuel choices during operation with few or no modifications.
•Low Noise and Vibration: Unlike conventional generators, the KARNO Power Module operates without internal combustion, resulting in a significantly lower noise level under normal operating conditions of approximately 67 decibels at six feet.
•High Power Density: The unique architecture and features of the KARNO Power Module that are enabled by advances in additive manufacturing are expected to enable the KARNO Power Module to achieve a high power density relative to competing power generation technologies.
•Modularity: The DC output of the KARNO Power Module allows multiple KARNO Power Modules to be connected on a single bus to achieve higher power outputs without impacting other performance characteristics.
Market Opportunity
As economies and industries evolve, the demand for electricity is accelerating, driven by the electrification of society, urbanization, increasing industrial output and technological growth. Electricity powers factories, drives the digital revolution, supports healthcare, education, and financial services, and serves as the foundation of economic productivity. Additional drivers include the projected widespread growth of artificial intelligence, automation, expanding data centers and the electrification of
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transportation. However, as global energy demand rises, traditional centralized power generation and distribution models face mounting challenges.
The aging of grid transmission infrastructure is creating new challenges as operators work to balance the availability of affordable, reliable power with maintaining grid stability and integrating new sources of clean power generation. The addition of intermittent renewable power generation further complicates grid management, emphasizing the need for resilient and adaptive electricity systems. Distributed power generation offers a solution by decentralizing electricity production, reducing transmission needs and delivering power closer to points of consumption.
We believe that Hyliion’s KARNO Power Module is an innovative solution in the emerging distributed generation space, offering a reliable power generator that combines high efficiency, fuel flexibility, and low emissions. Designed for both stationary and mobile applications, the KARNO Power Module addresses many of the challenges that have traditionally limited the widespread adoption of onsite power solutions. These include high operating costs, reliability issues, complex maintenance, noise pollution, space constraints, and dependency on limited fuel sources.
Hyliion’s initial KARNO Power Module product is a 200 kW system that is power-dense and easy to deploy. It features a compact, space-efficient rectangular design with a footprint of approximately 25 square feet, housing a single four-shaft linear generating unit and integrated balance-of-plant components. The KARNO Power Module supports fuel switching during operation without power loss, while flexible deployment options allow it to operate in grid-following, grid-forming, or islanded configurations (when paired with an external inverter), making it suitable for a wide range of applications. Additionally, the KARNO Power Module features real-time monitoring of over 1,000 operational parameters through its KARNO Cloud® platform, enabling proactive diagnostics, predictive maintenance, and performance optimization, ensuring maximum uptime. With cloud connectivity, users gain instant access to remote monitoring and control features, providing insights into system performance, fuel efficiency, and system health.
Beyond the 200 kW variant, Hyliion is advancing the development of larger Multi-MW (2 MW+) KARNO systems, which integrate multiple 200 kW KARNO Core units operating in tandem in a compact containerized footprint. The Multi-MW KARNO systems will target key market segments such as data centers and industrial prime power applications. We are also developing a modular 800 kW system consisting of four KARNO Core units that is planned to be delivered to the U.S. Navy in early 2027 as part of our project with ONR. We believe that this modular and scalable approach enables seamless power expansion while maintaining high efficiency and reliability. By utilizing multiple 200 kW generating blocks, the system offers built-in redundancy and the flexibility for customers to customize capacity to match their power needs.
Hyliion also plans to expand the KARNO product line over time with both larger and smaller capacity versions, adjusting power levels by varying the number of generator shafts and component sizes. Initially, the KARNO Power Module will target power applications ranging from 200 kW to the low megawatt range, addressing a broad spectrum of distributed generation needs. With its ability to deliver reliable, fuel-flexible, and highly efficient power, the KARNO Power Module is uniquely positioned to serve a variety of key market segments, including:
•Data Centers: As cloud computing, artificial intelligence, machine learning, and edge computing continue to expand, data centers are projected to consume an increasing share of global energy demand. Onsite power generation is an emerging solution for new data center developments, although conventional generating technologies often face local resistance due to noise or emissions concerns. Hyliion’s Multi-MW KARNO system is being designed to meet the needs of data center developers by providing a scalable, fuel-flexible onsite power solution with significantly reduced levels of noise and emissions than conventional diesel or natural gas generators. Capable of operating on more than 20 different fuels, the KARNO Power Module enables data center developers to minimize onsite generation infrastructure. Its ability to easily transition between pipeline-supplied fuels, such as hydrogen or natural gas, and onsite stored fuels, like methanol or diesel, eliminates the need for separate backup generation systems, reducing capital and operational costs. Additionally, as data center rack power densities rise to support increased AI workloads, Hyliion’s KARNO Power Module’s native 800V DC architecture simplifies power system design and enhances site resiliency.
•Commercial & Industrial: As electricity demand increases and grid infrastructure struggles, microgrids and onsite prime power solutions are becoming essential for industries facing high consumption charges, peak demand pricing, and grid reliability concerns. Businesses, industrial sites, and remote facilities increasingly seek localized power generation to mitigate rising energy costs, monetize assets, and improve operational resilience. With relatively high efficiency, fuel adaptability and low maintenance needs, KARNO Power Modules provide a cost-effective alternative to grid electricity, allowing businesses to optimize energy costs while ensuring uninterrupted operations. Its ability to integrate with energy storage and renewable sources is expected to enable installation of effective hybrid energy
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solutions. Additionally, the KARNO Power Module’s cogeneration capabilities may allow industries to utilize both electricity and thermal energy, improving overall system efficiency and recovering usable waste heat.
•Defense: Defense organizations around the world are pursuing advanced energy solutions to support modern, rapidly evolving, distributed operations across land, sea, air, and autonomous platforms. Hyliion’s fuel-agnostic KARNO platform is engineered to meet these changing mission profiles with a combination of versatility, efficiency, and durability. Designed to operate on over 20 fuels, including JP-8 and its variants, diesel, ammonia, and hydrogen, the KARNO system enhances logistical adaptability across diverse applications. Its low acoustic and thermal signatures support stealth and operational security, while its high fuel efficiency enables longer runtimes and reduced refueling needs. Built with minimal moving parts and robust architecture, the KARNO technology delivers extended maintenance intervals and high system uptime under challenging conditions. Whether deployed in forward operating bases, shipboard power systems, microgrids, or unmanned autonomous platforms, we expect that the scalable KARNO Power Module can deliver reliable, next-generation power for the strategic and tactical demands of global defense operations.
•Vehicle Charging: The adoption of electric vehicles (“EVs”) is placing increasing strain on grid capacity, a challenge expected to grow with the introduction of commercial EVs, including buses, delivery vans, and heavy-duty trucks. These vehicles require substantial power for charging, intensifying grid demands. While Direct Current (“DC”) fast charging technology and infrastructure are evolving to meet this need, many commercial operators cite limited grid capacity and high electricity costs as barriers to scaling their EV fleets. We believe the KARNO Power Module offers an advantaged solution for commercial EV charging. Its native DC output integrates with DC fast charging infrastructure, eliminating power losses associated with conversion. Additionally, the KARNO Power Module’s compact footprint and quiet operation will make it suitable for deployment in space-constrained locations, such as urban charging hubs, fleet depots, and remote charging stations where grid access is limited or expensive. When paired with onsite energy storage systems and renewable energy sources like solar or wind, KARNO Power Modules can enable resilient and sustainable microgrids for EV charging.
•Biogas (Landfill, Wastewater & Digester Gas): Biogas sourced from landfills, wastewater treatment plants, and dairy digesters represents a growing market as industries and municipalities seek to convert methane-rich waste gases into electricity and prevent methane, a potent greenhouse gas, from escaping into the environment or being flared. Current power generation technologies often struggle to process biogas due to contaminants such as hydrogen sulfide and siloxanes, as well as moisture and fluctuating gas compositions, necessitating preconditioning and purification before the fuel can be utilized. We believe the KARNO Power Module’s advanced architecture and corrosion-resistant materials enable it to operate with minimal gas preconditioning, making it a cost-effective, high-performance solution for converting waste gas into reliable power.
•Oil & Gas and Syngas: The oil and gas industry is electrifying due to growing power needs across drilling, production, refining, and transportation operations. However, wellhead and flare gas, byproducts of oil and gas extraction, are often wasted due to insufficient pipeline capacity or poor gas quality, leading to lost energy and increased emissions. The KARNO Power Module enables conversion of waste gas into usable electricity with minimal pre-treatment, enabling onsite power generation and grid integration. We believe the KARNO Power Module’s fuel flexibility, use of corrosion-resistant materials, and ability to handle variable fuel quality make it a suitable technology of choice for oilfield electrification while significantly reducing emissions. Additionally, the KARNO Power Module’s fuel-agnostic capability allows it to generate clean electricity from hydrogen-rich syngas, a valuable byproduct of gasification or industrial processes.
•Mobility: The KARNO Power Module is designed to be particularly suitable for applications that require a source of electric power in mobile applications such as electric vehicles, railroad locomotives, remote power generation and marine vessels. Compared to conventional power sources, the KARNO Power Module is expected to offer higher efficiency, lower emissions, quieter operation, reduced maintenance needs and the flexibility to operate on a wider range of fuel sources. Additionally, the KARNO Power Module’s high power density, modularity and native DC power output offer an added advantage where space constraints and integration are considerations.
•Backup Power: The market for local backup power generators is well established and positioned to grow due to decreasing grid reliability, the increasing share of intermittent renewable energy sources, rising extreme weather events, and the need for uninterrupted power. Also, the grid balancing and servicing market is expanding as utilities and independent power producers seek fast-ramping, distributed generation assets to balance supply and demand fluctuations. Innovative business models such as Resiliency-as-a-Service and Virtual Power Plants have emerged to leverage distributed generation assets for grid resilience. With growing concerns over emissions from internal combustion engine-powered generators in the backup power market, we believe the KARNO Power Module presents
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an opportunity to provide solutions for end users that desire a lower emissions profile and in the event emissions regulations are further tightened.
•Waste Heat: In hard-to-decarbonize industrial sectors such as cement, glass, and primary metals production, vast amounts of high-grade waste heat (1000°C+) are released during manufacturing processes. Traditionally, much of this thermal energy is lost due to limited efficient recovery solutions. Since the KARNO Power Module uses heat as its primary energy source to generate electricity, high-temperature industrial waste heat is expected to be able to be directly utilized to produce clean electricity, enabling industries to recover wasted energy, improve efficiency, and reduce emissions.
KARNO Power Module Development
Research and Development
Most of our current activities are focused on the R&D of our KARNO Power Module, including testing and validation to ensure that our products meet design specifications and customer requirements. These activities primarily take place at our facility in Cincinnati, Ohio and at our headquarters in Cedar Park, Texas. Our R&D is primarily focused on:
•development of the KARNO Core and KARNO Power Module including testing and validation;
•integration of the KARNO Core and KARNO Power Module technology into various applications;
•accelerated lifetime testing to improve reliability, maintainability and system-level robustness;
•development of battery systems that can be used as a starter power source for the KARNO Power Module or as a load buffer solution;
•data analytics; and
•alternative products for existing and in-development components and technology.
Development History and Progress
Since acquiring the KARNO technology from GE in September 2022, Hyliion has made significant investments in R&D to commercialize the 200 kW KARNO Power Module while simultaneously developing an 800 kW system for the U.S. Navy. This 800 kW platform is also intended to serve as the foundational building block for future multi megawatt KARNO systems targeting data centers and other large power applications.
Early development efforts focused on a KARNO Core that was designed for 125kW of power production, which was operated at our Ohio facility and served as a platform for extensive testing and technology advancement. Through this system, we validated the ability of the KARNO Core's fuel oxidation system to successfully operate on gaseous fuel. Testing also demonstrated very low levels of pollutant emissions. The 125 kW system enabled the development and validation of key components incorporated into the higher power 200 kW KARNO Power Module, including improved helium gas bearings for greater durability, a magnetic encoder for precise shaft position detection, optimized printed components to improve power, efficiency and manufacturing speed, and a larger Hyliion designed linear electric motor.
The 200 kW KARNO Power Module rating represents the electrical output delivered by the KARNO Core to the DC bus under standard-day conditions at sea level, consistent with industry practices for rating power generation equipment. This rating excludes power consumed by auxiliary components, such as fans and blowers, and actual net power output will vary based on customer configuration and environmental conditions, including ambient temperature and altitude. The use of standard-day conditions provides a consistent basis for comparing KARNO performance with alternative power generation technologies. Initial customer deployments are expected to operate below the 200 kW rating as we continue to implement component improvements intended to achieve the targeted power output which we expect to demonstrate by the end of 2026.
We have completed the design and sourcing of initial components for the balance of plant systems supporting the 200 kW KARNO Core, including the system enclosure, cooling, pressure control, fuel, battery, electrical, inlet air and exhaust systems. Development activities also include control software, safety systems, the human to machine interface and integration of these components into a complete generating system.
In 2025, key R&D activities included enhancements to the regenerator, a critical printed component that functions as a thermal capacitor by storing heat as helium cycles between hot and cold temperature regions within the system. Early testing identified opportunities to improve the regenerator’s heat storage and transfer capabilities, leading to a redesigned architecture that demonstrated improved performance in subsequent testing. Additional design enhancements improved thermal insulation of
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other system components to reduce heat losses. Further optimization of the regenerator and thermal insulation remains an important development objective as we work to increase power output and overall system efficiency.
Early Customer Deployments
In 2025, we delivered two early adopter KARNO Power Modules to the U.S. Navy, along with two additional units for internal testing and Underwriters Laboratories (“UL”) certification. The Navy units previously underwent testing at our Ohio facility under our R&D contract with the Office of Naval Research (“ONR”) and performed in line with expectations. We also completed development work enabling these Power Modules to operate on liquid diesel fuel, a key requirement for shipboard applications, and to seamlessly switch between liquid and gaseous fuels during operation.
In 2026, our development activities focused on testing and validating KARNO Power Module operation and software controls while producing additional units for early adopter customers. Testing of engineering development and customer units has been conducted at our Ohio facility, allowing engineers to closely monitor system performance and rapidly incorporate design enhancements intended to improve reliability.
During the second half of 2026, we discovered that a feature in a key printed component, known as the reactor, was susceptible to fatiguing due to thermal stresses experienced after extended run time at high power levels, resulting in a unit malfunction. This issue affects a more recent version of the reactor but has not been observed in earlier designs. We have since redesigned the reactor to address the issue and are printing updated parts that we believe will eliminate the issue. In the interim, we are continuing production of KARNO Cores for initial customer deployments using earlier reactor designs that have not exhibited this issue.
The need to retrofit affected units will delay completion of our early adopter customer deliveries beyond our previous 2026 target. We now expect to complete and deliver the approximately 10 early adopter units between late 2026 and early 2027. We continue to expect the first customer deployment unit to be moved to the customer’s site before the end of 2026. This unit and other early adopter units deployed in 2027 will then undergo further testing and validation while operating in their intended commercial environments. These deployments, together with our ongoing development efforts, are expected to validate critical design specifications, including projected operating life, maintenance requirements and durability.
Earlier in 2026, we successfully completed the nonrecurring portion of UL certification testing for the KARNO Power Module, a key milestone required before delivering units to customer sites. Testing included the linear electric motor, battery system and complete Power Module. Individual production units will continue to undergo final operational testing before receiving final UL certification until completion of facility level certification, which is expected in 2027.
Certain stated performance capabilities and product features may not be available at initial commercialization of the KARNO Power Module. Initial customer deployments will be configured to operate on a single fuel source, with future product iterations expected to support a broader range of gaseous fuels and ultimately more than 20 identified fuel types, including both gaseous and liquid fuels. We expect customers to specify their primary fuel requirements, with the option to configure future KARNO Power Modules to operate on additional fuels.
Recent Testing and Engineering Activities
Recent development accomplishments include the successful demonstration of uninterrupted operation of the reactor while switching among hydrogen, natural gas and diesel fuels. This validates the system's fuel agnostic architecture, which supports both gaseous and liquid fuels within a single integrated system rather than through separate hardware configurations. This reactor design will go through validation and then be integrated into the KARNO Core.
We also successfully demonstrated the coordinated operation of multiple Power Modules as a single generating system. During testing, two 200 kW units automatically shared changing electrical loads while maintaining stable power delivery. This capability is important for applications with variable electrical demand and supports development of a standardized 800 kW building block for future multi megawatt power plant configurations.
Development efforts also continue to focus on increasing generator power output and efficiency toward design specifications. These activities include further optimization of the regenerator to increase thermal storage capacity during operating cycles and improvements to thermal insulation to reduce heat losses. Finally, during the fourth quarter of 2026, we expect to begin extended durability testing of the complete KARNO Power Module using diesel as the primary fuel source.
Additive Manufacturing Improvements
Another major R&D objective in 2026 has been improving the throughput of our additive manufacturing fleet. Following the acquisition of approximately two dozen additive printers over the past two years, we have focused on increasing printer speed and throughput while optimizing the design of printed Power Module components for manufacturability and performance.
We have identified machine enhancements that we believe can increase print speeds by a factor of two to three, depending on the specific part and printer model. Based on these expected improvements, together with anticipated advances in next
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generation additive manufacturing systems expected to become available in the coming quarters, we currently expect to accelerate planned purchases of additional printers from 2028 into 2027. Additional testing and validation remain necessary before these improvements can be confirmed, but initial results have been encouraging.
Research and Development Services
We provide R&D services to third parties, including the ONR. In September 2024, Hyliion was awarded a cost-plus-fixed-fee contract of up to $16.0 million by the ONR to assess the suitability of the KARNO Power Module for Navy vessels and stationary power applications. In September 2026, the contract was modified to increase its value to $21.6 million to fund completion of the remaining deliverables, including an option of up to $2.5 million that the ONR may exercise in the future. The contract supports ONR’s objective of leveraging advanced technology to reduce its carbon footprint while enhancing operating capabilities.
In 2025, we delivered two KARNO Cores under this contract and an additional core in 2026, all of which we have been testing at our R&D facility in Cincinnati. In early 2027, we expect to deliver a four-core 800 kW KARNO Power Module system, which aligns with the Navy's schedule. The U.S. Navy has identified its USX-1 Defiant vessel as the platform for KARNO Core sea trials, supporting both ship propulsion and auxiliary power. We also plan to expand testing to include long duration operation, diesel fuel integration, simulation of ship motion and the ability of the system to operate in extreme temperature environments. Upon successful validation and demonstration, the KARNO Power Module could be used in future Navy platforms and for stationary power applications.
In July 2026, the Company was awarded a cost-plus-fixed-fee contract of up to $41.7 million by the ONR in support of the High Efficiency/Low Maintenance Ultra Reliable (“HELMUR”) Megawatt Scale Power Generation Units program. Under the 36-month contract, the Company will design, develop, construct, test and deliver 2-megawatt and 3-megawatt KARNO power generation systems to locations identified by ONR. The contract also includes work to advance the Company’s core technology, develop alternative core components to enhance system capabilities and reduce supply-chain risk associated with magnet availability, and further develop additive manufacturing processes. Work under the contract will be performed primarily in Cedar Park, Texas and is expected to be completed by July 2029. Funding for the contract was obligated at the time of award using fiscal year 2025 and 2026 Navy research, development, test and evaluation appropriations.
We expect to continue to provide R&D services under existing contracts and anticipate entering into additional R&D agreements in 2026 and 2027 with ONR and other government customers. These customers engage Hyliion to explore and validate KARNO technology for their specific applications and operating requirements. Areas of interest include the system’s low-emissions flameless oxidation system, high power output, compact configuration and ability to operate on multiple fuels. R&D services may also include testing under harsh environmental conditions, evaluating mobile applications and validating different power configurations to determine their suitability for customer requirements.
Key Factors Affecting Operating Results
We believe that our performance and future success depend on several factors that present significant opportunities for us but also pose risks and challenges, including but not limited to economic uncertainties, supply chain disruptions, inflation, high interest rates, and other risks discussed below and referenced in Part II, Item 1A “Risk Factors.”
Commercialization of KARNO Power Module
Our focus remains on the continued development and testing of our fuel-agnostic KARNO Power Module, together with the deployment of initial units with early adopter customers. We are targeting commercialization of the 200 kW KARNO Power Module following completion of these initial deployments and once sufficient testing and operating experience has been obtained to validate reliable operation and achievement of our design criteria. We anticipate that a substantial portion of our capital resources and efforts in the near future will be focused on these activities. The amount and timing of our future funding requirements will depend on many factors, including but not limited to the pace of completing initial KARNO Power Module testing and validation, the timing of KARNO Power Module commercialization, the pace at which we invest in KARNO Core additive printing capacity, our plans for manufacturing KARNO Power Module components (whether in-house or through outsourcing to third parties), the range of product offerings we plan to bring to market and external market factors beyond our control.
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Key Components of Statements of Operations
Revenue
We generate revenue by providing R&D services under contracts with third parties, including the U.S. government. Additionally, we expect to begin generating product revenue following the commercialization of our KARNO Power Module.
Cost of Revenue
Cost of revenue includes costs associated with R&D services revenue, such as direct costs, including labor, materials and equipment, and applicable overhead costs.
Research and Development Expense
R&D expenses consist primarily of costs incurred for the discovery and development of our KARNO Power Module, which include:
•personnel-related expenses including salaries, benefits, travel and share-based compensation, for personnel performing R&D activities;
•fees paid to third parties such as contractors for outsourced engineering services and to consultants;
•expenses related to components for development and testing, materials, supplies and other third-party services;
•depreciation for equipment used in R&D activities; and
•allocation of general overhead costs.
We expect to continue to invest in R&D activities to achieve operational and commercial goals.
Selling, General and Administrative Expense
Selling, general and administrative expenses consist of personnel-related expenses for our corporate, executive, finance, information technology, sales, marketing and other administrative functions, expenses for outside professional services, including legal, audit and accounting services, as well as expenses for facilities, software licenses, depreciation, amortization, travel, sales and marketing costs. Personnel-related expenses consist of salaries, benefits and share-based compensation. Factors that also affect selling, general and administrative expense include the total number of employees, costs incurred as a result of operating as a public company, including compliance with the rules and regulations of the U.S. Securities and Exchange Commission, legal, audit, insurance, investor relations activities and other administrative and professional services.
Exit and Termination Costs
Exit and termination costs consist primarily of recoveries from resale of assets.
Other Income
Other income currently consists primarily of interest income earned on our investments.
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Results of Operations
Comparison of Three Months Ended September 30, 2026 to Three Months Ended September 30, 2025
Our results of operations for the three months ended September 30, 2026 (the “current quarter”) and 2025 on a consolidated basis are summarized as follows (in thousands, except share and per share data):
| Three Months Ended September 30, | |||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Research and development services | $ | 7,452 | $ | 759 | $ | 6,693 | 881.8 | % | |||||||||||||||
| Total revenues | 7,452 | 759 | 6,693 | 881.8 | % | ||||||||||||||||||
| Cost of revenues | |||||||||||||||||||||||
| Research and development services | 6,900 | 806 | 6,094 | 756.1 | % | ||||||||||||||||||
| Total cost of revenues | 6,900 | 806 | 6,094 | 756.1 | % | ||||||||||||||||||
| Gross profit (loss) | 552 | (47) | 599 | N/A | |||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Research and development | 8,699 | 10,136 | (1,437) | (14.2) | % | ||||||||||||||||||
| Selling, general and administrative expenses | 4,291 | 5,184 | (893) | (17.2) | % | ||||||||||||||||||
| Exit and termination (benefits) costs | — | (70) | 70 | (100.0) | % | ||||||||||||||||||
| Total operating expenses | 12,990 | 15,250 | (2,260) | (14.8) | % | ||||||||||||||||||
| Loss from operations | (12,438) | (15,297) | 2,859 | (18.7) | % | ||||||||||||||||||
| Interest income | 1,374 | 1,960 | (586) | (29.9) | % | ||||||||||||||||||
| Net loss | $ | (11,064) | $ | (13,337) | $ | 2,273 | (17.0) | % | |||||||||||||||
| Net loss per share, basic and diluted | $ | (0.06) | $ | (0.08) | $ | 0.02 | (25.0) | % | |||||||||||||||
| Weighted-average shares outstanding, basic and diluted | 178,719,035 | 175,652,193 | 3,066,842 | 1.7 | % | ||||||||||||||||||
Revenue and Cost of Revenues
Revenue for R&D services increased $6.7 million and associated cost of revenues increased $6.1 million due to the timing of performance of the R&D services. The remaining amount of revenue that we may recognize under these contracts was up to $45.5 million as of September 30, 2026. We may incur losses in the performance of these contracts.
In July 2026, we were awarded an additional contract of up to $41.7 million by the ONR on a best effort basis. We began performance on this contract in the third quarter of 2026, and expect to increase performance in the second and third quarters of 2027, and continuing through mid-2029. These contracts can be cancelled by the United States government at any time for, among other reasons, convenience.
Research and Development
R&D expenses decreased $1.4 million due to significant efforts toward performance of our contracts with the ONR.
Selling, General and Administrative Expenses
Selling, general, and administrative expenses decreased $0.9 million due to significant efforts toward performance of our contracts with the ONR as more general and administrative expenses were charged to cost of revenues.
Exit and Termination (Benefits) Costs
Exit and termination benefits decreased by $0.1 million as a result of the adoption of the Plan and items discussed in Note 2, “Disposals” of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q, including recoveries from assets sold.
Interest Income
Interest income decreased $0.6 million primarily due to the decline in our investment balance.
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Comparison of Nine Months Ended September 30, 2026 to Nine Months Ended September 30, 2025
The following table summarizes our results of operations on a consolidated basis for the nine months ended September 30, 2026 (the “current nine months”) and 2025 (in thousands, except share and per share data):
| Nine Months Ended September 30, | |||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||
| Revenues | |||||||||||||||||||||||
| Research and development services | $ | 15,228 | $ | 2,763 | $ | 12,465 | 451.1 | % | |||||||||||||||
| Total revenues | 15,228 | 2,763 | 12,465 | 451.1 | % | ||||||||||||||||||
| Cost of revenues | |||||||||||||||||||||||
| Research and development services | 14,100 | 2,667 | 11,433 | 428.7 | % | ||||||||||||||||||
| Total cost of revenues | 14,100 | 2,667 | 11,433 | 428.7 | % | ||||||||||||||||||
| Gross profit | 1,128 | 96 | 1,032 | 1,075.0 | % | ||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Research and development | 25,864 | 32,503 | (6,639) | (20.4) | % | ||||||||||||||||||
| Selling, general and administrative expenses | 16,899 | 17,228 | (329) | (1.9) | % | ||||||||||||||||||
| Exit and termination (benefits) costs | (672) | 1,007 | (1,679) | N/A | |||||||||||||||||||
| Total operating expenses | 42,091 | 50,738 | (8,647) | (17.0) | % | ||||||||||||||||||
| Loss from operations | (40,963) | (50,642) | 9,679 | (19.1) | % | ||||||||||||||||||
| Interest income | 4,234 | 6,637 | (2,403) | (36.2) | % | ||||||||||||||||||
| Net loss | $ | (36,729) | $ | (44,005) | $ | 7,276 | (16.5) | % | |||||||||||||||
| Net loss per share, basic and diluted | $ | (0.21) | $ | (0.25) | $ | 0.04 | (16.0) | % | |||||||||||||||
| Weighted-average shares outstanding, basic and diluted | 178,280,291 | 175,106,583 | 3,173,708 | 1.8 | % | ||||||||||||||||||
Revenue and Cost of Revenues
Revenue for R&D services increased $12.5 million and associated cost of revenues increased $11.4 million due to the timing of performance of the R&D services. The remaining amount of revenue that we may recognize under these contracts was up to $45.5 million as of September 30, 2026. We may incur losses in the performance of these contracts.
In July 2026, we were awarded an additional contract of up to $41.7 million by the ONR on a best effort basis. We began performance on this contract in the third quarter of 2026, and expect to increase performance in the second and third quarters of 2027, and continuing through mid-2029. These contracts can be cancelled by the United States government at any time for, among other reasons, convenience.
Research and Development
R&D expenses decreased $6.6 million due to significant efforts toward performance of our contracts with the ONR, including the production of capitalized inventory that may either be utilized for future revenue generation under these contracts or for R&D activities.
Selling, General and Administrative Expenses
Selling, general, and administrative expenses decreased $0.3 million due to significant efforts toward performance of our contracts with the ONR as more general and administrative expenses were charged to cost of revenues.
Exit and Termination (Benefits) Costs
Exit and termination costs decreased by $1.7 million as a result of the adoption of the Plan and items discussed in Note 2, “Disposals” of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q, including recoveries from assets sold.
Interest Income
Interest income decreased $2.4 million primarily due to the decline in our investment balance.
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Liquidity and Capital Resources
At September 30, 2026, our total current assets were $67.3 million, consisting primarily of cash and cash equivalents of $16.7 million, short-term investments of $37.9 million, accounts receivable of $6.6 million and prepaid expenses of $5.3 million. Our total current liabilities were $8.6 million and were primarily comprised of accounts payable, accrued expenses and operating lease liabilities. We also had $66.7 million of investments in longer-term liquid securities which we maintain to generate higher income on capital that we do not expect to spend in the next 12 months.
We believe the credit quality and liquidity of our investment portfolio at September 30, 2026 is strong and will provide sufficient liquidity to satisfy operating requirements, working capital purposes and strategic initiatives. The unrealized gains and losses of the portfolio may remain volatile as changes in the general interest rate environment and supply and demand fluctuations of the securities within our portfolio impact daily market valuations. To mitigate the risk associated with this market volatility, we deploy a relatively conservative investment strategy focused on capital preservation and liquidity whereby no investment security may have a final maturity of more than 36 months from the date of acquisition or a weighted average maturity exceeding 18 months. Eligible investments under the Company’s investment policy bearing a minimum credit rating of A1, A-1, F1 or higher for short-term investments and A2, A, or higher for longer-term investments include money market funds, commercial paper, certificates of deposit and municipal securities. Additionally, all of our debt securities are classified as held-to-maturity as we have the intent and ability to hold these investment securities to maturity, which minimizes any realized losses that we would recognize prior to maturity. However, even with this approach we may incur investment losses as a result of unusual or unpredictable market developments, and we may experience reduced investment earnings if the yields on investments deemed to be low risk remain low or decline further due to unpredictable market developments. In addition, these unusual and unpredictable market developments may also create liquidity challenges for certain of the assets in our investment portfolio.
Based on our past performance, we believe our current and long-term assets will be sufficient to continue to execute on our business strategy and meet our capital requirements for the next twelve months. Our primary short-term cash needs are costs associated with KARNO Power Module development, building our initial deployment units and capital investments for additive printer acquisitions and other assets. Longer term, our capital needs will be determined by our go-to-market strategy as well as governmental R&D, which may include development of our own KARNO Power Module manufacturing capacity or outsourcing this work to third parties or business partners. We have up to $6.1 million remaining authorized for repurchases under our $20 million share repurchase program but have currently paused any additional repurchases.
Our existing R&D contracts with the ONR are expected to provide a significant source of revenue and cash inflows to support our ongoing development activities. To date, we have been awarded ONR cost-plus-fixed-fee contracts totaling $67.1 million, of which approximately $45.5 million remained available as of September 30, 2026. We also anticipate receiving additional R&D contract awards totaling approximately $8 million before the end of 2026.
In August 2026, we entered into an at-the-market sales agreement with Needham & Company, LLC and Northland Securities, Inc., under which we may sell, from time to time at our discretion, shares of our common stock having an aggregate offering price of up to $100 million. We are not obligated to sell any shares under the program, and any sales will depend on market conditions, our capital needs and other factors. Sales under the program, if any, would provide an additional source of liquidity to accelerate investments in assets needed for growth following commercialization, primarily additive printing machines and related assets. Sales of shares under the program, if any, may cause dilution to stockholders. For additional information, see “At-the-Market Offering Program” in Note 9 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q.
Based on current projections of operating expenses, capital spending, working capital growth and historical share repurchases, we expect to have approximately $115 million to $120 million in cash, short-term and long-term investments remaining on our balance sheet at the end of 2026. This projection does not assume any sales of common stock under our at-the-market offering program, and we do not plan to proceed with the equipment financing arrangement described in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026. We may evaluate equipment financing or other debt arrangements in the future.
We expect to continue to incur net losses in the short term as we execute on our strategic initiatives by completing the development and commercialization of the KARNO Power Module with customer deployments anticipated to continue throughout 2026. However, actual results could vary materially and adversely as a result of a number of factors including, but not limited to, those discussed in Part II, Item 1A. “Risk Factors.”
The amount and timing of our future funding requirements will depend on many factors, including the scope and results of our R&D efforts, the breadth of product offerings we plan to commercialize, the growth of sales, working capital needs, and our long-term manufacturing plan for the KARNO Power Module, including the pace of investments in additive manufacturing assets and the methods of financing those investments, as well as factors that are outside of our control. We regularly evaluate our funding needs and sources of capital and may seek external funding in the appropriate circumstances. While we believe that we have sufficient capital to support the anticipated commercialization of the KARNO Power Module, we expect to seek
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additional capital in the future to accelerate investments in production capacity. Potential sources include sales under our at-the-market program, other financing arrangements, and direct investments by customers in production assets dedicated to producing KARNO Power Modules for their purchase. Any such financing may include equity or debt securities and may not be available on acceptable terms, or at all. With our current cash and investments, we believe we are well positioned to be deliberate and opportunistic in determining the timing and structure of any additional capital raise.
During the periods presented, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities, which were established for the purpose of facilitating off-balance sheet arrangements.
Cash Flows
Net cash, cash equivalents and restricted cash provided by or used in operating activities, investing activities and financing activities for the nine months ended September 30, 2026 and 2025 is summarized as follows (in thousands):
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash from operating activities | $ | (30,278) | $ | (34,691) | |||||||
| Cash from investing activities | 24,401 | 43,930 | |||||||||
| Cash from financing activities | (355) | (588) | |||||||||
| $ | (6,232) | $ | 8,651 | ||||||||
Cash from Operating Activities
For the nine months ended September 30, 2026, cash flows used in operating activities were $30.3 million. Cash used primarily related to a net loss of $36.7 million, adjusted for a $6.0 million change in working capital accounts and $12.4 million in non-cash expenses (including $4.8 million related to share-based compensation, $6.0 million related to depreciation and amortization, $1.2 million related to property and equipment deposits applied to cost of revenues, $1.0 million related to prepaid expenses and other current assets, and $1.8 million related to accounts payable, accrued expenses and other current liabilities, partially offset by $6.1 million related to accounts receivable and $0.7 million related to inventory).
For the nine months ended September 30, 2025, cash flows used in operating activities were $34.7 million. Cash used primarily related to a net loss of $44.0 million, adjusted for a $0.1 million change in working capital accounts and $9.2 million in non-cash expenses (including $4.1 million related to share-based compensation, $4.1 million related to depreciation and amortization, $2.5 million related to prepaid expenses and other current assets, and $1.6 million in assets held for sale carrying value adjustments, partially offset by $1.8 million related to accounts payable, accrued expenses and other liabilities and $0.7 million related to gain on asset sales).
Cash from Investing Activities
For the nine months ended September 30, 2026, cash flows provided by investing activities were $24.4 million. Cash provided related to the sale or maturity of investments of $74.5 million and the proceeds from sale of assets of $1.9 million, offset by the purchase of investments of $49.6 million and acquired property and equipment of $2.4 million. We further recorded a $1.2 million reduction of property and equipment as a result of non-cash vendor tariff credits received for use against future purchases.
For the nine months ended September 30, 2025, cash flows provided by investing activities were $43.9 million. Cash provided related to the sale or maturity of investments of $101.0 million and the proceeds from sale of assets of $1.2 million, offset by the purchase of investments of $36.3 million and acquired property and equipment of $22.0 million.
Cash from Financing Activities
For the nine months ended September 30, 2026, cash flows used in financing activities were $0.4 million primarily due to payments of deferred equity offering costs.
For the nine months ended September 30, 2025, cash flows used in financing activities were $0.6 million, primarily due to taxes paid related to the net share settlement of equity awards.
Critical Accounting Policies and Estimates
In preparing our condensed consolidated financial statements, we applied the same critical accounting policies as described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, supplemented by those described below, that affect judgments and estimates of amounts recorded for certain assets, liabilities, revenues and expenses.
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Inventory
As of September 30, 2026, we have not yet commercialized the KARNO Power Module. Unless such components are capitalizable, costs incurred for components acquired prior to our determination of reaching a commercial stage are expensed as R&D costs, resulting in zero cost basis for those components. As a result, certain components on hand have a zero cost basis, and inventory capitalized in future periods that incorporates these components will reflect carrying amounts, and related cost of revenue upon sale, that are lower than would result had those components been initially capitalized.
When inventory may be utilized in performance of our contracts with the ONR, we capitalize that inventory including certain allocations of overhead, labor, and other direct costs and classify it as work-in-process inventory. When this inventory is designated to and utilized in an activity, we record either an R&D or a cost of sale charge in the period in which the utilization occurs.
All inventory at September 30, 2026 is classified as work-in-process. Inventory is valued using the specific identification cost method and is stated at the lower of cost or net realizable value. We review our inventory to determine whether its carrying value exceeds the net amount we expect to realize upon the ultimate sale of the inventory.
Share-Based Compensation
We account for share-based payments that involve the issuance of shares of our common stock to employees and non-employees and meet the criteria for share-based awards as share-based compensation expense based on the grant-date fair value of the award. The Company has elected to recognize the adjustment to share-based compensation expense in the period in which forfeitures occur. We recognize compensation expense for awards with only service conditions on a straight-line basis over the requisite service period for the entire award.
If we were to utilize different assumptions, including the estimate of underlying share volatility of our market-conditioned awards, share-based compensation cost could be under or overstated. If there are any modifications or cancellations of the underlying unvested securities, we may be required to accelerate any remaining unearned share-based compensation cost or incur incremental cost. Share-based compensation cost affects our research and development and selling, general and administrative expenses.
The Company granted 2.3 million restricted stock units in the nine months ended September 30, 2026 that are subject to vest between February 11, 2026 and December 31, 2028 contingent upon achieving underlying closing stock price thresholds. Through September 30, 2026, there was achievement of underlying closing stock price thresholds on 25% of these awards which will vest December 31, 2028. These awards were valued at $1.57 per unit using a Monte Carlo simulation including a blend of historical and implied share volatility of 105% and a risk-free rate of 3.48%.
Through September 30, 2026, there was achievement of underlying closing stock price thresholds on 20% of restricted stock units granted in 2025 which will vest between September 2027 and December 2027.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined in Rule 12b-2 under the Exchange Act. As a result, pursuant to Item 305(e) of Regulation S-K, we are not required to provide the information required by this Item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Based on our management’s evaluation (with the participation of our Principal Executive Officer and Principal Financial Officer) of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, our Principal Executive Officer and Principal Financial Officer have concluded that, at September 30, 2026, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and to provide reasonable assurance that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The information set forth under “Legal Proceedings” in Note 11 of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q is incorporated herein by reference. From time to time, we may be involved in other legal proceedings arising in the ordinary course of business; based on currently available information, we do not believe any such other proceedings, individually or in the aggregate, will have a significant adverse effect on the Company’s financial position, results of operations or cash flows.
ITEM 1A. RISK FACTORS
A description of the risk factors associated with our business is contained in the “Risk Factors” section of our 2025 Annual Report. Except as set forth below, there have been no material changes to our Risk Factors as therein previously reported.
We are, and may in the future become, subject to legal proceedings, government investigations and other claims, and unfavorable outcomes could adversely affect our business, results of operations, financial condition and stock price.
From time to time, we are subject to claims, lawsuits, demands, and other legal proceedings, and additional matters may arise in the future. For example, as described in Note 11, “Commitments and Contingencies,” of the Notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q, a putative securities class action lawsuit is pending against us and certain of our officers, a shareholder derivative action has been filed purportedly on our behalf against certain of our directors and officers, and we have received a shareholder demand to inspect certain of our books and records. These matters are at an early stage, and additional lawsuits or demands asserting similar allegations may be filed or made.
We may also become subject to other claims, including, without limitation, claims relating to intellectual property, product liability, commercial disputes and our contracts with the U.S. government. Regardless of any legal proceedings’ merit, defending against litigation or taking other actions in response can be expensive, time-consuming and disruptive to our operations, and can divert the attention of our management. The outcome of these matters is inherently uncertain, and settlements may not be available on acceptable terms. An adverse outcome could require us to change our business practices, and harm our reputation and our relationships with customers, including the U.S. government, and other business partners. Pending or future litigation, and any related publicity, may also adversely affect the market price of our common stock and our ability to raise additional capital on acceptable terms.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES
Issuer Purchases of Equity Securities
The following table provides information regarding repurchases of our Common Stock during the quarter ended September 30, 2026:
| Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(1) | Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(2) | ||||||||||||||||||||
| July 1 - 31, 2026 | — | $ | — | — | $ | 6,144,349 | |||||||||||||||||
| August 1 - 31, 2026 | — | $ | — | — | $ | 6,144,349 | |||||||||||||||||
| September 1 - 30, 2026 | — | $ | — | — | $ | 6,144,349 | |||||||||||||||||
| Total | — | — | |||||||||||||||||||||
(1) Share repurchases are conducted under our share repurchase program announced in December 2023, which has no expiration date, authorizing the repurchase of up to $20 million in shares. A total of 10,610,070 shares were purchased and retired under this program, which has been paused.
(2) This column includes the total value of shares available for repurchase under the Company’s share repurchase program. Shares under our share repurchase program may be repurchased in open market transactions, including pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, or through privately negotiated transactions. The timing, manner, price and amount of repurchases will be determined at our discretion and the share repurchase program may be suspended, terminated or modified at any time for any reason.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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ITEM 5. OTHER INFORMATION
Rule 10b5-1 and Non-Rule 10b5-1 Trading Arrangements
During the three months ended September 30, 2026, none of our officers or directors (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted terminated
ITEM 6. EXHIBITS
| Exhibit Number | Description | |||||||
| 1.1 | ||||||||
| 3.1 | ||||||||
| 3.2 | ||||||||
| 10.1 | ||||||||
10.2*† | ||||||||
10.3† | ||||||||
| 31.1* | ||||||||
| 31.2* | ||||||||
| 32.1** | ||||||||
| 32.2** | ||||||||
| 101.INS* | XBRL Instance Document | |||||||
| 101.SCH* | XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB* | XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibits 101) | |||||||
* Filed herewith.
** Furnished herewith.
† Indicates a management contract or compensatory plan or arrangement.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: November 10, 2026 | HYLIION HOLDINGS CORP. | |||||||
| /s/ Thomas Healy | ||||||||
| Name: | Thomas Healy | |||||||
| Title: | Chief Executive Officer (Principal Executive Officer) | |||||||
| /s/ Jon Panzer | ||||||||
| Name: | Jon Panzer | |||||||
| Title: | Chief Financial Officer (Principal Financial Officer) | |||||||
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CONSULTING AGREEMENT
This Consulting Agreement (this “Agreement”) is entered into effective as of August 30, 2026 (the “Effective Date”), by and between Hyliion Inc., a Delaware company, located at 1202 BMC Drive, Cedar Park, TX 78613 (the “Company”), and Gustanski Technical Services LLC, a Michigan limited liability company, located at [***] (the “Contractor”). Mary E. Gustanski (the “Contractor Representative”) is executing this Agreement solely for purposes of agreeing to the provisions expressly applicable to Contractor Representative.
WHEREAS, the Company desires to retain Contractor to provide, through Contractor Representative, technical and strategic advisory services relating to engineering, product commercialization and related matters; and
WHEREAS, Contractor Representative currently serves as a member of the Board of Directors (the “Parent Board”) of Hyliion Holdings Corp., the Company’s parent (“Parent”), and the Parties desire to distinguish between the Consulting Services under this Agreement and Contractor Representative’s duties and responsibilities as a director;
NOW, THEREFORE, in consideration of the mutual promises, covenants and undertakings set forth herein, the Parties agree as follows:
1.Consulting Services. During the Consulting Period, defined below, Contractor shall cause Contractor Representative to personally perform consulting and advisory services for the Company and its affiliates (“Consulting Services”) as described in Exhibit A. Contractor Representative shall personally perform the Consulting Services, and Contractor may not substitute any other individual to perform the Consulting Services without the Company’s prior written consent.
2.Authority and Responsibilities; Reporting.
a.In performing the Consulting Services pursuant to this Agreement, Contractor acts solely as an independent contractor and Contractor Representative acts solely on behalf of Contractor in her capacity as Contractor Representative. Neither Contractor nor Contractor Representative will have any right, power or authority to assume or create any obligation or liability, express or implied, in the name of or on behalf of the Company or subject the Company to any obligation or liability, unless expressly authorized by the Company in writing and only to the extent of such authorization. For the avoidance of doubt, Contractor Representative shall have no authority in her consulting capacity to direct any officer or employee of the Company or its affiliates or to make operating decisions on behalf of the Company unless expressly authorized in writing by the Company.
b.Contractor Representative will determine the manner and means of performing the Consulting Services, subject to the agreed scope, applicable Company security, safety, confidentiality and compliance requirements, and reasonable coordination with the Company’s designated management contact. The Company may provide Contractor and Contractor Representative access to Company facilities, systems, equipment and information as reasonably necessary to perform the Consulting Services.
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***Certain information has been excluded because it is both not material and is the type the registrant treats as private or confidential.
c.Nothing in this Agreement expands, restricts or otherwise modifies Contractor Representative’s authority, rights, duties or fiduciary obligations in her capacity as a director of Parent. When acting as a director of Parent, Contractor
Representative shall act solely in that capacity and not pursuant to this Agreement.
3.Consulting Fee. The Company will pay Contractor a consulting fee of $25,000 per month (“Consulting Fee”) for the Consulting Services. Contractor shall submit a monthly invoice describing the Consulting Services performed during the applicable month, and the Company shall pay all undisputed amounts within thirty (30) days after receipt of the invoice. If this Agreement begins or terminates during a calendar month, the Consulting Fee shall be prorated based on the number of days during which Consulting Services were performed. The Company shall reimburse Contractor for all reasonable and necessary out-of-pocket business expenses incurred by Contractor or Contractor Representative in performing the Consulting Services, provided such expenses are supported by appropriate documentation in accordance with the Company’s expense reimbursement policies. For the avoidance of doubt, the Consulting Fee is solely for the Consulting Services described in this Agreement and is separate from, and in addition to, any compensation payable to Contractor Representative in her capacity as a member of the Parent Board. Nothing in this Agreement guarantees Contractor Representative’s continued service on the Parent Board or committee membership.
4.Consulting Period. The “Consulting Period” shall commence on the Effective Date and shall continue for a period of twelve (12) months, unless earlier terminated in accordance with Section 5 below. The Parties may renew or extend the term of this Agreement by mutual written agreement.
5.Termination. Either Party may terminate this Agreement at any time, for any reason or no reason, upon thirty (30) days’ written notice to the other Party. The Company may waive all or any portion of the notice period and pay any Consulting Fee that otherwise would have accrued during the waived notice period. Either Party may terminate immediately for a material, non-curable breach; for a curable material breach, the non-breaching Party shall provide written notice and a thirty (30) day opportunity to cure. Termination of this Agreement shall not, by itself, affect Contractor Representative’s service as a director of Parent, and cessation of Contractor Representative’s service on the Parent Board shall not, by itself, terminate this Agreement unless separately determined by the Parent Board or otherwise provided herein.
6.Non-Solicitation and Non-Interference. During the Consulting Period and for three (3) months thereafter, Contractor and Contractor Representative shall not, in connection with or arising from the Consulting Services, knowingly solicit for employment or engagement any Company employee with whom Contractor Representative worked materially in performing the Consulting Services; provided that general solicitations not targeted at Company personnel shall not violate this Section. Nothing in this Section shall restrict Contractor Representative from taking any action that she reasonably determines is required to discharge her fiduciary duties as a director of Parent.
7.Contractor Warranties. In connection with the Consulting Services provided hereunder, Contractor represents and warrants to the Company, and Contractor Representative
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separately represents, warrants and covenants to the Company with respect to herself and her performance of the Consulting Services, as follows:
a.Contractor and Contractor Representative will comply with all applicable laws and regulations;
b.Contractor Representative will perform all Consulting Services hereunder in a professional and workmanlike manner, in accordance with any scope of work agreed between Contractor and the Company;
c.Contractor Representative has the level of skill and experience represented to the Company, and such skill and experience is commensurate with the requirements of the Consulting Services contemplated hereby;
d.Contractor and Contractor Representative may perform the Consulting Services contemplated hereunder without breach of any other agreement to which either is a party or other duty to which either is bound; and
e.Any written reports, analyses, recommendations or other deliverables specifically created by Contractor or Contractor Representative for the Company in performing the Consulting Services (“Work Product”) will be prepared in good faith and in a professional manner consistent with Contractor Representative’s experience. Neither Contractor nor Contractor Representative warrants any particular technical, commercial or business outcome resulting from the Company’s use of their advice or Work Product.
8.Independent Contractor. Contractor shall perform the Consulting Services as an independent contractor and not as an employee, officer, partner, joint venturer or agent of the Company. Contractor Representative shall not, by reason of the Consulting Services, be deemed an employee, officer, partner, joint venturer or agent of the Company. Neither Contractor nor Contractor Representative shall be entitled to participate in employee benefit plans by reason of the Consulting Services, and Contractor shall be responsible for applicable taxes arising from the Consulting Fee. Contractor Representative’s status and obligations as a director of Parent are separate from and not altered by the Consulting Services or this Agreement.
9.LIMITATION OF LIABILITY; INDEMNIFICATION.
a.IN NO EVENT SHALL THE COMPANY’S LIABILITY TO CONTRACTOR FOR ALL CLAIMS ARISING HEREUNDER, WHETHER IN TORT OR CONTRACT, EXCEED THE FEES DUE TO CONTRACTOR FOR CONSULTING SERVICES PERFORMED HEREUNDER DURING THE TERM, AND IN NO EVENT SHALL THE COMPANY BE LIABLE TO CONTRACTOR FOR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL, INDIRECT OR PUNITIVE DAMAGES HEREUNDER.
b.Contractor Representative shall have no personal liability to the Company or its affiliates for any claims, losses, liabilities, damages, judgments, settlements, costs or expenses (including reasonable attorneys’ fees) (collectively, “Losses”) arising from or related to the provision of the Consulting Services, except to the extent such Losses arise from Contractor Representative’s gross negligence, willful misconduct, fraud, knowing violation of law or breach of any representation, warranty, covenant or other obligation expressly applicable to Contractor Representative under this Agreement (collectively, “Excluded Conduct”).
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c.The Company shall indemnify, defend and hold harmless Contractor Representative from and against any Losses arising out of any third-party claim, action, suit or proceeding arising from or relating to Consulting Services performed by Contractor Representative within the scope of this Agreement, except to the extent such Losses result from Excluded Conduct. Contractor Representative shall promptly notify the Company of any such claim and reasonably cooperate, at the Company’s expense, in the defense thereof. The Company may assume and control the defense and settlement of such claim with counsel reasonably acceptable to Contractor Representative; provided that the
Company shall not settle any claim in a manner that imposes any admission of wrongdoing, non-monetary obligation or unreimbursed liability on Contractor Representative without her prior written consent, not to be unreasonably withheld, conditioned or delayed. Contractor Representative shall not settle any claim for which she seeks indemnification without the Company’s prior written consent, not to be unreasonably withheld, conditioned or delayed.
d.Nothing in this Agreement limits or modifies any rights Contractor Representative may have in her capacity as a director of Parent under the Parent’s certificate of incorporation, bylaws, indemnification agreement, D&O insurance or applicable law.
10.Receipt and Non-Disclosure of Confidential Information.
a.In the course of providing the Consulting Services, Contractor and Contractor Representative may receive Confidential Information (as defined below). Contractor and Contractor Representative shall hold Confidential Information in strict confidence, use it solely for the Consulting Services or, in the case of Contractor Representative, as otherwise required in the proper discharge of her duties as a director of Parent, and not use it for personal benefit or any purpose adverse to the Company. Contractor Representative acknowledges that her confidentiality obligations as a director of Parent exist independently of this Agreement and are not limited or superseded by this Section.
b.If Contractor or Contractor Representative shall be required by subpoena or similar government order or other legal process (“Legal Process”) to disclose any Confidential Information, the person or entity subject to such Legal Process shall provide the Company with prompt written notice of such requirement and cooperate if requested with the Company in efforts to resist disclosure or to obtain a protective order or similar remedy. Subject to the foregoing, if Confidential Information is required by Legal Process to be disclosed, Contractor or Contractor Representative, as applicable, may disclose such Confidential Information but shall not disclose any Confidential Information for a reasonable period of time, unless compelled under imminent threat of penalty, sanction, contempt citation or other violation of law, in order to allow the Company time to resist disclosure or to obtain a protective order or similar remedy. Any disclosure shall be limited to that portion of the Confidential Information which, in the opinion of counsel, is required by such Legal Process to be disclosed.
c.Upon termination of this Agreement, Contractor and Contractor Representative shall return or destroy, at the Company’s request, Work Product and Confidential Information in their possession or control that they received or created in connection with the Consulting Services, subject to routine archival copies and any materials Contractor Representative is entitled or required to retain in her
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capacity as a director of Parent or under applicable law. Any retained Confidential Information shall remain subject to applicable confidentiality obligations.
d.“Confidential Information” shall mean any information regarding the Company and/or its affiliates or third parties including trade secrets, pricing, software programs, marketing strategies, intellectual property, training materials, procedures, business arrangements with clients and/or third parties, contracts with clients and/or third parties, vendor lists and prices, manuals, financial statements (other than those publicly available), accounting practices and other secret, proprietary or confidential information relating to the Company which are valuable assets and property rights of the Company (collectively, “Confidential
Information”). Confidential Information includes the items set forth above whether or not developed or created by the Company, and whether or not marked or designated as “Confidential,” “Proprietary” or the like, in any form, including electronic or optical data storage and retrieval mechanisms, and including all forms of communication, including but not limited to physical demonstrations, in-person conversations and telephone conversations, email and other means of information transfer such as facility tours, regardless of whether any such information is protected by applicable trade secret or similar laws, and including any Work Product of Contractor or Contractor Representative or Consulting IP (as defined below).
e.Confidential Information shall not include information which: (i) is or becomes generally available to the public other than as a result of the disclosure by Contractor, Contractor Representative or another person bound by a confidentiality agreement with, or other legal or fiduciary or other obligation of secrecy or confidentiality to, the Company or another party with respect to such information; or (ii) becomes available to Contractor or Contractor Representative from a source other than the Company or any of its directors, officers, employees, agents, affiliates, representatives, or advisors, provided that such source is not bound by a confidentiality agreement with, or other legal or fiduciary or other obligation of secrecy or confidentiality to, the Company or another party with respect to such information. Contractor Representative acknowledges that she understands that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (x) is made
(i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (y) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Further, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secret under seal and (B) does not disclose the trade secret, except pursuant to court order.
11.Intellectual Property.
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a.Contractor and Contractor Representative shall promptly disclose to the Company all Work Product and any inventions, discoveries, designs, processes, methods, software, documentation, improvements or other intellectual property that Contractor or Contractor Representative first conceives, creates, develops or reduces to practice specifically in the performance of the Consulting Services and that directly relate to the scope of Consulting Services (collectively, “Consulting IP”). Consulting IP does not include (i) inventions, know-how, materials or intellectual property owned or developed by Contractor or Contractor Representative before the Effective Date or independently outside the Consulting Services without use of Company Confidential Information or resources (“Background IP”), (ii) Contractor Representative’s general knowledge, skills and experience, or (iii) ideas, analyses or materials created solely in the discharge of Contractor Representative’s duties as a director of Parent and not as part of the Consulting Services.
b.Contractor and Contractor Representative hereby assign to the Company all right, title and interest in and to the Consulting IP, including all patent, copyright, trade
secret and other intellectual property rights therein. To the extent any Background IP is incorporated into Consulting IP or other Work Product delivered to the Company, Contractor and Contractor Representative grant the Company a perpetual, worldwide, irrevocable, royalty-free, transferable and sublicensable license to use, reproduce, modify, distribute and otherwise exploit such Background IP solely as incorporated in or reasonably necessary to use the applicable Consulting IP or Work Product.
c.Contractor and Contractor Representative shall reasonably assist the Company, at the Company’s expense, in documenting, perfecting, obtaining, maintaining and enforcing the Company’s rights in Consulting IP, including by executing reasonable assignments, declarations and other documents.
d.Contractor and Contractor Representative shall maintain reasonable records of material Consulting IP created in performing the Consulting Services and provide such records to the Company upon request.
e.Contractor and Contractor Representative shall perform their respective obligations under this Section 11 without additional compensation other than the Consulting Fee, except that the Company shall reimburse reasonable out-of-pocket expenses incurred after termination in providing requested assistance under Section 11(c).
f.If, after reasonable efforts, the Company is unable to obtain the signature of Contractor or Contractor Representative on a document reasonably necessary to perfect the Company’s ownership of Consulting IP, Contractor and Contractor Representative each appoint the Company as its or her agent and attorney-in-fact solely for that limited purpose, which appointment is coupled with an interest and shall be irrevocable to the extent permitted by law.
12.Compliance with Laws, Anti-Corruption. The Company, Contractor and Contractor Representative will comply with applicable laws, rules, ordinances and regulations of the United States and the state designated in the governing law provision below, and with any other jurisdiction in which each acts. In no event will the Company, Contractor or
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Contractor Representative be obligated under this Agreement to take any action that it or she believes, in good faith, would cause it or her to be in violation of any laws, rules, ordinances or regulations applicable to it or her. Contractor represents and warrants, and Contractor Representative separately represents and warrants as to herself, that each is aware of, understands and has complied and will comply with, all applicable U.S. and foreign anti-corruption laws, including without limitation, the U.S. Foreign Corrupt Practices Act (“FCPA”) and the U.K. Bribery Act. In the event of a breach of any of the representations, warranties or covenants in this Section by Contractor or Contractor Representative, the Company may, in its sole discretion and in addition to any other remedies it may have under law or this Agreement, terminate this Agreement immediately. Any claims for payment by Contractor with regard to a transaction for which such breach has occurred, including claims for services previously performed, will be automatically terminated and cancelled and all payments previously paid with respect to such transaction will be refunded to the Company by Contractor. Contractor will further indemnify and hold the Company harmless against any and all claims, losses or damages arising from or related to such breach and termination of this Agreement. Contractor and Contractor Representative shall also comply with the Company’s Code of Business Conduct and Ethics, Insider Trading Policy, information security and cybersecurity requirements, and other Company policies reasonably applicable to the Consulting
Services, in each case as in effect from time to time.
13.Miscellaneous.
a.This Agreement shall be construed, administered and enforced according to the laws of the State of Texas without regard to its principles of conflict of laws. Any dispute arising from or related to this Agreement or the Services shall be litigated exclusively in a court of competent jurisdiction in Williamson or Travis County, Texas. The Parties irrevocably consent to the exercise of personal jurisdiction in Texas.
b.Any notice provided for under this Agreement to be given by either party shall be in writing and shall be effective either (i) when delivered in person by courier or by express service to the address set forth in the introductory paragraph of this Agreement or (ii) five business days after deposit in a sealed envelope in the United States mail, postage prepaid, by registered or certified mail, return receipt requested, addressed to such address or (iii) on the date of its transmission if sent via email or fax to the other party's accurate email address or fax number for the other party's accurate contact person and if confirmed within five business days thereafter with a print copy of same delivered personally or by such mail delivery. Either party may designate a different address by notice to the other given in accordance herewith.
c.This Agreement supersedes any and all other agreements, either oral or written, between the Parties with respect to the subject matter hereof and contains all of the covenants and agreements between the Parties with respect to the subject matter hereof. With respect to the rights and obligations expressly applicable to Contractor Representative, this Agreement likewise constitutes the entire agreement between the Company and Contractor Representative concerning those rights and obligations.
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d.Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY AND CONTRACTOR REPRESENTATIVE HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVES ANY RIGHT IT OR SHE MAY HAVE TO A TRIAL BY JURY REGARDING ANY ACTION, SUIT, OR PROCEEDING, DIRECTLY OR INDIRECTLY, AT ANY TIME ARISING OUT OF, OR RELATING TO, THIS AGREEMENT OR THE CONSULTING SERVICES.
e.The Company may assign or transfer this Agreement without Contractor’s consent to any successor entity or affiliate that agrees in writing to be bound by the terms and conditions of this Agreement. Contractor may not assign or transfer this Agreement, delegate or subcontract any of its obligations hereunder, or replace or substitute Contractor Representative, without the Company’s prior written consent. Contractor Representative may not assign or delegate any obligation expressly applicable to her under this Agreement without the Company’s prior written consent. Any purported assignment, transfer, delegation, subcontracting, replacement or substitution in violation of this Section shall be void.
f.No waiver or modification of any right or remedy under this Agreement or of any provision hereof will be effective unless it is stated in writing and signed by the parties. Failure, neglect, or delay by a party to enforce the provisions of this Agreement or its rights or remedies at any time will not be construed or deemed to be a waiver or release and will not in any way affect the validity of the whole or any part of this Agreement or prejudice such party’s right to take subsequent action. No effective waiver of any right, remedy or provision of this Agreement will be deemed a waiver of any other. No effective waiver of any right, remedy or provision of this Agreement will be deemed a waiver of the same right, remedy or provision at any other time.
g.This Agreement may be executed in two or more counterparts, each of which will be deemed an original, and all of which together will constitute one and the same instrument. Notwithstanding the statements or actions of the parties, no provisions of this Agreement will be binding upon either party until this Agreement is signed by both parties.
h.This Agreement may not be altered, amended or modified except by written instrument signed by the Parties; provided that any amendment or modification of a right or obligation expressly applicable to Contractor Representative shall also require Contractor Representative’s written consent.
i.The Parties and Contractor Representative agree that this Agreement will be fairly interpreted in accordance with its terms without any strict construction in favor of or against any of them and that ambiguities will not be interpreted against the drafting party.
j.Section headings are for convenience of reference only and shall not be used in interpreting this Agreement.
k.If any term, condition, or provision of this Agreement shall be found by a court of competent jurisdiction to be invalid, unlawful, unenforceable in any respect, then
(i) the court shall revise such term, condition, or provision the least amount necessary in order to make it enforceable, and (ii) the enforceability of any other provision of this Agreement shall not be affected thereby, and the parties will
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endeavor in good faith to agree to such amendments that will preserve, as far as possible, the intentions expressed in this Agreement. If the parties fail to agree on such an amendment, such invalid term, condition or provision will be severed from the remaining terms, conditions and provisions, and said remaining terms, conditions and provisions will continue to be valid and enforceable to the full extent permitted by applicable law.
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IN WITNESS WHEREOF, the Parties have executed this Agreement effective as of the Effective Date, and Contractor Representative has executed this Agreement solely with respect to the provisions expressly applicable to Contractor Representative.
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HYLIION INC.
By: /s/ Thomas Healy Name: Thomas J. Healy
Title: Founder and CEO
GUSTANSKI TECHNICAL SERVICES LLC
By: /s/ Mary Gustanski Name: Mary E. Gustanski
Title: Member
Individually, as Contractor Representative:
/s/ Mary Gustanski
Mary E. Gustanski
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EXHIBIT A CONSULTING SERVICES
•Advise management on product launch and commercialization planning
•Review engineering, manufacturing, and operational processes for product launch
•Assess technical risks that affect launch timing, product quality, reliability, manufacturability, or customer deployment
•Review commercialization metrics, milestones, and critical-path activities and provide recommendations to management
•Participate in periodic commercialization reviews and technical milestone assessments
•Advise on risk mitigation plans for technical, manufacturing, supply chain, and product deployment issues
•Review product design plans and engineering change management
•Provide strategic advice regarding manufacturing scale-up, production readiness, and process capability
•Advise on manufacturing yield improvement, process optimization, and quality systems
•Review supplier quality readiness and manufacturing risk for critical components
•Advise on commercialization of additive manufacturing and other advanced manufacturing processes
•Review field performance data from prototype, pilot, and customer deployment units
•Evaluate product reliability trends and recommend engineering priorities
•Provide recommendations concerning validation testing and technical qualification
•Advise on customer deployment strategies and technical support for early customer installations
•Assist management in evaluating commercialization risks and technical readiness for new applications
•Provide objective technical assessments to senior management regarding engineering priorities
•Advise management regarding engineering organization, technical capabilities, and resource allocation.
A-1 | ||
EXHIBIT 31.1
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Thomas Healy, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Hyliion Holdings Corp.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: November 10, 2026 | By: | /s/ Thomas Healy | ||||||
| Thomas Healy | ||||||||
| Chief Executive Officer (Principal Executive Officer) | ||||||||
EXHIBIT 31.2
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Jon Panzer, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Hyliion Holdings Corp.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: November 10, 2026 | By: | /s/ Jon Panzer | ||||||
| Jon Panzer | ||||||||
| Chief Financial Officer (Principal Financial Officer) | ||||||||
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
In connection with the Quarterly Report of Hyliion Holdings Corp. (the “Company”) on Form 10-Q for the period ended September 30, 2026, as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), I, Thomas Healy, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in this Report.
| Date: November 10, 2026 | By: | /s/ Thomas Healy | ||||||
| Name: | Thomas Healy | |||||||
| Title: | Chief Executive Officer (Principal Executive Officer) | |||||||
The foregoing certification is being furnished solely to accompany the report pursuant to 18 U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
EXHIBIT 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350
In connection with the Quarterly Report of Hyliion Holdings Corp. (the “Company”) on Form 10-Q for the period ended September 30, 2026, as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), I, Jon Panzer, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in this Report.
| Date: November 10, 2026 | By: | /s/ Jon Panzer | ||||||
| Name: | Jon Panzer | |||||||
| Title: | Chief Financial Officer (Principal Financial Officer) | |||||||
The foregoing certification is being furnished solely to accompany the report pursuant to 18 U.S.C. Section 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.