The scrutiny follows a June 23 report from Pelican Way Research, which labeled Hyliion a "glorified science project" and challenged the validity of a non-binding letter of intent for 250 KARNO Cores. This agreement, valued at approximately $133 million, represented a significant portion of Hyliion’s reported $400 million pipeline. Investigators are examining whether the company’s leadership knowingly inflated expectations through the partnership with VFG Holdings.

Pelican Way Research raised red flags regarding the counterparty, noting that VFG appeared to be a recently incorporated entity with minimal operational history and limited staff. Following the disclosure, Hyliion shares dropped 17.2%, closing at $6.10 per share. Investors claiming losses are now being urged to contact Pomerantz LLP to discuss potential litigation regarding these business practices.