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Item 2. Management’s Discussion and Analysis

2021-05-20 compared with 2020-11-12 · 139 added, 79 removed, 12 unchanged (95% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Climate Change Crisis Real Impact I Acquisition Corporation.

References to our “management” or our “management team” refer to

our officers and directors, and references to the “Sponsor” refer to Climate Change Crisis Real Impact I Acquisition Holdings, LLC.

The following discussion and analysis of the Company’s financial condition and results of operations should be read

in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report.

Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and

uncertainties.

Special Note Regarding Forward-Looking Statements

This Quarterly Report includes “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 Exchange Act that are not

historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected.

All statements, other than statements of historical fact included in this Form 10-Q including, without

limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations,

are forward-looking statements.

Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements.

Such forward-looking statements

relate to future events or future performance, but reflect management’s current beliefs, based on information currently available.

A number of factors could cause actual events, performance or results to differ materially from the events,

performance and results discussed in the forward-looking statements.

For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the

Risk Factors section of the Company’s final prospectus for its Initial Public Offering filed with the U.S.

Securities and Exchange Commission (the “SEC”).

The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at

Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

We are a blank check company formed under the laws of the State of Delaware on August 4, 2020 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other

similar Business Combination with one or more businesses.

We intend to effectuate our Business Combination using cash from the proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, our capital stock, debt or a

combination of cash, stock and debt.

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes

thereto contained elsewhere in this Quarterly Report.

Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

We are a blank check company formed under the laws of the State of Delaware on August 4, 2020 for the purpose of effecting a merger, capital stock exchange, asset acquisition,

stock purchase, reorganization or other similar business combination with one or more businesses.

We intend to effectuate our business combination using cash from the proceeds of the IPO and the sale of the private placement warrants, our capital

stock, debt or a combination of cash, stock and debt.

We expect to continue to incur significant costs in the pursuit of our acquisition plans.

We cannot assure you that our plans to complete a Business Combination will be successful.

We cannot assure you that our plans to complete an initial business combination will

be successful.

Recent Developments

On January 21, 2021, CRIS, SPAC Sub and EVgo Parties entered into the Business Combination Agreement.

The transactions contemplated by the Business Combination Agreement are collectively referred

to in this Item 2 as the “business combination.”

Pursuant to the Business Combination Agreement, on the Closing Date:

CRIS will contribute all of its assets to SPAC Sub, including but not limited to (1) an amount of funds equal to (A) funds held in the Trust Account (net of any amounts needed to effect redemptions elected by public stockholders and the

payment of any deferred underwriting fees from the IPO), plus (B) net cash proceeds from the PIPE, plus (C) any cash held by CRIS in any working capital

or similar account, less any transaction expenses of CRIS and the EVgo Parties;

and (2) the Holdings Class B Shares;

immediately following item (i) above, Holdings will contribute to OpCo all of the issued and outstanding limited liability company interests of HoldCo and, in connection therewith, (1) OpCo will be recapitalized as set forth in the OpCo

A&R LLC Agreement, and (2) OpCo will issue to Holdings the Holdings OpCo Units;

immediately following the item (ii) above, SPAC Sub will transfer to Holdings the Holdings Class B Shares and the right to enter into a tax receivable agreement;

immediately following item (iii) above, SPAC Sub will contribute to OpCo all of its remaining assets in exchange for the issuance by OpCo to SPAC Sub of the number of OpCo Units equal to the Issued OpCo Units.

The Business Combination Agreement contains customary representations, warranties and covenants by the parties thereto and the closing is subject to certain conditions as further described in the

Business Combination Agreement.

In connection with the execution of the Business Combination Agreement, on January 21, 2021, CRIS entered into Subscription Agreements with the PIPE Investors, pursuant to

which the PIPE Investors have agreed to purchase, and the Company has agreed to sell to the PIPE Investors, an aggregate of 40,000,000 shares of Class A common stock, for a purchase price of $10.00 per share, or an aggregate purchase price of

$400.0 million, in a PIPE.

Each Subscription Agreement contains customary representations and warranties of CRIS, on the one hand, and the applicable PIPE Investor, on the other hand, and customary

conditions to closing, including the consummation of the proposed business combination.

The purpose of the PIPE is to raise additional capital for use by HoldCo and its subsidiaries following the closing or the proposed business combination.

Results of Operations

We classify the warrants issued in connection with our IPO and concurrent private placement as liabilities at their fair value and adjust the warrant liability to fair value at each reporting

This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations.

We have neither engaged in any operations nor generated any revenues to date.

Our only activities from August 4, 2020 (inception) through September 30, 2020 were organizational activities and those necessary to

prepare for the Initial Public Offering, described below.

We do not expect to generate any operating revenues until after the completion of our Business Combination.

We expect to generate non-operating income in the form of interest income on

marketable securities held after the Initial Public Offering.

Our only activities from January 1, 2021 through March 31, 2021 were organizational activities, those necessary to

identify a target company for a business combination, as described below.

We do not expect to generate any operating revenues until after the completion of our initial business combination.

We expect to generate non-operating income in the form of

interest income on marketable securities held after the IPO.

We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

For the period from August 4, 2020 (inception) through September 30, 2020, we had a net loss of $1,401, which consisted of formation costs.

For the period from January 1, 2021 through March 31, 2021, we had a net loss of $30.9 million, which consists of operating costs of $1.9 million and a non-cash change in fair value of derivative

liability of $29.0 million, offset by interest income from bank of $15 and interest earned on investments held in the Trust Account of $3.5 thousand.

Liquidity and Capital Resources

Until the consummation of the Initial Public Offering, our only source of liquidity was an initial purchase of common stock by the Sponsor and loans from our Sponsor.

Subsequent to the end of the quarterly period covered by this Quarterly Report, on October 2, 2020, we consummated the Initial Public Offering of 23,000,000 Units at a price of $10.00 per Unit, which includes the full exercise by the

underwriters of their over-allotment option in the amount of 3,000,000, generating gross proceeds of $230,00,000.

Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 6,600,000 Private Placement Warrants at a

price of $1.00 per Private Placement Warrant in a private placement to our stockholders, generating gross proceeds of $6,600,000.

Following the Initial Public Offering, the full exercise of the over-allotment option by the underwriters’ and the sale of the Private Placement Warrants, a total of $230,000,000 was placed in the Trust Account.

incurred $13,161,756 in transaction costs, including $4,204,000 of underwriting fees, $8,050,000 of deferred underwriting fees and $907,756 of other offering costs.

We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account to complete our Business Combination.

withdraw interest to pay taxes.

To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to

finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants

or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.

In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Sponsors, or an affiliate of the Sponsor, or certain of the Company’s officers and directors

or their affiliates may, but are not obligated to, loan us funds as may be required.

If we complete a Business Combination, we would repay the Working Capital Loans out of the proceeds of the Trust Account released to us.

Otherwise, the Working

Capital Loans would be repaid only out of funds held outside the Trust Account.

In the event that a Business Combination does not close, we may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no

proceeds held in the Trust Account would be used to repay the Working Capital Loans.

The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $2,000,000 of

such Working Capital Loans may be convertible into units of the post Business Combination entity.

On October 2, 2020, we consummated the IPO of 23,000,000 units at a price of $10.00 per unit, which includes the full exercise by the underwriters of their over-allotment option in the amount of

3,000,000 units, generating gross proceeds of $230.0 million.

Simultaneously with the closing of the IPO, we consummated the sale of 6,600,000 private placement warrants at a price of $1.00 per private placement warrant in a private placement to

our stockholders, generating gross proceeds of $6.6 million.

Following the IPO, the full exercise of the over-allotment option by the underwriters and the sale of the private placement warrants, a total of $230.0 million was placed in the Trust Account.

incurred $13.2 million in transaction costs, including $4.2 million of underwriting fees, $8.1 million of deferred underwriting fees and $0.9 million of other offering costs.

For the period from January 1, 2021 through March 31, 2021, cash used in operating activities was $0.6 million comprised of net loss of $30.9 million and interest earned on investments held in the

Trust Account of $3.5 thousand as offset by a non-cash change in warrant liability of $29.0 million, and the changes in operating assets and liabilities of $1.3 million.

As of March 31, 2021, we had cash and investments held in the Trust Account of approximately $230.0 million.

We intend to use substantially all of the funds held in the Trust Account, including any

amounts representing interest earned on the Trust Account to complete our initial business combination.

We may withdraw interest to pay taxes.

To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete

our initial business combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

As of March 31, 2021, we had approximately $0.4 million of cash held outside of the Trust Account.

We intend to use the funds held outside the Trust Account primarily to identify and evaluate

target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and

material agreements of prospective target businesses, and structure, negotiate and complete an initial business combination.

The Sponsor, or an affiliate of the Sponsor, or certain of our officers and directors or their affiliates may, but are not obligated to, extend us working capital loans as may be required in order

to fund working capital deficiencies or finance transaction costs in connection with an initial business combination.

If we complete an initial business combination, we would repay the working capital loans out of the proceeds of the Trust Account

released to us.

Otherwise, the working capital loans would be repaid only out of funds held outside the Trust Account.

In the event that an initial business combination does not close, we may use a portion of proceeds held outside the Trust Account

to repay the working capital loans but no proceeds held in the Trust Account would be used to repay the working capital loans.

The working capital loans would either be repaid upon consummation of an initial business combination, without interest,

or, at the lender’s discretion, up to $2.0 million of such working capital loans may be convertible into warrants of the post-business combination entity.

The warrants would be identical to the private placement warrants.

Except for the foregoing, the terms of such Working Capital Loans, if any, have not

been determined and no written agreements exist with respect to such loans.

Except for the foregoing,

the terms of such working capital loans, if any, have not been determined and no written agreements exist with respect to such loans.

We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business.

However, if our estimate of the costs of identifying a target business, undertaking

in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination.

Moreover, we may need to obtain

additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our public shares upon consummation of our Business Combination, in which case we may issue additional securities or

incur debt in connection with such Business Combination.

Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our Business Combination.

If we are unable to complete our

Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account.

In addition, following our Business Combination, if cash on hand is insufficient, we may need to

obtain additional financing in order to meet our obligations.

However, if our estimate of the costs of identifying a target

business, undertaking in-depth due diligence and negotiating an initial business combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business

Moreover, we may need to obtain additional financing either to complete our initial business combination or because we become obligated to redeem a significant number of our public shares upon consummation of our initial business

combination, in which case we may issue additional securities or incur debt in connection with such initial business combination.

Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the

consummate of our initial business combination.

If we are unable to consummate our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account.

addition, following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

Related Party Transactions

Investment in the PIPE

In connection with the execution of the Business Combination Agreement, CRIS entered into Subscription Agreements with a number of PIPE Investors, pursuant to which the PIPE

Investors agreed to purchase, and CRIS agreed to sell to the PIPE Investors, an aggregate of 40,000,000 shares of Class A common stock, for a purchase price of $10.00 per share and an aggregate purchase price of $400,000,000, in the PIPE.

ONE, LLC, which is affiliated with members of CRIS’s officers and directors, will be purchasing 500,000 shares of Class A common stock in the PIPE for a total purchase price of $5.0 million.

In addition, private funds affiliated Pacific Investment

Management Company LLC (“PIMCO”), which are investors in the Sponsor, or their affiliates will be purchasing 5,000,000 shares of Class A common stock in the PIPE for a total purchase price of $50.0 million.

Payments to an Affiliate

Commencing as of March 2021, CRIS has been and will continue to make payments of approximately $45,000 per month on an annualized basis to Climate Real Impact Solutions

Services LLC, an entity owned by John Cavalier, our Chief Financial Officer and David Crane, our Chief Executive Officer and managed by Ms.

Frank-Shapiro, our Chief Operating Officer, for consulting services rendered to CRIS.

Crane also receive health insurance benefits from Climate Real Impact Solutions Services LLC.

Upon completion of the proposed business combination, it is expected that CRIS would cease to make any further payments.

Promissory Note

On March 31, 2021, CRIS issued the Holdings Promissory Note, pursuant to which CRIS borrowed $280,000 from Holdings in order to pay certain transaction expenses associated with

the business combination.

The Holdings Promissory Note bears interest at a rate of 0.12% compounded annually and is payable on the consummation of the business combination.

If the business combination is not consummated, fifty percent (50%) of the

principal balance of the Holdings Promissory Note will be forgiven and the remaining fifty percent (50%) of the principal balance will be repaid (i) immediately upon consummation of a separate business combination or (ii) to the extent that CRIS

has funds available to it that are (a) in excess of budgeted expenses and obligations to trade creditors in the ordinary course of business and (b) outside of its Trust Account, in each case, no later than April 2, 2023.

As of March 31, 2021, the

outstanding balance under the Holdings Promissory Note was $280,000.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of September 30, 2020.

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of March 31, 2021.

We do not participate in transactions that create relationships with

unconsolidated entities or financial partnerships, often referred to as “variable interest entities,” which would have been established for the purpose of facilitating off-balance sheet arrangements.

We have not entered into any off-balance sheet

financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Contractual Obligations

We did not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than as described below, as of September 30, 2020.

The underwriters are entitled to a deferred fee of $0.35 per Unit, or $8,050,000 in the aggregate.

The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the

event that we complete a Business Combination, subject to the terms of the underwriting agreement.

We did not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than as described below.

The underwriters are entitled to a deferred fee of $0.35 per unit, or $8.1 million in the aggregate.

The deferred fee will become payable to the underwriters from the amounts held in the Trust

Account solely in the event that we consummate an initial business combination, subject to the terms of the underwriting agreement.

We entered into various consulting arrangements with several service provider for administrative services and potential target financial analysis and due diligence services to us.

arrangements provide for aggregate monthly fees of approximately $90.0 thousand.

Critical Accounting Policies

The preparation of condensed financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and

assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported.

Actual results could materially

differ from those estimates.

We have not identified any critical accounting policies.

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires our management to make estimates

and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported.

Actual results could

materially differ from those estimates.

We have identified the following critical accounting policies:

Class A Common Stock Subject to Possible Redemption

We account for our Class A common stock subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Shares of Class A common stock

subject to mandatory redemption is classified as a liability instrument and is measured at fair value.

Conditionally redeemable common stock (including common stock that feature redemption rights that is either within the control of the holder or

subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity.

At all other times, common stock is classified as stockholders’ equity.

Our Class A common stock features certain

redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events.

Accordingly, shares of Class A common stock subject to possible redemption are presented as temporary equity, outside of the

stockholders’ equity section of our balance sheet.

Warrant Liability

We account for the warrants in accordance with the guidance contained in ASC 815-40-15-7D and 7F under which the warrants do not meet the criteria for equity treatment and must be recorded as

Accordingly, we classify the warrants as liabilities at their fair value and adjust the warrants to fair value at each reporting period.

This liability is subject to re-measurement at each balance sheet date until exercised, and any

change in fair value is recognized in our statement of operations.

The fair value of the warrants issued in the IPO has been estimated using a Monte Carlo simulation methodology as of the date of the IPO and such warrants’ quoted market price as of

March 31, 2021.

The private placement warrants were valued using a Modified Black Scholes Option Pricing Model.

Net Income (Loss) per Common Share

We apply the two-class method in calculating earnings per share.

Net income per common share, basic and diluted for Class A redeemable common stock is calculated by dividing the interest income

earned on the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Class A redeemable common stock outstanding for the period.

Net loss per common share, basic and diluted for Class B non-redeemable common

stock is calculated by dividing the net income, less income attributable to Class A redeemable common stock, by the weighted average number of Class B non-redeemable common stock outstanding for the period presented.

Recent Accounting Standards

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements.

Our management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis