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Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are controls and other procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
−Removed: Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements and projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
−Removed: EVgo, with the participation of its chief executive officer and chief financial officer, evaluated, as of the end of the period covered by this Quarterly Report, the effectiveness of the Company’s disclosure controls and procedures and determined that such controls were not effective at a reasonable assurance level as of June 30, 2022 due to material weaknesses in its internal control over financial reporting described below.
−Removed: Notwithstanding these material weaknesses, EVgo has concluded that the condensed consolidated financial statements included in this Quarterly Report are fairly stated in all material respects in accordance with GAAP.
+Added: Because of inherent limitations, no evaluation of disclosure controls and procedures can provide absolute assurance that EVgo has detected all control deficiencies.
+Added: Moreover, the design of disclosure controls and procedures is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
+Added: EVgo’s management, including its chief executive officer and chief financial officer, evaluated, as of the end of the period covered by this Quarterly Report, the effectiveness of the Company’s disclosure controls and procedures.
+Added: Based upon that evaluation, EVgo’s chief executive officer and chief financial officer determined that such controls were not effective as of September 30, 2022 due to material weaknesses in EVgo’s internal control over financial reporting described below.
+Added: Changes in Internal Control Over Financial Reporting
+Added: Internal control over financial reporting is defined in Rule 13a-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S.
+Added: generally accepted accounting principles (“GAAP”) and includes those policies and procedures that:
+Added: ● pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of assets of the Company;
+Added: ● provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company;
+Added: ● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
+Added: Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
+Added: Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
+Added: Other than as discussed below under the heading “ Material Weakness Remediation Plan ,” there were no changes in the Company’s internal control over financial reporting during the three months ended September 30, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Material Weakness Remediation Plan
−Removed: A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of its financial statements would not be prevented or detected on a timely basis.
−Removed: During the three months ended June 30, 2022, the Company identified multiple control deficiencies aggregating to a material weakness in the retail charging revenue cycle.
−Removed: The deficiencies resulted from ineffective control over the completeness and accuracy of retail charging revenue transactions combined with complexity in managing the high volume, low dollar value nature of such transactions.
−Removed: As previously described in the Company’s Annual Report under the section titled “Risk Factors,” EVgo has determined that the Company had material weaknesses in its internal control over financial reporting.
−Removed: Specifically, material weaknesses were identified with respect to segregation of duties and review;
−Removed: account reconciliations, preparation of supporting documentation and analysis;
+Added: As previously disclosed, EVgo has previously identified several material weaknesses in its internal control over financial reporting.
+Added: A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of EVgo’s financial statements will not be prevented or detected on a timely basis.
+Added: Specifically, material weaknesses have been previously identified with respect to segregation of duties and review;
+Added: account reconciliations and preparation of supporting documentation and analysis;
effective review of technical accounting matters;
−Removed: separate review and approval of journal entries;
−Removed: and review of key inputs for estimates of asset retirement obligations.
+Added: review of key inputs for estimates of asset retirement obligations;
+Added: retail charging revenue recognition;
+Added: and separate review and approval of journal entries.
As of December 31, 2021, EVgo remediated the material weakness related to the review and approval of journal entries.
−Removed: In order to address the remaining identified material weaknesses, the Company has established a remediation plan which includes the following measures:
+Added: In order to address the identified material weaknesses, the Company has established a remediation plan which includes the following measures:
● Increasing resources within its organization, including the expansion of its accounting, control and compliance functions to develop and implement continued improvements and enhancements to address the overall deficiencies that led to the material weaknesses;
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however, these remediation measures will be time consuming, result in increased costs and place significant demands on the Company’s financial and operational resources.
−Removed: Changes in Internal Control Over Financial Reporting
−Removed: In connection with the preparation of the audited consolidated financial statements of EVgo Holdco as of and for the year ended December 31, 2019, material weaknesses were identified in the Company’s internal control over financial reporting.
−Removed: Certain of these material weaknesses continued during the six months ended June 30, 2022 and have not yet been fully remediated.
−Removed: A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of EVgo’s annual or interim consolidated financial statements will not be prevented or detected on a timely basis.
−Removed: See the section entitled “ Risk Factors— Financial, Tax and Accounting-Related Risks—EVgo has identified material weaknesses in its internal control over financial reporting.
−Removed: If EVgo is unable to remediate these material weaknesses, or if EVgo identifies additional material weaknesses in the future or otherwise fails to maintain an effective system of internal control over financial reporting, this may result in material misstatements of EVgo’s consolidated financial statements or cause the Company to fail to meet EVgo’s periodic reporting obligations ” in the Company’s Annual Report.
−Removed: Other than as discussed above, there were no changes in the Company’s internal control over financial reporting during the three months ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II — OTHER INFORMATION
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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.