What changed in this filing

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2023-03-30 compared with 2022-03-24 · 708 added, 650 removed, 628 unchanged (68% of the section changed)

Quantitative and Qualitative Disclosures About Market Risk

EVgo is 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, the Company is not required to provide the information required by this Item.

EVgo is a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.

As a result, pursuant to Item 305(e) of Regulation S-K, the Company is not required to provide the information required by this Item 7A.

Consolidated Financial Statements and Supplementary Data.

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Report of Independent Registered Public Accounting Firm

( KPMG LLP , Philadelphia, PA , PCAOB ID:

( KPMG LLP , Albuquerque, NM , PCAOB ID:

Consolidated Balance Sheets at December 31, 2022 and 2021

Consolidated Statements of Operations for the year ended December 31, 2021, the Period From January 16, 2020 Through December 31, 2020 and the Period From January 1, 2020 Through January 15, 2020

Consolidated Statements of Stockholders’ and Member’s Equity (Deficit) for the Year Ended December 31, 2021, the Period From January 16, 2020 Through December 31, 2020 and the Period From January 1, 2020 Through January 15, 2020

Consolidated Statements of Cash Flows for the Year Ended December 31, 2021, the Period from January 16, 2020 Through December 31, 2020 and the Period from January 1, 2020 Through January 15, 2020

Consolidated Statements of Operations for the years ended December 31, 2022 and 2021

Consolidated Statements of Stockholders’ and Member’s Equity (Deficit) for the years ended December 31, 2022 and 2021

Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021

Notes to Consolidated Financial Statements

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We have audited the accompanying consolidated balance sheets of EVgo Inc.

(formerly known as EVgo Holdco, LLC and EVgo Services LLC) and subsidiaries (the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations, stockholders’ and member’s equity (deficit) / member’s equity, and cash flows for the year ended December 31, 2021 (Successor), and for the periods from January 16, 2020 to December 31, 2020 (Successor) and January 1, 2020 to January 15, 2020 (Predecessor), and the related notes and financial statement schedule II, (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the year ended December 31, 2021 (Successor), and for the periods from January 16, 2020 to December 31, 2020 (Successor) and January 1, 2020 to January 15, 2020 (Predecessor), in conformity with U.S.

and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, stockholders’ deficit / stockholders’ and member’s equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2022, and the related notes and financial statement schedule II, (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2022, in conformity with U.S.

generally accepted accounting principles.

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for leases as of January 1, 2022 due to the adoption of Leases (Accounting Standards Codification Topic 842) , and related amendments.

Basis for Opinion

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Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

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We have served as the Company’s auditor since 2020.

Philadelphia, Pennsylvania

Albuquerque, New Mexico

March 30, 2023

and Subsidiaries

Consolidated Balance Sheets

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Current assets

Cash and restricted cash

Accounts receivable, net

Cash, cash equivalents and restricted cash

Accounts receivable, net of allowance of $ 687 and $ 718 as of December 31, 2022 and 2021, respectively

Accounts receivable, capital-build

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Property, equipment and software, net

Intangible assets, net

Operating lease right-of-use assets

Restricted cash

Liabilities, redeemable noncontrolling interest and stockholders’/member’s (deficit) equity

Intangible assets, net

Liabilities, redeemable noncontrolling interest and stockholders’ deficit

Current liabilities

Accounts payable

Payables to related parties

Accrued liabilities

Operating lease liabilities, current

Deferred revenue, current

Customer deposits

Note payable, related party

Capital-build, buyout liability

Other current liabilities

Total current liabilities

Operating lease liabilities, noncurrent

Earnout liability, at fair value

Asset retirement obligations

Capital-build liability, excluding buyout liability

Capital-build liability

Deferred revenue, noncurrent

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Total liabilities

Commitments and contingencies (Note 13)

The accompanying notes are an integral part of these consolidated financial statements.

and Subsidiaries

Consolidated Balance Sheets (continued)

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Redeemable noncontrolling interest

Stockholders’/member’s (deficit) equity

Stockholders’ deficit

Preferred stock, $ 0.0001 par value;

10,000,000 shares authorized as of December 31, 2021;

10,000,000 shares authorized as of December 31, 2022 and 2021;

none issued and outstanding

Class A common stock, $ 0.0001 par value;

1,200,000,000 shares authorized as of December 31, 2021;

68,020,630 shares issued and outstanding (excluding 718,750 shares subject to possible forfeiture) as of December 31, 2021

1,200,000,000 shares authorized as of December 31, 2022 and 2021;

70,247,726 and 68,020,630 shares issued and outstanding (excluding 718,750 shares subject to possible forfeiture) as of December 31, 2022 and 2021, respectively

Class B common stock, $ 0.0001 par value;

400,000,000 shares authorized as of December 31, 2021;

195,800,000 shares issued and outstanding as of December 31, 2021

LLC interests

400,000,000 shares authorized as of December 31, 2022 and 2021;

195,800,000 shares issued and outstanding as of December 31, 2022 and 2021

Additional paid-in capital

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( 1,358,358 )

Total stockholders’/member’s (deficit) equity

Total stockholders’ deficit

( 1,358,331 )

Total liabilities, redeemable noncontrolling interest and stockholders’/member’s (deficit) equity

Total liabilities, redeemable noncontrolling interest and stockholders’ deficit

The accompanying notes are an integral part of these consolidated financial statements.

(Successor) and EVgo Services LLC (Predecessor)

and Subsidiaries

Consolidated Statements of Operations

(in thousands, except per share data)

Revenue from related parties

Revenue from related party

Total revenue

Cost of revenue

(exclusive of depreciation and amortization shown separately below)

Depreciation and amortization

Depreciation, net of capital-build amortization

Cost of sales

Gross (loss) profit

General and administrative

Transaction bonus

General and administrative expenses

Depreciation, amortization and accretion

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Operating loss

Interest expense

Interest expense, related party

Interest income

Other income, related parties

Other income, net

Other (expense) income, net

Change in fair value of earnout liability

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Total other income, net

net loss attributable to noncontrolling interest

Loss before income tax expense

Income tax expense

net loss attributable to redeemable noncontrolling interest

Net loss attributable to Class A common stockholders

Net loss per share to Class A common stockholders, basic and diluted

Weighted-average basic and diluted shares used in computation of earnings per share

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Statement of Stockholders’ and Member’s Equity (Deficit)

and Subsidiaries

Consolidated Statements of Stockholders’ Deficit

For the Year Ended December 31, 2022

LLC Interests

Class A Common Stock

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(in thousands)

Equity (Deficit)

Balance, December 31, 2021

(as previously reported)

( 1,358,358 )

( 1,358,331 )

Share-based compensation

Issuance of common stock under the ATM, net of issuance costs

Warrants exercised and release of warrant liability

Issuance of stock under share-based compensation plans

Shares withheld for taxes

Redeemable noncontrolling interest adjustment to fair value

Balance, December 31, 2022

1 Excludes $ 78.7 million of net loss attributable to redeemable noncontrolling interest.

The accompanying notes are an integral part of these consolidated financial statements.

and Subsidiaries

Consolidated Statements of Stockholders’ and Member’s Equity (Deficit)

For the Year Ended December 31, 2021

Stockholders’ /

LLC Interests

Class A Common Stock

Class B Common Stock

(in thousands)

Equity (Deficit)

Balance, December 31, 2020 (as previously reported)

Retroactive application of recapitalization

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( 1,358,331 )

1 Excludes $ 16.8 million of net loss attributable to redeemable noncontrolling interest.

The accompanying notes are an integral part of these consolidated financial statements.

(Successor) and EVgo Services LLC (Predecessor)

Consolidated Statement of Member’s Equity

For the Year Ended December 31, 2020

LLC Interests

(in thousands)

Balance, December 31, 2019 (as previously reported)

Retroactive application of recapitalization

Balance, December 31, 2019 (as adjusted)

Share-based compensation

Balance, January 15, 2020

New basis of equity on push-down of acquisition by EVgo Holdco

Balance, January 16, 2020

Share-based compensation

Contributions

Balance, December 31, 2020

1 Excludes $ 16.8 million of net income attributable to redeemable noncontrolling interest.

The accompanying notes are an integral part of these consolidated financial statements.

(Successor) and EVgo Services LLC (Predecessor)

and Subsidiaries

Consolidated Statements of Cash Flows

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Depreciation, amortization and accretion

Net loss on disposal of property and equipment

Net loss on disposal of property and equipment and impairment expense

Share-based compensation

Relief of contingent consideration

Interest expense, related party

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Prepaid expenses and other current and noncurrent assets

Operating lease assets and liabilities, net

Accounts payable

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Purchases of property, equipment and software

Proceeds from insurance for property losses

Purchases of investments

Proceeds from sale of investments

Acquisition of business, net of cash received

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Cash flows from financing activities

Issuance of common stock under the ATM

Proceeds from capital-build funding

Proceeds from exercise of warrants

Proceeds from CRIS Business Combination

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Payments on note payable, related party

Proceeds from exercise of warrants

Capital-build funding, net

Payment of transaction costs for CRIS Business Combination

Contributions

Payments of withholding tax on net issuance of restricted stock units

Payments of issuance costs and deferred transaction costs

Net cash provided by financing activities

Net increase (decrease) in cash and restricted cash

Net (decrease) increase in cash, cash equivalents and restricted cash

Cash and restricted cash, beginning of period

Cash and restricted cash, end of period 1

As of January 15, 2020, $ 0.6 million of cash included in the Predecessor’s balance sheet was not transferred to the Successor in accordance with the Holdco Merger Agreement (defined below) and was excluded from the Successor’s opening balance sheet.

Cash, cash equivalents and restricted cash, end of period

The accompanying notes are an integral part of these consolidated financial statements.

(Successor) and EVgo Services LLC (Predecessor)

and Subsidiaries

Consolidated Statements of Cash Flows (continued)

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Supplemental disclosure of noncash investing and financing activities

Accrued transaction costs for CRIS Business Combination

Asset retirement obligations incurred

Purchases of property and equipment in accounts payable and accrued liabilities

Non-cash increase in accounts receivable, capital-build and capital-build liability

Asset retirement obligations incurred

Accrued transaction costs

Reclassification of contingent earnout liability to equity upon triggering event

Purchases of property and equipment in accounts payable and accrued liabilities

Contingent earnout liability recognized upon closing of CRIS Business Combination

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The accompanying notes are an integral part of these consolidated financial statements.

(Successor) and EVgo Services LLC (Predecessor)

and Subsidiaries

Notes to Consolidated Financial Statements

Note 1– Description of Business and Nature of Operations

EVgo Services LLC (“EVgo Services” or “Predecessor”) owns and operates a public direct current (“DC”) fast charging network in the United States.

EVgo Services was founded in October 2010 as NRG EV Services, LLC, a Delaware limited liability company and wholly owned subsidiary of NRG Energy, Inc.

(“NRG”), an integrated power company based in Houston, Texas.

EVgo Services’ network of charging stations provides electric vehicle (EV) charging infrastructure to consumers and businesses.

Its network is capable of natively charging (i.e., charging without an adaptor) all EV models and charging standards currently available in the U.S.

EVgo Services partners with national and regional chains of grocery stores, automotive OEMs, hotels, shopping centers, gas stations, parking lot operators, local governments and independent property owners in order to locate and deploy its EV charging infrastructure.

(“EVgo”) owns and operates a public direct current (“DC”) fast charging network for electric vehicles (“EVs”) in the United States (“U.S.”).

EVgo’s network of charging stations provides EV charging infrastructure to consumers and businesses.

Its network is capable of charging all EV models and charging standards currently available in the U.S.

EVgo partners with automotive original equipment manufacturers (“OEMs”), fleet and rideshare operators, retail hosts such as grocery stores, shopping centers, gas stations, parking lot operators, governments and other organizations and property owners in order to locate and deploy its EV charging infrastructure.

EVgo Services LLC (“EVgo Services”) was formed in October 2010 as NRG EV Services, LLC, a Delaware limited liability company and wholly owned subsidiary of NRG Energy, Inc., an integrated power company based in Houston, Texas (“NRG”).

On June 17, 2016, NRG sold a majority interest in EVgo Services to Vision Ridge Partners.

Under the terms of the sale, NRG retained certain obligations to fund EVgo Services’ operating expenses and capital expenditures.

As of December 31, 2020, NRG had no ongoing obligations to EVgo Services under the terms of the original sales transaction.

On January 16, 2020 (the “Holdco Merger Date”), EVgo Services and its investors consummated the transactions contemplated pursuant to the merger agreement (the “Holdco Merger Agreement”) with EVgo Holdco, LLC (“EVgo Holdco”), whereby EVgo Services became a wholly-owned subsidiary of EVgo Holdco, resulting in a change in control by the Predecessor (the “Holdco Merger”).

EVgo Holdco, controlled by LS Power Equity Partners IV, L.P.

(“LS Power”), had no operations prior to the Holdco Merger.

The Company elected push-down accounting and all of the Company’s assets and liabilities related to LS Power were remeasured at fair value on the Holdco Merger Date.

On January 16, 2020 (the “Holdco Merger Date”), EVgo Holdco, LLC (“EVgo Holdco”), a Delaware limited liability company and a subsidiary of LS Power Equity Partners IV, L.P.

(“LS Power”), completed an acquisition of EVgo Services, pursuant to the merger agreement (the “Holdco Merger Agreement”) among EVgo Services, its investors and EVgo Holdco, whereby EVgo Services became a wholly-owned subsidiary of EVgo Holdco, resulting in a change in control of EVgo Services (the “Holdco Merger”).

EVgo Holdco had no operations prior to the Holdco Merger.

The Company (as defined below) elected push-down accounting and all of the Company’s assets and liabilities related to LS Power were remeasured at fair value on the Holdco Merger Date.

LS Power was considered to be the accounting acquirer and formed EVgo Holdings, LLC (“EVgo Holdings”) and EVgo Holdco as part of the transaction.

(the “Company,” “Successor,” “EVgo”) was incorporated in Delaware on August 4, 2020 under the name Climate Change Crisis Real Impact I Acquisition Corporation (“CRIS”).

(the “Company,” or “EVgo”) was incorporated in Delaware on August 4, 2020 under the name Climate Change Crisis Real Impact I Acquisition Corporation (“CRIS”).

The Company was formed for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Initial Business Combination”).

The registration statement for the Company’s initial public offering consummated on October 2, 2020 (the “Initial Public Offering”), was declared effective on September 29, 2020, and the Company signed an agreement with a syndicate of underwriters to issue 23,000,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), of which 23,000,000 shares of Class A common stock were a part.

The issuance included the full exercise by the underwriters of their over-allotment option in the amount of 3,000,000 units, at $ 10.00 per unit, generating gross proceeds of $ 230,000,000 which is described in Note 3.

On October 2, 2020, the Company completed the Initial Public Offering.

On October 2, 2020, the Company completed its initial public offering (the “Initial Public Offering”).

Simultaneously with the closing of the Initial Public Offering, the Company completed the sale of 6,600,000 warrants (the “Private Placement Warrants”) at $ 1.00 in a private placement to Climate Change Crisis Real Impact I Acquisition Holdings, LLC (the “Sponsor”), generating gross proceeds of $ 6,600,000 .

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As the sole managing member of EVgo OpCo, Thunder Sub operates and controls all of the business and affairs of EVgo OpCo and through EVgo OpCo and its subsidiaries, conducts its business.

As a result, beginning on July 1, 2021 (the CRIS Close Date), the Company consolidated the financial results of EVgo OpCo and recorded a redeemable noncontrolling interest

in its consolidated financial statements to reflect the EVgo OpCo Units that are owned by EVgo Holdings after the CRIS Close Date.

As a result, beginning on July 1, 2021 (the CRIS Close Date), the Company consolidated the financial results of EVgo OpCo and recorded a redeemable noncontrolling interest in its consolidated financial statements to reflect the EVgo OpCo Units that are owned by EVgo Holdings after the CRIS Close Date.

As of December 31, 2022, EVgo Holdings held 195,800,000 EVgo OpCo Units, representing 73.6 % of the total outstanding EVgo OpCo Units and an equal number of shares of the Company’s Class B common stock.

Each EVgo OpCo Unit, together with one share of Class B common stock, is redeemable, subject to certain conditions, for either one share of Class A common stock, or, at EVgo OpCo’s election, the cash equivalent to the market value of one share of Class A common stock, pursuant to the Amended and Restated LLC Agreement of EVgo OpCo dated July 1, 2021 (the “EVgo OpCo A&R LLC Agreement”).

COVID-19 Outbreak

The global outbreak of COVID-19 has resulted in significant volatility in the global and domestic economies, changes in consumer and business behavior, market downturns and restrictions on business and individual activities, which has led to overall reduced economic activity.

The COVID-19 pandemic also impacted the Company’s operations through construction delays and supply chain and shipping constraints.

EVgo also experienced delays in its negotiations with commercial or public-entity property owners, landlords and/or tenants (collectively, the “Site Hosts”) as they devoted more time to day-to-day operations and employee health and safety.

Finally, for some contractual commitments, EVgo is required to adhere to a construction schedule over specific timeframes.

Those timelines were impacted due to delays associated with COVID-19, and it is possible that the ongoing pandemic could continue to impact these timelines in the future.

How COVID-19 will affect EVgo’s future business results is unclear.

While the disruption is expected to be temporary, there is considerable uncertainty around the duration and magnitude of this disruption.

Development and commissioning lead times may be extended as a result of the measures taken by the state and local governments to mitigate the spread of COVID-19.

The extent of the financial impact and duration cannot be reasonably estimated at this time.

Geopolitical and Macroeconomic Environment

During the last several years, the global economy has experienced disruption and sustained volatility due to a number of factors.

In particular, the global outbreak of COVID-19 resulted in significant volatility in the global and domestic economies, changes in consumer and business behavior, market downturns and restrictions on business and individual activities, resulting in overall reduced economic activity.

The COVID-19 pandemic impacted EVgo’s operations through reduced network throughput, construction delays and supply chain and shipping constraints.

EVgo also experienced delays in its negotiations with commercial and public-entity property owners, landlords and/or tenants (collectively, the “Site Hosts”), as Site Hosts devoted more time to day-to-day operations and employee health and safety.

Finally, for some contractual commitments, EVgo is required to adhere to a construction schedule over specified timeframes.

Those timelines were impacted due to delays associated with COVID-19 and broader supply chain disruptions and it is possible that the pandemic and its ongoing effects could continue to impact these timelines in the future.

More recently, Russia’s military invasion of Ukraine and the subsequent sanctions imposed on Russia, Belarus, the so-called Donetsk People’s Republic and the so-called Luhansk People’s Republic have led to and will likely continue to lead to, geopolitical instability, market uncertainty and supply disruptions.

Finally, rising inflation has increased operating costs for many businesses and, together with slowing economic growth and fear of a recession, has led governments to change monetary policy in response.

The current economic environment remains uncertain and the extent to which EVgo’s operating and financial results for future periods will be impacted by the ongoing impacts of the COVID-19 pandemic, the ongoing conflict in Ukraine, increasing inflation, supply-chain disruptions, government efforts to reduce inflation and any recession will largely depend on future developments, which are highly uncertain and cannot be reasonably estimated at this time.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The CRIS Business Combination was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States of America (“GAAP”), primarily due to the fact that EVgo Holdings continues to control the Company through its ownership of the Class B common stock.

As described in Note 1, EVgo Services was acquired by EVgo Holdco on the Holdco Merger Date and EVgo Holdco was partially acquired by EVgo through EVgo’s acquisition of EVgo OpCo Units, on the CRIS Close Date.

EVgo Services’ consolidated financial statements and notes for the periods presented prior to the Holdco Merger Date are labeled “Predecessor.” The Company’s consolidated financial statements and notes as of and after the Holdco Merger Date are labeled “Successor.”

The accompanying consolidated financial statements are presented in accordance with GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”).

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The consolidated financial statements include the accounts of the Company and its subsidiaries and all intercompany transactions have been eliminated in consolidation.

Change in Presentation of Costs

During the third quarter of 2021, the Company changed its presentation of certain costs, including network platform service fees, certain storage and freight costs, pre-operational rent/license fees, call center expenses and certain costs related to field and customer operations.

In previous periods, these costs were included as a component of cost of sales.

The Company now presents these costs as a component of general and administrative expenses.

Management believes this presentation better reflects the nature of the costs, financial performance of the Company, enables better alignment between revenues and cost of sales and provides more clarity about the changes in cost of sales and general and administrative expenses, resulting in improved financial reporting and comparability and consistency of financial results.

All periods presented have been retrospectively revised to reflect the effects of the change to cost of sales and general and administrative expenses.

There was no net impact to loss from operations, net loss attributable to the Company or net loss per share for any periods presented.

The consolidated balance sheets, consolidated statements of shareholders’ and member’s equity (deficit), and the consolidated statements of cash flows are not affected by changes in the presentation of certain costs.

The following is a reconciliation for the respective periods:

Administrative

(in thousands)

Cost of Sales

For the year ended December 31, 2021

Computed under previous method

Change in presentation

For the period from January 16, 2020 through December 31, 2020

Previously reported

Change in presentation

For the period from January 1, 2020 through January 15, 2020

Previously reported

Change in presentation

GAAP defines subsequent events as events or transactions that occur after the balance sheet date but before financial statements are issued or are available to be issued.

Based on their nature, magnitude and timing, certain subsequent events may be required to be reflected in the consolidated financial statements at the balance sheet date and/or required to be disclosed in the notes to the consolidated financial statements.

The Company has evaluated subsequent events accordingly.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures.

Accordingly, actual results could differ from those estimates.

Significant estimates made by management include, but are not limited to, charging station depreciable lives, costs associated with asset retirement obligations, the fair value of the share-based compensation, earnout liability, warrant liability and the fair value measurements of assets and liabilities allocated for acquired businesses.

Accordingly, the actual results could differ significantly from those estimates.

The consolidated financial statements have been prepared in accordance with GAAP.

The preparation of EVgo’s consolidated financial statements requires the Company to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses and related disclosures of contingent assets and liabilities.

Significant estimates made by management include, but are not limited to, variable consideration estimates for revenue, depreciable lives of property and equipment and intangible assets, costs associated with asset retirement obligations, the

fair value of share-based compensation, earnout liability, warrant liability and the fair value measurements of assets and liabilities allocated for acquired businesses.

Management bases these estimates on its historical experience and various other assumptions that it believes to be reasonable under the circumstances.

Actual results experienced may vary materially and adversely from EVgo’s estimates.

Revisions to estimates are recognized prospectively.

Concentration of Business and Credit Risk

The Company maintains its cash accounts in a commercial bank.

The total cash balances held in a commercial bank are insured by the Federal Deposit Insurance Corporation up to $ 250,000 .

At various times during the years ended December 31, 2021 and 2020, the Company had uninsured balances.

The Company maintains its cash accounts in commercial banks.

Cash balances held in a commercial bank are secured by the Federal Deposit Insurance Corporation up to $ 250,000 .

At times, a portion of deposit balances may be in excess of federal insurance limits.

The Company has not experienced any losses on such accounts and believes it is not exposed to any significant credit risk on cash.

The Company mitigates its risk with respect to cash by maintaining its deposits at high-quality financial institutions and monitoring the credit ratings of those institutions.

The Company had accounts receivable with two customers that comprised 32.4 % and 66.0 % of the Company’s total accounts receivable as of December 31, 2021 and 2020, respectively.

For the year ended December 31, 2021, one customer represented 10.5 % of the Company’s total revenue.

For the period from January 16, 2020 through December 31, 2020, one customer represented 11.3 % of the Company’s total revenue.

For the period from January 1, 2020 through January 15, 2020, one customer represented 64.9 % of the Company’s total revenue.

For the year ended December 31, 2021, EVgo had two vendors that provided 37.3 % of total charging equipment and services to the Company.

For the period ended January December 31, 2020, EVgo had four vendors that provided 84.0 % of the total charging equipment and services to the Company.

The Company had one customer that comprised 19.7 % of the Company’s total accounts receivable as of December 31, 2022.

The Company had two customers that comprised 32.4 % of the Company’s total accounts receivable as of December 31, 2021.

For the year ended December 31, 2022, two customers represented 42.9 % of total revenue.

For the year ended December 31, 2021, one customer represented 10.5 % of total revenue.

For the years ended December 31, 2022 and 2021, EVgo had four and two vendors, respectively, that provided more than 10% of EVgo’s total charging equipment.

For the years ended December 31, 2022 and 2021, the amount provided by these vendors were 88.8 % and 37.3 % , respectively.

Reclassifications

The Company has made certain reclassifications to prior period amounts to conform to current period presentation.

Cash and Restricted Cash

Cash and restricted cash include cash held in cash depository accounts in major banks in the United States and are stated at cost.

The Company does not hold any highly liquid assets that can be considered as cash equivalents.

Cash that is held by a major bank and has restrictions on its availability to the Company is considered restricted cash.

The Company had unused letters of credit of $ 0.7 million as of December 31, 2021, associated with the construction of its charging stations and in connection with one of its operating leases.

Cash balances collateralizing these letters of credit are considered restricted cash.

The Company had no unused letters of credit as of December 31, 2020.

Cash, Cash Equivalents and Restricted Cash

Cash and restricted cash include cash held in cash depository accounts in major banks in the U.S.

and are stated at cost.

Cash equivalents are carried at fair value and are primarily invested in money market funds.

Cash that is held by a financial institution and has restrictions on its availability to the Company is classified as restricted cash.

The Company had unused letters of credit, which were collateralized with cash classified as restricted cash on the Company's consolidated balance sheets, of $ 0.7 million as of December 31, 2022 and 2021, associated with the construction of its charging stations and in connection with one of its operating leases.

Accounts Receivable and Allowance for Doubtful Accounts

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After all attempts to collect an account receivable have failed, the account receivable is written-off against the allowance for doubtful accounts.

The allowance for doubtful accounts was $ 0.7 million and $ 0.3 million as of December 31, 2021 and 2020, respectively.

Other accounts receivable of $ 1.3 million and a de minimis amount were included in accounts receivable, net, on the consolidated balance sheets as of December 31, 2022 and 2021, respectively.

Deferred Offering Costs

Deferred offering costs, consisting primarily of legal, accounting and filing fees relating to public offerings, are capitalized.

The deferred offering costs will be offset against public offering proceeds upon the effectiveness of an offering.

In the event that an offering is abandoned or terminated, deferred offering costs will be expensed.

As of December 31, 2022 and 2021, the Company had capitalized $ 1.0 million and $ 0.2 million, respectively, of deferred offering costs in other current assets on the consolidated balance sheets.

Cloud Implementation Costs

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Property, Equipment and Software

Property and equipment include charging stations and other technical installations, construction in process and charging equipment.

Property, equipment and software are stated at cost less accumulated depreciation and amortization.

Depreciation for property, equipment and software is computed using the straight-line method over the estimated useful lives of the assets, which are approximately three to seven years .

Leasehold improvements are amortized over the shorter of the lease term or seven years .

The estimated useful life of charging stations, other fixed assets and asset retirement costs is seven years .

Property and equipment includes land, charging stations and other technical installations, construction in process, charging station and related equipment and a building, which are stated at cost or at fair value as of the date of acquisition less accumulated depreciation and amortization.

Land is not depreciated.

Depreciation for property, equipment and software is computed using the straight-line method over the estimated useful lives of the assets.

The estimated useful life of the building is forty years and the estimated useful lives of the remaining assets are approximately three to seven years .

Charging equipment and charging station installation costs are depreciated when they are placed into service.

Construction in process consists primarily of charging equipment, charging station installation costs, and software that have not yet been placed into service and are not depreciated.

Charging equipment consists primarily of equipment and various components that have not yet been allocated to a project.

Leasehold improvements are amortized over the shorter of the estimated useful life or the lease term.

Depreciation is reported net of the amortization of the capital-build liability, as described in Note 7.

Charging equipment consists primarily of equipment and various components for charger projects that have not yet been placed in service and are recorded at historical cost.

Neither charging equipment nor construction in process are depreciated until they are placed in service.

The cost of maintenance and repairs is charged to expense as incurred while significant renewals and betterments are capitalized.

Deductions are made for retirements and/or disposals.

Following the disposition of an asset, the associated net cost is no longer recognized as an asset, and any gain or loss on the disposition is reflected in general and administrative expenses.

The Company has adopted the provisions of ASC Topic 350-40, Internal-Use Software , and therefore the costs incurred in the preliminary stages of development are expensed as incurred.

Following the disposition of an asset, the associated net cost is no longer recognized as an asset and any gain or loss on the disposition, inclusive of any amounts recovered from insurance, is reflected in general and administrative expenses.

The Company has adopted the provisions of ASC Topic 350-40, Internal-Use Software, and therefore the costs incurred in the preliminary stages of software development are expensed as incurred.

The Company capitalizes all costs related to software developed or obtained for internal use when management commits to funding the project, the preliminary project stage is completed and when technological feasibility is established.

Once a new functionality or improvement is released, the asset is subject to depreciation.

Capitalization of costs ceases when the project is substantially complete and ready for its intended use and the costs are amortized into general and administrative expenses using the straight-line method over the estimated useful lives of the assets.

Goodwill and Other Intangible Assets

Goodwill represents the difference between the purchase price and the fair value of identifiable net assets acquired in a business combination.

The Company’s goodwill and intangible assets are the result of the Holdco Merger and as part of the acquisition of Recargo, Inc.

(“Recargo”) (see Note 3).

Goodwill is not subject to amortization and is tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset may be impaired.

The Company’s goodwill and intangible assets are the result of the Holdco Merger and as part of the acquisition of PlugShare LLC (f/k/a Recargo, Inc.) (see Note 3).

EVgo completes an impairment test of goodwill at least annually or more frequently if facts or circumstances indicate that goodwill might be impaired.

EVgo’s annual impairment test date is October 1st.

Goodwill is tested for impairment at the reporting unit level.

EVgo first performs a qualitative assessment of EVgo’s single reporting unit.

Factors considered in the qualitative assessment include general macroeconomic conditions, industry and market conditions, cost factors, overall financial performance of EVgo’s reporting unit, events or changes affecting the composition or carrying amount of the net assets of EVgo’s reporting unit, any sustained decrease in EVgo’s share price and other relevant entity-specific events.

If EVgo elects to bypass the qualitative assessment or if EVgo determines, on the basis of qualitative factors, that the fair value of the reporting unit is more likely than not less than the carrying amount, a quantitative test would be required.

EVgo then performs the goodwill impairment test for each reporting unit by comparing the reporting unit’s carrying amount, including goodwill, to its fair value, which is measured based upon, among other factors, a discounted cash flow analysis, as well as market multiples for comparable companies.

Estimates critical to EVgo’s evaluation of goodwill for impairment include forecasts for revenue, EBITDA growth and long-term growth rates, as well as the discount rates.

If the carrying amount of the reporting unit is greater than its fair value, goodwill is considered impaired.

EVgo did not recognize any impairment losses for any periods presented.

It is possible in future periods that further declines in market conditions, customer demand or other potential changes in operations may increase the risk that these assets may become impaired.

Finite-lived intangible assets are amortized over their useful lives and recorded as either cost of sales or operating expenses depending on the nature of the intangible asset.

Costs incurred to renew or extend the term of recognized intangible assets are expensed as incurred.

During the fourth quarter of 2022, the Company reviewed its goodwill and other intangible assets for indicators of impairment and performed its annual goodwill impairment analysis as part of this review.

The Company did not note any indicators of impairment with respect to its goodwill or other intangible assets as of December 31, 2022 and no impairment charge was required.

Estimated useful lives of the Company’s intangible assets are presented below:

15 - 20 years

Host relationships

Site Host relationships

Customer relationships

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10 - 15 years

15 - 20 years

Long-Lived Asset Impairment

The Company reviews its long-lived assets, including goodwill and finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

If the Company identifies events or changes in circumstances that could impact recoverability, the Company compares the carrying value of the assets with their estimated future undiscounted cash flows.

The Company reviews its long-lived assets, including property and equipment, right-of-use assets and finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable.

If the Company identifies events or changes in circumstances that could impact recoverability, the Company compares the carrying value of the assets or asset groups with their estimated future undiscounted cash flows.

If it is determined that an impairment has occurred, the loss would be recognized during that period.

The impairment loss would be calculated as the difference between the asset carrying values and the present value of estimated net cash flows or comparable market values, giving consideration to recent operating performance and pricing trends.

During the fourth quarter of 2021, the Company reviewed its goodwill, other intangible assets and long-lived assets for indicators of impairment.

The Company further performed its annual goodwill impairment test as part of this review.

The Company did not note any indicators of impairment with respect to its goodwill, other intangible assets and long-lived assets as of December 31, 2021 and no impairment charge was required.

However, as a result of the COVID-19 pandemic, it is possible in future periods that further declines in market conditions, customer demand or other potential changes in operations may increase the risk that these assets may become impaired.

The impairment loss would be calculated as the difference between the asset or asset group carrying values and the present value of estimated net cash flows or comparable market values, giving consideration to recent operating performance and pricing trends.

EVgo did not recognize any impairment losses for any periods presented.

It is possible in future periods that further declines in market conditions, customer demand or other potential changes in operations may increase the risk that these assets may become impaired.

During the fourth quarter of 2022, the Company reviewed its long-lived assets for indicators of impairment, did not note any indicators of impairment and no impairment charge was required.

Lease Accounting

As a lessee, the Company has entered into agreements with various Site Hosts, which allow the Company to operate the charging stations on their property, and with various parties to lease its office and laboratory space.

As a lessor, the Company has entered into agreements to lease charging equipment, charging stations and other technical installations and sublease these sites to third parties.

The Company accounts for these leases as operating leases under ASC Topic 840, Leases .

The Company accounts for leases under ASC Topic 842, Leases (“ASC 842”).

As a lessee, the Company enters into agreements with various Site Hosts, which allow the Company to lease space to operate the charging stations on their property and with various parties to lease its office, warehouse and laboratory space.

The Company, at the inception of the contract, determines whether a contract is or contains a lease.

For leases with an initial contractual term in excess of 12 months, the Company records the related operating or finance right-of-use asset and lease liability.

Some leases also include renewal and/or early termination options, which can be exercised under specific conditions.

Renewal and termination options are not included in the measurement of the right-of-use assets and lease liabilities unless the Company is reasonably certain to exercise the options.

The Company’s lease agreements primarily require lease payments based on a minimum annual rental amount.

In addition to minimum lease payments, the Company’s lease agreements may contain variable lease payments based on revenue-sharing or inflation adjustments.

The Company has elected the practical expedient to not separate non-lease components from lease components in the measurement of liabilities for all asset classes.

Lease liabilities are recognized at the present value of the fixed lease payments using an implicit rate and, if not available, an incremental borrowing rate based on estimated collateralized borrowings available to the Company.

The Company incurs initial direct costs and receives landlord incentives that increase or decrease the calculated right-of-use asset, respectively.

The Company recognizes lease expense for operating leases on a straight-line basis over the lease term.

The Company expenses variable lease payments as incurred.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The Company has not entered into any finance leases.

As a lessor, the Company has entered into agreements to lease charging equipment, charging stations and other technical installations or sublease properties leased from Site Hosts to third parties.

The Company, at the inception of a

lease contract, determines if it is an operating, sales-type or direct financing lease.

The Company has not elected the practical expedient to not separate non-lease components from lease components in the measurement of liabilities for all asset classes.

The leases generally provide for fixed monthly payments and sometimes include provisions for contingent variable rent based on the number of charging sessions and minutes used, which are recognized when earned.

Fixed payments received under lease agreements for operating leases are recognized on a straight-line basis over the lease term and are reported in revenue in the consolidated statements of operations.

Deferred Revenue

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Capital-Build Liability and Expense Reimbursements

The Company receives third-party funding for charging stations and other programs.

The Company receives grant funding in the form of cash from governmental and non-governmental entities to construct and operate EV chargers.

As there is no authoritative guidance under GAAP regarding accounting for government assistance to for-profit business entities, the grants directly or indirectly provided by the government are accounted for by analogy to International Accounting Standard (“IAS”) 20, Accounting for Government Grants and Disclosure of Government Assistance .

Grant contracts provided by non-governmental entities are analyzed and if it does not fall under the scope of ASC 842 or ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), they are accounted for under IAS 20.

The charging stations purchased and installed under these programs or agreements are recorded in property and equipment.

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The Company retains ownership of these charging stations.

Reimbursement under the agreements for operating expenses relating to the operation of these charging stations is recorded in other income, related party.

Expense reimbursements for other programs under these agreements are presented within other income, related party, along with the corresponding expense, resulting in no net financial statement impact.

Reimbursement under the agreements for operating and maintenance expenses is recognized as an offset to cost of revenue in the consolidated statements of operations in the period in which EVgo recognizes the related costs of operation and maintenance of the chargers.

Derivative Financial Instruments

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Earnout Liability

In accordance with ASC 815, Earnout Shares (as defined in Note 3) are recorded as a derivative liability at fair value on the CRIS Close Date, since they are not indexed to the Company’s Class A common stock.

In accordance with ASC 815, Earnout Shares (as defined in Note 3) were initially recorded as a derivative liability at fair value as of the CRIS Close Date, since they are not indexed to the Company’s Class A common stock.

They are subsequently remeasured at each reporting date through the change in fair value of earnout liability in the consolidated statements of operations.

The estimated fair value of the contingent earnout liability is determined using a Monte Carlo simulation using a distribution of potential outcomes on a monthly basis over the Earnout Period (as defined in Note 18), prioritizing the most reliable information available.

The estimated fair value of the contingent earnout liability is determined using a Monte Carlo

simulation using a distribution of potential outcomes on a monthly basis over the Earnout Period (as defined in Note 17), prioritizing the most reliable information available.

The assumptions utilized in the calculation are based on the achievement of certain stock price milestones, including the current common stock price, expected volatility, risk-free rate, expected term and dividend rate.

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Upon initial recognition of the Company’s asset retirement obligation liability, property and equipment is increased by an amount offsetting the liability and depreciated over its useful life and the obligation is accreted to its estimated future value at the date of retirement.

Subsequent to establishing an asset retirement obligation, downward revisions in the liability due to a change in the expected timing or amount of cash flows are recorded as corresponding decreases to the asset retirement costs;

however, if the amount of the decrease exceeds the carrying value of the related asset retirement cost and related asset, such excess credits are adjusted through a reduction of accretion expense.

Asset retirement obligations require the use of estimates to determine third-party costs for dismantling and restoring the sites.

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Discount rates are based on the Company’s estimated credit adjusted risk-free rate.

The Company reviews its estimates of removal costs on an ongoing basis and will make changes to the asset retirement obligations as necessary.

The Company reviews its estimates of removal costs on an ongoing basis and makes changes to the asset retirement obligations as necessary.

Warrant Liability

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Accordingly, the Company classifies the warrants as liabilities at their fair value and adjusts the warrants to fair value at the end of 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 the statements of operations.

The fair value of the redeemable warrants (the “Public Warrants”), originally sold as part of the units issued in the Company’s Initial Public Offering, has been estimated using their quoted market price at December 31, 2021.

The Private Placement Warrants were valued using a Modified Black Scholes Option Pricing Model for initial and subsequent measurements and are categorized as a Level 3 (defined below) fair value measurement.

This liability is subject to re-measurement at each balance sheet date until exercised or redeemed by the Company and any change in fair value is recognized in the statements of operations.

The Private Placement Warrants were initially valued using a Monte Carlo simulation model, which was a level 3 (defined below) fair value measurement.

Commencing June 30, 2022, the fair value of the Private Placement Warrants was measured by reference to the trading price of the Public Warrants, which is considered to be a Level 2 (defined below) fair value measurement.

Fair Value Measurement

The Company determines fair value in accordance with ASC 820, Fair Value Measurement , which established a hierarchy for the inputs used to measure the fair value of financial assets and liabilities based on the source of the input, which generally range from quoted prices for identical instruments in a principal trading market (“Level 1”) to estimates determined using significant unobservable inputs (“Level 3”).

The Company determines fair value in accordance with ASC 820, Fair Value Measurement , which establishes a hierarchy for the inputs used to measure the fair value of financial assets and liabilities based on the source of the input, which generally range from quoted prices for identical instruments in a principal trading market (“Level 1”) to estimates determined using significant unobservable inputs (“Level 3”).

Multiple inputs may be used to measure fair value;

however, the level of fair value is based on the lowest significant input level within this fair value hierarchy.

The Company’s recurring and non-recurring fair value measurements include the initial valuation of asset retirement obligations, the issuance of share-based compensation awards, the initial valuations of the assets identified in purchase accounting, including intangible assets and property and equipment, and the earnout and warrant liabilities.

The measurements of trading securities and the liability for Public Warrants are considered Level 1 fair values.

The measurements of the remaining items are all considered Level 3 as significant unobservable inputs are used to estimate their values.

The Company’s recurring and non-recurring fair value measurements include the initial valuation of asset retirement obligations, the issuance of share-based compensation awards, the initial valuations of the assets and liabilities identified in purchase accounting, including intangible assets and property and equipment and the earnout and warrant liabilities.

Details on the methods and assumptions used to determine the fair values are as follows:

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Measurements that are least observable are estimated from significant unobservable inputs determined from sources with little or no market activity for comparable contracts or for positions with longer durations.

As of December 31, 2021 and 2020, the carrying values of certain accounts such as accounts receivable, accounts payable and accrued expenses are deemed to approximate their fair values due to their short-term nature.

The carrying values of certain accounts such as accounts receivable, accounts payable and accrued expenses are deemed to approximate their fair values due to their short-term nature.

The fair values of the Company’s money market funds are based on quoted prices in active markets for identical assets.

Revenue Recognition

The Company’s primary source of revenue is charging contracts with customers.

The Company’s sources of revenue are from retail, commercial and OEM charging contracts, regulatory credits, OEM network contracts, eXtend, and ancillary services.

Its primary source of revenue is charging contracts with customers.

A significant portion of the Company’s charging contracts have upfront payment terms or monthly payment terms.

Payments for walk-up retail charging usage are collected at the point of service, except for monthly member fees and member usage fees which are billed monthly in arrears, and payments for development and project management revenue occur either on an installment basis or are received in full upon completion.

Revenues for regulatory credits such as low carbon fuel standards credit sales are recognized upon delivery.

The Company recognizes revenue pursuant to ASC Topic 606, Revenue From Contracts With Customers (“ASC 606”), using a five-step model:

Payments for walk-up retail charging usage are collected at the point of service, except for monthly member fees and member usage fees which are billed monthly in arrears.

Payments for development and project management revenue occur either on an installment basis or are received upon completion of milestones.

Payment terms vary on a contract-by-contract basis, although terms generally include a requirement of payment within 30 to 60 days.

Revenues for regulatory credits such as LCFS credit sales are recognized upon delivery.

The Company recognizes revenue pursuant to ASC 606, using a five-step model:

(a) identification of the contract, or contracts, with a customer;

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Revenue is recorded based on the transaction price excluding amounts collected on behalf of third parties such as sales taxes, which are collected on behalf of and remitted to governmental authorities.

The majority of the Company’s contracts with customers only contain a single performance obligation.

The Company may also incur fulfillment costs that are reimbursed by its customers as pass-through costs that may or may not be subject to a mark-up.

Reimbursement for fulfillment costs is included in the transaction price and is recognized on a gross basis.

The Company recognizes estimated losses on contracts immediately upon identification of the loss.

Some of the Company’s contracts with customers only contain a single performance obligation.

When agreements involve multiple performance obligations, the Company accounts for individual performance obligations separately if they are distinct.

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The transaction price is allocated to each performance obligation based on the relative standalone selling price (“SSP”).

The Company determines the SSP based on observable standalone selling price when it is available, as well as other factors, including the price charged to its customers, its discounting practices and its overall pricing objectives, while maximizing observable inputs.

The Company determines the SSP based on observable SSP when it is available, as well as other factors, including the price charged to its customers, its discounting practices and its overall pricing objectives, while maximizing observable inputs.

EVgo’s contracts may provide its customers with the option to renew the agreement.

Generally, this option is not considered to provide a material right that should be accounted for as a separate performance obligation because the customer would not receive a discount if it decided to renew and the option to renew is generally cancellable by either party subject to the notice of non-renewal requirements specified in the contract.

If a material right is identified, the Company would account for these accordingly as separate performance obligations.

EVgo’s contracts may also provide its customers with the option to purchase additional future services.

Generally, this option is not considered to provide the customer with a material right that should be accounted for as a separate performance obligation since the cost of the additional future services are generally at market rates for such services and the Company is not automatically obligated to stand ready to deliver these additional goods or services because the customer may reject EVgo’s proposal.

Areas of Judgment and Estimates

The Company exercises judgment in determining which promises in a contract constitute performance obligations rather than set-up activities.

The Company determines which activities under a contract transfer a good or service to a customer rather than activities that are required to fulfill a contract but do not transfer control of a good or services to the customer.

Determining whether obligations in a contract are considered distinct performance obligations that should be accounted for separately or as a single performance obligation requires significant judgment.

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When observable pricing is not available, the Company determines SSP using estimation techniques, but maximizes the use of observable inputs in these estimation techniques.

The Company’s customer contracts may include variable consideration such as that due to the unknown number of users that will receive charging credits or an unknown number of sites that will receive maintenance services.

The Company estimates variable consideration under the expected value method or the most likely amount method.

If charging station installations are not completed by specified dates, the Company may be subject to installation penalties.

The Company may also be subject to other penalties identified in the customer agreements upon failure to maintain specified network uptimes and for other contractual service requirements.

Variable consideration for installation, service, and other penalties is estimated using the most likely amount method.

Practical Expedients and Exemptions

The Company elected the practical expedient to not adjust the consideration in a contract for the effects of a significant financing component if the Company expects, at contract inception, that the period between receipt of payment and the transfer of promised goods or services will be less than one year.

In many cases, the Company receives payment in advance of the transfer of promised goods or services.

In some cases, the Company receives payment in advance of the transfer of promised goods or services.

For contracts in which revenue is recognized over time and the entity has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date, the Company recognizes revenue at the amount to which it has the right to invoice.

The Company does not disclose the transaction price allocated to remaining performance obligations for (i) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice and (ii) contracts with variable consideration allocated entirely to a single performance obligation.

The Company’s remaining performance obligations under these contracts include providing charging services and maintenance services which will be recognized over the next one to four years.

Any element of variable consideration is due to the unknown number of users that will receive charging credits or an unknown number of sites that will receive maintenance services.

The Company has determined it is not necessary to estimate variable consideration as the uncertainty resolves itself monthly in accordance with the contracts’ revenue recognition pattern.

The Company’s remaining performance obligations under these contracts include providing charging services, branding services and maintenance services which will generally be recognized over the contract term.

An asset is recognized for the incremental costs of obtaining a contract with a customer if the benefit of those costs is expected to be longer than one year.

A practical expedient to expense costs as incurred for costs to obtain a contract with

a customer is applied when the amortization period would have been one year or less.

Contract costs are evaluated for impairment in accordance with ASC 310, Receivables .

Contract Balances

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Contract Assets .

Unbilled receivables arise when the timing of billings to customers differs from the timing of revenue recognition, such as when the Company recognizes revenue over time before a customer can be billed.

Contract assets include billed and unbilled receivables, which are classified as accounts receivable, net, on the consolidated balance sheets.

Billing practices are governed by the terms of each contract based upon costs incurred, achievement of milestones and/or predetermined schedules.

Billings do not necessarily correlate with the timing of revenue recognition such as revenue recognized over time using the relevant input method, which is generally either time-based or cost-based.

Contract assets include unbilled amounts resulting from revenue under contracts when the time-based or cost-based method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer.

Contract assets are classified as prepaid and other current assets on the consolidated balance sheets.

Contract Liabilities .

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Classification between deferred revenue and customer deposits depends on whether or not the Company has commenced performance of its performance obligations.

EVgo’s contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period, when applicable.

From time-to-time, the payment terms of contracts require the customer to make advance payments as well as interim payments as work progresses.

These advance payments generally are not considered to contain a significant financing component.

Sales Tax Collected from Customers

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Cost of Sales and General and Administrative Expenses

Cost of sales consists primarily of energy usage fees, depreciation and amortization expenses, site operating and maintenance expenses, customer service and network charges, warranty and repair services, and site costs and related expense associated with charging equipment.

Cost of sales consists primarily of energy usage fees, depreciation, net of capital-build amortization expenses, site operating and maintenance expenses, customer service and network charges, warranty and repair services, site costs and related expense associated with charging equipment.

General and administrative expenses primarily consist of payroll and related personnel expenses, IT and office services, office rent expense and professional services.

Advertising Costs

Advertising costs are expensed as incurred and totaled $ 1.6 million and $ 0.7 million for the year ended December 31, 2021 and for the period from January 16, 2020 through December 31, 2020, respectively.

For the period from January 1, 2020 through January 15, 2020, advertising costs were de minimis.

Advertising costs are generally expensed as incurred and totaled $ 2.0 million and $ 1.6 million for the years ended December 31, 2022 and 2021, respectively.

Research and Development Costs

Research and development costs are expensed as incurred and totaled $ 2.0 million and $ 1.2 million for the year ended December 31, 2021 and for the period from January 16, 2020 through December 31, 2020, respectively.

For the period from January 1, 2020 through January 15, 2020, research and development costs were de minimis.

The Company has a 401(k) plan that qualifies under Section 401(k) of the United States Internal Revenue Code of 1986, as amended (the “Code”).

The 401(k) plan provided employer contributions to eligible employees through April 2020.

Employer contributions to the 401(k) plan for the year ended December 31, 2021 and for the period from January 16, 2020 through December 31, 2020 were de minimis.

Employer contributions to the 401(k) plan for the period from January 16, 2020 through December 31, 2020 were $ 0.2 million.

Research and development costs are expensed as incurred and totaled $ 4.8 million and $ 2.0 million for the years ended December 31, 2022 and 2021, respectively.

The Company has a 401(k) plan that qualifies under Section 401(k) of the U.S.

Internal Revenue Code of 1986, as amended (the “Code”).

The 401(k) plan provides discretionary employer matching contributions to eligible employees up to 2% of an employee’s eligible gross pay up to IRS annual limits.

Employer contributions to the 401(k) plan for the year ended December 31, 2022 were $ 0.7 million and de minimis for the year ended December 31, 2021.

Share-Based Compensation

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Compensation expense for awards that vest in increments is recognized based on an accelerated attribution method.

In accordance with ASC Topic 718, Compensation – Stock Compensation (“ASC 718”), compensation expense is recorded

over the requisite service period for any awards that are expected to vest.

In accordance with ASC Topic 718, Compensation – Stock Compensation (“ASC 718”), compensation expense is recorded over the requisite service period for any awards that are expected to vest.

The Company has elected to account for forfeitures as they occur.

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“Pass-through” entities, such as EVgo OpCo and its subsidiaries, are not subject to U.S.

Federal and certain state income taxes at the entity level, and instead, the tax liabilities with respect to taxable income are passed through to the members, including the Thunder Sub.

federal and certain state income taxes at the entity level and instead, the tax liabilities with respect to taxable income are passed through to the members, including Thunder Sub.

As a result, prior to the CRIS Business Combination, EVgo Holdco and its subsidiaries were not subject to U.S.

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The Company’s chief operating decision-maker (“CODM”) is its Chief Executive Officer.

Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by its CODM in deciding how to allocate resources to an individual segment and is assessing performance.

The Company’s CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources and evaluating financial performance.

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Newly Adopted Accounting Standards

In January 2017, the FASB issued ASU 2017-04, Goodwill and Other, Simplifying the Test for Goodwill Impairment (“ASU 2017-04”).

The new guidance removes step 2 of the goodwill impairment test, which required a hypothetical purchase price allocation.

A goodwill impairment is now the amount by which a reporting unit’s carrying value exceeds

its fair value, not to exceed the carrying amount of goodwill.

All other goodwill impairment guidance remains largely unchanged.

The Company adopted ASU 2017-04 effective January 1, 2021.

This guidance only impacts the Company’s consolidated financial statements if there is a future impairment of goodwill.

In August 2018, the FASB issued ASU 2018-15 , Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40):

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) (“ASU 2018-15”), to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license).

The Company adopted ASU 2018-15 on a prospective basis as of January 1, 2021 and it did not have a material impact on its consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which enhances and simplifies various aspects of the income tax accounting guidance, including requirements such as the elimination of exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period, the recognition of deferred tax liabilities for outside basis differences, ownership changes in investments, and tax basis step-up in goodwill obtained in a transaction that is not a business combination.

The Company adopted ASU 2019-12 on July 1, 2021 and it did not have a material impact on its consolidated financial statements.

Recently Issued Accounting Standards

In February 2016, the FASB issued ASU 2016 02, Leases (Topic 842) (“ASC 842”).

Subsequent to the initial ASU, the FASB issued various related corrective and clarifying ASUs for this topic, all of which have been codified in ASC 842.

ASC 842 is effective for the Company for annual reporting periods beginning after December 15, 2021 and early adoption is permitted.

The ASU will require lessees to report most leases as assets and liabilities on the balance sheet.

The Company has elected to apply the group of practical expedients which allows the Company to carry forward its identification of contracts that are or contain leases, its historical lease classification and its initial direct costs for existing leases.

The Company has also elected to recognize leases with an initial term of 12 months or less on a straight-line basis without recognizing a right-to-use asset or operating lease liability.

The Company is in the process of finalizing the data validation and associated internal controls for its selected lease management system and anticipates a material increase in assets and liabilities due to the recognition of the required right-of-use asset and corresponding liabilities for all lease obligations that are currently classified as operating leases.

The adoption of this standard will result in enhanced disclosures and is not expected to have a material impact on the Company’s consolidated statement of cash flows or earnings (loss) from operations in the Company’s consolidated statements of operations.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments (“ASC 326”).

The amendments in ASU 2016-13 will provide more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date.

Subsequent to the initial ASU, the FASB issued various related corrective and clarifying ASUs for this topic, all of which have been codified in ASC 326.

The ASU is effective for annual reporting periods beginning after December 15, 2022.

The Company is currently evaluating the potential impact of adopting this guidance on its consolidated financial statements.

In November 2021, the FASB issued Accounting Standards Update (“ASU”) 2021-10, Government Assistance (Topic 832), Disclosures by Business Entities about Government Assistance .

This ASU provided guidance to increase the transparency of government assistance including the disclosure of (1) the types of assistance, (2) an entity’s accounting for the assistance and (3) the effect of the assistance on an entity’s financial statements.

Under the new guidance, an entity is required to provide the following annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy:

(1) information about the nature of the transactions and the related accounting policy used to account for the transactions, (2) the line items on the balance sheet and income statement that are affected by the transactions and the amounts applicable to each financial statement line item and (3) significant terms and conditions of the transactions, including commitments and contingencies.

This update has been implemented in the Company’s financial statements as of and for the year ended December 31, 2022.

The Company adopted this ASU prospectively as of and for the year ended December 31, 2022.

The adoption of this standard resulted in enhanced disclosures and did not have a material impact on the consolidated financial statements.

On May 3, 2021, the FASB issued ASU 2021-04, Earnings Per Shar e (Topic 260) , Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40):

Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options .

Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”).

This new standard provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange.

This standard is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

Issuers should apply the new standard prospectively to modifications or exchanges occurring after the effective date of the new standard.

Early adoption is permitted, including adoption in an interim period.

If an issuer elects to early adopt the new standard in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period.

The Company is

evaluating this new standard but does not expect it to have a material impact on the Company’s consolidated financial statements or disclosures.

The Company adopted ASU 2021-04 as of January 1, 2022, to be applied prospectively to modifications or exchanges occurring after the effective date, which did not have a material impact on the Company’s consolidated financial statements or disclosures.

In February 2016, the FASB issued ASC 842.

Subsequent to the release of the initial ASU, the FASB issued various related corrective and clarifying ASUs for this topic, all of which have been codified in ASC 842.

ASC 842 requires lessees to report most leases as assets and liabilities on the balance sheet.

The Company adopted ASC 842 effective January 1, 2022, using the modified retrospective transition method as allowed under ASU 2018-11, Leases (Topic 842):

Targeted Improvements , which includes the ability for the Company to recognize the cumulative effect of the adoption being recorded as an adjustment to retained earnings on the adoption date.

The Company elected to apply the package of practical expedients which allows the Company to carry forward its identification of contracts that are or contain leases, its historical lease classification and its initial direct costs for existing leases.

The Company did not elect the hindsight practical expedient.

The Company also elected to recognize leases with an initial term of 12 months or less on a straight-line basis without recognizing a right-of-use asset or lease liability.

As of the adoption date, the Company recorded operating lease right-of-use assets and operating lease liabilities of $ 21.1 million and $ 20.4 million, respectively.

The difference between the right-of-use assets and lease liabilities was primarily due to existing prepaid and accrued rent balances.

There was no impact to opening accumulated deficit as a result of the Company’s adoption of the guidance.

The adoption of this standard for both lessee and lessor accounting did not materially impact the Company’s consolidated statements of cash flows or operating loss in the Company’s consolidated statements of operations.

Refer to Note 5 for additional information.

Recently Issued Accounting Standards

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, as if it had originated the contracts.

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The adoption of the standard will impact future business combinations and require the Company to measure acquired contract assets and liabilities in accordance with ASC 606.

The Company expects the adoption of the standard to result in measuring acquired contract assets and liabilities as if it had originated the contracts.

The standard will not impact acquired contract assets or liabilities from business combinations occurring prior to the effective date of adoption.

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832), Disclosures by Business Entities about Government Assistance .

This ASU provided guidance to increase the transparency of government assistance including the disclosure of (1) the types of assistance, (2) an entity’s accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements.

(1) information about the nature of the transactions and the related accounting policy used to account for the transactions, (2) the line items on the balance sheet and income statement that are affected by the transactions, and the amounts applicable to each financial statement line item and, (3) significant terms and conditions of the transactions, including commitments and contingencies.

This update is effective for fiscal years beginning after December 15, 2021.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), as amended in December 2022 by ASU 2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848 (“ASU 2022-06”).

ASU 2020-04 provides

guidance to alleviate the burden in accounting for reference rate reform by allowing certain expedients and exceptions in applying GAAP to contracts, hedging relationships and other transactions impacted by reference rate reform.

The provisions apply only to those transactions that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform.

Adoption of the provisions of ASU 2020-04 are optional and are effective from March 12, 2020 through December 31, 2024, as amended by ASU 2022-06.

As of December 31, 2022, the Company has not adopted any expedients and exceptions under ASU 2020-04.

The Company will continue to evaluate the impact of ASU 2020-04 on its consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments (“ASC 326”).

The amendments in ASC 326 will provide more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date.

Subsequent to the initial ASU, the FASB issued various related corrective and clarifying ASUs for this topic, all of which have been codified in ASC 326.

For public companies that are considered “smaller reporting companies” as defined by the SEC, ASC 326 is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2022.

The Company does not expect this accounting guidance to materially impact its consolidated results of operations or financial position.

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Completion of the proposed transaction was subject to customary closing conditions, including the approval of the stockholders of CRIS.

On the CRIS Close Date, the Company consummated the previously announced CRIS Business Combination.

CRIS was the legal acquirer of a certain portion of EVgo OpCo and its subsidiaries and consideration received by EVgo Holdings in connection with the CRIS Business Combination consisted of shares of Class B common stock and EVgo OpCo Units and the rights under the Tax Receivable Agreement (see Note 6).

The CRIS Business Combination was accounted for as a reverse recapitalization recorded at historical carrying values with no goodwill or intangible assets acquired recognized.

On the CRIS Close Date, the Company consummated the CRIS Business Combination.

CRIS was the legal acquirer of a certain portion of EVgo OpCo and its subsidiaries and the consideration received by EVgo Holdings in connection with the CRIS Business Combination consisted of shares of Class B common stock and EVgo OpCo Units and the rights under the Tax Receivable Agreement (see Note 19).

The CRIS Business Combination was accounted for in accordance with ASC 805, Business Combinations (“ASC 805”) as a reverse recapitalization recorded at historical carrying values with no goodwill or intangible assets acquired recognized.

The shares and net loss per share available to holders of the Company’s common stock, prior to the CRIS Business Combination, were adjusted as shares reflecting the exchange ratio established in the Business Combination Agreement.

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Upon completion of the CRIS Business Combination, the voting interests, as of July 1, 2021, in the Company were as follows:

(in thousands)

(shares in thousands)

EVgo Holdings (LS Power) 1

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1 Represents shares of Class B common stock.

LS Power owns all of the outstanding voting interests in EVgo Holdings and as a result, controls the vote with respect to all matters presented to stockholders following the CRIS Business Combination.

LS Power owns all of the outstanding voting interests in EVgo Holdings and as a result, has controlled the vote with respect to all matters presented to stockholders following the CRIS Business Combination.

In addition to the shares, CRIS issued Private Placement Warrants and Public Warrants to purchase shares of Class A common stock in connection with its Initial Public Offering, which remained outstanding following the closing of the CRIS Business Combination.

An aggregate of 18,100,000 warrants to acquire shares of Class A common stock are outstanding, which are comprised of 6,600,000 Private Placement Warrants and 11,500,000 Public Warrants.

Each warrant is exercisable for one share of Class A common stock at $ 11.50 per share.

As of December 31, 2022, an aggregate of 18,097,120 warrants to acquire shares of Class A common stock were outstanding, comprised of 3,148,569 Private Placement Warrants and 14,948,551 Public Warrants.

Each warrant is exercisable for one share of Class A common stock at a price of $ 11.50 per share.

The fair value of these warrants as of July 1, 2021 was $ 79.6 million.

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The estimated fair value of the Earnout Shares issued and outstanding upon closing was $ 18.3 million and was accounted for as a derivative liability (see Note 17).

In connection with the CRIS Business Combination, there were direct and incremental costs incurred of $ 58.1 million, consisting primarily of investment banking, legal, accounting, and other professional fees, which were recorded to additional paid-in capital as a reduction of proceeds.

In connection with the CRIS Business Combination, there were direct and incremental transaction costs incurred, consisting primarily of investment banking, legal, accounting and other professional fees, which were recorded to additional paid-in capital as a reduction of proceeds.

The $ 58.1 million includes $ 8.1 million in deferred underwriting fees of CRIS that were incurred prior to close and paid out as part of the CRIS Business Combination.

Other incremental costs of $ 3.6 million were also incurred and expensed by the Company during the year ended December 31, 2021, primarily related to advisory, legal, accounting fees and other professional services in conjunction with the CRIS Business Combination, which are included in general and administrative expenses in the consolidated statement of operations.

Recargo, Inc.

On July 9, 2021 (the “Recargo Acquisition Date”), the Company entered into a stock purchase agreement (the “Recargo Agreement”) to acquire 100 % of the outstanding common stock of Recargo.

Recargo operates as a cloud-based data solutions provider in the electric vehicle sector and generates revenue through a variety of services that leverage its user base and its generated data.

The Company believes that the acquisition of Recargo will allow it to expand its revenue base and will result in certain synergies within its operations.

The Company accounted for the acquisition of Recargo as a business combination under ASC 805, Business Combinations (“ASC 805”).

There were no incremental costs related to the CRIS Business Combination incurred during the year ended December 31, 2022.

PlugShare LLC

On July 9, 2021 (the “PlugShare Acquisition Date”), the Company entered into a stock purchase agreement (the “PlugShare Agreement”) to acquire 100 % of the outstanding common stock of PlugShare LLC (f/k/a Recargo, Inc.).

Effective as of December 29, 2021, Recargo, Inc.

a California corporation, converted into EVgo Recargo, LLC, a California limited liability company.

Effective as of March 16, 2022, EVgo Recargo, LLC changed its name to PlugShare LLC.

PlugShare operates as a cloud-based data solutions provider in the EV sector and generates revenue through a variety of services that leverage its user base and its generated data.

The Company accounted for the acquisition of PlugShare as a business combination under ASC 805.

Pursuant to ASC 805, the purchase price is allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition.

Any excess of the amount paid over the estimated fair values of the identifiable net assets acquired is allocated to goodwill.

The total purchase price was $ 25.0 million, per the terms of the Recargo Agreement, none of which were contingent upon future financial results.

The table below summarizes the preliminary allocation of the estimated fair value of the assets acquired and liabilities assumed by the Company on the Recargo Acquisition Date, including resulting goodwill.

This allocation may be adjusted as the Company finalizes fair value estimates and such adjustments may be material.

Goodwill of $ 8.9 million was recorded as a result of the Recargo acquisition and reflects assets not separately identifiable under ASC 805.

The total purchase price was $ 25.0 million, per the terms of the PlugShare Agreement, none of which were contingent upon future financial results.

The table below summarizes the allocation of the fair value of the assets acquired and liabilities assumed by the Company on the PlugShare Acquisition Date, including resulting goodwill.

Goodwill of $ 8.9 million was recorded as a result of the PlugShare acquisition and reflects assets not separately identifiable under ASC 805.

Goodwill is expected to be amortizable for U.S.

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The Company determined the fair values of the assets acquired and liabilities assumed with the assistance of a third-party valuation firm.

Intangible assets recorded on the Recargo Acquisition Date include user base, trade name and technology of $ 11.0 million, $ 1.1 million and $ 2.2 million, respectively.

Intangible assets recorded on the PlugShare Acquisition Date include user base, trade name and technology of $ 11.0 million, $ 1.1 million and $ 2.2 million, respectively.

The fair values of the intangible assets were determined based on a discounted cash flow model using the with-or-without method for user base and the relief-from-royalty method for trade name and technology.

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These methods incorporate various estimates and assumptions, such as projected revenue growth rates, profit margins and forecasted cash flows based on discount rates and terminal growth rates.

The fair values of the property, plant and equipment were determined using the cost approach.

The fair values of the property and equipment were determined using the cost approach.

This approach involves adjusting the historical cost basis of the assets in the fixed asset register for inflation and then deducting for various forms of obsolescence.

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The fair value of accounts receivable, consisting of customer receivables, approximated the carrying value, which was equal to the gross contractual amounts receivable because no portion of such contractual amounts was expected to be uncollectible.

The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the Recargo Acquisition Date:

The following table summarizes the final fair values of the assets acquired and liabilities assumed at the PlugShare Acquisition Date:

Acquisition Date

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Goodwill recognized

The following unaudited pro forma financial information presents consolidated revenue and net loss for the periods indicated as if the Recargo acquisition had occurred on January 1, 2020:

The following unaudited pro forma financial information presents consolidated revenue and net loss for the periods indicated as if the PlugShare acquisition had occurred on January 1, 2021:

(in thousands)

Pro forma revenue

Pro forma net loss

The above unaudited pro forma results have been calculated by combining the historical results of the Company and Recargo, as if the acquisition had occurred as of the beginning of the earliest period presented in the Company’s consolidated financial statements and exclude the impact of acquisition-related expenses.

The pro forma table above also includes estimates for additional depreciation, amortization and accretion related to the fair values of property, plant and equipment, intangible assets, capital build liability, and asset retirement obligations that were included as the basis of those assets acquired and liabilities assumed in the business acquisition.

Pro forma net income (loss)

The above unaudited pro forma results have been calculated by combining the historical results of the Company and PlugShare, as if the acquisition had occurred as of the beginning of the earliest period presented in the Company’s consolidated financial statements and exclude the impact of acquisition-related expenses.

The pro forma table above also includes estimates for additional depreciation, amortization and accretion related to the fair values of property and equipment, intangible assets, capital build liability and asset retirement obligations that were included as the basis of those assets acquired and liabilities assumed in the business acquisition.

Pro forma net loss was adjusted to exclude acquisition-related costs incurred during the periods presented.

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The pro forma financial information is not necessarily indicative of the results that would have been achieved had the transactions occurred on the date indicated or that may be achieved in the future.

For the period from the Recargo Acquisition Date of July 9, 2021 through December 31, 2021, revenue and net loss from Recargo totaling $ 1.6 million and $ 5.2 million, respectively, are included in the consolidated statement of operations for the year ended December 31, 2021, which includes $ 0.6 million of acquisition-related expenses in general and administrative expenses.

EVgo Holdings

As discussed in Note 1, on January 16, 2020, EVgo Services became an indirect wholly owned subsidiary of EVgo Holdings (through its 100 % ownership in EVgo Holdco), resulting in a change of control of the Predecessor.

EVgo Holdings accounted for the acquisition of EVgo Services as a business combination under ASC 805.

Pursuant to ASC 805, EVgo Holdco elected to apply push-down accounting.

Under this method, the purchase price is allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition.

Any excess of the amount paid over the estimated fair values of the identifiable net assets acquired is allocated to goodwill.

Purchase consideration was $ 130.5 million of cash as well as the contingent consideration arrangement described below.

EVgo Holdings also awarded $ 5.3 million in a transaction bonus to the employees in connection with the acquisition.

The table below summarizes the allocation of the estimated fair value of the assets and liabilities acquired by EVgo Holdings as of the Holdco Merger Date, including goodwill recorded.

Goodwill of $ 22.1 million was recorded as a result of the acquisition and is included in the Company’s reportable segment.

The goodwill is the result of assets not separately identifiable under ASC 805 and expected synergies from the Holdco Merger and is deductible for tax purposes.

A contingent consideration liability of $ 4.0 million was included as part of the net assets acquired in the table below.

The maximum potential contingent consideration under the Holdco Merger Agreement if all related milestones are achieved is $ 12.5 million.

The contingent consideration liability was recorded based on estimated fair value as of the Holdco Merger Date, which includes certain assumptions on the achievement of targets included in the agreement.

These assumptions considered the contractual terms and probability of achieving each milestone based on all available information as of the Holdco Merger Date.

These assumptions were then utilized to estimate the liability using a probability weighted discounted cash flow (DCF) method.

During the year ended December 31, 2020, the Company determined that the milestones were not and will not be achieved and therefore, the contingent liability was released into other income during the successor period.

The fair value of the Company and its assets were established with the assistance of a third-party valuation firm.

Intangible assets recorded on the Holdco Merger Date include Site Host relationships, customer relationships, developed technology and trade names of $ 41.5 million, $ 19.0 million, $ 11.8 million and $ 3.9 million, respectively.

The fair value of intangibles was determined based on the discounted cash flow model using the relief from royalty method, with the exception of customer relationships and Site Host relationships.

The customer relationships were valued using the with or without method.

Site Host relationships were valued using discounted projected cash flows relative to these relationships.

Each of these approaches are a form of the income approach method.

These methodologies incorporate various estimates and assumptions, such as projected revenue growth rates, profit margins and forecasted cash flows based on discount rates and terminal growth rates.

For the remaining assets and liabilities, the cost method was used to determine their respective fair values.

The fair value of the property and equipment were determined based on the indirect cost approach in which current costs that were not new were adjusted for all forms of depreciation.

The capital build liability used the cost-build-up method.

As of January 15, 2020, $ 0.6 million of cash included in the Predecessor’s closing balance sheet was not transferred to the Successor in accordance with the Holdco Merger Agreement.

The purchase price has been allocated to the acquired assets.

The following table summarizes the fair values of the assets acquired and liabilities assumed at the Holdco Merger Date:

Holdco Merger Date

(in thousands)

Current assets

Accounts receivable

Accounts receivable, capital build

Prepaid expenses and other current assets

Total current assets

Property and equipment

Intangible assets

Current liabilities

Accounts payable

Accrued expenses

Deferred revenue, current

Customer deposits

Other current liabilities

Total current liabilities

Deferred revenue, noncurrent

Capital-build liability, NEDO buyout

Capital-build liability, excluding NEDO buyout

Asset retirement obligations

Other liabilities

Total liabilities

Net assets acquired

The following unaudited pro forma financial information presents the consolidated revenue and net loss for the periods indicated as if the Holdco Merger had occurred on January 1, 2020:

(in thousands)

Pro forma revenue

Pro forma net loss

The above unaudited pro forma results have been calculated by combining the historical results of the Company and the acquiring business as if the acquisition had occurred as of the beginning of the earliest period presented in the Company’s consolidated financial statements and exclude the impact of acquisition-related expenses of $ 5.3 million related to the transaction bonus for the period from January 16, 2020 through December 31, 2020.

The pro forma results include estimates for additional depreciation and amortization related to the fair value of property, plant and equipment and intangible assets and reduced amortization of capital-build liabilities and asset retirement obligations related to the purchase accounting basis adjustments.

Estimates for stock compensation expense and intercompany loan expense have been included within the pro forma results as these items were established in accordance with the terms of the Holdco Merger Agreement.

For all periods presented, historical depreciation and amortization expense of the acquired business was adjusted to reflect the acquisition date fair value amounts of the related tangible and intangible assets.

Stock compensation expense and intercompany loan expense were included for all periods as if the acquisition had occurred as January 1, 2020 and any

acquisition-related expenses that were incurred for the Holdco Merger were excluded from all periods.

No other material pro forma adjustments were deemed necessary, either to conform to the acquiree’s accounting policies or for any other situation.

For the period from the PlugShare Acquisition Date of July 9, 2021 through December 31, 2021, revenue and net loss from PlugShare totaling $ 1.6 million and $ 5.2 million, respectively, are included in the consolidated statement of operations for the year ended December 31, 2021, which includes $ 0.6 million of acquisition-related expenses in general and administrative expenses.

Note 4 – Revenue Recognition

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The Company’s revenue streams, respective performance obligations and methods of recognition are summarized below.

All the Company’s revenues are sourced from the United States.

All the Company’s revenues are sourced from the U.S.

Charging Revenue, Retail.

Retail customers have multiple options — monthly plans, pay as you go, and walk-up — for charging services with revenue recognized at a point in time for the delivered usage (electrical power delivered, minutes of charging, access and other fees).

Monthly membership fees are paid and recognized on a monthly basis.

EVgo sells electricity directly to drivers who access EVgo’s publicly available networked chargers.

Various pricing plans exist for customers and drivers have the choice to charge as members (with monthly fees and reduced per-minute or kilowatt-hour (“kWh”) pricing) through a subscription service or as non-members.

Revenue for these sales is recognized at a point in time upon delivery of electricity and is charged to the customer based on electrical power delivered, minutes of charging, or on a fee basis.

Monthly membership fees are charged to the customer and recognized on a monthly basis.

Charging Revenue, Commercial.

Commercial revenue is derived from contracts with high volume fleet customers, such as transportation network companies (“TNCs”) or delivery services, that can access EVgo’s charging infrastructure through EVgo’s public network.

In addition to offering access to its public network, EVgo offers dedicated charging solutions to fleets.

As part of this offering, EVgo typically builds, owns and operates charging infrastructure for the exclusive use of a dedicated customer and is currently offering flexible ownership models, such as its charging as a service (“ChaaS”) offering.

Any lease components that are identified for dedicated fleet hubs are accounted for in accordance with ASC 842.

Non-lease components and fulfillment costs are accounted for in accordance with ASC 606 and are recognized upon delivery of electricity and charged to the fleet customer based on electrical power delivered or minutes of charging and may be subject to a minimum usage requirement.

Charging Revenue, OEM.

The Company contracts with various automobile manufacturers (“OEMs”) to provide charging services to purchasers of their vehicles (“OEM Customers”), ranging from one to three years in duration and are recognized as charging services are provided.

The Company contracts with various automobile manufacturers (“OEMs”) to provide charging services to purchasers of their vehicles (“OEM Customers”) through charging credits or charging memberships, generally ranging up to five years in duration, and revenues are recognized as electricity is provided to the OEM Customers.

At the end of the contract, the OEM Customer can convert the account to a monthly subscription service or a “pay as you go” account.

In addition, certain contracts provide charging credits, where the customer has a specific time frame to utilize such credits.

Revenue is recognized in the month the customer uses the credits.

Under other contracts, the Company provides a finite amount of charging service to each OEM Customer for which revenue is recognized at a point in time when the charging services are delivered.

Charging Revenue, Commercial

Commercial revenue is derived from contracts with ride-share or other fleet partners whereby their drivers utilize the Company’s network.

Revenue is recognized based upon usage (electrical power delivered or minutes of charging) or amounts billed on a per charger basis for a group of chargers built for dedicated access by a single fleet or ride-share customer.

The Company has elected to recognize revenue using the as-invoiced practical expedient as it is consistent with the services rendered on a monthly basis.

Network Revenue, OEM

Network revenue OEM is related to contracts that have significant charger infrastructure build programs, which represent set-up costs under ASC 606.

Proceeds from these contracts are allocated to performance obligations related to marketing activities, memberships, reservations and charging credits.

Marketing activities are recognized over time and measurement is based on amounts spent.

For memberships and reservations, revenue is recognized over time and measured based on the charging activity of subscriber members at each measurement period.

Any unused charging credits from the above contracts are recognized as breakage using the proportional method or, for programs where there is not enough information to determine the pattern of rights exercised by the customer, the remote method.

Ancillary Revenue

Ancillary revenue primarily includes:

maintenance services and development, mobile applications, technical support, training and project management revenue.

The Company provides maintenance services for charger sites based on contractual requirements or when maintenance services are requested.

Ancillary revenue also includes a number of other revenue streams not currently significant to the overall operations such as software license agreements and branding initiatives.

The Company has elected to recognize revenue using the as-invoiced practical expedient for maintenance services that are invoiced on a monthly basis.

The Company’s performance obligation under development contracts is to develop and deliver a completed site with installed charging hardware.

Development and project management revenue is recognized over time using an input method based on costs incurred to date to measure progress.

Under this method, all costs incurred in the period that relate to a contract are charged to cost of sales and the related revenue is recognized based on the measured progress to completion.

The Company recognizes estimated losses on contracts immediately upon identification of the loss.

When revenue is recognized in excess of contract billings to date, an unbilled receivable known as “costs and estimated earnings in excess of billings” is recorded.

When contract billings to date exceed the revenue recognized, a liability known as “billings in excess of costs and estimated earnings” is recorded until the progression of the contract results in recognition of revenue.

Certain OEM contracts provide charging credits for OEM Customers and revenue is recognized at a point in time when OEM Customers use the credits for charging sessions.

Other charging memberships provide OEM customers with a stand-ready obligation and revenue is recognized over time based on the membership period.

Regulatory Credit Sales.

The Company earns revenue from the sale of regulatory credits such as low carbon fuel standard credits, which are generated from the operation of charging stations.

The Company’s only performance obligation is to transfer title to the credits once each transaction to sell the credits has been executed.

Revenue is recognized from the sale of these credits at a point in time when title is transferred to the purchaser.

As a charging station owner and operator, the Company earns revenue from the sale of regulatory credits such as LCFS credits in states where such programs are enacted currently, including the Fast Charging Infrastructure (“FCI”) program in California.

These credits are generated through charging stations based on the volume of kWh sold.

EVgo earns revenue through the sale of these credits to buyers obligated to purchase the credits to comply with the FCI program mandates.

The Company’s performance obligation is to sell regulatory credits to certain of its customers.

As such, revenue is recognized at the point of sale.

The Company records the value of the credits generated from operations based on an incremental cost basis and determined this cost to be nominal.

Network Revenue, OEM.

Network revenue, OEM is related to contracts that have significant charger infrastructure build programs, which may represent set-up costs under ASC 606 for chargers that are owned by the Company.

The transaction prices from these contracts are allocated to performance obligations including, but not limited to, marketing activities, branding services, memberships and reservations.

Revenue from marketing activities is recognized at a point in time on a net basis as the marketing services are rendered.

Memberships are stand-ready obligations and revenue is recognized over time.

For reservations, revenue is recognized at a point in time once the performance obligation is satisfied.

Branding is recognized over time as the customer receives the benefit.

Prepaid charging credits that expire unused are recognized as breakage using the proportional method or, for programs where there is not enough information to determine the pattern of rights exercised by the customer, the remote method.

eXtend Revenue.

Through EVgo eXtend, EVgo provides hardware, design, and construction services for charging sites, as well as ongoing operations, maintenance and networking and software integration solutions, while the Company’s customers purchase and retain ownership of the charging assets.

For some eXtend customers, EVgo also provides grant

application support and related services.

In 2022, EVgo announced an eXtend deal with the Pilot Company to deploy up to 2,000 fast charging stalls that the Pilot Company will own and EVgo will build, network, operate and maintain.

For the eXtend offering, the Company generally has multiple performance obligations including, but not limited to, the sales of equipment, the provision of engineering, procurement, and construction services during the construction lifecycle, and the provision of operations and maintenance services once the charging network is operational.

Revenue from sales of equipment is generally recognized at a point in time when the performance obligation is satisfied.

The Company’s performance obligation under development contracts is to develop and deliver a completed site with installed charging hardware.

The build-out fee can be structured as firm-fixed price or cost-plus arrangements and becomes payable as certain contract and/or construction milestones are achieved or as construction costs are incurred monthly.

Development and project management revenue is recognized over time using the relevant input method, which is generally either time-based or cost-based.

Under the time-based and cost-based methods, all costs incurred in the period that relate to a contract are charged to cost of sales and the related revenue is recognized based on the measured progress to completion.

EVgo may provide latent defect warranties for equipment and installation labor services related to EVgo’s charger installation services.

EVgo’s warranty obligations are generally not accounted for as separate performance obligations as warranties cannot be separately purchased and warranties do not provide a service in addition to the assurance that the charging stations will function as expected.

The operations and maintenance fees generally commence once the charging stations become operational with recurring fees generally based upon a fixed or variable rate.

For maintenance services that are invoiced monthly, the Company has elected to recognize revenue using the as-invoiced practical expedient.

Ancillary Revenue.

EVgo has a number of offerings that currently include customization of digital applications, charging data integration, micro-targeted advertising services, smart charging reservations, loyalty programs and access to chargers behind parking lot pay gates.

EVgo also offers equipment procurement and operations services for customers who operate dedicated networks.

For software-driven digital, equipment procurement and operations services, the Company recognizes revenue at a point in time or over time based on when the performance obligation is met.

The Company provides research and consulting services to its PlugShare customers.

These are generally short-term projects and the Company recognizes revenue at a point in time upon delivery of the results of the research and consulting services to the customer.

The Company enters into short-term and long-term contracts with PlugShare customers to provide charging data integration services.

The contract fees for the data integration services are generally structured as a fixed fee arrangements over a specified licensing period and revenue is generally recognized for the single performance obligation monthly, on a straight-line basis, over the licensing period.

The Company generally enters into short-term cancelable insertion orders with its advertising customers for advertising campaigns that are served through the PlugShare software platform.

Sponsorship advertising arrangements are generally priced under a cost per engagement structure, which is a set price per click or engagement.

Advertising customer contracts may contain multiple performance obligations with each distinct service.

The performance obligations are generally considered a series of distinct services as the performance obligations are satisfied over time and revenue is recognized in the period of delivery.

The contract transaction price is comprised of variable consideration based on the stated rates applied against the number of units delivered inclusive of the bonus units subject to the maximums provided in the contract.

The contractual rates and actual units delivered are used to determine the transaction price each period end.

The transaction price is allocated to each performance obligation based on the SSP of each performance obligation.

Advertising revenue is recognized ratably over the service period based on actual units delivered subject to the maximums under the contract.

Disaggregation of Revenue

The table below presents a disaggregation of EVgo’s revenue for the years ended December 31, 2022 and 2021:

(in thousands)

Charging revenue, retail

Charging revenue, OEM

Charging revenue, commercial

Charging revenue, OEM

Regulatory credit sales 1

Network revenue, OEM

eXtend revenue

Ancillary revenue 2

Regulatory credit sales

Total revenue

The table above includes revenue earned from related parties of $ 0.6 million, $ 1.3 million and $ 0.1 million for the year ended December 31, 2021, the period from January 16, 2020 through December 31, 2020 and the period from January 1, 2020 through January 15, 2020, respectively (see Note 15).

The following table provides information about contract assets and liabilities from contracts with customers:

(in thousands)

1 There were no amounts earned from related parties for the year ended December 31, 2022.

The amount for the year ended December 31, 2021 includes $ 0.6 million of revenue earned from related parties.

2 Amount for the year ended December 31, 2022 includes $ 0.1 million of revenue earned from a related party and there was no related party revenue for the year ended December 31, 2021.

The following table provides information about contract assets and liabilities from contracts with customers as of December 31, 2022 and 2021:

(dollars in thousands)

Contract assets

Contract liabilities

The following table provides the activity for the contract liabilities recognized during the respective periods:

*Percentage greater than 999%.

Contract assets as of December 31, 2022 increased to $ 2.9 million compared to a de minimis balance as of December 31, 2021 from new contracts that began in 2022.

Contract liabilities as of December 31, 2022 increased $ 19.3 million, or 50 %, to $ 57.8 million compared to $ 38.4 million as of December 31, 2021 due to additional payments from customers with existing long-term contracts and contracts entered into during 2022.

The following table provides the activity for the contract liabilities recognized during the years ended December 31, 2022 and 2021:

(in thousands)

Beginning balance

Balance as of December 31, 2021

Recognized in revenue

Marketing activities

Ending balance

It is anticipated that deferred revenue as of December 31, 2021 will be recognized for the years ending December 31, as follows:

Marketing activities recognized on a net basis

Balance as of December 31, 2022

Revenues for the years ended December 31, 2022 and 2021 include the following:

(in thousands)

Amounts included in the beginning of period contract liability balance

Amounts associated with performance obligations satisfied in previous periods

It is anticipated that deferred revenue as of December 31, 2022 will be recognized for the following years ending December 31, as follows:

(in thousands)

ASC 606 does not require disclosure of the transaction price to remaining performance obligations if the contract contains variable consideration allocated entirely to a wholly unsatisfied performance obligation.

Under many customer contracts, each unit of product represents a separate performance obligation and therefore future volumes are wholly unsatisfied and disclosure of the transaction price allocated to a wholly unsatisfied performance obligations is not required.

Under many customer contracts, each unit of product represents a separate performance obligation and therefore future volumes are wholly unsatisfied and thus disclosure of the transaction price allocated to a wholly unsatisfied performance obligations is not required.

Under these contracts, variability arises as both volume and pricing are not known until the product is delivered.

As of December 31, 2021, there was $ 22.9 million in variable consideration for wholly unsatisfied performance obligations, which is included in deferred revenue on the consolidated balance sheet.

As of December 31, 2022 and 2021, there was $ 8.7 million and $ 22.9 million, respectively, in variable consideration for wholly unsatisfied performance obligations, which is included in deferred revenue on the consolidated balance sheets.

Note 5 – Lease Accounting

As disclosed in Note 2, the Company adopted ASC 842 as of January 1, 2022 under the modified retrospective transition method.

Prior to the adoption of ASC 842, the Company accounted for leases in accordance with ASC 840, Leases .

Lessee Accounting

Site Host Agreements

The Company has entered into agreements with Site Hosts, which allow the Company to operate the charging stations on the Site Hosts’ property.

The agreements with the Site Hosts, which are deemed to be operating leases, may include one or more provisions to compensate the Site Hosts, such as fixed fees, cost reimbursements, revenue sharing and payments per customer charge, and may also include renewal options and/or escalation clauses.

The expenses related to these agreements are recorded in cost of sales for sites that are operational.

Expenses for sites that are not operational are charged to general and administrative expenses.

As of December 31, 2021, future fixed minimum payments due under site agreements with the Site Hosts for the years ending December 31, are as follows:

The Company has entered into agreements with Site Hosts, which allow the Company to operate charging stations on the Site Hosts’ property.

Additionally, the Company leases offices, off-site charging hubs, a warehouse and laboratory space under agreements with third-party landlords.

The agreements with the Site Hosts and landlords are deemed to be operating leases.

Original lease terms generally range from one to 15 years and certain leases contain renewal options that can extend the term for up to an additional seven years .

The Company has not entered into any finance leases.

The Company has estimated operating lease commitments of $ 53.0 million for leases where the Company has not yet taken possession of the underlying asset as of December 31, 2022.

As such, the related operating lease right-of-use assets and operating lease liabilities have not been recognized in the Company’s consolidated balance sheet as of December 31, 2022.

For the year ended December 31, 2022, the Company’s lease costs consisted of the following:

(in thousands)

Expenses related to the Site Hosts’ agreements totaled $ 2.2 million, $ 2.2 million and $ 0.1 million for the year ended December 31, 2021, the period from January 16, 2020 through December 31, 2020 and the period from January 1, 2020 through January 15, 2020, respectively.

In some instances, the Company subleases Site Host properties to third parties.

Future sublease income to be received by the Company under non-cancelable subleases is $ 2.4 million.

Office and Laboratory Leases

The Company leases offices and laboratory space under operating leases requiring periodic payments.

Rent expense for the year ended December 31, 2021, the period from January 16, 2020 through December 31, 2020 and the period from January 1, 2020 through January 15, 2020 was $ 1.0 million, $ 0.9 million and a de minimis amount, respectively.

As of December 31, 2021, future minimum payments due under the office and laboratory leases for the years ending December 31, are as follows:

Operating lease costs 1

Cost of sales

General and administrative expenses

Variable lease costs

Cost of sales

General and administrative expenses

Short-term lease costs

1 Rental expense for operating leases recorded in accordance with ASC 840 was $ 3.2 million for the year ended December 31, 2021.

As of December 31, 2022, the maturities of operating lease liabilities under ASC 842 for the years ending December 31, were as follows:

(in thousands)

Total undiscounted operating lease payments

imputed interest

Total discounted operating lease liabilities

As of December 31, 2021, the maturities of operating lease liabilities under ASC 840, Leases , for the years ending December 31, were as follows:

(in thousands)

Other supplemental and cash flow information, for the year ended December 31, 2022, consisted of the following:

(dollars in thousands)

Weighted-average remaining lease term

Weighted-average discount rate

Cash paid for amounts included in measurement of operating lease liabilities

Right-of-use assets obtained in exchange for new operating lease liabilities

Lessor Accounting

The Company leases charging equipment, charging stations and other technical installations and subleases properties leased from Site Hosts to third parties under operating leases where EVgo is the lessor.

Initial lease terms are generally one to three years with renewal options.

Leases provide for fixed monthly payments and include provisions for contingent rent based on number of minutes or kilowatt of energy consumed.

Rental and sublease income under these leases are recognized in revenue.

The Company recognized minimum rental and sublease income of $ 0.9 million and $ 0.8 million for the year ended December 31, 2021 and the period from January 16, 2020 through December 31, 2020, respectively.

There was a de minimis amount of minimum rental and sublease income recognized during the period from January 1, 2020 through January 15, 2020.

For chargers that are built for dedicated access to a single fleet or ride-share customer, the Company has determined these contracts are in the scope of ASC 840 , whereby the monthly usage charges are considered contingent rentals and are recognized on a monthly basis as usage is known.

The Company did not recognize any contingent rental income for the year ended December 31, 2021 and the period from January 1, 2020 through January 15, 2020.

For the period from January 16, 2020 through December 31, 2020, the Company recognized $ 0.1 million in contingent rental income.

As of December 31, 2021, future minimum rental payments due to the Company as lessor under operating leases (including subleases) for the years ending December 31, are as follows:

Initial lease terms are generally five to 10 years with renewal options .

Since the leasing arrangements the Company enters into with lessees are operating leases, the underlying asset is carried at its carrying value as owned and operated systems within property, equipment and software, net, or included in operating lease right-of-use assets on the consolidated balance sheets.

For the year ended December 31, 2022, the Company’s lease income consisted of the following components:

(in thousands)

The components of charging equipment and charging stations leased to others under operating leases and which are included within the Company’s property, equipment and software, net, are as follows as of:

Operating lease income:

Fixed lease income

Sublease income

Total lease income 1

1 Lease income recorded in accordance with ASC 840 was $ 0.9 million for the year ended December 31, 2021.

As of December 31, 2022, future minimum rental payments due to the Company as lessor under operating leases (including subleases) for the Company’s fiscal years ending December 31, were as follows:

(in thousands)

The components of charging equipment, charging stations, land, and subleased host sites leased to third parties under operating leases, which are included within the Company’s property, equipment and software, net, and operating lease right-of-use-assets were as follows as of:

(in thousands)

Charging station equipment and construction costs

Land and building

accumulated depreciation

Note 6 – Tax Receivable Agreement

In connection with the CRIS Business Combination, EVgo entered into a tax receivable agreement (the “Tax Receivable Agreement”) with EVgo Holdings (along with permitted assigns, the “TRA Holders”) and LS Power Equity Advisors, LLC, as agent.

The Tax Receivable Agreement generally provides for payment by the Company, Thunder Sub or any of their subsidiaries (other than EVgo OpCo and its subsidiaries) (“Company Group”) to the TRA Holders of 85 % of the net cash savings, if any, in U.S.

Federal, state and local income tax or franchise tax that the Company actually realizes or is deemed to realize in certain circumstances) after the CRIS Business Combination as a result of (i) certain increases in tax basis that occur as a result of the Company Group’s acquisition (or deemed acquisition for U.S.

Federal income tax purposes) of all or a portion of the TRA Holders’ EVgo OpCo Units pursuant to the CRIS Business Combination or the exercise of the redemption or Call Rights set forth in the EVgo OpCo A&R LLC Agreement and (ii) imputed interest deemed to be paid by the Company Group as a result of, and additional tax basis arising from, any payments the Company Group makes under the Tax Receivable Agreement.

The Company Group will retain the benefit of any remaining net cash savings.

If the Company Group elects to terminate the Tax Receivable Agreement early (or it is terminated early due to the Company Group’s failure to honor a material obligation thereunder or due to certain mergers, asset sales, other forms of business combinations or other changes of control), the Company Group is required to make an immediate payment equal to the present value of the anticipated future payments to be made by it under the Tax Receivable Agreement (based upon certain assumptions and deemed events set forth in the Tax Receivable Agreement, including (i) that the Company Group has sufficient taxable income on a current basis to fully utilize the tax benefits covered by the Tax Receivable Agreement, and (ii) that any EVgo OpCo Units (other than those held by the Company Group) outstanding on the termination date or change of control date, as applicable, are deemed to be redeemed on such date).

Amounts payable by the Company under the Tax Receivable Agreement are accrued through a charge to income when it is probable that a liability has been incurred and the amount is estimable.

During the year ended December 31, 2021, no transactions occurred that would result in a cash tax savings benefit that would trigger the recording of a liability by the Company based on the terms of the Tax Receivable Agreement.

Property, equipment and software, net

Operating lease right-of-use assets

Note 6 – Government Assistance

EVgo continuously pursues public grants, subsidies and incentives to reduce capital expenditures.

EVgo has dedicated, and plans to continue to dedicate, a variety of internal and external resources to monitor, submit for and utilize available grant, subsidy and incentive funding for the development of DCFCs on a state, local and national level.

EVgo’s network expansion and local build plans take into account expected timing for and availability of funding of this type.

Certain government assistance includes terms and conditions including, but not limited to, periodic reporting on a monthly, quarterly or annual basis, specific minimum uptime and operational requirements over a period of three to five years typically from the operational date.

As of December 31, 2022, the Company’s commitments under government assistance are expected to expire over the next five years .

Noncompliance with any of the terms or conditions could impact the Company’s ability to receive future government assistance or could result in the recapture of amounts paid to the Company by the granting agencies.

The Company has evaluated the recapture provisions related to government assistance included in the capital-build liability on the consolidated balance sheets as of December 31, 2022 and concluded that it is not probable that the recapture provisions will be triggered.

In addition, EVgo regularly monitors compliance with these provisions and has not been affected by noncompliance in the past .

The government assistance received is aggregated below as the programs contain similar terms and are accounted for similarly in accordance with IAS 20.

As of and for the year ended December 31, 2022 balances related to government assistance were as follows:

(in thousands)

Accounts receivable, capital-build, as of

Capital-build liability as of

Capital-build amortization included in depreciation, net of capital-build amortization, included in cost of sales for the year ended

Proceeds from capital build funding for the year ended

Note 7 – Property, Equipment and Software, Net

Property, equipment and software, net, consisted of the following as of:

Property, equipment and software, net, consisted of the following as of December 31, 2022 and 2021:

(in thousands)

Charging station installation costs

Construction in process

Charging equipment

Charging station equipment

Charging station installation costs

Office equipment and vehicles

Charging equipment

Land and building

Office equipment, vehicles and other

Less accumulated depreciation and amortization

Total property, equipment and software, net

Depreciation and amortization expense consisted of the following for the periods presented:

Depreciation and amortization expense consisted of the following for the years ended December 31, 2022 and 2021:

(in thousands)

5 unchanged sentences

Amortization of software

For the years ended December 31, 2022 and 2021, impairment expense of $ 6.8 million and $ 0.9 million, respectively, was recognized for projects in construction that were abandoned.

For the years ended December 31, 2022 and 2021, $ 1.2 million and $ 0.4 million, respectively, was also recognized for losses on disposals of property and equipment, net of insurance recoveries.

For the year ended December 31, 2022, $ 0.3 million was recognized in write-offs of asset retirement costs and there were no write-offs of asset retirement costs during the year ended December 31, 2021.

These losses were included in general and administrative expenses in the consolidated statements of operations.

Note 8 – Intangible Assets, Net

Intangible assets, net, consisted of the following as of:

Intangible assets, net, consisted of the following as of December 31, 2022:

December 31, 2022

3 unchanged sentences

Developed technology

Intangible assets, net, consisted of the following as of December 31, 2021:

December 31, 2021

3 unchanged sentences

Developed technology

Amortization of intangible assets was $ 10.2 million, $ 8.2 million and a de minimis amount for the year ended December 31, 2021, the period from January 16, 2020 through December 31, 2020 and the period from January 1, 2020 through January 15, 2020, respectively.

As of December 31, 2021, aggregate future amortization of amortizable intangible assets for the years ending December 31, is as follows:

Amortization of intangible assets was $ 11.6 million and $ 10.2 million for the years ended December 31, 2022 and 2021, respectively.

As of December 31, 2022, the aggregate future amortization of amortizable intangible assets for the following years ending December 31, were as follows:

(in thousands)

4 unchanged sentences

The Company reviews estimates of removal costs on an ongoing basis.

Accretion expense was $ 1.6 million, $ 1.1 million and a de minimis amount for the year ended December 31, 2021, the period from January 16, 2020 through December 31, 2020 and the period from January 1, 2020 through January 15, 2020, respectively.

Asset retirement obligation activity for the years ended December 31, 2022 and 2021 was as follows:

1 unchanged sentence

Beginning balance

Acquisition fair value adjustment

Liabilities incurred

Recargo acquisition

PlugShare acquisition

Accretion expense

3 unchanged sentences

Note 10 – Note Payable, Related Party

of the Federal Reserve discount rate plus 7.0 % (compounded annually) with a maturity date of January 16, 2027.

On January 16, 2020, EVgo Services entered into the Secured Demand Grid Promissory Note (“Demand Note”) with EVgo Holdings whereby EVgo Services funded the operations of EVgo Holdco with loans upon request at an interest rate of the Federal Reserve discount rate plus 7.0 % (compounded annually) with a maturity date of January 16, 2027.

The Demand Note was secured by the assets of EVgo Holdco and did not have a stated credit limit.

Interest expense incurred was $ 1.9 million and $ 1.4 million during the year ended December 31, 2021 and the period from January 16, 2020 through December 31, 2020, respectively.

On July 1, 2021, the outstanding balance of the Demand Note (including accrued interest of $ 1.9 million) of $ 59.6 million was converted to equity of EVgo Services, which was contributed by EVgo Holdings to EVgo Holdco immediately thereafter in connection with the CRIS Business Combination (see Note 3).

Note 11 – Other Current Assets and Accrued Liabilities

Other current assets consisted of the following as of:

(in thousands)

Predecessor seller receivable 1

1 Represents amounts due from the former owners of the Predecessor for non-income tax related assessments.

Accrued liabilities consisted of balances related to the following as of:

On July 1, 2021, the outstanding balance of the Demand Note (including accrued interest of $ 1.9 million) of $ 59.6 million was converted into equity of EVgo Services, which was contributed by EVgo Holdings to EVgo Holdco immediately thereafter in connection

with the CRIS Business Combination (see Note 3).

Interest expense incurred on the Demand Note was $ 1.9 million during the year ended December 31, 2021.

Note 11 – Accrued Liabilities

Accrued liabilities consisted of balances related to the following as of December 31, 2022 and 2021:

(in thousands)

Property and equipment

Charging equipment and related services

Employee compensation

Charging equipment and services

Note 12 – Equity Structure

8 unchanged sentences

Prior to the CRIS Business Combination, only holders of shares of Class B common stock of CRIS had the right to vote on the election of directors.

Holders of Class A common stock and Class B common stock will vote together as a single class on all matters submitted to a vote of stockholders except as required by law.

The 5,750,000 shares of Class B common stock of CRIS

held by the founders of CRIS prior to the CRIS Business Combination automatically converted into shares of Class A common stock on a one -for-one basis.

Holders of Class A common stock and Class B common stock vote together as a single class on all matters submitted to a vote of stockholders except as required by law or as provided in EVgo’s Charter.

The 5,750,000 shares of Class B common stock of CRIS held by the founders of CRIS prior to the CRIS Business Combination automatically converted into shares of Class A common stock on a one -for-one basis.

The holders of shares of Class B common stock generally have the right to cause EVgo OpCo to redeem all or a portion of their EVgo OpCo Units together with a corresponding number of shares of Class B common stock in exchange for, at EVgo OpCo’s election, a corresponding number of shares of Class A common stock or an approximately equivalent amount of cash as determined pursuant to the terms of the EVgo OpCo A&R LLC Agreement.

Upon the future exchange of EVgo OpCo Units held by any holder of shares of Class B common stock, a corresponding number of shares of Class B common stock held by such holder of EVgo OpCo Units will be cancelled.

Shares of Class B common stock can only be transferred with their corresponding EVgo OpCo Units in accordance with the EVgo OpCo A&R LLC Agreement.

Upon the closing of the CRIS Business Combination, EVgo Holdings received 195,800,000 shares of Class B common stock, together with 195,800,000 EVgo OpCo Units (see Note 22 for additional information).

Issuance of Common Stock

On November 10, 2022, EVgo entered into a Distribution Agreement with J.P.

Morgan Securities LLC, Evercore Group L.L.C.

and Goldman Sachs & Co.

LLC as sales agents, pursuant to which the Company may sell up to $ 200 million of shares of Class A common stock in “at the market” transactions at prevailing market prices (the “ATM Program”).

During the year ended December 31, 2022, EVgo sold 1,588,340 shares of Class A common stock pursuant to the ATM Program, with aggregate gross proceeds of $ 10.7 million.

After deducting transaction costs and commissions of $ 0.3 million, the Company received net proceeds of approximately $ 10.4 million.

Member’s Equity

As a result of the Holdco Merger, the Company became a wholly owned subsidiary of EVgo Holdco, itself a wholly owned subsidiary of EVgo Holdings.

EVgo Holdco has one class of limited liability interests that are 100 % owned by EVgo Holdings.

EVgo Holdings’ equity structure consists of “Class A Common Units,” “Class B Common Units” (together with the Class A Common Units, the “Capital Units”) and Incentive Units (defined in Note 20) (together with the Capital Units, the “Common Units”) issued pursuant to the Amended and Restated Limited Liability Company Agreement dated as of January 16, 2020 (the “Holdings LLCA”).

Prior to the EVgo Holdco Merger Date, the Predecessor equity structure consisted of “Predecessor Class A Preferred Units,” “Predecessor Class B Common Units,” “Predecessor Class C Profit Interest Units” and “Predecessor Class D Preferred Units” (collectively, the “Predecessor Units”) issued pursuant to the Second Amended and Restated Limited Liability Agreement of EVgo Services (as amended by that certain Amendment No.

1 dated August 23, 2017).

The Predecessor Class C Profit Interest Units were intended to constitute profit interests.

The Company analyzed the relevant provisions of ASC 480, Distinguishing Liabilities from Equity, and determined that the Predecessor Units should be recognized as equity on its consolidated balance sheets.

Note 13 – Other Income (Expense), including Related Parties

The Company receives aid in the construction of charging stations that are capitalized as property and equipment.

One portion of the funds received is deferred as a capital-build liability, which is recognized ratably over the related charging station’s remaining useful life as an offset to depreciation.

The other portion relates to reimbursement of operating and maintenance expenses, which is recorded as other income for the year ended December 31, 2021 and the period from January 16, 2020 through December 31, 2020.

For the period from January 1, 2020 through January 15, 2020, these

reimbursements were recorded as other income, related party, as they were received from an entity considered a related party, which is no longer considered a related party after the Holdco Merger.

For the following periods, other income (expense), net, and other income, related parties, consisted of the following:

(in thousands)

Other income (expense), net

Other expense

Gain on marketable securities

Release of contingent liability (see Note 3)

Other income, related parties

As a result of the Holdco Merger, from the time of the Holdco Merger Date until the CRIS Close Date, the Company was a wholly owned subsidiary of EVgo Holdco.

EVgo Holdco had one class of limited liability interests that were 100 % owned by EVgo Holdings.

EVgo Holdings’ equity structure consisted of “Class A Common Units,” “Class B Common Units” (together with the Class A Common Units, the “Capital Units”) and Incentive Units (defined in Note 20) (together with the Capital Units, the “Common Units”) issued pursuant to the Amended and Restated Limited Liability Company Agreement of EVgo Holdings, LLC dated as of January 16, 2020 (the “EVgo Holdings LLCA”).

Note 13 – Commitments and Contingencies

Pilot Infrastructure Agreement

On July 5, 2022, EVgo entered into a charging infrastructure agreement (the “Pilot Infrastructure Agreement”) and an operations and maintenance agreement (the “Pilot O&M”) with Pilot Travel Centers LLC (“Pilot Company”) and General Motors LLC (“GM”) to build, operate and maintain up to 2,000 stalls served by DC chargers that Pilot Company will own.

The stalls will be located at Pilot Company sites across the United States.

Pursuant to the Pilot Infrastructure Agreement, EVgo is required to meet certain construction milestones measured by the number of sites commissioned, and Pilot Company is required to make certain payments each month based on completion of pre-engineering and development work, the progress of construction at each site and for each charger procured by EVgo.

Subject to extensions of time for specified excusable events, if EVgo is unable to meet its commissioning obligations, Pilot Company will be entitled to liquidated damages calculated per day, subject to a cap of $ 30,000 at each site.

The Pilot Infrastructure Agreement contains various provisions that may permit or cause early termination, including Pilot Company’s right to terminate after 1,000 stalls have been completed, the inability of EVgo to secure certain chargers and a material increase in the price of chargers due to a change in law.

If Pilot Company elects to terminate the Pilot Infrastructure Agreement after 1,000 stalls have been completed, Pilot Company must pay EVgo a termination fee per stall for those not built;

such fee varies based on the number of stalls already built.

If EVgo is wholly or partially unable to perform its obligations under the Pilot Infrastructure Agreement due to certain circumstances outside its control, including delays by permitting authorities and utilities or certain force majeure events, such inability will not be considered a breach or default under the Pilot Infrastructure Agreement.

Under the Pilot O&M, EVgo is required to perform operations, maintenance and networking services on stalls built and commissioned under the Pilot Infrastructure Agreement in exchange for payment of a monthly fee by Pilot to EVgo.

EVgo is subject to certain performance criteria under the Pilot O&M.

Delta Charger Supply Agreement and Purchase Order

On July 12, 2022, EVgo entered into a General Terms and Conditions for Sale of EV Charger Products (the “Delta Charger Supply Agreement”) with Delta Electronics, Inc.

(“Delta”), including an initial purchase order (the “Purchase Order”), pursuant to which EVgo will purchase and Delta will sell EV chargers manufactured by Delta in specified quantities at certain delivery dates.

EVgo expects to use a portion of the chargers purchased under the Purchase Order to meet the requirements of the Pilot Infrastructure Agreement.

EVgo is required to purchase a minimum of 1,000 chargers from Delta under the Purchase Order and may, at EVgo’s election, increase the number of chargers it purchases from Delta to 1,100 .

General Motors Agreement

On July 20, 2020, EVgo entered into a five-year contract with GM (the “GM Agreement”) to build 2,750 fast charger stalls that EVgo will own and operate as part of the Company’s public network.

The GM Agreement has been amended

twice to expand the overall number of charger stalls to be installed to 3,250 , adjust charger stall installation targets, extend the completion deadline to March 31, 2026, and provide for a payment of $ 7,000,000 in December 2022 in exchange for EVgo’s agreement to apply certain branding decals on the fast chargers funded by GM pursuant to the GM Agreement and maintain a specified uptime percentage (described below) over the term of the agreement.

Pursuant to the GM Agreement, EVgo is required to meet certain quarterly milestones measured by the number of charger stalls installed, and GM is required to make certain payments based on charger stalls installed.

Under the GM Agreement, EVgo is required to install a total of 3,250 charger stalls by March 31, 2026, 44 % of which are required to be installed by December 31, 2023.

Meeting these milestones will require additional funds beyond the amounts committed by GM, and EVgo may face delays in construction, commissioning or aspects of installation of the charger stalls the Company is obligated to develop.

EVgo is also required to maintain network availability (i.e., the percentage of time a charger is operational and available on the network) of at least 95 %.

In addition to the capital build program, EVgo is committed to providing GM EV customers with reservations and certain EVgo services at a discounted rate and branding on chargers.

The contract is accounted for under ASC 606, which includes performance obligations related to reservations, memberships, and branding.

The capital-build program is considered a set-up activity and not a performance obligation under ASC 606.

The GM Agreement is subject to early termination in certain circumstances, including in the event EVgo fails to meet the quarterly charger stall-installation milestones or maintain the specified level of network availability.

If GM opts to terminate the agreement, EVgo may not be entitled to receive continued payments from GM and instead may be required to pay liquidated damages to GM.

In the event EVgo fails to meet a charger stall-installation milestone or maintain the required network availability in a calendar quarter, GM has the right to provide EVgo with a notice of such deficiency within 30 days of the end of the quarter.

If the same deficiency still exists at the end of the quarter immediately following the quarter for which a deficiency notification was delivered, GM may immediately terminate the agreement and seek pre-agreed liquidated damages of up to $ 15.0 million.

If EVgo does not meet its charger stall-installation milestone in any period, GM will have the right, if it so chooses, to send EVgo a charger stall count breach notice, which would trigger a cure period.

It is possible that EVgo will not meet the charger stall-installation milestones under the GM Agreement in the future, particularly as a consequence of delays in permitting, commissioning and utility interconnection, including delays associated with the COVID-19 pandemic, as well as industry and regulatory adaptation to the requirements of high-powered charger installation, including slower than expected third-party approvals of certain site acquisitions and site plans by utilities and landowners, and supply chain issues.

Nissan Agreements

EVgo has executed two program services agreements with Nissan North America, Inc.

These agreements provide for a capital build program, joint marketing activities and charging credit programs for purchasers or lessees of Nissan EVs.

Under the joint-marketing activities provisions of the first agreement (the “Nissan Agreement”), EVgo was to spend a specified amount annually on joint-marketing activities that were mutually agreed-upon with Nissan.

Credits for charging were allocated annually to purchasers or lessees of Nissan EVs and allowed each participant to charge their vehicle for 12 to 24 months at no charge to the participant, up to the amount of the charging credit allocated to such participant.

In the event a participant did not use the entire amount of its charging credit within 12 or 24 months, a portion of the remaining dollar value of such credit rolled over to subsequent periods and a portion was retained by the Company.

Under the terms of the Nissan Agreement, purchasers or lessees of Nissan LEAF electric vehicles in certain markets could receive charging services at an EVgo station or a participating third-party charging station.

Pursuant to the Nissan Agreement, the Company was required to support, maintain and make available at least 850 chargers through July 7, 2021.

EVgo has executed two agreements with Nissan North America, Inc.

(“Nissan”) under which EVgo has provided charger construction and installation and certain other services.

Pursuant to the first agreement (the “Nissan 1.0 Agreement”), the Company was required to support, maintain and make available at least 850 chargers through July 2021, and purchasers or lessees of Nissan LEAF EVs in certain markets could receive charging services at EVgo stations or participating third-party charging stations.

The Company fulfilled all build, support and maintenance obligations under the Nissan 1.0 Agreement.

On June 13, 2019, EVgo entered into a second agreement with Nissan (the “Nissan 2.0 Agreement”).

The Nissan 2.0 Agreement includes a capital-build program requiring the Company to install, operate and maintain public, high-power dual-standard chargers in specified markets pursuant to a schedule that outlines the build timelines for the chargers to be constructed (the “Build Schedule”).

Under the terms of the Nissan 2.0 Agreement, the Build Schedule is negotiated at the beginning of each year.

All chargers for each program year must be installed by August 31.

In 2021, EVgo worked with Nissan to revise the annual Build Schedule to extend the milestone dates.

Furthermore, Nissan waived penalties for installation delays in program year one.

EVgo’s ability to meet Build Schedule obligations may be impacted by delays in permitting, slower than expected third-party approvals of certain site acquisitions, delays in utility interconnection resulting from industry adaptation to the requirements of high-powered charger installation, as well as supply chain issues.

Going forward, EVgo is uncertain if these, or other potential issues in the procurement, installation, or energization of DCFC, will be resolved in a timely fashion.

At this time, EVgo’s ability to meet future Build Schedule obligations may continue to be impacted by circumstances similar to those experienced during the first half of 2021, or other potential issues including, but not limited to, equipment design and procurement, timing of third-party funding agreements, and the siting, permitting, construction, energizing of DCFC or delays in releasing public grant funding.

The second agreement between EVgo and Nissan, entered into in June 2019 (the “Nissan 2.0 Agreement”), provides for joint marketing activities, charging credit programs for purchasers or lessees of Nissan EVs, and a capital-build program.

The Nissan 2.0 Agreement has been amended several times, including most recently in the fourth quarter of 2022 (the “Nissan Amendment”) to, among other things, adjust the allocation of the value of unused charging credits and to provide new offerings for purchasers or lessees of certain Nissan EV models.

Under the joint-marketing activities provisions of the Nissan 2.0 Agreement, EVgo is obligated to spend a specified amount annually on joint-marketing activities that are mutually agreed-upon with Nissan.

Under the charging credit program provisions in the Nissan 2.0 Agreement, credits for charging are allocated to purchasers or lessees of Nissan EVs, and such purchasers or lessees are permitted to charge their EV for 12 months at no charge to the participant, up to the amount of the charging credit allocated to such participant or on an unlimited basis, depending on the model of Nissan EV purchased or leased.

In the event a participant does not use the entire amount of the allocated charging credit or if the annual charging credit pool is not exhausted within a specific period, a portion of the remaining dollar value of such credit rolls over to subsequent periods,

and a portion is retained by the Company.

For Nissan EV purchasers or lessees receiving unlimited charging, the Company receives an upfront activation fee for each purchaser or lessee as well as a usage-based fee.

The capital-build program provided for in the Nissan 2.0 Agreement requires the Company to install, operate and maintain public, high-power dual-standard chargers in specified markets pursuant to a schedule that outlines the build timelines for the chargers to be constructed (the “Build Schedule”).

If the Company fails to meet its Build Schedule obligations, Nissan may invoke a penalty of up to $ 70,000 per delayed site beyond a designated cure period, which could result in an adjustment to the consideration received by the Company under the Nissan 2.0 Agreement.

EVgo and Nissan previously agreed to amend the Nissan 2.0 Agreement to extend the installation deadlines under the Build Schedule by up to 12 months , and Nissan has waived penalties for installation delays relating to program year one.

The contract is accounted for under ASC 606, which includes performance obligations related to memberships, charging credits, and joint marketing activities.

The capital-build program is considered a set-up activity and not a performance obligation under ASC 606.

EVgo’s ability to meet its Build Schedule obligations may be impacted by delays in permitting, commissioning and utility interconnection, including delays associated with the COVID-19 pandemic, as well as industry and regulatory adaptation to the requirements of high-powered charger installation, including slower than expected third-party approvals of certain site acquisitions and site plans by utilities and landowners, and supply chain issues.

Nissan has the right to terminate the Nissan 2.0 Agreement, without penalty or obligation of any kind, upon 30 days’ written notice if it is unable to secure funding to make payments required under the Nissan 2.0 Agreement.

Nissan receives budget approvals annually from Nissan Motor Company Limited.

As of December 31, 2021, Nissan has fulfilled its annual payment obligations under the Nissan 2.0 Agreement.

If Nissan terminates the Nissan 2.0 Agreement due to a lack of funding, EVgo will still be required to perform the following:

(i) meet charger installation milestones through the date of termination; (ii) provide an aggregate of $ 1.6 million in joint marketing activities and (iii) provide $ 4.8 million worth of charging credits that shall continue to be administered.

Pursuant to the Nissan 2.0 Agreement, as modified by the aforementioned extension and other amendments, EVgo is required to install an aggregate of 210 chargers by February 29, 2024 at a number of sites to be mutually agreed upon during each Build Schedule.

Pursuant to the current Build Schedule, EVgo is required to install 58 chargers by August 31, 2022.

If the Company fails to meet future Build Schedule obligations, Nissan may invoke a penalty of up to $ 35,000 per delayed site beyond a designated cure period, up to 61 sites, which would result in adjustment to the consideration received for the Company’s performance obligations under the Nissan 2.0 Agreement.

General Motors Agreement

On July 20, 2020, EVgo entered into a five-year contract with GM (the “GM Agreement”) to build 2,750 fast chargers that EVgo will own and operate as part of the Company’s public network.

On November 2, 2021, EVgo entered into an amendment agreement with GM in order to adjust stall installation targets and expand the overall number of chargers to be installed to 3,250 fast chargers.

EVgo believes this agreement will serve to accelerate the Company’s development plans and enhance customer acquisition and brand equity among retail drivers.

Under the GM Agreement, EVgo is required to install a total of 3,250 chargers by December 31, 2025, 72 % of which are required to be installed by December 31, 2023.

Meeting these milestones will require additional funds beyond the amounts committed by GM, and EVgo may face delays in construction, commission or aspects of installation of the chargers the Company is obligated to develop.

EVgo is also required to maintain network availability (i.e., the percentage of time a charger is operational and available on the network) of at least 93 %.

In addition to the capital build program, EVgo committed to providing a certain number of new GM EV cars with an EVgo charging credit and limited time access to other EVgo services at a discounted rate.

The GM Agreement is subject to early termination in certain circumstances, including in the event EVgo fails to meet the quarterly charger-installation milestones or maintain the specified level of network availability.

If GM opts to terminate the agreement, EVgo may not be entitled to receive continued payments from GM and instead may be required to pay liquidated damages to GM.

In the event EVgo fails to meet a charger-installation milestone or maintain the required network availability in a calendar quarter, GM has the right to provide EVgo with a notice of such deficiency within 30 days of the end of the quarter.

As of March 15, 2022, there were approximately 2,500 stalls that had been approved by GM, of which approximately 2,000 stalls were already in the active engineering and construction development pipeline.

As of March 15, 2022, EVgo had 85 stalls left to install in order to meet its charger-installation milestone for the quarter ending March 31, 2022.

EVgo may not meet the charger-installation milestones under the GM Agreement in the future, particularly as a consequence of delays in permitting, commissioning and utility interconnection resulting from COVID-19 and supply chain disruptions in business operations across the utility, engineering and permitting chain;

as well as industry and regulatory adaptation to the requirements of high-powered charger installation, including slower than expected third-party approvals between utilities and landowners of sites where charger stations will be located.

In 2022, Nissan fulfilled its annual payment obligations under the Nissan 2.0 Agreement.

Legal Proceedings

In the ordinary course of the Company’s business, the Company may be subject to lawsuits, investigations, claims and proceedings, including, but not limited to, contractual disputes or employment, health and safety matters.

Although the outcome of any potential future litigation is uncertain, the Company believes it has adequate insurance coverage in the event of any future litigation or disputes.

On December 17, 2020, SAF Partners II, LLC and EV Holdings Investments, LLC (collectively, the “SAF Parties”) filed a complaint against EVgo Holdco in the State of Delaware Court of Chancery for $ 5 million regarding certain deferred contingent compensation contemplated by the Holdco Merger as of December 19, 2019, by and among EVgo Holdco and certain of the SAF Parties.

The SAF Parties are the Company’s predecessor shareholders.

Pursuant to an agreement between EVgo Holdings and EVgo Holdco, EVgo Holdings will indemnify EVgo Holdco for losses of up to $ 7 million (including legal costs) related to the contingent compensation claim.

On January 14, 2022, the SAF Parties and EVgo Holdco settled the dispute for $ 1.5 million.

Although the Company is not currently facing other pending or threatened litigation, future events or circumstances, currently unknown to management, may potentially have a material effect on its financial position, liquidity or results of operations in any future reporting period.

The Company accrues for losses that are both probable and reasonably estimable.

Loss contingencies are subject to significant uncertainties and, therefore, determining the likelihood of a loss and/or the measurement of any loss can be complex and subject to change.

Contingent liabilities arising from ordinary course litigation are not expected to have a material adverse effect on the Company’s financial position.

However, future events or circumstances, currently unknown to management, may potentially have a material effect on the Company’s financial position, liquidity or results of operations in any future reporting period.

Purchase Commitments

As of December 31, 2022, EVgo had $ 114.7 million in outstanding purchase order commitments to EVgo’s contract manufacturers and component suppliers for charging equipment, all of which was short-term.

In certain instances, EVgo is permitted to cancel, reschedule or adjust these orders.

EVgo also had $ 3.2 million in commitments to other vendors, of which $ 1.9 million was short-term.

Note 14 - Related Party Transactions

Receivable from Related Party.

As of December 31, 2021, the Company had a $ 1.5 million receivable from EVgo Holdings related to the matter regarding the SAF Parties (see Note 14).

As of December 31, 2021, the Company had a $ 1.5 million receivable from EVgo Holdings pursuant to an indemnification obligation related to a matter settled between the Company’s predecessor shareholders and EVgo Holdco on January 14, 2022 regarding certain deferred contingent compensation contemplated by the Holdco Merger Agreement.

The receivable was settled in March 2022.

Note Payable, Related Party.

As noted in Note 10, the Company had an outstanding note payable with EVgo Holdings that was converted to equity on the CRIS Close Date.

Management Services Agreement

The Company and EVgo Management, Inc.

(“Predecessor Management”) were previously party to a management services agreement related to the administration of the 2016 Stock Incentive Plan of Predecessor Management (the “2016 Plan”).

During the term of this agreement, the Company was responsible for administering the 2016 Plan and selecting employees, directors and consultants to whom an Award (as defined by the 2016 Plan) would be granted, determining the terms of the Awards, and any other actions consistent with the terms of the 2016 Plan.

The Company’s responsibilities under this agreement included the recommendation of employees, directors and consultants to Predecessor Management to whom Awards may be granted, the terms of the Awards, and recommendation of directors of Predecessor Management, general, administrative, and back-office services relating to the operation of Predecessor Management and the maintenance of the 2016 Plan, and any other actions consistent with the terms of the 2016 Plan.

All shares underlying any Award granted were subject to a right of first refusal and a repurchase right in favor of Predecessor Management.

The Company did not receive a fee from Predecessor Management for providing these services and the management services agreement is no longer in effect after the Holdco Merger Date.

As noted in Note 10, the Company had an outstanding note payable with EVgo Holdings that was converted into equity on the CRIS Close Date.

Regulatory Credit Sales.

The Company may enter into agreements to facilitate the purchase and sale of LCFS credits with a subsidiary of LS Power at prevailing market prices.

For the year ended December 31, 2022, there was no regulatory

credit income recognized from related parties.

For the year ended December 31, 2021, the Company recognized $ 0.6 million of regulatory credit income, which was included in revenue from related party in the consolidated statements of operations.

Ancillary Revenue.

The Company recognized ancillary revenue of $ 0.1 million and a de minimis amount for the years ended December 31, 2022 and 2021, respectively, from an entity related to a former Board member.

Cost of Sales.

The Company purchased $ 0.1 million and a de minimis amount of electricity for the years ended December 31, 2022 and 2021, respectively, from an entity related to a Board member.

Consulting Services.

The Company recorded $ 1.3 million and $ 0.7 million for consulting and corporate development services rendered by LS Power Equity Advisors, LLC to general and administrative expenses in the consolidated statements of operations for the year ended December 31, 2021 and the period from January 16, 2020 through December 31, 2020, respectively.

As of December 31, 2020, the Company had payables to entities controlled by LS Power for services rendered totaling $ 0.1 million.

There were no services rendered prior to the Holdco Merger Date.

Low Carbon Fuel Standards

The Company entered into various agreements to facilitate the purchase and sale of California Low Carbon Fuel Standard Credits (“LCFS”) with a subsidiary of LS Power at prevailing market levels after the Holdco Merger Date.

For the year ended December 31, 2021 and the period from January 16, 2020 through December 31, 2020, the total amount of regulatory credit income recognized by the Company through the LCFS trading program with LS Power’s subsidiary totaled $ 0.6 million and $ 1.3 million, respectively, which is included in revenue from related parties in the consolidated statements of operations.

Related Party Revenue

The Company had two contracts with an entity considered a related party up to the date of the Holdco Merger, which is no longer considered a related party as of January 16, 2020.

For the period from January 1, 2020 through January 15, 2020, the Company recognized revenue of $ 0.1 million related to these agreements while the entity was a related party.

Transaction Bonus

On January 16, 2020, in connection with the Holdco Merger, LS Power contributed $ 5.3 million to the Company related to a contingent transaction bonus awarded to eligible employees (see Note 3).

LS Power Equity Advisors, LLC provides consulting and corporate development services to the Company.

During the year ended December 31, 2022, there were no services provided.

The Company recorded $ 1.3 million for consulting and corporate development services rendered by LS Power Equity Advisors, LLC to general and administrative expenses in the consolidated statements of operations for the year ended December 31, 2021.

Note 15 – Fair Value Measurements

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See Note 2 for additional information, including the fair value hierarchy.

There were no earnout or warrant liabilities as of December 31, 2020.

The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis and indicates the level within the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value as of December 31, 2021:

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicates the level within the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value as of December 31, 2022 and 2021:

(in thousands)

Cash equivalents

Money market funds

Earnout liability

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Warrant liability – Private Placement Warrants

The warrants are accounted for as liabilities in accordance with ASC 815 and are presented as warrant liabilities on the consolidated balance sheets.

The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liability in the consolidated statements of operations.

The Private Placement Warrants were valued using a Monte Carlo simulation methodology.

The close price of the Public Warrants price was used as the fair value as of each relevant date (see Note 17).

There were no assets measured on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2021.

There were no assets or liabilities measured on a recurring basis using significant unobservable inputs (Level 3) during the year ended December 31, 2020.

The following table presents a reconciliation for all liabilities

measured and recognized at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31, 2021:

Total liabilities

The following table presents a reconciliation for all liabilities measured and recognized at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2022 and 2021:

(in thousands)

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Liability recognized due to the CRIS Business Combination

Transfer to Level 1

Liability settled through equity

Change in fair value of liability

Transfers out of Level 3

Fair value as of December 31, 2021

Change in fair value of liability

Transfers out of Level 3

Fair value as of December 31, 2022

Assumptions used in the valuations of the Private Placement Warrant liability were as follows:

Risk-free interest rate

Expected term (in years)

Expected volatility

Dividend rate

Exercise price

Assumptions used in the valuations of the earnout liability are as follows:

Risk-free interest rate

Expected term (in years)

Expected volatility

Dividend rate

Note 16 – Warrant Liability

Public Warrants may only be exercised for a whole number of shares.

The Public Warrants became exercisable on October 2, 2021.

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● in whole and not in part;

● at $ 0.10 per warrant upon a minimum of 30 days ’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares, based on the redemption date and the fair market value of the Class A common stock;

● at a price of $ 0.10 per warrant upon a minimum of 30 days ’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares, based on the redemption date and the fair market value of the Class A common stock;

● if and only if, the Reference Value equals or exceeds $ 10.00 per share (as adjusted);

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The exercise price and number of Class A common stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation.

However, except as described below, the Public Warrants will not be adjusted for issuance of Class A common stock at a price below its exercise price.

However, except as described below, the Public Warrants will not be adjusted for the issuance of Class A common stock at a price below its exercise price.

Additionally, in no event will the Company be required to net cash settle the Public Warrants.

Additionally, the Private Placement Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees (except for a number of shares of Class A common stock as described above under “ — Redemption of warrants when the price per Class A common stock equals or exceeds $ 18.00 ” and “— Redemption of warrants when the price per Class A common stock equals or exceeds $ 10.00 ” ).

The Public Warrants may be exercised only for a whole number of shares.

The Private Placement Warrants are identical to the Public Warrants underlying the units sold in the Initial Public Offering, except that the Private Placement Warrants and the shares of Class A common stock issuable upon the exercise of the Private Placement Warrants are entitled to certain registration rights pursuant to the Registration Rights Agreement, dated as of July 1, 2021, by and among the Company, the Sponsor, certain other initial stockholders, and Holdings.

Additionally, the Private Placement Warrants are exercisable for cash or on a cashless basis, at the holder’s option and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees (except for a number of shares of Class A common stock as described above under “ — Redemption of warrants when the price per Class A common stock equals or exceeds $ 18.00 ” and “— Redemption of warrants when the price per Class A common stock equals or exceeds $ 10.00 ” ).

If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by such holders on the same basis as the Public Warrants.

Assumptions used in the valuations of the Private Placement Warrant liability are as follows:

Risk-free interest rate

Expected term

Expected volatility

Dividend rate

Exercise price

Note 17 – Earnout Liability

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On July 2, 2021, the $ 12.50 Triggering Event occurred and, as a result, 718,750 Earnout Shares valued at $ 10.9 million were deemed to be earned and reclassified into equity on that date.

The estimated fair value of the earnout liability related

to the 718,750 Earnout Shares subject to the $ 15.00 Triggering Event originally valued at $ 8.8 million was remeasured to $ 5.2 million at December 31, 2021.

The change in fair value of the earnout liability resulted in a gain of $ 2.2 million recognized in the consolidated statement of operations for the year ended December 31, 2021 (see Note 16).

Assumptions used in the valuations of the earnout liability are as follows:

Expected volatility

Risk-free interest rate

Expected term

Dividend rate

The estimated fair value of the earnout liability related to the 718,750 Earnout Shares subject to the $ 15.00 Triggering Event originally valued at $ 8.8 million was $ 1.7 million and $ 5.2 million as of December 31, 2022 and 2021, respectively.

The change in fair value of the earnout liability resulted in a gain of $ 3.5 million and $ 2.2 million recognized in the consolidated statements of operations for the years ended December 31, 2022 and 2021, respectively (see Note 15).

Note 18 – Income Taxes

The provision for income taxes consists primarily of income taxes related to federal and state jurisdictions where business is conducted related to the Company’s ownership in EVgo OpCo.

All income (loss) before income taxes is generated in the United States.

For the year ended December 31, 2021, the period from January 16, 2020 through December 31, 2020 and the period from January 1, 2020 through January 15, 2020, the Company’s provision for income taxes and effective tax rates were deemed to be de minimis.

All income (loss) before income taxes is generated in the U.S.

For the years ended December 31, 2022 and 2021, the Company’s provision for income taxes and effective tax rates were deemed to be de minimis.

Prior to July 1, 2021, the Company was not a taxable entity for U.S.

Federal income tax purposes or for any of the states in which the Company operates.

federal income tax purposes or for any of the states in which the Company operated.

On July 1, 2021, pursuant to the CRIS Business Combination, the Company became a taxable entity for U.S.

federal income tax purposes and for all of the states in which the Company operates.

Due to an operating loss in the year ended December 31, 2021, the Company’s effective tax rate was zero .

Due to operating losses in the years ended December 31, 2022 and 2021, the Company’s effective tax rate was zero .

The provision for income taxes differs from the amount computed by applying the U.S.

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Change in fair value of warrant liability

Other permanent items

Change in fair value of earnout liability

Transaction costs

Other permanent items

Change in valuation allowance

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Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as net operating loss and tax credit carryforwards.

There were no net deferred tax assets as of December 31, 2020 and no net deferred tax liabilities

as of December 31, 2021 and 2020.

The significant components of the Company’s deferred tax assets as of December 31, 2021 are as follows:

There were no net deferred tax assets and no net deferred tax liabilities as of December 31, 2022 and 2021.

The significant components of the Company’s deferred tax assets as of December 31, 2022 and 2021 were as follows:

(in thousands)

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Management considered all available material evidence, both positive and negative, in assessing the appropriateness of a valuation allowance for the Company’s deferred tax assets, including the generation of future taxable income, the scheduled reversal of deferred tax liabilities and other available material evidence.

After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance against its net deferred tax assets as of December 31, 2021.

As of December 31, 2021, EVgo had $ 22.0 million in Federal net operating losses with an indefinite carryforward period, tax credits of $ 0.5 million expiring in 2041 and state net operating losses with various expiration periods.

As of December 31, 2022 and 2021, EVgo had $ 50.3 million and $ 22.0 million, respectively, in federal net operating losses with an indefinite carryforward period, tax credits of $ 1.5 million and $ 0.5 million, respectively, which will start expiring in 2041, and state net operating losses with various expiration periods.

The Company files income tax returns in the U.S.

1 unchanged sentence

As of December 31, 2022 and 2021, there were no unrecognized tax benefits for uncertain tax positions, nor any amounts accrued for interest and penalties.

Note 19 – Tax Receivable Agreement

federal, state and local income tax or franchise tax that the Company actually realizes or is deemed to realize in certain circumstances after the CRIS Business Combination as a result of (i) certain increases in tax basis that occur as a result of the Company Group’s acquisition (or deemed acquisition for U.S.

federal income tax purposes) of all or a portion of the TRA Holders’ EVgo OpCo Units pursuant to the CRIS Business Combination or the exercise of the redemption or Call Rights set forth in the EVgo OpCo A&R LLC Agreement and (ii) imputed interest deemed to be paid by the Company Group as a result of and additional tax basis arising from, any payments the Company Group makes under the Tax Receivable Agreement.

The Company Group will retain the benefit of any remaining net cash savings.

Agreement and (ii) that any EVgo OpCo Units (other than those held by the Company Group) outstanding on the termination date or change of control date, as applicable, are deemed to be redeemed on such date).

Amounts payable by the Company under the Tax Receivable Agreement are accrued through a charge to income when it is probable that a liability has been incurred and the amount is estimable.

During the years ended December 31, 2022 and 2021, no transactions occurred that would result in a cash tax savings benefit that would trigger the recording of a liability by the Company based on the terms of the Tax Receivable Agreement.

Note 20 – Share-Based Compensation

2 unchanged sentences

Cost of sales

General and administrative

General and administrative expenses

Total share-based compensation expense

Restricted Stock Units

On July 1, 2021, concurrent with the closing of the CRIS Business Combination, the stockholders also approved the board-approved EVgo Inc.

2021 Long Term Incentive Plan (the “2021 Incentive Plan”), effective March 26, 2021 (the “Effective Date”).

The 2021 Incentive Plan reserves 33,918,000 shares of Class A common stock for issuance to

employees, non-employee directors and other service providers.

2021 Long Term Incentive Plan

On July 1, 2021, concurrent with the closing of the CRIS Business Combination, stockholders approved the Board of Directors-approved 2021 Long Term Incentive Plan (the “2021 Incentive Plan”).

The 2021 Incentive Plan reserves 33,918,000 shares of Class A common stock for issuance to employees, non-employee directors and other service providers.

As of December 31, 2022, there were 28,968,027 shares of Class A common stock available for grant.

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and (x) substitute awards.

Unless earlier terminated by action of the Company’s Board of Directors, the 2021 Incentive Plan will terminate on the tenth anniversary of the Effective Date.

RSUs typically vest annually over a period of three years from the date of grant.

The fair value of RSUs is based on the closing price of the Company’s Class A common stock on the grant date.

The table below represents the Company’s RSU activity under the 2021 Incentive Plan during the year ended December 31, 2021:

(in thousands)

Unless earlier terminated by action of the Company’s Board of Directors, the 2021 Incentive Plan will terminate on the tenth anniversary of the 2021 Incentive Plan’s effective date of March 26, 2021.

Stock Options

The Company commenced granting stock options to certain senior employees in 2022.

Compensation expense related to share-based awards is measured and recognized in the financial statements based on the fair value of the awards granted.

The fair value of each option award is estimated on the grant date using the Black-Scholes option-pricing model and recognized on a straight-line basis over the requisite service period.

The options vest annually over a three-year period and have a term of 10 years .

The following table summarizes stock option activity for the year ended December 31, 2022:

Weighted Average

Shares Underlying

Weighted Average

(shares in thousands)

Exercise Price

Contractual Life

Intrinsic Value

Outstanding as of December 31, 2021

Outstanding as of December 31, 2022

Total unrecognized share-based compensation expense related to RSUs was $ 13.4 million as of December 31, 2021, which will be recognized over a weighted average period of 1.5 years.

Successor Incentive Units

On or immediately prior to the Holdco Merger, the existing Predecessor Class C Profit Interest Units, which constituted profits interests held by Predecessor Management, and the related 2016 Plan were cancelled and terminated, respectively.

Following the Holdco Merger, all employees of EVgo Services received share-based compensation in the form of units in EVgo Management, LLC (“EVgo Management”) that track incentive units issued by EVgo Holdings to EVgo Management (“Incentive Units”).

EVgo Holdings owned 100 % of EVgo Holdco from the Holdco Merger Date through the CRIS Business Combination.

The Holdings LLCA provides for the issuance of a limited number of Incentive Units.

Each Incentive Unit grants a profits interest in EVgo Holdings, which can generally be described as a participation interest whose right to receive distributions is determined by the cumulative amount of distributions (cash or in-kind) received by each outstanding Capital Unit in EVgo Holdings up to and including the date of a distribution.

As of December 31, 2022, the Company’s unrecognized share-based compensation expense related to stock options was approximately $ 1.6 million, which is expected to be recognized over a period of 1.5 years.

The weighted average grant date fair value per share of options granted during the year ended December 31, 2022 was $ 8.79 .

There were no stock

options vested or exercisable as of December 31, 2022.

The fair value of the stock options granted during the year ended December 31, 2022 was computed using Black-Scholes option-pricing model using the following key assumptions:

Risk-free interest rate

Dividend yield

Expected volatility

Expected life (in years)

Risk-free interest rate.

The risk-free interest rate was based on the implied yield currently available in U.S.

Treasury securities at maturity with an equivalent term.

Dividend yield.

The Company has not declared or paid any dividends through December 31, 2022 and does not currently expect to do so in the future.

Expected volatility.

The Company based its estimate of expected volatility on the historical and implied volatility of comparable companies from a representative peer group selected based on industry and market capitalization data.

The Company uses the average expected volatility rates reported by the comparable group for an expected term that approximated the expected term estimated by the Company.

Expected life.

The Company did not have sufficient exercise history to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior.

The expected term for stock options, calculated using the simplified method due to limited exercise data, was the midpoint of the stock option vesting term and the expiration date of the stock option.

Restricted Stock Units

RSUs granted by EVgo typically vest annually over a period of three years from the date of grant.

The fair value of RSUs is calculated based on the closing price of the Company’s Class A common stock on the grant date.

The table below represents the Company’s RSU activity under the 2021 Incentive Plan during the years ended December 31, 2022 and 2021:

(shares in thousands)

Nonvested as of December 31, 2020

Nonvested as of December 31, 2021

Nonvested as of December 31, 2022

The total fair value of RSUs vested during the year ended December 31, 2022 was $ 7.1 million.

No RSUs vested during the year ended December 31, 2021.

As of December 31, 2022, the Company’s unrecognized share-based compensation expense related to unvested RSUs was approximately $ 19.7 million, which is expected to be recognized over a period of 1.5 years.

EVgo Management Holdings, LLC Incentive Units

Following the Holdco Merger and prior to the CRIS Business Combination, all employees of EVgo Services received share-based compensation in the form of units in EVgo Management Holdings, LLC (“EVgo Management”) that track incentive units issued by EVgo Holdings to EVgo Management (“Incentive Units”).

The EVgo Holdings LLCA provides for the issuance of 1,000,000 Incentive Units.

Each Incentive Unit grants a profits interest in EVgo Holdings, which can

generally be described as a participation interest whose right to receive distributions is determined by the cumulative amount of distributions (cash or in-kind) received by each outstanding Capital Unit in EVgo Holdings up to and including the date of a distribution.

Distributions to the Incentive Unit holders are made solely from cash or property of EVgo Holdings.

Incentive Unit holders have no claim as to the cashflow or assets of EVgo Holdco or EVgo Services.

The Incentive Units are awarded pursuant to the Holdings LLCA, and consequently the limited liability agreement of EVgo Management and individual grant agreements.

The Incentive Units were awarded pursuant to the EVgo Holdings LLCA and consequently the limited liability agreement of EVgo Management and individual grant agreements.

These agreements include limitations with respect to the distribution entitlements of such Incentive Units and limitations imposed in order to cause such Incentive Units to qualify as “profits interests” within the meaning of Internal Revenue Service Revenue Procedures 93-27 and 2001-43, Internal Revenue Service Notice 2005-43, or any future Internal Revenue Service guidance.

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As a result, the Incentive Units essentially have no value on the date of grant.

Of each individual grant of Incentive Units, a portion are designated as time vesting (the “Time Vesting Incentive Units”) and remaining portion is designated as sale vesting (the “Sale Vesting Incentive Units”).

The Time Vesting Incentive Units will vest annually and equally over a period of four years from the date of grant.

Sale Vesting Incentive Units will vest based upon the achievement of certain trigger events relating to the sale of EVgo Holdings.

The Company determined the Incentive Units and resulting profits interest to be equity-classified requiring application of ASC 718.

Of each individual grant of Incentive Units, a portion was designated as time vesting (the “Time Vesting Incentive Units”) and the remaining portion was designated as sale vesting (the “Sale Vesting Incentive Units”).

The Time Vesting Incentive Units vest annually and equally over a period of four years from the date of grant.

Sale Vesting Incentive Units vest based upon the achievement of certain trigger events relating to the sale of EVgo Holdings.

The Company determined the Incentive Units and resulting profits interest are equity-classified requiring application of ASC 718.

Under ASC 718, share-based payment awards are initially measured at the fair value of the equity instruments that the entity is required to issue when the employee becomes entitled to the instrument (i.e., when all service, performance, market and/or other conditions have been met).

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The Company has elected to account for forfeitures as they occur.

The Holdings LLCA provides for the issuance of 1,000,000 Incentive Units.

Of each grant of Incentive Units, a portion are designated as Time Vesting Incentive Units and remaining portion are designated as Sale Vesting Incentive Units.

Time Vesting Incentive Units will vest each year over a period of four years .

100 % of the Sale Vesting Incentive Units will vest upon the achievement of certain milestones related to “Sale of the Company.” The Company recognizes compensation cost for the Time Vesting Incentive Units awards on a straight-line basis.

No compensation cost will be recognized for the Sale Vesting Incentive Units until such time that a Sale of the Company occurs.

The Company has recorded expense related to the Time Vesting Incentive Units over the vesting term based on a fair value calculated using the Monte Carlo simulation model in conjunction with the Finnerty Model.

The assumptions noted in the following table for the year ended December 31, 2021 and for the period from January 16, 2020 through December 31, 2020:

The assumptions underlying the simulation are noted in the following table for the year ended December 31, 2021:

Annual risk-free rate of return

Expected volatility

Expected term

Expected term (in years)

Dividend yield

Presented below is a summary of the activity of the Company’s Incentive Units for the year ended December 31, 2021 and the period from January 16, 2020 through December 31, 2020:

(in thousands)

Granted on January 16, 2020

Presented below is a summary of the activity of the Company’s Incentive Units for the years ended December 31, 2022 and 2021:

(shares in thousands)

Outstanding at December 31, 2020

Outstanding at December 31, 2021

Units vested at December 31, 2021

Units outstanding and expected to vest as of December 31, 2021

As of December 31, 2021, there was $ 10.0 million of total unrecognized compensation cost related to nonvested Incentive Units, which is expected to be recognized over a weighted-average period of 2.6 years.

Predecessor Share-Based Compensation

Prior to the Holdco Merger Date, the primary purpose of Predecessor Management, which owned Class C Profit Interest Units of the Company, was to issue share-based compensation to employees and directors of the Predecessor.

Accordingly, the expense related to awards granted under the 2016 Plan to employees and directors of the Predecessor is recorded as share-based compensation expense on the Company’s consolidated statements of operations.

Prior to the Holdco Merger, Predecessor Management issued stock options (the “Options”) under the 2016 Plan.

A maximum of 559,000 shares may be issued under the 2016 Plan.

Options granted under the 2016 Plan are exercisable over a maximum term of 10 years from the date of grant.

In general, the Options vest over a four-year period, with each Option becoming exercisable as to 25 % of the number of shares subject to the Option one year from the grant dates and exercisable as to an additional 6.25 % of the number shares subject to the Option every three months thereafter for an additional three years.

The Company has recorded expense related to the Options over the vesting term based on a fair value calculated using the Black-Scholes model, with the input of the fair value of the underlying stock equal to the value of the common stock of Predecessor Management.

The fair value of each Option award is estimated on the date of grant using the Black-Scholes Option Pricing Model using the assumptions noted in the following table for the year ended December 31, 2021 and the period from January 1, 2020 through January 15, 2020:

Annual risk-free rate of return

Expected volatility

Expected term

Dividend yield

The risk-free interest rate for periods within the contractual life of the Option is based on the U.S.

Treasury yield curve in effect at the time of grant.

The expected volatility of the Options granted was estimated using the historical volatility of comparable public companies as a substitute for the historical volatility of the Company’s common shares, which is not determinable without an active external or internal market.

The expected term of Options granted represents the period of time that Options granted are expected to be outstanding.

There was no Option activity during the period from January 1, 2020 through January 15, 2020.

Options outstanding as of January 15, 2020 were:

(in thousands)

Outstanding at January 15, 2020 and December 31, 2019

Options vested and exercisable at January 15, 2020

Nonvested options outstanding at January 15, 2020

Presented below is a summary of the activity of the Company’s nonvested Options for the period from January 1, 2020 through January 15, 2020:

(in thousands)

Nonvested at January 1, 2020

Nonvested at January 15, 2020

The 2016 Plan was terminated as of the Holdco Merger Date and all nonvested and outstanding Options were cancelled and not replaced by any plan by the Successor.

Share-based compensation expense was de minimis for the period from January 1, 2020 through January 15, 2020 and there was no further share-based compensation expense recorded after the Holdco Merger Date.

Outstanding at December 31, 2022

As of December 31, 2022, the Company’s unrecognized share-based compensation expense related to unvested Incentive Units was approximately $ 7.0 million, which is expected to be recognized over a period of 1.7 years.

Note 21 – Net Loss Per Share

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During loss periods, diluted loss per share is based on the weighted average number of common shares outstanding (basic), because the inclusion of common stock equivalents would be antidilutive.

The following table sets forth the computation of basic and diluted earnings per share for the year ended December 31, 2021:

The following table sets forth the computation of basic and diluted net income (loss) per share for the years ended December 31, 2022 and 2021:

(in thousands, except per share data)

net loss attributable to noncontrolling interest

net loss attributable to redeemable noncontrolling interest

Net loss attributable to Class A common stockholders

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Prior to the consummation of the CRIS Business Combination, EVgo OpCo was wholly owned by EVgo Holdings.

shares of Class B common stock to Thunder Sub, Thunder Sub transferred 195,800,000 shares of Class B common stock and the right to enter into the Tax Receivable Agreement to EVgo Holdings, and Thunder Sub contributed all of its remaining assets to EVgo OpCo in exchange for EVgo OpCo Units equal to the number of shares of Class A common stock outstanding.

The Class B common stock owned by EVgo Holdings have been evaluated and are excluded from net income per share calculations as they do not participate in earnings or loss of the Company.

In connection with the CRIS Business Combination, EVgo Holdings contributed all of the equity interests in EVgo Holdco to EVgo OpCo in exchange for 195,800,000 EVgo OpCo Units, the Company contributed all of its assets and 195,800,000 shares of Class B common stock to Thunder Sub, Thunder Sub transferred 195,800,000 shares of Class B common stock and the right to enter into the Tax Receivable Agreement to EVgo Holdings and Thunder Sub contributed all of its remaining assets to EVgo OpCo in exchange for EVgo OpCo Units equal to the number of shares of Class A common stock outstanding.

The shares of Class B common stock owned by EVgo Holdings have been evaluated and are excluded from net income or loss per share calculations as they do not participate in earnings or loss of the Company.

Therefore, retrospective application of the conversion of these ownership interests into shares of Class B common stock would not result in an appropriate or meaningful presentation of EPS.

Therefore, the EPS information presented only relates to the periods subsequent to the consummation of the CRIS Business Combination on July 1, 2021 and has not been presented for the period from January 16, 2020 through December 31, 2020 and the period from January 1, 2020 through January 15, 2020.

The Company’s potentially dilutive securities consist of the Company’s Public Warrants, Private Placement Warrants, restricted stock units and unvested Earnout Shares.

For the periods in which EPS is presented, the following securities were excluded from the computation of diluted EPS since their impact would have been antidilutive:

Therefore, the EPS information presented only relates to the periods subsequent to the consummation of the CRIS Business Combination on July 1, 2021.

The Company’s potentially dilutive securities consist of the Company’s Public Warrants, Private Placement Warrants, RSUs, stock options and unvested Earnout Shares.

For the periods in which EPS is presented, the Company excluded the following potential shares, presented based on amounts outstanding at each period end, from the computation of diluted net income (loss) per share attributable to Class A common stockholders since their impact would have been antidilutive:

(in thousands)

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Private Placement Warrants

Restricted stock units

Stock options

Additionally, 718,750 unvested Earnout Shares were excluded from the computation of diluted EPS since their vesting threshold (i.e., the $ 15.00 Triggering Event) had not yet been met as of December 31, 2022.

Note 22 – Redeemable Noncontrolling Interest

Upon completion of the CRIS Business Combination, EVgo Holdings owns, through a series of transactions, 195,800,000 EVgo OpCo Units, representing a 74.0 % economic ownership interest in EVgo OpCo, and a corresponding number of shares of Class B common stock, representing a 74.0 % voting interest in the Company.

As of December 31, 2022, EVgo Holdings held 195,800,000 EVgo OpCo Units, representing a 73.6 % economic ownership interest in EVgo OpCo (reflecting the exclusion of 718,750 shares of Class A common stock held by other entities that were subject to possible forfeiture) and a corresponding number of shares of Class B common stock, representing a 73.4 % voting interest in the Company.

EVgo Holdings is entitled to one vote per share of Class B common stock but is not entitled to receive dividends or any assets upon liquidation, dissolution, distribution or winding-up of the Company.

Each EVgo OpCo Unit is redeemable, together with one share of Class B common stock, for either one share of Class A common stock or, at EVgo OpCo’s election, the cash equivalent market value of one share of Class A common stock in accordance with the terms of the EVgo OpCo A&R LLC Agreement (see Note 12).

The EVgo OpCo Units held by EVgo Holdings have been classified as redeemable noncontrolling interest in the Company.

The EVgo OpCo Units held by EVgo Holdings have been classified as a redeemable noncontrolling interest in the Company.

The cash redemption feature of the EVgo OpCo Units, together with a corresponding number of shares of Class B common stock, at the option of EVgo OpCo, is considered outside of the control of the Company.

Therefore, in accordance with ASC Topic 480, Distinguishing Liabilities from Equity , the EVgo OpCo Units are classified as temporary equity in the Company’s consolidated balance sheet.

Therefore, in accordance with ASC Topic 480, Distinguishing Liabilities from Equity , the EVgo OpCo Units are classified as temporary equity in the Company’s consolidated balance sheets.

The redeemable noncontrolling interest held by EVgo Holdings in EVgo OpCo, through its ownership of EVgo OpCo Units, was initially measured at its carrying amount on the CRIS Close Date.

Net income or loss is attributed to the redeemable noncontrolling interest during each reporting period based on its ownership percentage, as appropriate.

Subsequent to that, the redeemable noncontrolling interest is measured at its fair value (i.e., based on the Class A stock price) at the end of each reporting period, with the remeasurement amount being no less than the initial carrying amount, as adjusted for the redeemable noncontrolling interest’s share of net income or loss.

The offset of any fair value adjustment is recorded to equity, with no impact to net income or loss.

Net income or loss and other comprehensive income or loss are attributed to the redeemable noncontrolling interest during each reporting period based on its ownership percentage, as appropriate.

Subsequent to that, the redeemable noncontrolling interest is measured at its fair value (i.e., based on the Class A common stock price) at the end of each reporting period, with the remeasurement amount being no less than the initial carrying amount, as adjusted for the redeemable noncontrolling interest’s share of net income or loss and other comprehensive income or loss.

The offset of any fair value adjustment is recorded to equity, with no impact to net income (loss).

The table below presents the reconciliation of changes in redeemable noncontrolling interest for the period from the CRIS Close Date through December 31, 2022:

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Redeemable noncontrolling interest resulting from the CRIS Business Combination

Net income attributable to redeemable noncontrolling interest for the period

Net loss attributable to redeemable noncontrolling interest for the period

Equity-based compensation attributable to redeemable noncontrolling interest during the period

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Balance as of December 31, 2021

Net loss attributable to redeemable noncontrolling interest for the period

Equity-based compensation attributable to redeemable noncontrolling interest during the period

Adjustment to revise redeemable noncontrolling interest to its redemption value at period-end

Balance as of December 31, 2022

Note 23 – Subsequent Events

Awards under Equity Incentive Plan

During 2023, the Company’s Board of Directors approved grants of 4,849,968 RSUs and $ 4.4 million of stock options to employees and other service providers under the 2021 Incentive Plan.

The awards will vest based on continued service, generally over a period of three years .

The grant date fair value of the awards will be recognized as share-based compensation expense over the requisite service periods.

Granting of 205 Petition

On February 3, 2023, the Company filed a petition (the “Petition”) in the Court of Chancery under Section 205 of the Delaware General Corporation Law seeking (i) the validation of the stockholder vote approving CRIS’s certificate of incorporation in connection with the CRIS Business Combination (see Note 3) and (ii) the validation and declaration of effectiveness of (a) EVgo’s Charter (including its filing and effectiveness, in each case as of July 1, 2021) and (b) the securities issued or to be issued in reliance on such approval and/or the validity of EVgo’s Charter, as of the respective dates of their issuance (including the 5,750,000 shares of Class A common stock into which the shares of Class B common stock converted upon the consummation of the CRIS Business Combination).

The Company filed the Petition due in part to a recent ruling of the Court of Chancery that created uncertainty as to the validity and effectiveness of these corporate acts and, consequently, as to the Company’s capital structure.

Such purported uncertainty was eliminated on February 21, 2023, when, following a hearing of the Petition, the Court of Chancery issued an order validating each of the corporate acts described above, effective as of the time each such act was originally taken, notwithstanding any failures of authorization or potential failures of authorization described in, or resulting from the matters described in, the Petition.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Not applicable.

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-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk