What changed in this filing

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Item 1. Financial Statements

2023-05-09 compared with 2022-11-04 · 299 added, 514 removed, 281 unchanged (74% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

September 30,

(in thousands)

Current assets

Cash and restricted cash

Accounts receivable, net of allowance of $ 773 and $ 718 as of September 30, 2022 and December 31, 2021, respectively

Cash, cash equivalents and restricted cash

Accounts receivable, net of allowance of $ 782 and $ 687 as of March 31, 2023 and December 31, 2022, respectively

Accounts receivable, capital-build

Receivable from related party

Prepaid expenses

8 unchanged sentences

Accounts payable

Payables to related parties

Accrued liabilities

9 unchanged sentences

Deferred revenue, noncurrent

Warrant liability, at fair value

Other liabilities

Warrant liabilities, at fair value

Total liabilities

3 unchanged sentences

Condensed Consolidated Balance Sheets (continued)

September 30,

(in thousands, except share data)

2 unchanged sentences

Preferred stock, $ 0.0001 par value;

10,000,000 shares authorized as of September 30, 2022 and December 31, 2021;

10,000,000 shares authorized as of March 31, 2023 and December 31, 2022;

none issued and outstanding

Class A common stock, $ 0.0001 par value;

1,200,000,000 shares authorized as of September 30, 2022 and December 31, 2021;

68,665,545 and 68,020,630 shares issued and outstanding (excluding 718,750 shares subject to possible forfeiture) as of September 30, 2022 and December 31, 2021, respectively

1,200,000,000 shares authorized as of March 31, 2023 and December 31, 2022;

71,403,860 and 70,247,726 shares outstanding (excluding 718,750 shares subject to possible forfeiture) as of March 31, 2023 and December 31, 2022, respectively

Class B common stock, $ 0.0001 par value;

400,000,000 shares authorized as of September 30, 2022 and December 31, 2021;

195,800,000 shares issued and outstanding as of September 30, 2022 and December 31, 2021

400,000,000 shares authorized as of March 31, 2023 and December 31, 2022;

195,800,000 shares issued and outstanding as of March 31, 2023 and December 31, 2022

Additional paid-in capital

Accumulated deficit

( 1,051,018 )

( 1,358,358 )

Total stockholders’ deficit

( 1,050,991 )

( 1,358,331 )

Total liabilities, redeemable noncontrolling interest and stockholders’ deficit

1 unchanged sentence

and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

Condensed Consolidated Statements of Operations

Three Months Ended

Nine Months Ended

September 30,

(in thousands, except per share data)

Revenue from related party

Total revenue

Cost of revenue

Depreciation and amortization

Depreciation, net of capital-build amortization

Cost of sales

General and administrative

Gross profit (loss)

General and administrative expenses

Depreciation, amortization and accretion

1 unchanged sentence

Operating loss

Interest expense

Interest expense, related party

Interest income

Other (expense) income, net

Other income (expense), net

Change in fair value of earnout liability

Change in fair value of warrant liability

Total other (expense) income, net

Loss (income) before income tax expense

Change in fair value of warrant liabilities

Total other expense, net

Loss before income tax expense

Income tax expense

Net (loss) income

net (loss) income attributable to redeemable noncontrolling interest

Net (loss) income attributable to Class A common stockholders

Net (loss) income per share to Class A common stockholders, basic

Net (loss) income per share to Class A common stockholders, diluted

Net (loss) income

Other comprehensive income, net of tax:

Net change in unrealized gain on available-for-sale securities

Comprehensive (loss) income

comprehensive (loss) income attributable to redeemable noncontrolling interest

Comprehensive (loss) income attributable to Class A common stockholders

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

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

and Subsidiaries

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

For the Nine Months Ended September 30, 2022

Condensed Consolidated Statements of Stockholders’ Deficit

For the Three Months Ended March 31, 2023 and 2022

Class A Common Stock

Class B Common Stock

Comprehensive

Stockholders’

1 unchanged sentence

Balance, December 31, 2022

( 1,358,358 )

( 1,358,331 )

Share-based compensation

Warrants exercised and release of warrant liability

Issuance of stock under share-based compensation plans, including income tax effect

Issuance of stock under share-based compensation plans

Redeemable noncontrolling interest adjustment to fair value

2 unchanged sentences

( 1,050,991 )

Share-based compensation

Warrants exercised and release of warrant liability

Issuance of stock under share-based compensation plans, including income tax effect

Net unrealized loss on available-for-sale securities

Redeemable noncontrolling interest adjustment to fair value

Balance, June 30, 2022

Share-based compensation

Issuance of stock under share-based compensation plans, including income tax effect

Net change in unrealized gain on available-for-sale securities

Redeemable noncontrolling interest adjustment to fair value

Balance, September 30, 2022

Balance, December 31, 2021

( 1,358,358 )

( 1,358,331 )

1 Excludes $ 40.9 million of net loss attributable to redeemable noncontrolling interest.

2 Excludes $ 12.5 million of net income attributable to redeemable noncontrolling interest.

3 Excludes $ 37.7 million of net loss attributable to redeemable noncontrolling interest.

and Subsidiaries

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

For the Nine Months Ended September 30, 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

Balance, December 31, 2020 (as adjusted)

Share-based compensation

Warrants exercised

Release of warrant liability

Issuance of stock under share-based compensation plans

Redeemable noncontrolling interest adjustment to fair value

Balance, March 31, 2022

Share-based compensation

Balance, June 30, 2021

Equitization of note payable, related party

CRIS Business Combination, net of expenses

Share-based compensation

Vesting of earnout shares

Fair value adjustment to redeemable noncontrolling interest

( 1,981,852 )

Balance, September 30, 2021

( 1,981,825 )

1 Excludes $ 36.0 million of net loss attributable to redeemable noncontrolling interest.

2 Excludes $ 40.9 million of net income attributable to redeemable noncontrolling interest.

2 unchanged sentences

Condensed Consolidated Statements of Cash Flows

Nine Months Ended

September 30,

Three Months Ended

(in thousands)

2 unchanged sentences

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

Interest expense, related party

Change in fair value of earnout liability

Change in fair value of warrant liability

Change in fair value of warrant liabilities

Changes in operating assets and liabilities

13 unchanged sentences

Proceeds from insurance for property losses

Purchases of investments

Proceeds from sale of investments

Acquisition of business, net of cash received

Net cash used in investing activities

Cash flows from financing activities

Proceeds from CRIS Business Combination

Proceeds from note payable, related party

Payments on note payable, related party

Proceeds from capital-build funding

Proceeds from exercise of warrants

Capital-build funding, net

Payment of transaction costs for CRIS Business Combination

Payment of deferred transaction costs

Payments of issuance costs and deferred transaction costs

Net cash provided by financing activities

Net (decrease) increase in cash and restricted cash

Cash and restricted cash, beginning of period

Cash and restricted cash, end of period

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

and Subsidiaries

Condensed Consolidated Statements of Cash Flows (continued)

Nine Months Ended

September 30,

(in thousands)

Net decrease in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash, beginning of period

Cash, cash equivalents and restricted cash, end of period

Supplemental disclosure of noncash investing and financing activities

Accrued transaction costs

Asset retirement obligations incurred

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

Purchases of property and equipment in accounts payable and accrued liabilities

Reclassification of contingent earnout liability to equity upon triggering event

Contingent earnout liability recognized upon closing of CRIS Business Combination

Conversion of note payable, related party, to equity

Reclassification of redeemable noncontrolling interest on CRIS Close Date

Fair value adjustment to redeemable noncontrolling interest

Purchases of property and equipment in accounts payable and accrued liabilities

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

Non-cash increase in asset retirement obligations

Accrued transaction costs

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

2 unchanged sentences

Note 1 – Description of Business and Nature of Operations

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

EVgo was founded in October 2010 as NRG EV Services, LLC, a Delaware corporation and wholly owned subsidiary of NRG Energy, Inc., an integrated power company based in Houston, Texas.

(“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 natively charging (i.e., charging without an adaptor) all EV models and charging standards currently available in the U.S.

EVgo 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.

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.

This disruption contributed to reduced network throughput on EVgo’s chargers.

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.

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.

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,” 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”).

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 .

On July 1, 2021 (the “CRIS Close Date”), the Company consummated the business combination (the “CRIS Business Combination”) with CRIS, CRIS Thunder Merger LLC (“Thunder Sub”), EVgo Holdings, EVgo Holdco and EVgo OpCo, LLC (“EVgo OpCo” and together with EVgo Holdings and EVgo Holdco, the “EVgo Parties”) pursuant to the business combination agreement dated January 21, 2021 (the “Business Combination Agreement”).

Following the CRIS Close Date, the combined company is organized in an “Up-C” structure in which the business of EVgo Holdco and its subsidiaries is held by EVgo OpCo and continues to operate through the subsidiaries of EVgo Holdco and in which the Company’s only direct assets consist of equity interests in Thunder Sub, which, in turn, holds only common units in EVgo OpCo (“EVgo OpCo Units”).

As of March 31, 2023, the Company, through Thunder Sub, owned 26.8 % of the EVgo OpCo Units.

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 of March 31, 2023, EVgo Holdings held 195,800,000 EVgo OpCo Units, representing 73.2 % 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”).

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The condensed consolidated financial statements are unaudited and prepared in accordance with GAAP for interim financial information, as set by the Financial Accounting Standards Board (“FASB”), and pursuant to the rules and regulations of the SEC.

The accompanying condensed consolidated financial statements are unaudited and are presented in accordance with GAAP for interim financial information, as set by the Financial Accounting Standards Board (“FASB”), and pursuant to the rules and regulations of the SEC.

References to GAAP issued by the FASB in these notes to the condensed consolidated financial statements are to the FASB Accounting Standards Codification (“ASC”).

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

These unaudited condensed consolidated financial statements include all adjustments considered necessary, in the opinion of management, for a fair presentation of the condensed consolidated balance sheets, condensed consolidated statements of operations and comprehensive income (loss), condensed consolidated statements of stockholders’ and member’s equity (deficit) and condensed consolidated statements of cash flows for the periods presented.

The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the operating results for the full year ending December 31, 2022 or any other period.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (the “Annual Report”).

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

These condensed consolidated financial statements include all adjustments considered necessary, in the opinion of management, for a fair presentation of the condensed consolidated balance sheets, condensed consolidated statements of operations, condensed consolidated statements of stockholders’ deficit and condensed consolidated statements of cash flows for the periods presented.

The results of operations for the three months ended March 31, 2023 are not necessarily indicative of the operating results for the full year ending December 31, 2023 or any other period.

These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “Annual Report”).

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.

2 unchanged sentences

Use of Estimates

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

The preparation of EVgo’s condensed 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 and stand-alone selling prices for performance obligations for revenue, depreciable lives of property and equipment and intangible assets, costs associated with asset retirement obligations, the fair value of operating lease right-of-use assets and liabilities, reporting units used in goodwill impairment tests, share-based compensation, earnout liability, and warrant liabilities.

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 secured by the Federal Deposit Insurance Corporation up to $ 250,000 .

At various times, the Company has uninsured balances.

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 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 its cash balances.

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 three customers that comprised 36.2 % of the Company’s total accounts receivable as of September 30, 2022.

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

For the nine months ended September 30, 2022 and 2021, one customer represented 17.2 % and one customer represented 12.0 % of total revenue, respectively.

For the three and nine months ended September 30, 2022, EVgo had three vendors that provided 87.3 % and 78.3 %, respectively, of total charging equipment and services to the Company.

For the three and nine months ended September 30, 2021, EVgo had one vendor that provided 11.0 % and 13.0 %, respectively, of total charging equipment and services to the Company.

Cash and Restricted Cash

The Company had two customers that collectively comprised 57.6 % of the Company’s total net accounts receivable as of March 31, 2023.

The Company had one customer that comprised 20.5 % of the Company’s total net accounts receivable as of December 31, 2022.

For the three months ended March 31, 2023, two customers collectively represented 51.4 % of revenue.

For the three months ended March 31, 2022, two customers collectively represented 28.6 % of revenue.

For the three months ended March 31, 2023 and 2022, EVgo had one and four vendors, respectively, that provided more than 10% of EVgo’s total charging equipment.

For each of the three months ended March 31, 2023 and 2022, the percentage of EVgo’s total charging equipment provided by these vendors collectively was 84.3 %.

Reclassifications

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

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.

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

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

The Company had unused letters of credit of $ 0.7 million as of September 30, 2022 and 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.

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 condensed consolidated balance sheets, of $ 0.7 million as of March 31, 2023 and December 31, 2022, 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.

Available-for-sale Debt Securities

Available-for-sale debt securities are recorded at fair value, and unrealized gains and losses that are considered to be temporary are recorded, net of tax, as a component of accumulated other comprehensive income.

In general, investments with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments.

All other investments are classified as long-term.

The Company evaluates the available-for-sale securities for other-than-temporary impairment on a quarterly basis.

Unrealized losses are charged against net earnings when a decline in fair value is determined to be other than temporary.

The Company reviews several factors to determine whether a loss is other than temporary, such as the length and extent of the fair value decline, the financial condition and near-term prospects of the issuer and whether the Company has the intent to sell or will more likely than not be required to sell the securities before the securities' anticipated recovery, which may be at maturity.

Realized gains and losses are accounted for using the specific identification method.

Purchases and sales of securities are recorded on a trade-date basis.

All of the Company’s available-for-sale debt securities were sold during the three months ended September 30, 2022, resulting in a realized loss of $ 0.2 million.

Prior to the sale, EVgo’s investment portfolio primarily included corporate debt securities, asset backed securities, U.S.

government treasury securities, certificates of deposit and commercial paper.

Other accounts receivable of $ 1.2 million and $ 1.3 million were included in accounts receivable, net, on the condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022, respectively.

Newly Adopted 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 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 $ 19.1 million and $ 18.4 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 condensed consolidated statements of cash flows or operating loss in the Company’s condensed consolidated statements of operations and comprehensive income (loss).

Refer to Note 5 for additional information.

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 (“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.

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 condensed consolidated financial statements or disclosures.

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 Topic 606, Revenue from Contracts with Customers (“ASC 606”), as if it had originated the contracts.

The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022.

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

The Company adopted ASU 2021-08 prospectively on January 1, 2023.

The adoption of this standard did not have any impact on the condensed consolidated financial statements.

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

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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 is currently evaluating the potential impact of adopting this guidance in the first quarter of 2023 on its condensed consolidated financial statements.

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 Topic 606, Revenue From Contracts With Customers (“ASC 606”), as if it had originated the contracts.

The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022.

Early adoption is permitted.

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.

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 will be effective for the Company’s financial statements as of and for the year ended December 31, 2022.

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

Note 3 – Acquisition

PlugShare LLC

On July 9, 2021, the Company entered into the PlugShare Agreement to acquire 100 % of the outstanding common stock of PlugShare (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 believes that the acquisition of PlugShare has allowed it to expand its revenue base and has resulted in certain synergies within its operations.

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

Pursuant to ASC 805, the purchase price was 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 was allocated to goodwill.

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

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:

Three Months Ended

Nine Months Ended

September 30,

(in thousands)

Pro forma revenue

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 condensed 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 loss was adjusted to exclude acquisition-related costs incurred during the periods presented.

No other material pro forma adjustments were deemed necessary.

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.

The Company adopted ASC 326 prospectively as of January 1, 2023.

The adoption of this standard did not materially impact the Company’s condensed consolidated results of operations or financial position.

Recently Issued Accounting Standards

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 March 31, 2023, 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 condensed consolidated financial statements.

Note 3 – Revenue Recognition

The table below presents a disaggregation of EVgo’s revenue for the three and nine months ended September 30, 2022 and 2021:

Disaggregation of Revenue

The table below presents a disaggregation of EVgo’s revenue for the three months ended March 31, 2023 and 2022:

Three Months Ended

Nine Months Ended

September 30,

(in thousands)

Charging revenue, retail

Charging revenue, OEM

Charging revenue, commercial

Charging revenue, OEM

Regulatory credit sales

Network revenue, OEM

eXtend revenue

Ancillary revenue

Regulatory credit sales

Total revenue

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

September 30,

(in thousands)

The following table provides information about contract assets and liabilities from contracts with customers as of March 31, 2023 and December 31, 2022:

(dollars in thousands)

Contract assets

Contract liabilities

The following table provides the activity for contract liabilities during the period presented:

Nine Months Ended

September 30,

There were no contract assets as of March 31, 2023 compared to $ 2.9 million as of December 31, 2022 which was driven by the difference between the timing of when revenue is recognized from performance obligations satisfied in the current reporting period and when amounts are invoiced to the customer.

Contract liabilities as of March 31, 2023 increased $ 16.7 million, or 29 %, to $ 74.5 million compared to $ 57.8 million as of December 31, 2022 due to receipt of cash payments partially offset by the satisfaction of performance obligations.

The following table provides the activity for the contract liabilities recognized during the three months ended March 31, 2023:

(in thousands)

1 unchanged sentence

Recognized in revenue

Marketing activities

Balance as of September 30, 2022

It is anticipated that deferred revenue as of September 30, 2022, excluding variable consideration allocated entirely to wholly unsatisfied performance obligations, will be recognized for the years ending December 31, as follows:

Marketing activities recognized on a net basis

Balance as of March 31, 2023

Revenues for the three months ended March 31, 2023 and 2022 include the following:

Three Months Ended

(in thousands)

ASC 606 does not require disclosure of, and the table above does not include, the transaction price allocated 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 wholly unsatisfied performance obligations is not required.

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 March 31, 2023 will be recognized for the following periods 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 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 September 30, 2022 and December 31, 2021, there was $ 7.3 million and $ 22.9 million, respectively, in variable consideration for wholly unsatisfied performance obligations, which is included in deferred revenue on the condensed consolidated balance sheets.

As of March 31, 2023 and December 31, 2022, there was $ 10.6 million and $ 8.7 million, respectively, in variable consideration for wholly unsatisfied performance obligations, which is included in deferred revenue on the condensed consolidated balance sheets.

Note 4 – Lease Accounting

As disclosed in Note 2, the Company adopted ASC 842 as of January 1, 2022.

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 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 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 condensed consolidated statements of operations and comprehensive income (loss).

Lessee Accounting

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

Additionally, the Company leases offices and laboratory space under agreements with third-party landlords.

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 range from one to 15 years and certain leases contain renewal options that can extend the term for an additional one to 10 years .

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

The Company has not entered into any finance leases.

The Company has estimated operating lease commitments of $ 48.0 million for leases where the Company has not yet taken possession of the underlying asset as of September 30, 2022.

As such, the related operating lease right-of-use assets and operating lease liabilities have not been recognized in the Company’s condensed consolidated balance sheet as of September 30, 2022.

For the three and nine months ended September 30, 2022, the Company’s lease costs consisted of the following:

The Company has estimated operating lease commitments of $ 49.2 million for leases where the Company has not yet taken possession of the underlying asset as of March 31, 2023.

As such, the related operating lease right-of-use assets and operating lease liabilities have not been recognized in the Company’s condensed consolidated balance sheet as of March 31, 2023.

For the three months ended March 31, 2023 and 2022, the Company’s lease costs consisted of the following:

Three Months Ended

Nine Months Ended

September 30,

(in thousands)

1 unchanged sentence

Cost of sales

Selling, general and administrative expenses

General and administrative expenses

Variable lease costs

Cost of sales

Selling, general and administrative expenses

General and administrative expenses

Short-term lease costs

1 Rental expense for operating leases was $ 0.7 million and $ 1.8 million for the three and nine months ended September 30, 2021, respectively.

As of September 30, 2022, the maturities of operating lease liabilities for the years ending December 31, are as follows:

As of March 31, 2023, the maturities of operating lease liabilities for the periods ending December 31, were as follows:

(in thousands)

2 unchanged sentences

Total discounted operating lease liabilities

The following table shows future minimum payments under noncancellable operating leases with initial terms of greater than one year, based on the expected due dates of the various installments as of December 31, 2021, as previously reported in the Company’s Annual Report, prior to the adoption of ASC 842:

(in thousands)

Other supplemental information, as of September 30, 2022, consisted of the following:

September 30,

Weighted-average remaining lease term

Other supplemental and cash flow information, for the three months ended March 31, 2023 and 2022, consisted of the following:

Three Months Ended

(dollars in thousands)

Weighted-average remaining lease term (in years)

Weighted-average discount rate

Other supplemental cash flow information, for the nine months ended September 30, 2022, consisted of the following:

(in thousands)

Cash paid for amounts included in measurement of operating lease liabilities

2 unchanged sentences

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 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, on the condensed consolidated balance sheets and is depreciated to estimated residual value over its expected useful life.

For the three and nine months ended September 30, 2022, the Company’s lease income consisted of the following components:

Initial lease terms are generally one to five 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 condensed consolidated balance sheets.

For the three months ended March 31, 2023 and 2022, the Company’s lease income consisted of the following components:

Three Months Ended

Nine Months Ended

September 30,

(in thousands)

1 unchanged sentence

Fixed lease income

Variable lease income

Sublease income

Total lease income

1 Lease income was $ 0.9 million and $ 1.4 million for the three and nine months ended September 30, 2021, respectively.

As of September 30, 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:

As of March 31, 2023, future minimum rental payments due to the Company as lessor under operating leases (including subleases) for the periods ending December 31, were as follows:

(in thousands)

The components of charging equipment and charging stations leased to third parties under operating leases, which are included within the Company’s property, equipment and software, net, were as follows as of September 30, 2022 and December 31, 2021:

September 30,

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 March 31, 2023 and December 31, 2022:

(in thousands)

Charging station equipment and construction costs

Land and building

accumulated depreciation

Property, equipment and software, net

Operating lease right-of-use assets

Note 5 – Property, Equipment and Software, Net

Property, equipment and software, net, consisted of the following as of September 30, 2022 and December 31, 2021:

September 30,

Property, equipment and software, net, consisted of the following as of March 31, 2023 and December 31, 2022:

(in thousands)

Charging station installation costs

Construction in process

Charging equipment

Charging station equipment

Charging station installation costs

Charging equipment

Land and building

Office equipment, vehicles and other

Total property, equipment and software

Less accumulated depreciation and amortization

Total property, equipment and software, net

Depreciation and amortization expense consisted of the following for the three and nine months ended September 30, 2022 and 2021:

Property, equipment and software, net

Depreciation, amortization, impairment expense and loss on disposal of property and equipment, net of insurance recoveries, consisted of the following for the three months ended March 31, 2023 and 2022:

Three Months Ended

Nine Months Ended

September 30,

(in thousands)

5 unchanged sentences

Amortization of software

Losses on disposal of property and equipment, which are included in general and administrative expenses in the condensed consolidated statements of operations and comprehensive income (loss), were $ 1.7 million and $ 4.6 million for the three and nine months ended September 30, 2022, respectively, and $ 0.3 million and $ 0.6 million for the three and nine months ended September 30, 2021, respectively.

Impairment expense

Loss on disposal of property and equipment, net of insurance recoveries

Note 6 – Intangible Assets, Net

Intangible assets, net, consisted of the following as of September 30, 2022:

September 30, 2022

Intangible assets, net, consisted of the following as of March 31, 2023:

March 31, 2023

(in thousands)

2 unchanged sentences

Developed technology

Amortization of intangible assets for the three and nine months ended September 30, 2022 and 2021 was as follows:

Three Months Ended

Nine Months Ended

September 30,

(in thousands)

Amortization of intangible assets

Amortization of intangible assets was $ 2.9 million for each of the three months ended March 31, 2023 and 2022.

Note 7 – Asset Retirement Obligations

Asset retirement obligations represent the present value of the estimated costs to remove commercial charging stations and restore the sites to the condition prior to installation.

Asset retirement obligations represent the present value of the estimated costs to remove the commercial charging stations and restore the sites to the condition prior to installation.

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

Accretion expense for the three and nine months ended September 30, 2022 and 2021 was as follows:

Three Months Ended

Nine Months Ended

September 30,

(in thousands)

Accretion expense

Asset retirement obligation activity for the nine months ended September 30, 2022 was as follows:

Asset retirement obligation activity for the three months ended March 31, 2023 was as follows:

(in thousands)

Beginning balance

Balance as of December 31, 2022

Liabilities incurred

2 unchanged sentences

Liabilities settled

Ending balance

Balance as of March 31, 2023

Note 8 – 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 approximately 500 Pilot Company sites across more than 40 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’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;

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 (the “Pilot Company”) and General Motors LLC (“GM”) to build, operate, and maintain up to 2,000 stalls served by DC chargers that the Pilot Company will own.

The stalls will be located at the Pilot Company sites across the U.S.

Pursuant to the Pilot Infrastructure Agreement, EVgo is required to meet certain construction milestones measured by the number of sites commissioned, and the 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, the 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 the 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 the Pilot Company elects to terminate the Pilot Infrastructure Agreement after 1,000 stalls have been completed, the 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.

6 unchanged sentences

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 (which will enable the construction of 2,000 stalls) from Delta under the Purchase Order and may, at EVgo’s election, increase the number of chargers it purchases from Delta to 1,100 .

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 (as amended from time to time, the “GM Agreement”) to build fast charger stalls that EVgo will own and operate as part of the Company’s public network.

The GM Agreement has been amended several times to expand the overall number of charger stalls to be installed from 2,750 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 % across the GM network.

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 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, entered into in March 2016 (the “Nissan 2016 Agreement”), the Company was required to support, maintain and make available at least 850 chargers through July 7, 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 2016 Agreement.

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.

EVgo executed an agreement with Nissan North America, Inc.

(“Nissan”) in June 2019 (the “Nissan Agreement”), that provides for joint marketing activities, charging credit programs for purchasers or lessees of Nissan EVs, and a capital-build program.

The Nissan 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.

2 unchanged sentences

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 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, up to 48 sites, which could result in an adjustment to the consideration received by the Company under the Nissan 2.0 Agreement.

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 Agreement.

EVgo and Nissan previously agreed to amend the Nissan 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.

EVgo’s ability to meet its 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 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 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 Agreement.

Nissan receives budget approvals annually from Nissan Motor Company Limited.

As of September 30, 2022, 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) pay any existing Build Schedule penalties due at the time of termination;

(ii) meet a specified charger installation milestone of 80 chargers in certain designated markets within two years of such termination; (iii) provide an aggregate of $ 1.6 million in joint marketing activities;

and (iv) 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 extensions and other amendments, EVgo is required to install an aggregate of 210 chargers by February 29, 2024.

Pursuant to the current Build Schedule, EVgo is required to install 48 chargers by February 28, 2023.

General Motors Agreement

On July 20, 2020, EVgo entered into a five-year contract (the “GM Agreement”) with GM 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 September 30, 2022, there were approximately 3,191 stalls already in the active engineering and construction development pipeline, of which 2,840 stalls had been approved by GM.

As of September 30, 2022, EVgo had 457 stalls left to install in order to meet its charger-installation milestone.

EVgo is required to open to the public 607 additional stalls by December 31, 2022 or GM will have the right, if it so chooses, to send EVgo a stall count breach notice, which would trigger a cure period through December 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.

Nissan has fulfilled its annual payment obligations under the Nissan 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.

Although the Company is not currently facing any material 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 September 30, 2022, EVgo had $ 10.7 million in outstanding purchase order commitments to EVgo’s contract manufacturers and component suppliers for charging equipment.

As of March 31, 2023, EVgo had $ 66.0 million in outstanding purchase order commitments to EVgo’s contract manufacturers and component suppliers for charging equipment, all of which were short-term.

In certain instances, EVgo is permitted to cancel, reschedule or adjust these orders.

Note 10 – Related Party Transactions

Receivable from Related Party

As of December 31, 2021, the Company had a $ 1.5 million receivable from EVgo Holdings pursuant to an indemnification obligation relating to a matter settled between SAF Partners II, LLC and EV Holdings Investments, LLC on January 14, 2022.

Payables to Related Parties

As of September 30, 2022, the Company owed $ 24,488 for tax refunds received on behalf of EVgo Holdings and EVgo Management Holdings, LLC.

Note Payable, Related Party

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 de minimis for the three months ended September 30, 2021 and $ 1.9 million for the nine months ended September 30, 2021.

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.

Consulting Services

LS Power Equity Advisors, LLC provides consulting and corporate development services to the Company from time to time.

There were no such services rendered during the three and nine months ended September 30, 2022.

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 condensed consolidated statements of operations and comprehensive income (loss) for the nine months ended September 30, 2021.

The costs incurred after the CRIS Close Date through September 30, 2021 were de minimis.

Low Carbon Fuel Standard Credits

The Company may enter into agreements to facilitate the purchase and sale of California Low Carbon Fuel Standard (“LCFS”) credits with a subsidiary of LS Power at prevailing market prices.

For the three and nine months ended September 30, 2022 and the three months ended September 30, 2021, there was no regulatory credit income recognized from related parties.

For the nine months ended September 30, 2021, the Company recognized $ 0.6 million of such regulatory credit income, which is included in revenue from related party in the condensed consolidated statement of operations and comprehensive income (loss).

Note 9 – Fair Value Measurements

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date.

In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).

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 September 30, 2022:

September 30,

In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).

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 March 31, 2023 and December 31, 2022:

(in thousands)

Cash equivalents

Money market funds

Earnout liability

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Warrant liability – Private Placement Warrants

Total liabilities

The earnout liability was valued using a Monte Carlo simulation methodology.

The warrants are accounted for as liabilities in accordance with ASC 815 and are presented as warrant liabilities on the condensed 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 condensed consolidated statements of operations and comprehensive income (loss).

The closing price of the Public Warrants was used as the fair value as of each reporting date.

As of September 30, 2022 and December 31, 2021, the carrying values of certain accounts such as accounts receivable, accounts payable and accrued expenses were deemed to approximate their fair values due to their short-term nature.

There were no assets measured on a recurring basis using significant unobservable inputs (Level 3) as of September 30, 2022 or December 31, 2021.

There were no other transfers between levels of the hierarchy for the nine months ended September 30, 2022.

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 nine months ended September 30, 2022:

(in thousands)

Fair value as of December 31, 2021

Change in fair value of liability

Transfers out of Level 3

Fair value as of September 30, 2022

Net change in unrealized gain (loss) for instruments still held at September 30, 2022

The fair value of the Private Placement Warrants issued was initially measured using a Monte Carlo simulation model.

As of 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 fair value measurement.

Earnout Liability

The estimated fair value of the 1,437,500 shares of Class A common stock held by the Company’s initial stockholders that are subject to potential forfeiture (the “Earnout Shares”) issued and outstanding at the closing of the CRIS Business Combination on the CRIS Close Date was $ 18.3 million based on a Monte Carlo simulation valuation model using a distribution of potential outcomes on a monthly basis over the earnout period between the CRIS Close Date and the five-year anniversary of the CRIS Close Date using the most reliable information available.

On July 2, 2021, the volume-weighted average price (“VWAP”) of shares of Class A common stock equaled or exceeded $ 12.50 for 20 trading days within a 30-trading day period within five years of the CRIS Close Date 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 a VWAP of $ 15.00 (the “$ 15.00 Triggering Event”) originally valued at $ 8.8 million was remeasured to $ 5.2 million as of December 31, 2021 and to $ 3.9 million as of September 30, 2022.

Assumptions used in the valuation of the earnout liability are as follows:

September 30,

Risk-free interest rate

Expected term

Expected term (in years)

Expected volatility

Dividend rate

The warrants are accounted for as liabilities in accordance with ASC 815, Derivatives and Hedging , and are presented as warrant liabilities on the condensed 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 liabilities in the condensed consolidated statements of operations.

The close price of the Public Warrants was used as its fair value as of each relevant date.

As of March 31, 2023, the Private Placement Warrants were valued using a Monte Carlo simulation methodology, which is considered a Level 3 fair value measurement.

As of December 31, 2022, t he fair value of the Private Placement Warrants was measured by reference to the trading price of the Public Warrants, which is considered a Level 2 fair value measurement.

Assumptions used in the valuation of the Private Placement Warrant liability are as follows:

Risk-free interest rate

Expected term (in years)

Expected volatility

Dividend rate

Exercise price

(in thousands)

Fair value as of December 31, 2022

Change in fair value of liability

Transfers into Level 3

Fair value as of March 31, 2023

There were no other transfers between levels of the fair value hierarchy for the three months ended March 31, 2023.

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.

There were no assets measured on a recurring basis using significant unobservable inputs (Level 3) as of March 31, 2023 or December 31, 2022.

Note 10 – Income Taxes

The Company’s provision for income taxes consists primarily of income taxes, in federal and state jurisdictions where EVgo OpCo and its subsidiaries conduct business, that are incurred by the Company as a result of the Company’s ownership interest in EVgo OpCo.

For the three and nine months ended September 30, 2022 and 2021, the Company’s provision for income taxes and effective tax rate were de minimis primarily due to the Company’s current income tax benefit being offset by a change in the full valuation allowance on its deferred tax assets and a significant portion of income (loss) being allocated to a nontaxable partnership.

Prior to July 1, 2021, EVgo Holdco and its subsidiaries were not taxable entities for U.S.

federal income tax purposes or for any of the states in which such entities operated.

On July 1, 2021, pursuant to the CRIS Business Combination, the Company acquired an interest in EVgo Holdco and its subsidiaries through EVgo OpCo, and the Company’s allocable share of EVgo OpCo’s income became subject to U.S.

federal and state income taxes in jurisdictions in which EVgo OpCo and its subsidiaries operate.

The Company’s 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 U.S.

For the three months ended March 31, 2023 and 2022, the Company’s provision for income taxes and effective tax rates were de minimis primarily due to the Company’s full valuation allowance on its deferred tax assets and a significant portion of income (loss) being allocated to a nontaxable partnership.

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 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.

In assessing the realization of its deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

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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 maintained a full valuation allowance against its net deferred tax assets as of September 30, 2022 and December 31, 2021 .

In addition, there were no unrecognized tax benefits for uncertain tax positions, nor any amounts accrued for interest and penalties as of September 30, 2022 or December 31, 2021.

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 March 31, 2023 and December 31, 2022 .

The Company files income tax returns in the U.S.

at the federal level and in various state and local jurisdictions and is subject to examination by the various taxing authorities for all periods since its inception.

As of March 31, 2023 and December 31, 2022, there were no unrecognized tax benefits for uncertain tax positions, nor any amounts accrued for interest and penalties.

Note 11 – Tax Receivable Agreement

In connection with the CRIS Business Combination, EVgo entered into 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 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 Group 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.

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.

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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.

As of September 30, 2022 and December 31, 2021, no transactions have 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 14 – Net Income (Loss) Per Share

The following table sets forth the computation of basic and diluted net income (loss) per share for the three and nine months ended September 30, 2022:

As of March 31, 2023, no transactions have 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 12 – Net Loss Per Share

The following table sets forth the computation of basic and diluted net loss per share for the three months ended March 31, 2023 and 2022:

Three Months Ended

Nine Months Ended

September 30,

(in thousands, except per share data)

Net (loss) income

net (loss) income attributable to redeemable noncontrolling interest

Net (loss) income attributable to Class A common stockholders

net (loss) income attributable to participating securities

Net (loss) income attributable to Class A common stockholders, basic and diluted

net loss attributable to redeemable noncontrolling interest

Net loss attributable to Class A common stockholders

net loss attributable to participating securities

Net loss attributable to Class A common stockholders, basic and diluted

Weighted average common stock outstanding

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Weighted average common stock outstanding, basic and diluted

Net (loss) income per share – basic and diluted

Prior to the consummation of the CRIS Business Combination, EVgo OpCo was wholly owned by EVgo Holdings.

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 earnings (loss) per common share (“EPS”).

Therefore, the EPS information presented only relates to the periods subsequent to the consummation of the CRIS Business Combination on July 1, 2021.

Net loss per share – basic and diluted

The Company’s potentially dilutive securities consist of the Company’s Public Warrants, Private Placement Warrants, restricted stock units (“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:

Three and Nine Months Ended

September 30,

For the periods in which net loss per share is presented, the Company excluded the following potential shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to Class A common stockholders since their impact would have been antidilutive:

Three Months Ended

(in thousands)

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Stock options

Additionally, 718,750 unvested Earnout Shares (participating securities) were excluded from the computation of diluted EPS since their vesting threshold (i.e., the $ 15.00 Triggering Event) had not been met as of September 30, 2022.

Additionally, 718,750 unvested Earnout Shares were excluded from the computation of diluted net loss per share since their vesting threshold (i.e., the $ 15.00 Triggering Event) had not yet been met as of March 31, 2023 and 2022.

Note 13 – Share-Based Compensation

On July 1, 2021, concurrent with the closing of the CRIS Business Combination, the stockholders also approved the Board of Directors-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.

As of September 30, 2022, there were 29,435,928 shares of Class A common stock available for grant.

The 2021 Incentive Plan provides for potential grants of:

(i) incentive stock options qualified as such under U.S.

Federal income tax laws;

(ii) stock options that do not qualify as incentive stock options;

(iii) stock appreciation rights;

(iv) restricted stock awards;

(vi) vested stock awards;

(vii) dividend equivalents;

(viii) other share- or cash-based awards;

(ix) cash awards;

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.

The following table sets forth the Company’s total share-based compensation expense included in the Company’s condensed consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2022 and 2021:

The following table sets forth the Company’s total share-based compensation expense included in the Company’s condensed consolidated statements of operations for the three months ended March 31, 2023 and 2022:

Three Months Ended

Nine Months Ended

September 30,

(in thousands)

Cost of sales

General and administrative

General and administrative expenses

Total share-based compensation expense

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 March 31, 2023, there were 24,407,475 shares of Class A common stock available for grant.

Stock Options

On April 1, 2022, the Company granted stock options covering 375,428 underlying shares of Class A common stock to employees .

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 nine months ended September 30, 2022:

Weighted Average

The following table summarizes stock option activity for the three months ended March 31, 2023:

Shares Underlying

Weighted Average

(shares in thousands)

Weighted Average

Intrinsic Value

Exercise Price

Contractual Life

Intrinsic Value

Outstanding as of December 31, 2022

Outstanding as of September 30, 2022

As of September 30, 2022, the Company’s unrecognized share-based compensation expense related to stock options was approximately $ 2.2 million, which is expected to be recognized over a period of 1.6 years.

The weighted average grant date fair value per share of options granted during the nine months ended September 30, 2022 was $ 8.79 .

No stock options were granted during the three months ended September 30, 2022 and there were no stock options vested or exercisable as of September 30, 2022.

The fair value of the stock options granted on April 1, 2022 was computed using Black-Scholes option-pricing model using the following key assumptions:

Outstanding as of March 31, 2023

Outstanding and exercisable as of March 31, 2023

As of March 31, 2023, 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.

No stock options were exercised during the three months ended March 31, 2023.

The fair value of the stock options granted during the three months ended March 31, 2023 was computed using Black-Scholes option-pricing model using the following key assumptions:

Risk-free interest rate

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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 September 30, 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 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 nine months ended September 30, 2022:

The table below represents the Company’s RSU activity under the 2021 Incentive Plan during the three months ended March 31, 2023:

(shares in thousands)

Outstanding as of December 31, 2021

Outstanding as of September 30, 2022

As of September 30, 2022, the Company’s unrecognized share-based compensation expense related to unvested RSUs was approximately $ 23.1 million, which is expected to be recognized over a period of 1.5 years .

Incentive Units

Certain employees of EVgo Services have received share-based compensation in the form of units in EVgo Management that track incentive units issued by EVgo Holdings to EVgo Management (“Incentive Units”).

The Incentive Units typically vest annually over a period of four year s from the date of grant.

Presented below is a summary of the activity of the Company’s Incentive Units during the nine months ended September 30, 2022:

Unvested as of December 31, 2022

Unvested as of March 31, 2023

Vested but not released

Outstanding as of March 31, 2023

The total fair value of RSUs vested during the three months ended March 31, 2023 was $ 7.7 million.

As of March 31, 2023, the Company’s unrecognized share-based compensation expense related to unvested RSUs was approximately $ 39.3 million, which is expected to be recognized over a period of 1.7 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”).

Of each individual grant of Incentive Units, 65 % of the grant was designated as time vesting (the “Time Vesting Incentive Units”) and the remaining portion ( 35 % of the grant) 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.

Presented below is a summary of the activity of the Company’s Incentive Units during the three months ended March 31, 2023:

(units in thousands)

Outstanding and expected to vest as of December 31, 2021

Outstanding and expected to vest as of September 30, 2022

As of September 30, 2022, there was $ 7.5 million of unrecognized share-based compensation expense related to unvested Incentive Units, which is expected to be recognized over a period of 1.9 years.

Outstanding as of December 31, 2022

Outstanding as of March 31, 2023

As of March 31, 2023, the Company’s unrecognized share-based compensation expense related to unvested Incentive Units was approximately $ 6.4 million, which is expected to be recognized over a period of 1.4 years.

Liability-Classified Awards

In February 2023, the Company’s Board of Directors approved grants of $ 4.4 million in stock options underlying shares of Class A common stock to certain employees.

The number of options subject to the grants was to be determined based on the Black-Scholes value of the Company’s common stock on the trading day period prior to the award date.

The awards were accounted for as liability-classified awards as of March 31, 2023 and compensation expense for the three months ended March 31, 2023 was recognized using the accelerated attribution method over the service period.

As of March 31, 2023, the Company had $ 4.2 million of unrecognized costs related to unvested liability-classified awards which were expected to be recognized over a weighted average period of 1.9 years.

In April 2023, the number of shares became fixed on the award date and the Company accordingly reclassified these awards as equity-classified awards on the award date.

Note 14 – Redeemable Noncontrolling Interest

As of September 30, 2022, EVgo Holdings held 195,800,000 EVgo OpCo Units, representing a 74.0 % 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 an approximately 74 % 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.

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 condensed 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 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 or loss.

The table below presents the reconciliation of changes in redeemable noncontrolling interest for the nine months ended September 30, 2022:

As of March 31, 2023, EVgo Holdings held 195,800,000 EVgo OpCo Units, representing a 73.3 % 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 73.2 % voting interest in the Company.

The table below presents the reconciliation of changes in redeemable noncontrolling interest for the three months ended March 31, 2023:

(in thousands)

Balance as of December 31, 2022

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

Adjustment to revise redeemable noncontrolling interest to its redemption value at period-end

Balance as of September 30, 2022

Balance as of March 31, 2023

Note 15 – Subsequent Events

In October 2022, the Company granted 510,999 restricted stock units to employees and other service providers under the 2021 Incentive Plan.

The fair value of the restricted stock units awarded was $ 4.0 million, which was estimated on the dates of grant based on the fair value of the Company’s Class A common stock, using similar methods and assumptions as those previously disclosed by the Company.

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.

During October 2022, EVgo entered into the Nissan Amendment.

As a result of the Nissan Amendment, the timing of revenue for the charging credit programs will shift during the contract term starting in the fourth quarter of 2022.

See Note 9 for additional information, including regarding changes to the capital-build program under the Nissan Amendment.

Issuance of Common Stock

As previously announced, 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 $ 200.0 million of shares of Class A common stock in “at the market” transactions at prevailing market prices (the “ATM Program”).

In April 2023, EVgo sold 889,340 shares of Class A common stock pursuant to the ATM Program, with aggregate gross proceeds of $ 5.8 million.

After deducting commissions of $ 0.1 million, the Company received net proceeds of approximately $ 5.7 million.

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

What changed 10-Q

Item 1. Financial Statements