What changed in this filing

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2024-03-06 compared with 2023-03-30 · 396 added, 543 removed, 793 unchanged (54% of the section changed)

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Report of Independent Registered Public Accounting Firm

( KPMG LLP , Albuquerque, NM , PCAOB ID:

( KPMG LLP , Denver, CO , PCAOB ID:

Consolidated Balance Sheets at December 31, 2023 and 2022

Consolidated Statements of Operations for the years ended December 31, 2023 and 2022

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

Consolidated Statements of Stockholders’ Deficit for the years ended December 31, 2023 and 2022

Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022

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

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

and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, stockholders’ deficit, and cash flows for each of the years in the two-year period ended December 31, 2023, and the related notes and financial statement schedule II (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2023, in conformity with U.S.

generally accepted accounting principles.

Change in Accounting Principle

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

Basis for Opinion

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

Albuquerque, New Mexico

Denver, Colorado

March 6, 2024

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Accounts receivable, capital-build

Receivable from related party

Prepaid expenses

Other current assets

Prepaid expenses and other current assets

Total current assets

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Deferred revenue, noncurrent

Warrant liability, at fair value

Other liabilities

Warrant liabilities, at fair value

Total liabilities

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

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

102,935,965 and 70,247,726 shares outstanding (excluding 718,750 shares subject to possible forfeiture) as of December 31, 2023 and 2022, respectively

Class B common stock, $ 0.0001 par value;

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Accumulated deficit

( 1,358,358 )

Total stockholders’ deficit

( 1,358,331 )

Total liabilities, redeemable noncontrolling interest and stockholders’ deficit

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(in thousands, except per share data)

Revenue from related party

Charging, retail

Charging, commercial

Charging, OEM

Regulatory credit sales

Total charging network

Total revenue

Cost of revenue

Depreciation, net of capital-build amortization

Cost of sales

General and administrative expenses

Charging network

Depreciation, net of capital-build amortization

Total cost of sales

Gross profit (loss)

Operating expenses

General and administrative

Depreciation, amortization and accretion

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Interest expense

Interest expense, related party

Interest income

Other (expense) income, net

Other expense, net

Change in fair value of earnout liability

Change in fair value of warrant liability

Change in fair value of warrant liabilities

Total other income, net

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and Subsidiaries

Consolidated Statements of Stockholders’ Deficit

Consolidated Statement of Stockholders’ Deficit

For the Year Ended December 31, 2023

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Balance, December 31, 2022

( 1,358,358 )

( 1,358,331 )

Share-based compensation

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

Warrants exercised and release of warrant liability

Issuance of stock under share-based compensation plans

Shares withheld for taxes

Issuance of Class A common stock under the equity offering, net of issuance costs

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

Issuance of Class A common stock under share-based compensation plans

Redeemable noncontrolling interest adjustment to fair value

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and Subsidiaries

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

Consolidated Statement of Stockholders’ Deficit

For the Year Ended December 31, 2022

Stockholders’ /

LLC Interests

Class A Common Stock

Class B Common Stock

Stockholders’

(in thousands)

Equity (Deficit)

Balance, December 31, 2020 (as previously reported)

Retroactive application of recapitalization

Balance, December 31, 2020 (as adjusted)

Share-based compensation

Equitization of note payable, related party

CRIS Business Combination, net of expenses

Vesting of Earnout Shares

Warrants exercised

Release of warrant liability

Fair value adjustment to redeemable noncontrolling interest

( 1,269,630 )

( 1,525,297 )

Balance, December 31, 2021

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( 1,358,331 )

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

Share-based compensation

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

Issuance of Class A common stock under share-based compensation plans

Warrants exercised and release of warrant liability

Shares withheld for taxes

Redeemable noncontrolling interest adjustment to fair value

Balance, December 31, 2022

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

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

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Depreciation, amortization and accretion

Net loss on disposal of property and equipment and impairment expense

Net loss on disposal of property and equipment, net of insurance recoveries, 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

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Receivables from related parties

Prepaid expenses and other current and noncurrent assets

Prepaid expenses and other current assets and other assets

Operating lease assets and liabilities, net

Accounts payable

Payables to related parties

Accrued liabilities

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Cash flows from investing activities

Purchases of property, equipment and software

Capital expenditures

Proceeds from sale-leaseback transactions

Proceeds from insurance for property losses

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Proceeds from sale of investments

Acquisition of business, net of cash received

Net cash used in investing activities

Cash flows from financing activities

Issuance of common stock under the ATM

Proceeds from issuance of Class A common stock under the ATM

Proceeds from issuance of Class A common stock under the equity offering

Proceeds from capital-build funding

Proceeds from exercise of warrants

Proceeds from CRIS Business Combination

Proceeds from note payable, related party

Payments on note payable, related party

Payment of transaction costs for CRIS Business Combination

Payments of withholding tax on net issuance of restricted stock units

Payments of issuance costs and deferred transaction costs

Payments of deferred debt issuance costs

Payments of deferred equity issuance costs

Net cash provided by financing activities

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

Cash and restricted cash, beginning of period

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

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Supplemental disclosure of noncash investing and financing activities

Purchases of property and equipment in accounts payable and accrued liabilities

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

Asset retirement obligations incurred

Accrued transaction costs

Reclassification of contingent earnout liability to equity upon triggering event

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

Non-cash increase in capital-build liability

Capital expenditures in accounts payable and accrued liabilities

Non-cash increase in asset retirement obligations

Deferred debt issuance costs in accounts payable and accrued liabilities

Deferred equity issuance costs in accounts payable and accrued liabilities

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

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Note 1 — Description of Business and Nature of Operations

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

(“EVgo” or the “Company”) 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.

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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”).

(“LS Power”), completed an acquisition of EVgo Services LLC (“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”).

LS Power formed EVgo Holdings, LLC (“EVgo Holdings”) and EVgo Holdco as part of the transaction.

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 are held by EVgo OpCo and continue 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 December 31, 2022, the Company, through Thunder Sub, owned 26.4 % of the EVgo OpCo Units.

On May 22, 2023, in connection with an underwritten equity offering, EVgo Member Holdings, LLC, an affiliate of EVgo Holdings, the Company’s controlling stockholder, purchased 5,882,352 shares of the Company’s Class A common stock at the equity offering price of $ 4.25 per share.

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

Accordingly, the Company consolidates the financial results of EVgo OpCo and records a redeemable noncontrolling interest in its consolidated financial statements to reflect the EVgo OpCo Units that are owned by EVgo Holdings.

As of December 31, 2023 and 2022, EVgo Holdings held 195,800,000 EVgo OpCo Units, representing 65.4 % and 73.6 %, respectively, of the total outstanding EVgo OpCo Units and an equal number of shares of the Company’s Class B common stock.

As of December 31, 2023, the shares of the Company’s Class B common stock held by EVgo Holdings and the shares of the Company’s Class A common stock held by EVgo Member Holdings, LLC, collectively represented a 67.4 % voting interest in the Company.

EVgo Holdings did not hold any shares of the Company’s Class A common stock as of December 31, 2022.

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”).

Geopolitical and Macroeconomic Environment

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

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

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

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

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

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

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

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

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

Note 2 — Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

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

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

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

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Use of Estimates

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

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

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

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

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

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

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

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

The Company has not experienced any losses on such accounts.

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

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

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

The Company had two customers that collectively comprised 45.7 % of the Company’s total net accounts receivable as of December 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 year ended December 31, 2023, one customer represented 45.2 % of total revenue.

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

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

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

For the year ended December 31, 2023 , one vendor provided 76.9 % of EVgo’s total charging equipment.

For the year ended December 31, 2022, four vendors collectively provided 88.8 % of EVgo’s total charging equipment.

Reclassifications

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

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

Cash, Cash Equivalents and Restricted Cash

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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.

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

Deferred Offering Costs

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

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

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

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

Other accounts receivable of $ 2.7 million and $ 1.3 million were included in accounts receivable, net, on the consolidated balance sheets as of December 31, 2023 and 2022, respectively.

Deferred Equity Issuance Costs

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

The deferred equity issuance costs are offset against public offering proceeds upon the effectiveness of an offering.

In the event that an offering is abandoned or terminated, deferred equity issuance costs are expensed.

As of December 31, 2023 and 2022, the Company had capitalized $ 0.8 million and $ 1.0 million, respectively, of deferred equity issuance costs in other current assets on the consolidated balance sheets.

Cloud Implementation Costs

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

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

Depreciation is reported net of the amortization of the capital-build liability.

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

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

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

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

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During the fourth quarter of 2023, the Company reviewed its goodwill and other intangible assets for indicators of impairment and performed its annual goodwill impairment analysis as part of this review.

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

The Company did not note any impairment with respect to its goodwill or other intangible assets as of December 31, 2023, and no impairment charge was required.

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

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Long-Lived Asset Impairment

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

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

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

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

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

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

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

Lease Accounting

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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.

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

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

Renewal and termination options are not included in the measurement of the ROU 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.

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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 incurs initial direct costs and receives landlord incentives that increase or decrease the calculated ROU asset, respectively.

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

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The Company has not entered into any finance leases.

Sale-leasebacks are transactions through which assets are sold at fair value and subsequently leased back.

The resulting leases qualify and are accounted for as operating leases.

Gains and losses on sale-leaseback transactions are recognized immediately.

Failed sale-leaseback transactions are generally classified as finance leases and result in retention of the “sold” assets within land, buildings and equipment with a finance lease liability equal to the amount of proceeds received recorded as a component of other liabilities on the consolidated balance sheets.

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

The Company, at the inception of a

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

The Company, at the inception of a lease contract, determines if it is an operating, sales-type or direct financing lease.

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

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

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

As there is no authoritative guidance under GAAP regarding accounting for

government assistance to for-profit business entities, the grants directly or indirectly provided by the government are accounted for by analogy to International Accounting Standard (“IAS”) 20, Accounting for Government Grants and Disclosure of Government Assistance .

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

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The Company retains ownership of these charging stations.

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

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

Derivative Financial Instruments

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Earnout Liability

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

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

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

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

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

In connection with the CRIS Business Combination, certain initial stockholders of CRIS entered into an agreement with the Sponsor (the “Sponsor Agreement”) that provides for certain transfer restrictions and forfeiture provisions, among other things.

Pursuant to the Sponsor Agreement, the initial stockholders party thereto are required to forfeit up to 1,437,500 shares of Class A common stock (the “Earnout Shares”) if certain events do not occur.

In accordance with ASC 815, the Earnout Shares are recorded as a derivative liability at fair value since they are not indexed to the Company’s Class A common stock.

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

The estimated fair value of the contingent earnout liability is determined using a Monte Carlo simulation using a distribution of potential outcomes on a monthly basis over the Earnout Period (as defined in Note 14), prioritizing the most reliable information available.

Until its settlement, the contingent earnout liability is categorized as a Level 3 (defined below) fair value measurement because the Company utilizes projections during the Earnout Period that include unobservable inputs.

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

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

however, if the amount of the decrease

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

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

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

Warrant Liability

Warrant Liabilities

The Company accounts for its issued and outstanding warrants (as described in Note 13) in accordance with the guidance contained in ASC 815, under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities.

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

The fair value of the redeemable warrants (the “Public Warrants”), originally sold as part of the units issued in the Company’s Initial Public Offering, has been estimated using the closing price of the Public Warrants as of December 31, 2022 and 2021.

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

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

The fair value of the Private Placement Warrants on the date of issuance and on each measurement date is estimated by reference to the trading price of the public warrants, which is considered a Level 2 (defined below) fair value measurement, or using a Monte Carlo simulation methodology, which is considered a Level 3 (defined below) fair value measurement and includes inputs such as EVgo’s stock price, the risk-free interest rate, the expected term, the expected volatility, the dividend rate, the exercise price and the number of Private Placement Warrants outstanding.

Assumptions used in the Monte Carlo model are subjective and require significant judgment and actual results can differ from assumed and estimated amounts.

Fair Value Measurement

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

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

The carrying values of certain accounts such as cash, restricted cash, accounts receivable, prepaid expenses and other current assets, 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 December 31, 2023 and 2022.

Revenue Recognition

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

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

Its primary source of revenue is charging contracts with customers.

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

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

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

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

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

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

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

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

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

In reaching its conclusion, the Company assesses the nature of each individual service offering and how the services are provided in the context of the contract, including whether the services are significantly integrated which may require judgment based on the facts and circumstances of the contract.

In reaching its conclusion,

the Company assesses the nature of each individual service offering and how the services are provided in the context of the contract, including whether the services are significantly integrated which may require judgment based on the facts and circumstances of the contract.

Determining the relative SSP for contracts that contain multiple performance obligations requires significant judgment to appropriately determine the suitable method for estimating the SSP.

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

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

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

A practical expedient to expense costs as incurred for costs to obtain a contract with a customer is applied when the amortization period would have been one year or less.

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

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The Company records contract liabilities when cash payments are received in advance of the Company’s performance of its obligations.

Contract liabilities under the scope of ASC 606 include deferred revenue and customer deposits on the consolidated balance sheets.

Contract liabilities under the scope of ASC 606 include deferred revenue and

customer deposits on the consolidated balance sheets.

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

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Cost of Sales and General and Administrative Expenses

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

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

Cost of sales consists primarily of energy usage fees, depreciation (net of capital-build amortization expenses), site operating and maintenance expenses, network charges, warranty and repair services, site costs and related expense associated with charging equipment as well as cost of sales related to the eXtend business and the sale of data services and other ancillary services.

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

Advertising Costs

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

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

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

The 401(k) plan provides discretionary employer matching contributions to eligible employees up to IRS annual limits.

Employer contributions to the 401(k) plan for the years ended December 31, 2023 and 2022 were $ 0.3 million and $ 0.7 million, respectively.

Share-Based Compensation

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

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

In accordance with ASC Topic 718, Compensation — Stock Compensation (“ASC 718”), compensation expense for awards with service conditions is recorded over the requisite service period, and compensation expense for awards with market and service conditions is recognized over the longer of the explicit service period or the derived service period for the market condition for any awards that are expected to vest.

The Company issues new shares upon the exercise of stock options and upon the vesting of restricted share units and performance stock units.

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

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EVgo and Thunder Sub report U.S.

federal income taxes on a consolidated basis and will be taxed at the prevailing corporate tax rates.

federal income taxes on a consolidated basis and will

be taxed at the prevailing corporate tax rates.

EVgo and Thunder Sub include in income, for U.S.

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Basic earnings (loss) per share represents net earnings (loss) attributable to common stockholders divided by the weighted average number of common shares outstanding during the period.

The Company considers any Earnout Shares (as defined in Note 3) that are issued and outstanding but considered contingently returnable if certain conditions are not met, as participating securities due to their non-forfeitable right to receive dividends, requiring the use of the two-class method.

The Company considers any Earnout Shares that are issued and outstanding but considered contingently returnable if certain conditions are not met, as participating securities due to their non-forfeitable right to receive dividends, requiring the use of the two-class method.

Diluted earnings per share represents net earnings attributable to common stockholders divided by the weighted average number of common shares outstanding, inclusive of the dilutive impact of all potentially dilutive securities outstanding during the period, as applicable.

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Newly Adopted Accounting Standards

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

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

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

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

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

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

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

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

Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“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 consolidated financial statements or disclosures.

In February 2016, the FASB issued ASC 842.

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

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

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

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

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

The Company did not elect the hindsight practical expedient.

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

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

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

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

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

Refer to Note 5 for additional information.

Recently Issued Accounting Standards

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

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 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 Company’s consolidated financial statements.

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

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

The amendments in ASC 326 provide more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a

reporting entity at each reporting date.

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

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

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

The adoption of this standard did not materially impact the Company’s 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):

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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.

ASU 2020-04 provides guidance to alleviate the burden in accounting for reference rate reform by allowing certain expedients and exceptions in applying GAAP to contracts, hedging relationships and other transactions impacted by reference rate reform.

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

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

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

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

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

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

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

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

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

Note 3 – Business Combinations

Climate Change Crisis Real Impact I Acquisition Corporation

CRIS was formed on August 4, 2020 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase reorganization or similar business combination with one or more climate focused businesses.

On January 21, 2021, EVgo Parties and CRIS entered into the Business Combination Agreement for EVgo Holdco and its subsidiaries to become partially owned by a publicly listed company, with the combined company organized in an “Up-C” structure.

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

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

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

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

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

As a result of the CRIS Business Combination, the post-business combination company is organized in an “Up-C” structure and the post-business combination company’s status changed from a “blank-check” company to a “smaller reporting company.” Following the CRIS Business Combination, the post-business combination company changed the corporate name from “Climate Change Crisis Real Impact I Acquisition Corporation” to “EVgo Inc.” The Class A common stock and warrants of the combined company, EVgo, began trading on the Nasdaq Stock Market on July 2, 2021 under the symbols “EVGO” and “EVGOW,” respectively.

In connection with the execution of the Business Combination Agreement, on January 21, 2021, CRIS entered into separate subscription agreements with certain investors (“PIPE Investors”), whereby it issued 40,000,000 shares of Class A common stock at $ 10.00 per share (“PIPE shares”) for an aggregate purchase price of $ 400.0 million in a private placement (the “PIPE”).

EVgo Services’ note payable, related party (including accrued interest), was $ 59.6 million on July 1, 2021, which was converted into equity.

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

(shares in thousands)

EVgo Holdings (LS Power) 1

CRIS’s Class A stockholders

PIPE Investors

CRIS’s converted founder shares

Closing Class A and B shares

1 Represents shares of Class B common stock.

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

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

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

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

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

The table below summarizes the net cash received by EVgo upon the closing of the CRIS Business Combination, net of transactions costs and redemptions:

(in thousands)

Gross proceeds from PIPE

Gross proceeds from CRIS

Less transaction costs

Less redemptions

Pursuant to the Sponsor Agreement, the initial stockholders party thereto are required to forfeit up to 1,437,500 shares (the “Earnout Shares”) received upon conversion of shares of Class B common stock of CRIS held by such stockholders at closing of the CRIS Business Combination if certain events do not occur.

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

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

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

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

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

PlugShare LLC

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

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

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

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

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

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

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

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

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

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

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

Goodwill is expected to be amortizable for U.S.

federal income tax purposes.

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

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

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

Each of these methods is a form of the income approach.

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

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

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

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

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

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

Acquisition Date

(in thousands)

Current assets

Accounts receivable

Prepaid expenses and other current assets

Total current assets

Restricted cash

Property and equipment

Intangible assets

Current liabilities

Accounts payable

Accrued expenses

Deferred revenue, current

Total current liabilities

Capital-build liability

Asset retirement obligations

Total liabilities

Net assets acquired

Consideration paid

Goodwill recognized

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

(in thousands)

Pro forma revenue

Pro forma net income (loss)

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

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

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

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.

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

As of December 31, 2023, the Company has not identified any contracts, hedging relationships and other transactions impacted by reference rate reform and therefore does not expect any impact resulting from the adoption of ASU 2020-04 on the Company’s consolidated results of operations or financial position.

In November 2023, the FASB issued ASU 2023-07, ASC Subtopic 280 “ Segment Reporting — Improvements to Reportable Segment Disclosures ” (“ASU 2023-07”).

ASU 2023-07 requires incremental disclosures related to a public entity’s reportable segments but does not change the definition of a segment, the method for determining segments, or the criteria for aggregating operating segments into reportable segments.

ASU 2023-07 provides for significant segment expense categories and amounts for each reportable segment and an aggregate amount and description of other segment items included in each reported measure of segment profit or loss beyond the significant segment expenses for each reportable segment;

permits the disclosure of multiple measures of segment profit or loss for each reportable segment, subject to a minimum disclosure of the measure of segment profit or loss that is most consistent with the amounts included in the financial statements (consistent with current guidance);

confirms that all disclosures required in the segments guidance apply to all public entities, including those with a single operating or reportable segment;

requires disclosure of the title and position of the individual or the name of the group identified as the CODM in the financial statements;

and requires disclosure of how the CODM uses each reported measure of segment profit or loss to assess performance and allocate resources to the segment.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024 and should be applied retrospectively to all prior periods presented in the financial statements.

Early adoption is permitted.

The Company is currently evaluating this ASU to determine its impact on the Company’s disclosures.

In December 2023, the FASB Issued ASU 2023-09, ASC Subtopic 740 “ Income Taxes — Improvements to Income Tax Disclosures ” (“ASU 2023-09”), which increases transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

The Company is currently evaluating the effect that the adoption of this ASU will have on its consolidated financial statements.

Note 3 — Revenue Recognition

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

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

Charging Revenue, Retail.

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

Charging, Retail.

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

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

Various pricing plans exist for customers and drivers have the choice to charge as members (with monthly fees and reduced

per-minute or kilowatt-hour (“kWh”) pricing) through a subscription service or as non-members.

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

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

Charging Revenue, Commercial.

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

Charging, Commercial .

High volume fleet customers, such as transportation network companies or delivery services, can access EVgo’s charging infrastructure through EVgo’s public network.

Pricing for charging services is most often negotiated directly between EVgo and the fleet owner based on the business needs and usage patterns of the fleet.

In these arrangements EVgo contracts with and bills either the fleet owner directly or an individual fleet driver utilizing EVgo’s chargers.

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

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

EVgo offers a variety of pricing models for its dedicated charging solutions, including a mix of volumetric commitments and variable and fixed payments to EVgo for provision of its services .

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

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

Charging Revenue, OEM.

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

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

Charging, OEM .

The Company contracts with various automobile manufacturers (“OEMs”) to provide charging services to drivers who have purchased or leased such OEMs’ EVs and who access EVgo’s public charger network, to expand EVgo’s network of owned DCFCs and to provide other related services.

Revenues are recognized as electricity is provided to the OEM Customers.

Other related services currently provided to OEMs by EVgo include co-marketing, data services and digital application services.

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

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Regulatory Credit Sales.

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

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

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

As a charging station owner and operator, EVgo earns regulatory credits, such as Low Carbon Fuel Standard (“LCFS”) credits and other regulatory credits, in states where such programs are enacted currently, including the Fast Charging Infrastructure program in California.

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

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

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

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

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

Network Revenue, OEM.

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

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

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

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

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

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

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

eXtend Revenue.

Network, OEM.

This revenue stream represents revenue related to contracts that have significant charger infrastructure build programs, which represent set-up costs under ASC 606 for chargers that are owned by EVgo.

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

Marketing activities are recognized at a point in time as the services are performed and measurement is based on amounts spent.

Branding services are recognized over time as the customer receives the benefit.

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

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

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

For some eXtend customers, EVgo also provides grant

application support and related services.

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

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

For some eXtend customers, EVgo also provides grant application support and related services.

EVgo’s primary eXtend contract is for the deployment of up to 2,000 fast charging stalls that the Pilot Company will own and EVgo will build, network, operate and maintain.

lifecycle, and the provision of operations and maintenance services once the charging network is operational.

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

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

Ancillary Revenue.

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

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

EVgo offers a variety of software-driven digital, development and operations services to its customers.

EVgo has offerings that currently include customization of digital applications, charging data integration, micro-targeted advertising services, smart charging reservations, loyalty programs, access to chargers behind parking lot pay gates, and equipment procurement and operations services for customers operating dedicated networks.

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

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

Disaggregation of Revenue

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

(in thousands)

Charging revenue, retail

Charging revenue, commercial

Charging revenue, OEM

Regulatory credit sales 1

Network revenue, OEM

eXtend revenue

Ancillary revenue 2

Total revenue

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

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

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

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

Contract Assets and Liabilities

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

As of December 31,

(dollars in thousands)

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Contract liabilities

*Percentage greater than 999%.

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

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

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

As of December 31, 2023, there was $ 1.2 million in contract assets compared to $ 2.9 million as of December 31, 2022.

The balance of contract assets is driven by the difference in 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 December 31, 2023 increased $ 29.7 million, or 51 %, to $ 87.4 million compared to $ 57.8 million as of

December 31, 2022.

The balance of contract liabilities is driven by the difference in timing between when cash is received pursuant to a contract and when the Company’s performance obligations under the contract are satisfied.

The following table provides the activity for the contract liabilities recognized:

(in thousands)

Balance as of December 31, 2021

Beginning balance

Recognized in revenue

Marketing activities recognized on a net basis

Balance as of December 31, 2022

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

Ending balance

Revenues include the following:

(in thousands)

Amounts included in the beginning of period contract liability balance

Amounts included in the beginning of period contract liabilities balance

Amounts associated with performance obligations satisfied in previous periods

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

It is anticipated that deferred revenue as of December 31, 2023 will be recognized in the following years ending December 31:

(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.

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Note 4 — Lease Accounting

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

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

Lessee Accounting

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.

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

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

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

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

The Company has not entered into any finance leases.

The Company has estimated operating lease commitments of $ 48.4 million for leases where the Company has not yet taken possession of the underlying asset as of December 31, 2023.

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

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

As such, the related operating lease ROU assets and operating lease liabilities have not been recognized in the Company’s consolidated balance sheet as of December 31, 2023.

The Company’s lease costs consisted of the following:

(in thousands)

Operating lease costs

Cost of sales

Charging network cost of sales

General and administrative expenses

Variable lease costs

Cost of sales

Charging network cost of sales

General and administrative expenses

Short-term lease costs

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

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

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

(in thousands)

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Total discounted operating lease liabilities

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

(in thousands)

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

Other supplemental and cash flow information consisted of the following:

(dollars in thousands)

Weighted-average remaining lease term

Weighted-average remaining lease term (in years)

Weighted-average discount rate

Cash paid for amounts included in measurement of operating lease liabilities

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

ROU assets obtained in exchange for new operating lease liabilities

Sale Leaseback Transactions

During the year ended December 31, 2023, subsidiaries of the Company (the “Real Estate Subsidiaries”) sold three parcels of real estate for an aggregate purchase price of $ 16.5 million, which reflected the fair value of the parcels.

The Company received net proceeds of $ 14.6 million and recognized an aggregate loss on the sale transactions of $ 0.6 million.

Concurrently with the closing of the sale transactions, the Real Estate Subsidiaries also entered into lease agreements with the purchaser of the three parcels, pursuant to which the Real Estate Subsidiaries will lease the parcels for an initial term of ten years , with six 5-year renewal options.

The Real Estate Subsidiaries have conditional termination rights under the leases.

The leases were classified as operating leases in accordance with ASC 842.

There were no sale-leaseback transactions entered into during the year ended December 31, 2022.

Lessor Accounting

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

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

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

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

Initial lease terms are generally one to 10 years and may contain 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 property, equipment and software, net, or included in operating lease ROU assets on the consolidated balance sheets.

The Company’s operating lease income consisted of the following components:

(in thousands)

Operating lease income:

Fixed lease income:

Charging, commercial revenue

Sublease income

Total lease income 1

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

Ancillary revenue

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

(in thousands)

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

(in thousands)

Charging station equipment and construction costs

Charging station equipment and installation costs

Land and building

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Property, equipment and software, net

Operating lease right-of-use assets

Operating lease ROU assets

Note 5 — Government Assistance

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

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

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

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

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

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

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) provided for an employee retention credit (“ERC”), which is a refundable payroll tax credit, for eligible businesses that experienced a full or partial government-ordered suspension of operations or a “significant” decline in gross receipts in any quarter.

The Company accounted for these ERC payroll tax credits in accordance with the provisions of International Accounting Standards (“IAS”) 20, Accounting for Government Grants and Disclosure of Government Assistance, which permits the recording and presentation of either the gross amount as other income or netting the credit against the related expense.

The Company recorded $ 0.6 million of ERC payroll tax credits as a reduction in general and administrative expenses for the year ended December 31, 2023.

There were no ERC credits received during the year ended December 31, 2022.

The government assistance received is aggregated below as the programs contain similar terms and are accounted for similarly in accordance with IAS 20 and are included in the consolidated financial statements as follows:

(in thousands)

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Capital-build liability as of

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

Proceeds from capital build funding for the year ended

General and administrative expenses for the years ended

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

Proceeds from capital build funding for the years ended

Note 6 — Property, Equipment and Software, Net

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

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

As of December 31,

(in thousands)

Charging station installation costs

Construction in process

Charging station equipment

Construction in process

Charging equipment

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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 years ended December 31, 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:

(in thousands)

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Amortization of software

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

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

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

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

Impairment expense

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

Note 7 — Intangible Assets, Net

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

December 31, 2022

(in thousands)

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

December 31, 2021

(in thousands)

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Developed technology

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

Amortization of intangible assets was $ 11.6 million for each of the years ended December 31, 2023 and 2022.

As of December 31, 2023, the aggregate future amortization of amortizable intangible assets for the following years ending December 31, were as follows:

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

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

(in thousands)

Asset retirement obligation activity was as follows:

Beginning balance

Liabilities incurred

PlugShare acquisition

Accretion expense

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Ending balance

Note 10 – 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.

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

with the CRIS Business Combination (see Note 3).

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

Note 9 — Accrued Liabilities

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

Accrued liabilities consisted of balances related to the following:

As of December 31,

(in thousands)

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Class B Common Stock

The Company is authorized to issue 400,000,000 shares of Class B common stock, which is a voting, non-economic class of common stock with a par value of $ 0.0001 per share.

The Company is authorized to issue 400,000,000 shares of Class B common stock, which is a voting class of common stock with a par value of $ 0.0001 per share.

Holders of Class B common stock are entitled to one vote for each share.

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

Holders of shares of Class B common stock are not entitled to share in any dividends or other distributions from the Company unless the dividend consists of shares of the Company’s Class B common stock or of rights, options, warrants or other securities convertible or exercisable into or exchangeable for shares of Class B common stock paid proportionally with respect to each outstanding share of our Class B common stock and a dividend consisting of shares of Class A common stock or of rights, options, warrants or other securities convertible or exercisable into or exchangeable for shares of Class A common stock on the same terms as simultaneously paid to the holders of Class A common stock.

In the event of the voluntary or involuntary liquidation, dissolution, distribution of assets or winding-up of the Company, the holders of shares of Class B common stock are not entitled to receive any Company assets in respect of their shares of Class B Common Stock.

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

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

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

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

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

Issuance of Common Stock

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

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During the year ended December 31, 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 transaction costs and commissions of $ 0.3 million, the Company received net proceeds of approximately $ 10.4 million.

Member’s Equity

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

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

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

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

As of December 31, 2023, the Company had sold a total of 2,478,280 shares of Class A common stock under the ATM Program.

Equity Offering

During the year ended December 31, 2023 , the Company completed an underwritten equity offering of 30,123,129 shares of Class A common stock at an offering price of $ 4.25 per share with aggregate gross proceeds of $ 128.0 million.

The Company received net proceeds of $ 123.2 million, after deducting $ 4.8 million in underwriting discounts and commissions and other equity issuance costs.

Equity Issuance Costs

In connection with the issuance of Class A common stock through the ATM Program and the equity offering, in addition to the discounts and commissions deducted from the gross proceeds, the Company incurred direct and incremental equity issuance costs, consisting primarily of legal, accounting, and other professional fees.

Equity issuance costs directly attributable to the offering were recorded to additional paid-in capital as a reduction of proceeds.

Deferred equity issuance costs will offset additional paid-in capital on a pro rata basis as the available shares on the shelf offering are issued.

For the years ended December 31, 2023 and 2022, $ 0.4 million and $ 0.1 million of costs were recorded as additional paid-in capital as a reduction of proceeds, respectively.

Note 11 — Commitments and Contingencies

Pilot Infrastructure Agreement

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

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

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

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

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

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

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.

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

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

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

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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 .

The Purchase Order was amended in August 2023 to provide for certain Delta chargers to be manufactured in Delta’s new facility in Plano, Texas rather than in Taiwan.

General Motors Agreement

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

The GM Agreement has been amended

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

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 %.

Under the GM Agreement, EVgo is required to install a total of 3,250 charger stalls by March 31, 2026, 45 % of which were installed by December 31, 2023.

Meeting the quarterly 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.

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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 (the “Nissan 1.0 Agreement”), the Company was required to support, maintain and make available at least 850 chargers through July 2021, and purchasers or lessees of Nissan LEAF EVs in certain markets could receive charging services at EVgo stations or participating third-party charging stations.

The Company fulfilled all build, support and maintenance obligations under the Nissan 1.0 Agreement.

The second agreement between EVgo and Nissan, entered into in June 2019 (the “Nissan 2.0 Agreement”), provides for joint marketing activities, charging credit programs for purchasers or lessees of Nissan EVs, and a capital-build program.

The Nissan 2.0 Agreement has been amended several times, including most recently in the fourth quarter of 2022 (the “Nissan Amendment”) to, among other things, adjust the allocation of the value of unused charging credits and to provide new offerings for purchasers or lessees of certain Nissan EV models.

Under the joint-marketing activities provisions of the Nissan 2.0 Agreement, EVgo is obligated to spend a specified amount annually on joint-marketing activities that are mutually agreed-upon with Nissan.

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 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 Agreement

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 to, among other things, adjust the allocation of the value of unused charging credits and to provide new offerings for purchasers or lessees of certain Nissan EV models.

Under the joint-marketing activities provisions of the Nissan Agreement, EVgo was obligated to spend a specified amount annually on joint-marketing activities that were mutually agreed-upon with Nissan until March 1, 2024.

Under the charging credit program provisions in the Nissan Agreement, credits for charging are allocated to purchasers or lessees of Nissan EVs, and such purchasers or lessees are permitted to charge their EV for 12 months at no charge to the participant, up to the amount of the charging credit allocated to such participant or on an unlimited basis, depending on the model of Nissan EV purchased or leased.

In the event a participant does not use the entire amount of the allocated charging credit or if the annual charging credit pool is not exhausted within a specific period, a portion of the remaining dollar value of such credit rolls over to subsequent periods,

and a portion is retained by the Company.

For Nissan EV purchasers or lessees receiving unlimited charging, the Company receives an upfront activation fee for each purchaser or lessee as well as a usage-based fee.

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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.

The contract is accounted for under ASC 606, which includes performance obligations related to memberships, charging credits, and joint marketing activities.

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.

EVgo’s ability to meet its Build Schedule obligations may be impacted by delays in permitting, commissioning and utility interconnection, 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.

In 2022, Nissan fulfilled its annual payment obligations under the Nissan 2.0 Agreement.

Nissan has fulfilled its annual payment obligations under the Nissan Agreement.

Legal Proceedings

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Purchase Commitments

As of December 31, 2022, EVgo had $ 114.7 million in outstanding purchase order commitments to EVgo’s contract manufacturers and component suppliers for charging equipment, all of which was short-term.

As of December 31, 2023, EVgo had $ 56.5 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.

EVgo also had $ 3.2 million in commitments to other vendors, of which $ 1.9 million was short-term.

Note 14 - Related Party Transactions

Receivable from Related Party.

As of December 31, 2021, the Company had a $ 1.5 million receivable from EVgo Holdings pursuant to an indemnification obligation related to a matter settled between the Company’s predecessor shareholders and EVgo Holdco on January 14, 2022 regarding certain deferred contingent compensation contemplated by the Holdco Merger Agreement.

The receivable was settled in March 2022.

Note Payable, Related Party.

As noted in Note 10, the Company had an outstanding note payable with EVgo Holdings that was converted into equity on the CRIS Close Date.

Regulatory Credit Sales.

The Company may enter into agreements to facilitate the purchase and sale of LCFS credits with a subsidiary of LS Power at prevailing market prices.

For the year ended December 31, 2022, there was no regulatory

credit income recognized from related parties.

For the year ended December 31, 2021, the Company recognized $ 0.6 million of regulatory credit income, which was included in revenue from related party in the consolidated statements of operations.

Ancillary Revenue.

The Company recognized ancillary revenue of $ 0.1 million and a de minimis amount for the years ended December 31, 2022 and 2021, respectively, from an entity related to a former Board member.

Cost of Sales.

The Company purchased $ 0.1 million and a de minimis amount of electricity for the years ended December 31, 2022 and 2021, respectively, from an entity related to a Board member.

Consulting Services.

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

During the year ended December 31, 2022, there were no services provided.

The Company recorded $ 1.3 million for consulting and corporate development services rendered by LS Power Equity Advisors, LLC to general and administrative expenses in the consolidated statements of operations for the year ended December 31, 2021.

As of December 31, 2023, EVgo also had $ 12.0 million in commitments to other third parties, of which $ 10.5 million was short-term.

Note 12 — Fair Value Measurements

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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).

See Note 2 for additional information, including the fair value hierarchy.

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicates the level within the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value as of December 31, 2022 and 2021:

As of December 31,

(in thousands)

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Total liabilities

The following table presents a reconciliation for all liabilities measured and recognized at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2022 and 2021:

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

Assumptions used in the valuations of the earnout liability were as follows:

As of December 31,

Risk-free interest rate

Expected restriction period (in years)

Expected volatility

Dividend rate

The warrants are accounted for as liabilities in accordance with ASC 815 and are presented as warrant liabilities on the consolidated balance sheets.

The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the consolidated statements of operations.

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

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

As of December 31, 2022, the Private Placement Warrants were 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 using the Monte Carlo method simulation methodology are as follows:

Risk-free interest rate

Expected term (in years)

Expected volatility

Dividend rate

Exercise price

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):

(in thousands)

Fair value as of December 31, 2021

Liability recognized due to the CRIS Business Combination

Liability settled through equity

Change in fair value of liability

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Change in fair value of liability

Transfers into Level 3

Transfers out of Level 3

Fair value as of December 31, 2023

Assumptions used in the valuations of the Private Placement Warrant liability were as follows:

Risk-free interest rate

Expected term (in years)

Expected volatility

Dividend rate

Exercise price

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

Risk-free interest rate

Expected term (in years)

Expected volatility

Dividend rate

Note 13 — Warrant Liability

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No warrant will be exercisable and the Company will not be obligated to issue any shares of Class A common stock upon exercise of a warrant unless the share of Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.

The Company will use its commercially reasonable efforts to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed, as specified in the warrant agreement;

provided that if shares of the Class A common stock are at the time of any exercise of a Public Warrant not listed on a national securities exchange such that they satisfy the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of Public Warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but it will use its commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available.

The Company must use its commercially reasonable efforts to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed, subject to certain exceptions set forth in the warrant agreement.

Such registration statement was initially filed on July 20, 2021 and declared effective on July 30, 2021.

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Note 14 — Earnout Liability

The Earnout Shares are subject to potential forfeiture by their holders if the volume-weighted average price (“VWAP”) of the shares does not equal or exceed the following prices for any 20 trading days within any 30-trading day period within the five years following the closing of the CRIS Business Combination:

● For 718,750 Earnout Shares, a VWAP of at least $ 12.50 (the “$ 12.50 Triggering Event”)

● For 718,750 Earnout Shares, a VWAP of at least $ 15.00 (the “$ 15.00 Triggering Event”)

Earnout Shares totaling 718,750 are subject to potential forfeiture by their holders if the volume-weighted average price (“VWAP”) of the shares does not equal or exceed at least $ 15.00 (the “$ 15.00 Triggering Event”) for any 20 trading days within any 30 -trading day period within the five years following the closing of the CRIS Business Combination.

Upon the closing of the CRIS Business Combination, the contingent obligation related to the Earnout Shares was accounted for as a liability because the triggering events that determine the number of Earnout Shares earned include events that are not solely indexed to the Company’s common stock.

The estimated fair value of the 1,437,500 Earnout Shares issued and outstanding at the closing of the CRIS Business Combination on July 1, 2021 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 using the most reliable information available.

On July 2, 2021, the $ 12.50 Triggering Event occurred and, as a result, 718,750 Earnout Shares valued at $ 10.9 million were deemed to be earned and reclassified into equity on that date.

The estimated fair value of the earnout liability related to the 718,750 Earnout Shares subject to the $ 15.00 Triggering Event originally valued at $ 8.8 million was $ 1.7 million and $ 5.2 million as of December 31, 2022 and 2021, respectively.

The change in fair value of the earnout liability resulted in a gain of $ 3.5 million and $ 2.2 million recognized in the consolidated statements of operations for the years ended December 31, 2022 and 2021, respectively (see Note 15).

The estimated fair value of the earnout liability related to the 718,750 Earnout Shares subject to the $ 15.00 Triggering Event was $ 0.7 million and $ 1.7 million as of December 31, 2023 and 2022, respectively.

The change in fair value of the earnout liability resulted in a gain of $ 1.1 million and $ 3.5 million recognized in the consolidated statements of operations for the years ended December 31, 2023 and 2022, respectively.

Note 15 — Income Taxes

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All income (loss) before income taxes is generated in the U.S.

For the years ended December 31, 2022 and 2021, the Company’s provision for income taxes and effective tax rates were deemed to be de minimis.

Prior to July 1, 2021, the Company was not a taxable entity for U.S.

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

On July 1, 2021, pursuant to the CRIS Business Combination, the Company became a taxable entity for U.S.

federal income tax purposes and for all of the states in which the Company operates.

Due to operating losses in the years ended December 31, 2022 and 2021, the Company’s effective tax rate was zero .

Due to operating losses in the years ended December 31, 2023 and 2022, the Company’s provision for income taxes and effective tax rate was de minimis.

The provision for income taxes differs from the amount computed by applying the U.S.

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Change in fair value of earnout liability

Transaction costs

Change in valuation allowance

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Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as net operating loss and tax credit carryforwards.

There were no net deferred tax assets and no net deferred tax liabilities as of December 31, 2022 and 2021.

The significant components of the Company’s deferred tax assets as of December 31, 2022 and 2021 were as follows:

There were no deferred tax liabilities as of December 31, 2023 and 2022.

The significant components of the Company’s deferred tax assets were as follows:

As of December 31,

(in thousands)

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Management considered all available material evidence, both positive and negative, in assessing the appropriateness of a valuation allowance for the Company’s deferred tax assets, including the generation of future taxable income, the scheduled reversal of deferred tax liabilities and other available material evidence.

After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance against its net deferred tax assets as of December 31, 2022 and 2021.

As of December 31, 2023 and 2022, EVgo had $ 94.0 million and $ 50.3 million, respectively, in federal net operating losses with an indefinite carryforward period, tax credits of $ 7.9 million and $ 1.5 million, respectively, which will start expiring in 2041, and state net operating losses with various expiration periods.

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federal jurisdiction 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 December 31, 2022 and 2021, there were no unrecognized tax benefits for uncertain tax positions, nor any amounts accrued for interest and penalties.

As of December 31, 2023 and

2022, there were no unrecognized tax benefits for uncertain tax positions, nor any amounts accrued for interest and penalties.

Note 16 — Tax Receivable Agreement

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

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

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) (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 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.

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

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

Agreement and (ii) that any EVgo OpCo Units (other than those held by the Company Group) outstanding on the termination date or change of control date, as applicable, are deemed to be redeemed on such date).

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

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(in thousands)

Cost of sales

Other cost of sales

General and administrative expenses

Total share-based compensation expense

During the year ended December 31, 2023, the Company entered into a transition agreement with Catherine Zoi and certain other parties in connection with Ms.

Zoi’s resignation as the Company’s Chief Executive Officer (the “Zoi Transition Agreement”).

Pursuant to the Zoi Transition Agreement, subject to certain conditions, Ms.

Zoi shall be deemed to have remained in continuous employment with the Company or its affiliates through April 30, 2024 for purposes of vesting, settlement, and exercisability of her outstanding and unvested RSUs and stock options.

Zoi shall have up to 30 days after April 30, 2024 to exercise any vested options before they expire.

The Zoi Transition Agreement also provided that Ms.

Zoi would vest in her Time Vesting Incentive Units (as defined below) scheduled to vest on January 16, 2024 and that Ms.

Zoi will additionally vest in her Sale Vesting Incentive Units (as defined below) upon the consummation of a sale of the Company during the six-month period following Ms.

Zoi’s separation date, if such a sale transaction occurs.

The Company determined that these provisions represented a modification of existing equity awards, resulting in the cumulative compensation cost recognized for Ms.

Zoi’s original RSU, stock option, and Time Vesting Incentive Unit awards being zero immediately prior to the modification as none of the awards were otherwise expected to vest.

incremental fair value of the modified RSU, stock option and Time Vesting Incentive Unit awards of $ 4.2 million was recognized over the period from the modification date to Ms.

Zoi’s separation date.

The incremental fair value of the modified Sale Vesting Incentive Unit awards was $ 6.1 million.

The fair value of the modified awards is reflected in the weighted average grant date fair value of the Company’s unvested RSUs and Incentive Units (as defined below) as of December 31, 2023 in the tables below.

2021 Long Term Incentive Plan

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(iv) restricted stock awards;

(v) restricted stock units (“RSUs”);

(vi) vested stock awards;

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and (x) substitute awards.

Unless earlier terminated by action of the Company’s Board of Directors, the 2021 Incentive Plan will terminate on the tenth anniversary of the 2021 Incentive Plan’s effective date of March 26, 2021.

Unless earlier terminated by action of the Company’s Board of Directors, the 2021 Incentive Plan will terminate on March 26, 2031.

Stock Options

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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 fair value of each option award is estimated on the grant date and recognized on a straight-line basis over the requisite service period.

The options vest annually over a three-year period and have a term of 10 years .

The following table summarizes stock option activity for the year ended December 31, 2022:

Weighted Average

Shares Underlying

Weighted Average

The following table summarizes stock option activity:

(shares in thousands)

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Outstanding as of December 31, 2022

Outstanding as of December 31, 2023

Exercisable as of December 31, 2023

As of December 31, 2023, the Company’s unrecognized share-based compensation expense related to stock options was approximately $ 1.4 million, which is expected to be recognized over a period of 1.5 years.

The weighted average grant date fair value per share of options granted during the year ended December 31, 2022 was $ 8.79 .

There were no stock

options vested or exercisable as of December 31, 2022.

The fair value of the stock options granted during the year ended December 31, 2022 was computed using Black-Scholes option-pricing model using the following key assumptions:

Risk-free interest rate

Dividend yield

Expected volatility

Expected life (in years)

Risk-free interest rate.

The weighted average grant date fair value of options granted during the years ended December 31, 2023 and 2022 was $ 3.20 and $ 8.79 , per share, respectively.

The fair value of the stock options granted during the year ended December 31, 2023 was computed using Black-Scholes or Hull White option-pricing models, in order to ensure that the valuation reflected all substantive characteristics of the instruments, with the assumptions described below.

The risk-free interest rate was based on the implied yield currently available in U.S.

Treasury securities at maturity with an equivalent term.

Dividend yield.

The Company has not declared or paid any dividends through December 31, 2023 and does not currently expect to do so in the future.

For valuations where the Company had limited historical volatility information available, the expected volatility was based on a weighted average between the actual volatility for comparable public companies and the actual volatility for the Company, if shorter than the expected term of the options.

The expected life under the Black-Scholes model was estimated using the simplified method or full remaining term, based on whether or not the participant was expected to exercise the option.

The expected life under the Hull-White model was calculated as the average time to achieve the 2.8 x strike exercise price in the simulation.

The following key assumptions were used in the option pricing models in computing the fair value of the stock options granted:

Year Ending December 31,

Risk-free interest rate

Expected dividend yield

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.

Expected life (in years)

Restricted Stock Units

RSUs granted by EVgo typically vest annually over a period of three years from the date of grant.

RSUs granted by EVgo vest annually over a period of three years from the date of grant.

The fair value of RSUs is calculated based on the closing price of the Company’s Class A common stock on the grant date.

The table below represents the Company’s RSU activity under the 2021 Incentive Plan during the years ended December 31, 2022 and 2021:

The table below represents the Company’s RSU activity under the 2021 Incentive Plan:

(shares in thousands)

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Nonvested as of December 31, 2023 1

The total fair value of RSUs vested during the year ended December 31, 2022 was $ 7.1 million.

No RSUs vested during the year ended December 31, 2021.

Vested but not released

Outstanding as of December 31, 2023 1

1 Weighted average grant date fair value reflects the impact of modified awards .

The total fair value of RSUs vested during the years ended December 31, 2023 and 2022 was $ 8.9 million and $ 7.1 million, respectively.

As of December 31, 2023, the Company’s unrecognized share-based compensation expense related to unvested RSUs was approximately $ 22.8 million, which is expected to be recognized over a period of 1.5 years.

Performance Stock Units

The Company started granting performance stock units (“PSUs”) in 2023.

The PSUs issued in 2023 are subject to market-based performance targets in order for these units to vest.

Vesting is also subject to continued service requirements through the vesting date over a period of three years from the date of grant.

Compensation expense for such nonvested stock units is recognized on a straight-line basis over the longer of the explicit service period or the derived service period for the market condition, regardless of whether the market condition is satisfied.

The table below represents the Company’s PSU activity under the 2021 Incentive Plan:

(shares in thousands)

Nonvested as of December 31, 2022

Nonvested as of December 31, 2023

No PSUs vested during the year ended December 31, 2023.

As of December 31, 2023, the Company’s unrecognized share-based compensation expense related to unvested PSUs was approximately $ 1.5 million, which is expected to be recognized over a period of 2.1 years.

The grant date fair value for such nonvested stock units was estimated using a Monte Carlo simulation that incorporates option-pricing inputs covering the period from the grant date through the end of the performance period.

The following assumptions were used for the grants:

Risk-free interest rate

Expected dividend yield

Expected volatility

Cost of equity

Expected life (in years)

EVgo Management Holdings, LLC Incentive Units

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The EVgo Holdings LLCA provides for the issuance of 1,000,000 Incentive Units.

Each Incentive Unit grants a profits interest in EVgo Holdings, which can

generally be described as a participation interest whose right to receive distributions is determined by the cumulative amount of distributions (cash or in-kind) received by each outstanding Capital Unit in EVgo Holdings up to and including the date of a distribution.

Each Incentive Unit grants a profits interest in EVgo Holdings, which can generally be described as a participation interest whose right to receive distributions is determined by the cumulative amount of distributions (cash or in-kind) received by each outstanding Capital Unit in EVgo Holdings up to and including the date of a distribution.

Distributions to the Incentive Unit holders are made solely from cash or property of EVgo Holdings.

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Specifically, such limitations were established such that any holder of Incentive Units will participate only in the post-grant appreciation in value of EVgo Holdings.

As a result, the Incentive Units essentially have no value on the date of grant.

As a result, the Incentive Units essentially had no value on the date of grant.

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

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

The Company has recorded expense related to the Time Vesting Incentive Units over the vesting term based on a fair value calculated using the Monte Carlo simulation model in conjunction with the Finnerty Model.

The assumptions underlying the simulation are noted in the following table for the year ended December 31, 2021:

Annual risk-free rate of return

As of December 31, 2023, the Company’s unrecognized share-based compensation expense related to unvested Time Vesting Incentive Units was approximately $ 0.5 million, which is expected to be recognized over a weighted average period of 1.0 years.

As of December 31, 2023, unrecognized share-based compensation expense related to unvested Sale Vesting Incentive Units was approximately $ 8.0 million, which is contingent upon the occurrence of a sale event.

The fair value of Incentive Units modified during the year ended December 31, 2023 were calculated using the Monte Carlo simulation model.

Assumptions used in the valuation of the modified Incentive Units are as follows:

Risk-free interest rate

Discount for lack of marketability

Expected volatility

Expected term (in years)

Dividend yield

Presented below is a summary of the activity of the Company’s Incentive Units for the years ended December 31, 2022 and 2021:

(shares in thousands)

Outstanding at December 31, 2020

Outstanding at December 31, 2021

Outstanding at December 31, 2022

As of December 31, 2022, the Company’s unrecognized share-based compensation expense related to unvested Incentive Units was approximately $ 7.0 million, which is expected to be recognized over a period of 1.7 years.

Time to exit (in years)

Presented below is a summary of the activity of the Company’s Incentive Units:

(units in thousands)

Nonvested as of December 31, 2021

Nonvested as of December 31, 2022

Nonvested as of December 31, 2023 1

1 Weighted average grant date fair value reflects the impact of modified awards .

Note 18 — Net Loss Per Share

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During loss periods, diluted loss per share is based on the weighted average number of common shares outstanding (basic), because the inclusion of common stock equivalents would be antidilutive.

The following table sets forth the computation of basic and diluted net income (loss) per share for the years ended December 31, 2022 and 2021:

The following table sets forth the computation of basic and diluted net income loss per share:

(in thousands, except per share data)

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Net loss 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 EPS.

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

The Company’s potentially dilutive securities consist of the Company’s Public Warrants, Private Placement Warrants, RSUs, stock options and unvested Earnout Shares.

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

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 loss per share attributable to Class A common stockholders since their impact would have been antidilutive:

(in thousands)

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Stock options

Additionally, 718,750 unvested Earnout Shares were excluded from the computation of diluted EPS since their vesting threshold (i.e., the $ 15.00 Triggering Event) had not yet been met as of December 31, 2022.

All PSUs were excluded from the computation of diluted EPS since their service and market vesting conditions had not yet been met as of December 31, 2023.

Note 19 — Redeemable Noncontrolling Interest

As of December 31, 2022, EVgo Holdings held 195,800,000 EVgo OpCo Units, representing a 73.6 % economic ownership interest in EVgo OpCo (reflecting the exclusion of 718,750 shares of Class A common stock held by other entities that were subject to possible forfeiture) and a corresponding number of shares of Class B common stock, representing a 73.4 % voting interest in the Company.

As of December 31, 2023 and 2022, EVgo Holdings held 195,800,000 EVgo OpCo Units, representing a 65.5 % and a 73.6 % economic ownership interest, respectively, 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 the same number of shares of Class B common stock, representing a 65.4 % and 73.4 % voting interest, respectively, 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.

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The cash redemption feature of the EVgo OpCo Units, together with a corresponding number of shares of Class B common stock, at the option of EVgo OpCo, is considered outside of the control of the Company.

Therefore, in accordance with ASC Topic 480, Distinguishing Liabilities from Equity , the EVgo OpCo Units are classified as temporary equity in the Company’s consolidated balance sheets.

Therefore, in

accordance with ASC Topic 480, Distinguishing Liabilities from Equity , the EVgo OpCo Units are classified as temporary equity in the Company’s consolidated balance sheets.

The redeemable noncontrolling interest held by EVgo Holdings in EVgo OpCo, through its ownership of EVgo OpCo Units, was initially measured at its carrying amount on the CRIS Close Date.

Net income or loss 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.

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, exclusive of the par value of the related Class B common stock, with the remeasurement amount being no less than the initial carrying amount, as adjusted for the redeemable noncontrolling interest’s share of net income or loss and other comprehensive income or loss.

The offset of any fair value adjustment is recorded to equity, with no impact to net income (loss).

The table below presents the reconciliation of changes in redeemable noncontrolling interest for the period from the CRIS Close Date through December 31, 2022:

The following is a reconciliation of changes in redeemable noncontrolling interest:

(in thousands)

Balance as of July 1, 2021

Redeemable noncontrolling interest resulting from the CRIS Business Combination

Net loss attributable to redeemable noncontrolling interest for the period

Equity-based compensation attributable to redeemable noncontrolling interest during the period

Balance as of December 31, 2021

Net loss attributable to redeemable noncontrolling interest

Equity-based compensation attributable to redeemable noncontrolling interest

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

Balance as of December 31, 2022

Net loss attributable to redeemable noncontrolling interest for the period

Equity-based compensation attributable to redeemable noncontrolling interest during the period

Net loss attributable to redeemable noncontrolling interest

Equity-based compensation attributable to redeemable noncontrolling interest

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

Balance as of December 31, 2023

Note 23 – Subsequent Events

Awards under Equity Incentive Plan

During 2023, the Company’s Board of Directors approved grants of 4,849,968 RSUs and $ 4.4 million of stock options to employees and other service providers under the 2021 Incentive Plan.

The awards will vest based on continued service, generally over a period of three years .

The grant date fair value of the awards will be recognized as share-based compensation expense over the requisite service periods.

Granting of 205 Petition

On February 3, 2023, the Company filed a petition (the “Petition”) in the Court of Chancery under Section 205 of the Delaware General Corporation Law seeking (i) the validation of the stockholder vote approving CRIS’s certificate of incorporation in connection with the CRIS Business Combination (see Note 3) and (ii) the validation and declaration of effectiveness of (a) EVgo’s Charter (including its filing and effectiveness, in each case as of July 1, 2021) and (b) the securities issued or to be issued in reliance on such approval and/or the validity of EVgo’s Charter, as of the respective dates of their issuance (including the 5,750,000 shares of Class A common stock into which the shares of Class B common stock converted upon the consummation of the CRIS Business Combination).

The Company filed the Petition due in part to a recent ruling of the Court of Chancery that created uncertainty as to the validity and effectiveness of these corporate acts and, consequently, as to the Company’s capital structure.

Such purported uncertainty was eliminated on February 21, 2023, when, following a hearing of the Petition, the Court of Chancery issued an order validating each of the corporate acts described above, effective as of the time each such act was originally taken, notwithstanding any failures of authorization or potential failures of authorization described in, or resulting from the matters described in, the Petition.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

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What changed 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk