SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended March 31,June 30, 2021
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to
Commission File No. 001-39572
EVgo Inc.
(Exact name of registrant as specified in its charter)
| | |
Delaware | 85-2326098 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
|
11835 West Olympic Boulevard, Suite 900E Los Angeles, California90064 |
(Address of Principal Executive Offices, including zip code) |
|
(877) 494-3833 |
(Registrant’s telephone number, including area code) |
|
CLIMATE CHANGE CRISIS REAL IMPACT I ACQUISITION CORPORATION 300 Carnegie Center, Suite 150 Princeton, NJ 08540 |
(Former name, former address and former fiscal year, if changed since last report) |
Securities registered pursuant to Section 12(b) of the Act:
| | | | |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Shares of Class A common stock, $0.0001 par value | EVGO | Nasdaq Global Select Market | ||
Redeemable warrants, | EVGOW | Nasdaq Global Select Market |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | |
☐ Large accelerated filer | ☐ Accelerated filer | |
☒ Non-accelerated filer | ☒ Smaller reporting company | |
☒ Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☒☐ No ☐
As of May 20,August 9, 2021 there were 23,000,00068,736,770 shares of Class A common stock and 5,750,000195,800,000 shares of Class B common stock, $0.0001 par value, issued and outstanding.
FORM 10-Q FOR THE QUARTER ENDED MARCH 31,JUNE 30, 2021
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i
EXPLANATORY NOTE
On July 1, 2021, Climate Change Crisis Real Impact I Acquisition Corporation.
In this Quarterly Report, unless otherwise stated or unless the context otherwise requires:
| ● | “ASC” means Accounting Standards Codification. |
| ● | “Annual Report” means the annual report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 29, 2021, as amended by the amended annual report on Form 10-K/A, filed with the SEC on May 3, 2021. |
| ● | “Business Combination Agreement” means that business combination agreement entered into on January 21, 2021 by and among CRIS, SPAC Sub and the EVgo Parties. |
| ● | “Class A common stock” means Class A common stock of EVgo, par value $0.0001 per share. |
| ● | “Class B common stock” means Class B common stock of EVgo, par value $0.0001 per share. |
| ● | “common stock” means Class A common stock and Class B common stock. |
| ● | “EVgo Parties” means OpCo, HoldCo and Holdings. |
| ● | “Exchange Act” means the Securities Exchange Act of 1934, as amended |
| ● | “HoldCo” means EVgo HoldCo, LLC, a Delaware limited liability company. |
| ● | “Holdings” means EVgo Holdings, LLC, a Delaware limited liability company. |
| ● | “Holdings Class B Shares” means 198,500,000 shares of Class B common stock (such number of shares of Class B common stock equal to the number of Holdings OpCo Units) |
| ● | “Holdings OpCo Units” means 198,500,000 OpCo Units. |
| ● | “Holdings Promissory Note” means the unsecured promissory note CRIS issued to Holdings on March 31, 2021 |
| ● | “IPO” means CRIS’s initial public offering of units consummated on October 2, 2020. |
| ● | “Issued OpCo Units” means such number of OpCo Units equal to the number of shares of Class A common stock issued and outstanding after giving effect to the Business Combination and the PIPE. |
| ● | “OpCo” means EVGO OPCO, LLC, a Delaware limited liability company. |
| ● | “OpCo A&R LLC Agreement” means the amended and restated limited liability company agreement of OpCo entered into in connection with the closing of the Business Combination. |
| ● | “OpCo Units” means the equity interests of OpCo. |
| ● | “PIPE” means the sale of 40,000,000 shares of Class A common stock to the investors for a purchase price of $10.00 per share and an aggregate purchase price of $400.0 million, in a private placement. |
| ● | “PIPE Investors” means the investors in the PIPE. |
1
| ● | “Private Placement Warrants” means the 6,600,000 warrants purchased by the Sponsor in a private placement simultaneously with the closing of the IPO, each of which is exercisable for one share of Class A common stock at $11.50 per share, at a price of $1.00 per warrant. |
| ● | “Public Shares” means the shares of Class A common stock included in the units sold by CRIS in its IPO. |
| ● | “public stockholder” means a holder of public shares. |
| ● | “Public Warrants” means the redeemable warrants sold as part of the units in the Company’s IPO. |
| ● | “redemption rights” means the rights of stockholders to elect to redeem all or a portion of the public shares into a pro rata portion of the cash held in the Trust Account. |
| ● | “SEC” means the U.S. Securities and Exchange Commission. |
| ● | “SPAC Sub” means CRIS Thunder Merger LLC, a Delaware limited liability company. |
| ● | “Sponsor” means CRIS’s sponsor, Climate Change Crisis Real Impact I Acquisition Holdings, LLC, a Delaware limited liability company. |
| ● | “Subscription Agreements” means the separate subscription agreements entered into by CRIS with the PIPE Investors in connection with the execution of the Business Combination Agreement. |
| ● | “Trust Account” means the trust account established in connection with the IPO. |
| ● | “units” means the units of CRIS, which consisted of one share of Class A common stock and one half of one redeemable warrant of CRIS, with each such public warrant entitling the holder thereof to purchase one share of Class A common stock at a price of $11.50 per share. |
2
Certain statements in this Quarterly Report may constitute “forward-looking statements.” Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this prospectusreport may include, for example, statements about:
| ● | trends in the climate sector and trends specific to clean energy, renewables and carbon removal; |
| ● | our expectations around the performance of EVgo, including competitive prospects of the business following the initial business combination; |
| ● | the impacts and uncertainty resulting from the ongoing COVID-19 pandemic, and the effects of the ongoing pandemic on the climate sector, and the economy; |
| ● | our public securities’ potential liquidity and trading; |
| ● | the lack of a market for our securities; |
| ● | our financial performance. |
The forward-looking statements contained in this Quarterly Report are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the sections of our Annual Report entitled “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
3
ITEM 1.FINANCIAL STATEMENTS
EVGO INC. (F/K/A CLIMATE CHANGE CRISIS REAL IMPACT I ACQUISITION CORPORATION
March 31, 2021 (unaudited) | December 31, 2020 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | 385,272 | $ | 990,249 | ||||
| Prepaid expenses | 420,646 | 261,496 | ||||||
| Total Current Assets | 805,918 | 1,251,745 | ||||||
| Investments held in Trust Account | 230,006,837 | 230,003,380 | ||||||
| Total Assets | $ | 230,812,755 | $ | 231,255,125 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accrued expenses | $ | 2,216,885 | $ | 723,277 | ||||
| Accrued offering costs | -- | 25,000 | ||||||
| Total Current Liabilities | 2,216,885 | 748,277 | ||||||
| Warrant liability | 61,855,000 | 32,844,000 | ||||||
| Deferred underwriting fee payable | 8,050,000 | 8,050,000 | ||||||
| Total Liabilities | 72,121,885 | 41,642,277 | ||||||
| Commitments and contingencies | ||||||||
| Class A common stock subject to possible redemption, 15,369,086 and 18,461,284 shares at redemption value at March 31, 2021 and December 31, 2020, respectively | 153,690,860 | 184,612,840 | ||||||
| Stockholders’ Equity | ||||||||
| Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding | — | — | ||||||
| Class A common stock, $0.0001 par value; 100,000,000 shares authorized; 7,630,914 and 4,538,716 issued and outstanding (excluding 15,369,086 and 18,461,284 shares subject to possible redemption) as of March 31, 2021 and December 31, 2020, respectively | 763 | 454 | ||||||
| Class B common stock, $0.0001 par value; 10,000,000 shares authorized; 5,750,000 shares issued and outstanding as of March 31, 2021 and December 31, 2020 | 575 | 575 | ||||||
| Additional paid-in capital | 50,223,046 | 19,301,375 | ||||||
| Accumulated deficit | (45,224,374 | ) | (14,302,396 | ) | ||||
| Total Stockholders’ Equity | 5,000,010 | 5,000,008 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 230,812,755 | $ | 231,255,125 | ||||
| | | | | | |
|
| June 30, 2021 |
| December 31, 2020 | ||
| | (unaudited) | | | ||
ASSETS | | | | | | |
Current assets |
| |
|
| |
|
Cash | | $ | 264,262,731 | | $ | 990,249 |
Prepaid expenses | |
| 209,510 | |
| 261,496 |
Total current assets | |
| 264,472,241 | |
| 1,251,745 |
| | | | | | |
Investments held in Trust Account | |
| 230,009,180 | |
| 230,003,380 |
Total Assets | | $ | 494,481,421 | | $ | 231,255,125 |
| | | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |
|
| |
|
|
Current liabilities | |
|
| |
|
|
Accrued expenses | | $ | 5,904,054 | | $ | 723,277 |
Accrued offering costs | |
| 0 | |
| 25,000 |
Note payable – EVgo Holdings, LLC | | | 280,000 | | | 0 |
Total current liabilities | |
| 6,184,054 | |
| 748,277 |
| | | | | | |
Warrant liability | |
| 83,262,182 | |
| 32,844,000 |
PIPE Investment | | | 264,092,960 | | | 0 |
Deferred underwriting fee payable | |
| 8,050,000 | |
| 8,050,000 |
Total Liabilities | |
| 361,589,196 | |
| 41,642,277 |
| | | | | | |
Commitments and contingencies | |
|
| |
|
|
| | | | | | |
Class A common stock subject to possible redemption, 12,789,222 and 18,461,284 shares at redemption value at June 30, 2021 and December 31, 2020, respectively | |
| 127,892,220 | |
| 184,612,840 |
| | | | | | |
Stockholders’ Equity | |
|
| |
|
|
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding | |
| 0 | |
| 0 |
Class A common stock, $0.0001 par value; 100,000,000 shares authorized; 10,182,778 and 4,538,716 issued and outstanding (excluding 12,789,222 and 18,461,284 shares subject to possible redemption) as of June 30, 2021 and December 31, 2020, respectively | |
| 1,021 | |
| 454 |
Class B common stock, $0.0001 par value; 10,000,000 shares authorized; 5,750,000 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively | |
| 575 | |
| 575 |
Additional paid-in capital | |
| 76,021,428 | |
| 19,301,375 |
Accumulated deficit | |
| (71,023,019) | |
| (14,302,396) |
Total Stockholders’ Equity | |
| 5,000,005 | |
| 5,000,008 |
Total Liabilities and Stockholders’ Equity | | $ | 494,481,421 | | $ | 231,255,125 |
The accompanying notes are an integral part of the financial statements.
4
EVGO INC. (F/K/A CLIMATE CHANGE CRISIS REAL IMPACT I ACQUISITION CORPORATION
| Formation and operating costs | $ | 1,914,450 | ||
| Loss from operations | (1,914,450 | ) | ||
| Other income (expense): | ||||
| Interest income - bank | 15 | |||
| Interest earned on investments held in Trust Account | 3,457 | |||
| Change in fair value of warrant liability | (29,011,000 | ) | ||
| Other (expense), net | (29,007,528 | ) | ||
| Net loss | $ | (30,921,978 | ) | |
| Weighted average shares outstanding of Class A redeemable common stock | 23,000,000 | |||
| Basic and diluted income per share, Class A redeemable common stock | $ | 0.00 | 1 | |
| Weighted average shares outstanding of Class B non-redeemable common stock | 5,750,000 | |||
| Basic and diluted net loss per share, Class B non-redeemable common stock | $ | (5.38 | 2) |
| | | | | | | |
| | Three Months | | Six Months | | ||
| | Ended | | Ended | | ||
| | June 30, | | June 30, | | ||
| | 2021 (unaudited) | | 2021 (unaudited) | | ||
Operating and formation costs |
| $ | 4,393,929 |
| $ | 6,308,379 | |
Loss from operations | |
| (4,393,929) | |
| (6,308,379) | |
| | | | | | | |
Other income (expense): | | | | | | | |
Interest income – bank | |
| 123 | |
| 138 | |
Interest earned on investments held in Trust Account | |
| 2,343 | |
| 5,800 | |
Change in fair value of warrant liability | |
| (21,407,182) | |
| (50,418,182) | |
Other expense, net | |
| (21,404,716) | |
| (50,412,244) | |
| | | | | | | |
Loss before income taxes | | | (25,798,645) | | | (56,720,623) | |
Benefit (provision) for income taxes | | | 0 | | | 0 | |
Net loss | | $ | (25,798,645) | | $ | (56,720,623) | |
| | | | | | | |
Weighted average shares outstanding, Class A redeemable common stock | |
| 23,000,000 | |
| 23,000,000 | |
Basic and diluted income per share, Class A redeemable common stock | | $ | 0 | | $ | 0 | |
| | | | | | | |
Weighted average shares outstanding, Class B non-redeemable common stock | |
| 5,750,000 | |
| 5,750,000 | |
Basic and diluted net loss per share, Class B non-redeemable common stock | | $ | (4.49) | | $ | (9.86) | |
The accompanying notes are an integral part of the financial statements.
5
EVGO INC. (F/K/A CLIMATE CHANGE CRISIS REAL IMPACT I ACQUISITION CORPORATION
THREE AND SIX MONTHS ENDED JUNE 30, 2021 THROUGH MARCH 31, 2021
Class A Common Stock | Class B Common Stock | Additional Paid-in | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
| Balance – December 31, 2020 | 4,538,716 | $ | 454 | 5,750,000 | $ | 575 | $ | 19,301,375 | $ | (14,302,396 | ) | $ | 5,000,008 | |||||||||||||||
| Change in value of Class A Common Stock subject to redemption | 3,092,198 | 309 | -- | -- | 30,921,671 | -- | 30,921,980 | |||||||||||||||||||||
| Net loss | — | — | — | — | — | (30,921,978 | ) | (30,921,978 | ) | |||||||||||||||||||
| Balance – March 31, 2021 | 7,630,914 | $ | 763 | 5,750,000 | $ | 575 | $ | 50,223,046 | $ | (45,224,374 | ) | $ | 5,000,010 | |||||||||||||||
| | | | | | | | | | | | | | | | | | | |
| | Class A | | Class B | | Additional | |
| | | Total | ||||||||
| | Common Stock | | Common Stock | | Paid-in | | Accumulated | | Stockholders’ | |||||||||
|
| Shares |
| Amount |
| Shares |
| Amount |
| Capital |
| Deficit |
| Equity | |||||
Balance – December 31, 2020 | | 4,538,716 | | $ | 454 | | 5,750,000 | | $ | 575 | | $ | 19,301,375 | | $ | (14,302,396) | | $ | 5,000,008 |
Change in value of Class A Common Stock subject to redemption |
| 3,092,198 |
| | 309 |
| 0 |
| | 0 |
| | 30,921,671 |
| | 0 |
| | 30,921,980 |
Net loss |
| 0 |
| | 0 |
| 0 |
| | 0 |
| | 0 |
| | (30,921,978) |
| | (30,921,978) |
Balance – March 31, 2021 (unaudited) | | 7,630,914 | | | 763 |
| 5,750,000 | | | 575 | | | 50,223,046 | | | (45,224,374) | | | 5,000,010 |
Change in value of Class A Common Stock subject to redemption | | 2,579,864 | | | 258 | | 0 | | | 0 | | | 25,798,382 | | | 0 | | | 25,798,640 |
Net loss |
| 0 |
| | 0 |
| 0 |
| | 0 |
| | 0 |
| | (25,798,645) |
| | (25,798,645) |
Balance – June 30, 2021 (unaudited) |
| 10,210,778 | | $ | 1,021 | | 5,750,000 | | $ | 575 | | $ | 76,021,428 | | $ | (71,023,019) | | $ | 5,000,005 |
The accompanying notes are an integral part of the financial statements.
6
EVGO INC. (F/K/A CLIMATE CHANGE CRISIS REAL IMPACT I ACQUISITION CORPORATION
SIX MONTHS ENDED JUNE 30, 2021 THROUGH MARCH 31, 2021
| Cash Flows from Operating Activities: | ||||
| Net loss | $ | (30,921,978 | ) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||
| Operating costs paid through promissory note – related party | -- | |||
| Interest earned on investments held in Trust Account | (3,457 | ) | ||
| Change in fair value of warrant liability | 29,011,000 | |||
| Changes in operating assets and liabilities: | ||||
| Prepaid expenses | (159,150 | ) | ||
| Accrued expenses | 1,493,608 | |||
| Net cash used in operating activities | (579,977 | ) | ||
| Cash Flows from Financing Activities: | ||||
| Payment of offering costs | (25,000 | ) | ||
| Net cash used in financing activities | (25,000 | ) | ||
| Net Change in Cash | (604,977 | ) | ||
| Cash – Beginning of period | 990,249 | |||
| Cash – End of period | $ | 385,272 | ||
| Non-Cash financing activities: | ||||
| Change in value of Class A common stock subject to possible redemption | $ | (30,921,980 | ) | |
| | | |
Cash Flows from Operating Activities: |
| |
|
Net loss | | $ | (56,720,623) |
Adjustments to reconcile net loss to net cash used in operating activities: | |
|
|
Interest earned on investments held in Trust Account | |
| (5,800) |
Change in fair value of warrant liability | |
| 50,418,182 |
Changes in operating assets and liabilities: | |
|
|
Prepaid expenses | |
| 51,986 |
Accrued expenses | |
| 5,180,777 |
Net cash used in operating activities | |
| (1,075,478) |
| | | |
Cash Flows from Financing Activities: | |
|
|
Proceeds from PIPE Investment | | | 264,092,960 |
Proceeds from note payable - EVgo Holdings, LLC | | | 280,000 |
Payment of offering costs | |
| (25,000) |
Net cash provided by financing activities | |
| 264,347,960 |
| | | |
Net Change in Cash | |
| 263,272,482 |
Cash – Beginning of period | |
| 990,249 |
Cash – End of period | | $ | 264,262,731 |
| | | |
Non-cash financing activities: | |
|
|
Change in value of Class A common stock subject to possible redemption | | $ | (56,720,620) |
The accompanying notes are an integral part of the financial statements.
7
EVGO INC. (F/K/A CLIMATE CHANGE CRISIS REAL IMPACT I ACQUISITION CORPORATION)
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS JUNE 30, 2021
(UNAUDITED)
NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS
EVgo Inc. (the “Company”) was incorporated in Delaware on August 4, 2020.2020 under the name “Climate Change Crisis Real Impact I Acquisition Corporation.” 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 one1 or more businesses (the “Business“Initial Business Combination”).
As of consummating a Business Combination. The Company is an early stage and emerging growth company and, as such,June 30, 2021, the Company is subject to all of the risks associated with early stage and emerging growth companies.
As of March 31,June 30, 2021, the Company had not commenced any operations. All activity for the period from August 4, 2020 (inception) through March 31,June 30, 2021 relates to the Company’s formation and the initial public offering (“Initial Public Offering”), which is described below, identifying a target company for aan Initial Business Combination, and activities in connection with the proposed acquisition of EVgo Holdings, LLC, a Delaware limited liability company (“Holdings”)., which closed on July 1, 2021. The Company willhas not generategenerated any operating revenues until afterprior to the completion of athe Business Combination, at the earliest.Combination. The Company will generategenerated non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering.
The registration statement for the Company’s Initial Public Offering was declared effective on September 29, 2020 and the Company signed an agreement with a syndicate of underwriters to issue 23,000,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), which includes the full exercise by the underwriters of their over-allotment option in the amount of 3,000,000 Units, at $10.00 per Unit, generating gross proceeds of $230,000,000 which is described in Note 3. On October 2, 2020 the Company completed the Initial Public Offering.
Simultaneously with the closing of the Initial Public Offering, the Company completed the sale of 6,600,000 warrants (the “Privatethe Private Placement Warrants”)Warrants at $1.00 per Private Placement Warrant in a private placement to Climate Change Crisis Real Impact I Acquisition Holdings, LLC (the “Sponsor”), generating gross proceeds of $6,600,000, which is described in Note 4.
Following the closing of the Initial Public Offering on October 2, 2020, an amount of $230,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”) located in the United States. The funds in the Trust Account will bewere invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund meeting certain conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of aan Initial Business Combination and (ii) the distribution of the funds held in the Trust Account, as described below, except that interest earned on the Trust Account can be released to the Company to pay its tax obligations (less $100,000 of interest to pay dissolution expenses).
Substantially all of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants arewere intended to be applied generally toward consummating aan Initial Business Combination, and the Company’s management hashad broad discretion to identify targets for such a potential Initial Business Combination and over the specific application of the funds held in the Trust Account if and when such funds are properly released from the Trust Account. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete a Business Combination with one or more operating businesses or assets that together have an aggregate fair market value equal to at least 80% of the net assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the income earned on the Trust Account) at the time of the Company’s signing a definitive agreement in connection with its initial Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires an interest in the target business or assets sufficient for it not to be required to register as an investment company under the Investment Company Act. In addition, the Company has agreed not to enter into a definitive agreement regarding an initial business combination without the prior consent of the PIMCO private funds (an affiliate of the Sponsor).
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Stock, sold in its initial public stockholders will be entitledoffering, exercised their right to redeem their Public Sharesthose shares for cash at a pro rata portionprice of the amount then in the Trust Account (initiallyapproximately $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.
Immediately after giving effect to the Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial business combination activity, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
Business Combination & Related PIPE
On January 21, 2021, the Company and SPAC Sub, entered into a business combination agreement (the “Business Combination Agreement”) with Holdings, EVgo HoldCo, LLC, a Delaware limited liability company and wholly-owned subsidiary of Holdings (the( “HoldCo”) and EVGO OPCO, LLC, a Delaware limited liability company and wholly-owned subsidiary of Holdings (“OpCo” and, together with Holdings and HoldCo, the “EVgo Parties”). The transactions contemplated byOn July 1, 2021 (the “Closing Date”), the Company consummated the Business Combination Agreement are collectively referredpursuant to herein as the “business combination.”
Pursuant to the Business Combination Agreement, at on July 1, 2021:
(i)the closingCompany contributed all of its assets to CRIS Thunder Merger LLC, a Delaware limited liability company and wholly-owned subsidiary of the business combinationCompany (“Merger Sub”), including but not limited to (1) funds held in the Trust Account (as defined below), net cash proceeds from the PIPE (as defined below) (the “Closing”“PIPE Proceeds”), any cash held by the Company in any working capital or similar account (net of transaction expenses); and (2) 195,800,000 newly issued shares (the “Holdings Class B Shares”) on the date the transactions are consummated (the “Closing Date”):
(ii)immediately following the SPAC Contribution, Holdings contributed to OpCo all of the issued and outstanding limited liability company interests of HoldCo and, in connection therewith, (1) OpCo as recapitalized as set forth in the OpCo A&R LLC Agreement (as defined below), and (2) OpCo issued to Holdings 195,800,000 units of OpCo (“OpCo Units” and such transactions, the “Holdings Contribution”); (iii)immediately following the Holdings Contribution, Merger Sub transferred to Holdings the Holdings Class B Shares and the right to enter into the Tax Receivable Agreement (as defined below) (such transactions, the “Merger Sub Transfer”); and (iv)immediately following the Merger Sub Transfer, Merger Sub contributed to OpCo all of its remaining assets in exchange for the issuance by OpCo to Merger Sub of a number of OpCo Units equal to the number of shares of Class A common stock issued and outstanding after giving effect to |
In connection with the execution of the Business Combination Agreement, on January 21, 2021, the Company entered into separate subscription agreements (the “Subscription Agreements”) with a number of investors (the “PIPE Investors”), pursuant to which the PIPE Investors have agreed to purchase, and the Company has agreed to sell to the PIPE Investors, an aggregate of 40,000,000 shares of Class A common stock (the “PIPE Shares”), for a purchase price of $10.00 per share, or an aggregate purchase price of $400.0 million, in a private placement (the “PIPE”).
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Pursuant to the Subscription Agreements, the Company agreed that, within 30 calendar days after the Closing Date (the “Filing Deadline”), the Company will file with the SEC (at the Company’s sole cost and expense) a registration statement registering the resale of the PIPE Shares (the “PIPE Resale Registration Statement”), and the Company will use its commercially reasonable efforts to have the PIPE Resale Registration Statement declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) the 60th calendar day (or 90th calendar day if the SEC notifies the Company that it will “review” the PIPE Resale Registration Statement) following the Filing Deadline and (ii) the 5th business day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that the PIPE Resale Registration Statement will not be “reviewed” or will not be subject to further review.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.
The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K/A (Amendment No. 1) for the year ended December 31, 2020 as filed with the SEC on May 3, 2021, which contains the audited financial statements and notes thereto. The interim results for the three and six months ended March 31,June 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future interim period.
Emerging Growth Company
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
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Use of Estimates
The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.
Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.
Offering Costs
Deferred offering costs consist of legal, accounting and other expenses incurred through the balance sheet datedates that are directly related to the Initial Public Offering. Offering costs amounting to $13,161,756 were charged to stockholders’ equity upon the completion of the Initial Public Offering.
Class A Common Stock Subject to Possible Redemption
The Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Shares of Class A common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s Class A common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, shares of Class A common stock subject to possible redemption are presented as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet.
Warrant Liability
The Company accounts for its issued and outstanding warrants (such warrants, as described in Note 8, the “Warrants”) in accordance with the guidance contained in ASC 815-40-15-7DTopic 815, “Derivatives and 7FHedging” (“ASC 815”) under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Warrants as liabilities at their fair value and adjusts the Warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the statementstatements of operations. The fair value of the Public Warrants issuedredeemable warrants sold as part of the units in the Company’s IPO (“Public Warrants”) has been estimated using the Public Warrants’ quoted market price at June 30, 2021 and December 31, 2020 and March 31, 2021.2020. The Private Placement Warrants were valued using a Modified Black Scholes Option Pricing Model.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under ASC Topic 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax
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position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no0 unrecognized tax benefits and no0 amounts accrued for interest and penalties as of March 31,June 30, 2021 and December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.
Net Income (Loss) per Common Share
Net income (loss) per common share is computed by dividing net lossincome (loss) by the weighted average number of shares of common stock outstanding during the period. The Company has not considered the effect of warrants sold in the Initial Public Offering and private placement to purchase 18,100,000 shares of Class A common stock in the calculation of diluted income per share, since the exercise of the warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.
The Company’s condensed consolidated statements of operations includes a presentation of income (loss) per share for common shares subject to possible redemption in a manner similar to the two-class method of income (loss) per share. Net income (loss) per common share, basic and diluted, for Class A redeemable common stock is calculated by dividing the interest income earned on the Trust Account, by the weighted average number of Class A redeemable common stock outstanding since original issuance. Net lossincome (loss) per share, basic and diluted, for Class B non-redeemable common stock is calculated by dividing the net loss,income (loss), adjusted for income attributable to Class A redeemable common stock, net of applicable franchise and income taxes, by the weighted average number of Class B non-redeemable common stock outstanding for the period. Class B non-redeemable common stock includes the Founder Shares as these shares do not have any redemption features and do not participate in the income earned on the Trust Account.
The following table reflects the calculation of basic and diluted net income (loss)loss per common share (in dollars, except per share amounts):
For the Period From January 1, 2021 Through March 31, 2021 | ||||
| Redeemable Class A Common Stock | ||||
| Numerator: Earnings allocable to Redeemable Class A Common Stock | ||||
Interest Income | $ | 3,472 | ||
| Income and Franchise Tax | (3,472 | ) | ||
| Net Earnings | $ | -- | ||
| Denominator: Weighted Average Redeemable Class A Common Stock | ||||
| Redeemable Class A Common Stock, Basic and Diluted | 23,000,000 | |||
| Earnings/Basic and Diluted Redeemable Class A Common Stock | $ | 0.00 | ||
| Non-Redeemable Class B Common Stock | ||||
| Numerator: Net Loss minus Redeemable Net Earnings | ||||
| Net Loss | $ | (30,921,978 | ) | |
| Redeemable Net Earnings | -- | |||
| Non-Redeemable Net Loss | $ | (30,921,978 | ) | |
| Denominator: Weighted Average Non-Redeemable Class B Common Stock | ||||
| Non-Redeemable Class B Common Stock, Basic and Diluted | 5,750,000 | |||
| Loss/Basic and Diluted Non-Redeemable Class B Common Stock | $ | (5.38 | ) | |
| | | | | | |
|
| Three Months | | Six Months | ||
| | Ended | | Ended | ||
| | June 30, | | June 30, | ||
| | 2021 | | 2021 | ||
Redeemable Class A Common Stock |
| |
|
| |
|
Numerator: Earnings allocable to Redeemable Class A Common Stock |
| |
|
| |
|
Interest Income | | $ | 2,343 | | $ | 5,800 |
Income and Franchise Tax available to be withdrawn from the Trust Account | |
| (2,343) | |
| (5,800) |
Redeemable Net Earnings | | $ | 0 | | $ | 0 |
Denominator: Weighted Average Redeemable Class A Common Stock | |
|
| |
|
|
Redeemable Class A Common Stock, Basic and Diluted | |
| 23,000,000 | |
| 23,000,000 |
Earnings/Basic and Diluted Redeemable Class A Common Stock | | $ | 0 | | $ | 0 |
| | | | | | |
Non-Redeemable Class B Common Stock | |
|
| |
|
|
Numerator: Net Loss minus Redeemable Net Earnings | |
|
| |
|
|
Net Loss | | $ | (25,798,645) | | $ | (56,720,623) |
Less: Redeemable Net Earnings | |
| 0 | |
| 0 |
Non-Redeemable Net Loss | | $ | (25,798,645) | | $ | (56,720,623) |
Denominator: Weighted Average Non-Redeemable Class B Common Stock | |
|
| |
|
|
Non-Redeemable Class B Common Stock, Basic and Diluted | |
| 5,750,000 | |
| 5,750,000 |
Loss/Basic and Diluted Non-Redeemable Class B Common Stock | | $ | (4.49) | | $ | (9.86) |
For the three and six months ended June 30, 2021, basic and diluted shares are the same as there are no non-redeemable securities that are dilutive to the stockholders.
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Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying condensed consolidated balance sheet,sheets, primarily due to their short-term nature.
Fair Value Measurements
Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
| ● | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
| ● | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
| ● | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement.
Derivative Financial Instruments
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”.815. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the condensed consolidated balance sheetsheets as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.
Recent Accounting Standards
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.
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NOTE 3. INITIAL PUBLIC OFFERING
Pursuant to the Initial Public Offering, on October 2, 2020, the Company sold 23,000,000 Units which includes the full exercise by the underwriters of their over-allotment option in the amount of 3,000,000 Units, at a price of $10.00 per Unit. The PIMCO private funds (an affiliate of the Sponsor) purchased an aggregate of 1,980,000 Units, at a price of $10.00 per Unit. Each Unit consists of one1 share of Class A common stock and one-half of one warrant (“Public Warrant”).Warrant. Each whole Public Warrant entitles the holder to purchase one1 share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 8).
NOTE 4. PRIVATE PLACEMENT
Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 6,600,000 Private Placement Warrants at a price of $1.00 per Private Placement Warrant, or $6,600,000 in the aggregate in a private placement. Each Private Placement Warrant is exercisable to purchase one1 share of Class A common stock at an exercise price of $11.50 per share, subject to adjustment (see Note 8). A portion of the proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company doesdid not complete aan Initial Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants held in the Trust Account will bewould have been used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Private Placement Warrants will expirewould have expired worthless.
NOTE 5. RELATED PARTY TRANSACTIONS
Founder Shares
On August 10, 2020, the Sponsor purchased 5,750,000 shares of the Company’s Class B common stock (the “Founder Shares”) for an aggregate purchase price of $25,000. In September 2020, the Sponsor transferred 175,500 Founder Shares to directors, officers and consultants of the Company (together with the Sponsor, the “initial stockholders”). The Founder Shares included an aggregate of up to 750,000 shares subject to forfeiture by the initial stockholders to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the number of Founder Shares would collectively represent approximately 20% of the Company’s issued and outstanding shares after the Initial Public Offering. As a result of the underwriters’ election to fully exercise their over-allotment option, 750,000 Founder Shares are no longer subject to forfeiture.
The initial stockholders have agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until the earlier of (A) one year after the completion of athe Business Combination and (B) subsequent to athe Business Combination, (x) if the last reported sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after athe Business Combination, or (y) the date on which the Company completes a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of Class A common stock for cash, securities or other property.
Consulting Arrangements
During the period ended March 31,June 30, 2021, the Company enlisted the services of several consultants under various arrangements for administrative services, potential target and financial analysis and due diligence services to the Company. The Company in connection with these agreements has been and will continue to make payments of approximately $45,000 per month on an annualized basis to Climate Real Impact Solutions Services LLC, an entity owned by John Cavalier, our former Chief Financial Officer and David Crane, our former Chief Executive Officer and managed by Ms. Frank-Shapiro, our former Chief Operating Officer, for consulting services rendered to the Company. Such payments ceased upon completion of the Business Combination. These arrangements provided for aggregate monthly fees of approximately $90,000. For the period from January 1, 2021 through March 31,six months ended June 30, 2021 the Company incurred $237,962and paid $259,885 in such fees, noneof which $25,000 isare included in accrued expenses on the condensed consolidated balance sheet as of March 31,June 30, 2021.
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NOTE 6. COMMITMENTS AND CONTINGENCIES
Risks and Uncertainties
Management continues to evaluate the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Registration and Stockholder Rights
Pursuant to a registration and stockholder rights agreement entered into on September 29, 2020, the holders of the Founder Shares, Private Placement Warrants and warrants that may be issued upon conversion of Working Capital Loans (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) are entitled to registration rights requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to shares of Class A common stock). Any holder of at least 20% of the outstanding registrable securities owned by the holders are entitled to make up to two2 demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of aan Initial Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. The Company will bear certain expenses incurred in connection with the filing of any such registration statements.
In addition,connection with the Closing on July 1, 2021, the Company, the Sponsor and the other initial stockholders terminated the existing registration rights agreement and entered into the Registration Rights Agreement with EVgo Holdings, LLC (together with the Sponsor, the other initial stockholders and any person or entity who becomes a party to the Registration Rights Agreement, the “Holders”) that grant certain resale registration rights with respect to (a) the Private Placement Warrants (including any shares of Class A common stock issued or issuable upon the exercise of any Private Placement Warrants), (b) shares of Common Stock issued or issuable upon conversion of any founder shares, (c) any outstanding shares of Class A common stock held by a Holder as of the date of the Registration Rights Agreement, (d) any shares of Class A common stock issued or issuable upon exchange of OpCo Units and shares of Class B common stock held by a Holder as of the date of the Registration Rights Agreement, and (e) any other equity security of the Company issued or issuable with respect to any such shares of Common Stock by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or reorganization (collectively, the “Registrable Securities”), subject to the terms and conditions set forth in the Registration Rights Agreement.
Pursuant to the Registration Rights Agreement, the Company will file with the SEC within 15 business days after the Closing a registration statement registering the resale of the Registrable Securities permitted to be registered for resale from time to time pursuant to the applicable rules and regulations under the Securities Act. The Company will use its reasonable best efforts to cause the registration statement to become effective and stockholder rights agreement, upon consummation ofremain effective, in accordance with the Registration Rights Agreement. Additionally, the Company agreed that, as soon as reasonably practicable after the Company is eligible to register the Holders’ securities on a Business Combination,registration statement on Form S-3, the Company will file a new registration statement with the SEC (at the Company’s initial stockholderssole cost and expense) and the Company will be entitleduse its reasonable best efforts to designate three individuals for nomination for electioncause such new registration statement to become effective and remain effective, in accordance with the Company’s board of directors for so long as they continue to hold, collectively, at least 50% ofRegistration Rights Agreement. The Registration Rights Agreement also provides the Founder Shares (or the securities into which such Founder Shares convert) held by such personsHolders with certain customary demand and piggyback registration rights. Such registration statement was initially filed on the date of this prospectus. Thereafter, such initial stockholders will be entitled to designate (i) two individuals for nomination for election to the Company’s board of directors for so long they continue to hold, collectively, at least 30% of the Founder Shares (or the securities into which such Founder Shares convert) held by such personsJuly 20, 2021 and declared effective on the date of this prospectus and (ii) one individual for nomination for election to the Company’s board of directors for so long they continue to hold, collectively, at least 20% of the Founder Shares (or the securities into which such Founder Shares convert) held by such persons on the date of this prospectus.
Deferred Underwriting Fee
The underwriters arewere entitled to a deferred fee of $0.35 per Unit, or $8,050,000 in the aggregate. The deferred fee will become payablewas paid to the underwriters from the amounts held in the Trust Account solely inat the event thatclosing of the Company completes a Business Combination, subject to the terms of the underwriting agreement. The underwriters did not receive any upfront underwriting discount or commissions on the 1,980,000 Units purchased by the PIMCO private funds or their respective affiliates but will receive deferred underwriting commissions with respect to such Units.
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Note Payable – EVgo Holdings, LLC
On March 31, 2021, CRIS issued the Holdings Promissory Note, pursuant to which CRIS borrowed $280,000 from Holdings in order to pay certain transaction expenses associated with the Business Combination. The Holdings Promissory Note bears interest at a rate of 0.12% compounded annually and is payable on the consummation of the Business Combination. If the Business Combination was not consummated, 50 percent (50%) of the principal balance of the Holdings Promissory Note would have been forgiven and the remaining 50 percent (50%) of the principal balance would have been repaid (i) immediately upon consummation of a separate business combination or (ii) to the extent that CRIS has funds available to it that are (a) in excess of budgeted expenses and obligations to trade creditors in the ordinary course of business and (b) outside of its Trust Account, in each case, no later than April 2, 2023. As of June 30, 2021, there was a $280,000 outstanding balance under the Holdings Promissory Note. As of July 1, 2021, as a result of the closing of the Business Combination, this note is a related party note. The balance was subsequently repaid in connection with the Business Combination.
NOTE 7. STOCKHOLDERS’ EQUITY
Preferred Stock
— The Company is authorized to issue 1,000,000 shares of preferred stock with a parvalue of $0.0001 per share with such designation, rights and preferences as may be determined from time to timeby the Company’s board of directors.Class A Common Stock
— The Company is authorized to issue 100,000,000 shares of Class A commonstock with a par value of $0.0001 per share. Holders of Class A common stock are entitled to one vote for eachshare.Class B Common Stock
— The Company is authorized to issue 10,000,000 shares of Class B commonstock with a par value of $0.0001 per share.Holders of Class A common stock and Class B common stock will vote together as a single class on all matters submitted to a vote of stockholders except as required by law.
NOTE 8. WARRANT LIABILITY
Warrants
— There are 11,500,000 Public Warrants and 6,600,000 Private Warrants outstanding. Public Warrants may only be exercised for a whole number of shares. No fractional warrantswill be issued upon separation of the Units and only whole warrants will trade. The Public Warrants will become exercisable on the later of (a) 12 months from the closing of the Initial Public Offering and (b) 30 days after the completion ofThe Company will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. 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.
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The Company has agreed that as soon as practicable, but in no event later than fifteen business days after the closing of the Company’s initialInitial Business Combination, the Company will use its commercially reasonable efforts to file with the SEC a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants. The Company will use its commercially reasonable efforts to cause such registration statement to become effective within 60 business days after the closing of aan Initial Business Combination and 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 warrantPublic 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. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after the closing of aan Initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption.
Redemption of Warrants when the price per Class A common stock equals or exceeds $18.00.
| ● | in whole and not in part; |
| ● | at a price of $0.01 per warrant; |
| ● | upon a minimum of 30 days’ prior written notice of redemption to each warrant holder; and |
| ● | if, and only if, the last reported sale price of the Class A common stock for any 20 trading days within a 30-trading day period ending three trading days before the Company sends to the notice of redemption to the warrant holders (“Reference Value”) equals or exceeds $18.00 per share (as adjusted). |
If and when the warrants become redeemable by the Company, it may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws.
Redemption of Warrants when the price per Class A common stock equals or exceeds $10.00.
| ● | in whole and not in part; |
| ● | at $0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares, based on the redemption date and the fair market value of the Class A common stock; |
| ● | if, and only if, the Reference Value equals or exceeds $10.00 per share (as adjusted); and |
| ● | if the Reference Value is less than $18.00 per share (as adjusted), the Private Placement Warrants must also concurrently be called for redemption on the same terms as the outstanding Public Warrants, as described above. |
The exercise price and number of Class A common stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuance of Class A common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company has not completed a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their Public Warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Placement Warrants and the shares of Class A common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or saleable until 30 days after the completion of a Business Combination, subject to certain limited exceptions, and will be entitled to certain registration rights (see Note 6).
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Additionally, the Private Placement Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees (except for a number of shares of Class A common stock as described above under Redemption of warrants for Class A common stock). If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by such holders on the same basis as the Public Warrants.
NOTE 9. FAIR VALUE MEASUREMENTS
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. |
Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. |
Level 3: | Unobservable inputs based on an assessment of the assumptions that market participants would use in pricing the asset or liability. |
As of June 30, 2021 and December 31, 2020, assets held in the Trust Account were comprised of $230,006,837$230,009,180 and $230,003,380, respectively, held in money market funds which are invested primarily in U.S. Treasury Securities. Through March 31,June 30, 2021, the Company did not withdraw any interest earned on the Trust Account to pay for its franchise and income tax obligations.
The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at Marchas of June 30, 2021 and December 31, 20212020 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
Description | Level | March 31, 2021 | December 31, 2020 | |||||||||
| Assets: | ||||||||||||
| Investments held in Trust Account – U.S. Treasury Securities Money Market Fund | 1 | $ | 230,006,837 | $ | 230,003,380 | |||||||
| Liabilities | ||||||||||||
| Warrant Liability – Public Warrants | 1 | 38,755,000 | 20,700,000 | |||||||||
| Warrant Liability – Private Warrants | 3 | $ | 23,100,000 | $ | 12,144,000 | |||||||
| | | | | | | | |
| | |
| June 30, |
| December 31, | ||
Description |
| Level | | 2021 | | 2020 | ||
Assets: | |
| |
| | |
| |
Investments held in Trust Account – U.S. Treasury Securities Money Market Fund |
| 1 | | $ | 230,009,180 | | $ | 230,003,380 |
Liabilities: |
|
| |
|
| |
|
|
Warrant Liability – Public Warrants |
| 1 | | $ | 46,918,850 | | $ | 20,700,000 |
Warrant Liability – Private Warrants |
| 3 | | $ | 36,343,332 | | $ | 12,144,000 |
The Warrants are accounted for as liabilities in accordance with ASC 815-40815 and are presented withinas warrant liabilities on the balance sheet.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 statementunaudited condensed consolidated statements of operations.
The Private Warrants were initially valued using a Modified Black Scholes Option Pricing Model, which is considered to be a Level 3 fair value measurement. The Modified Black Scholes model’s primary unobservable input utilized in determining the fair value of the Private Warrants is the expected volatility of the common stock. The expected volatility
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as of the IPO date (10%) was derived from observable public warrant pricing on comparable ‘blank-check’ companies without an identified target. The expected volatility as of subsequent valuation dates was implied from the Company’s own public warrant pricing. A Monte Carlo simulation methodology was used in estimating the fair value of the public warrantsPublic Warrants for periods where no observable traded price was available, using the same expected volatility as was used in measuring the fair value of the Private Warrants. For periods subsequent to the detachment of the warrants from the Units, the close price of the public warrantPublic Warrant price was used as the fair value as of each relevant date.
The key inputs into the Monte Carlo simulation model for the warrants were as follows:
| | | | |
| | June 30, | | |
| | 2021 | | |
Input | | | | |
Stock Price | | $ | 15.02 | |
Risk-free interest rate | | | 0.87 | % |
Expected term (years) | | | 0.01 | |
Expected volatility | | | 12 | % |
Exercise price | | $ | 11.50 | |
Probability of transaction | | | 100 | % |
Fair value of Units | | $ | 5.51 | |
The following table presents the changes in the fair value of warrant liabilities:
Private Placement | Level | Public | Level | Warrant Liability | ||||||||||||||||
| Fair value as of December 31, 2020 | $ | 12,144,000 | $ | 20,700,000 | $ | 32,844,000 | ||||||||||||||
| Change in valuation inputs or other assumptions | 10,956,000 | 3 | 18,055,000 | 1 | ||||||||||||||||
| Fair value as of March 31, 2021 | $ | 23,100,000 | $ | 38,755,000 | $ | 61,855,000 | ||||||||||||||
| | | |
|
| Private | |
| | Placement | |
Fair value as of December 31, 2020 | | $ | 12,144,000 |
Change in valuation inputs or other assumptions |
| | 24,199,332 |
Fair value as of June 30, 2021 | | $ | 36,343,332 |
There were no0 transfers in or out of Level 3 from other levels in the fair value hierarchy.
NOTE 10. SUBSEQUENT EVENTS
The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. BasedOther than the closing of the Business Combination on July 1, 2021 described in Note 1 above, based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.
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ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Overview
We are a blank check company formed under the laws of the State of Delaware on August 4, 2020 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. We intend to effectuate our business combination using cash fromOn July 1, 2021, we consummated the proceeds of the IPO and the sale of the private placement warrants, our capital stock, debt or a combination of cash, stock and debt.
Recent Developments
On January 21, 2021, CRIS,we, SPAC Sub and EVgo Parties entered into the Business Combination Agreement. The transactions contemplated byOn July 1, 2021 (the “Closing Date”), we consummated the Business Combination Agreement are collectively referred to in this Item 2 as the “business combination.”
immediately following “Holdings Contribution”); |
immediately following the |
immediately following Units,” such transaction, the “Merger Sub Contribution” and together with the SPAC Contribution, the Holdings Contribution and the Merger Sub Transfer, the “Transactions”). |
CRIS entered into Subscription Agreements with the PIPE Investors, pursuant to which the PIPE Investors have agreed to purchase, and the Company has agreed to sell to the PIPE Investors, an aggregate of 40,000,000ONE, LLC purchased 500,000 shares of Class A common stock in the PIPE for a total purchase price of $10.00 per share,$5,000,000. Ms. Comstock, a member of the Company’s board of directors, is an investor in CRIS PIPE ONE, LLC. In addition, the PIMCO private funds or an aggregatetheir affiliates purchased 5,000,000 shares of Class A common stock in the PIPE for a total purchase price of $400.0 million, in a PIPE.
Results of Operations
We classify the warrants issued in connection with our IPO and concurrent private placement as liabilities at their fair value and adjust the warrant liability to fair value at each reporting period. This liability is subject to re-measurement at each balance sheetsheets date until exercised, and any change in fair value is recognized in our statementstatements of operations.
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As of June 30, 2021, we have neither engaged in any operations nor generated any revenues to date. Our only activities from January 1, 2021August 4, 2020 (inception) through March 31,June 30, 2021 were organizational activities, those necessary to identify a target company for a business combination, as described below. We dodid not expect to generate any operating revenues until afterprior to the completion of our initial business combination.Business Combination. We expect to generategenerated non-operating income in the form of interest income on marketable securities held after the IPO. We incuralso incurred expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
For the period from January 1, 2021 through March 31,three months ended June 30, 2021, we had a net loss of $30.9$25.8 million, which consists of operating costs of $1.9$4.4 million and a non-cash change in fair value of derivative liability of $29.0$21.4 million, offset by interest income from bank of $15$123 and interest earned on investments held in the Trust Account of $3.5 thousand.
For the six months ended June 30, 2021, we had a net loss of $56.7 million, which consists of operating costs of $6.3 million and a non-cash change in fair value of derivative liability of $50.4 million, offset by interest income from bank of $138 and interest earned on investments held in the Trust Account of $5,800.
Liquidity and Capital Resources
On October 2, 2020, we consummated the IPO of 23,000,000 units at a price of $10.00 per unit, which includes the full exercise by the underwriters of their over-allotment option in the amount of 3,000,000 units, generating gross proceeds of $230.0 million. Simultaneously with the closing of the IPO, we consummated the sale of 6,600,000 private placement warrantsPrivate Placement Warrants at a price of $1.00 per private placement warrantPrivate Placement Warrant in a private placement to our stockholders, generating gross proceeds of $6.6 million.
Following the IPO, the full exercise of the over-allotment option by the underwriters and the sale of the private placement warrants,Private Placement Warrants, a total of $230.0 million was placed in the Trust Account. We incurred $13.2 million in transaction costs, including $4.2 million of underwriting fees, $8.1 million of deferred underwriting fees and $0.9 million of other offering costs.
For the period from January 1, 2021 through March 31,six months ended June 30, 2021, cash used in operating activities was $0.6$1.1 million comprised of net loss of $30.9$56.7 million and interest earned on investments held in the Trust Account of $3.5 thousand as$5,800 offset by a non-cash change in warrant liability of $29.0$50.4 million, and the changes in operating assets and liabilities of $1.3$5.2 million.
As of March 31,June 30, 2021, we had cash and investments held in the Trust Account of approximately $230.0 million.million and approximately $264.3 million of cash held outside of the Trust Account, which included a portion of the proceeds from the PIPE which were received prior to Closing of the Business Combination. We intend to useused substantially all of the funds held in the Trust Account including any amounts representing interest earned on the Trust Account to complete our initial business combination. We may withdraw interest to pay taxes. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial business combination, the remaining proceedsBusiness Combination on July 1, 2021. Funds held in the Trust Account will bewere used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate ofbusiness as the costs of identifying a target business, undertaking in-depth due diligence and negotiating an initial business combination are less thanCompany has consummated the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to complete our initial business combination or because we become obligated to redeem a significant number of our public shares upon consummation of our initial business combination, in which case we may issue additional securities or incur debt in connection with such initial business combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the consummate of our initial business combination. If we are unable to consummate our initial business combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our initial business combination, if cashBusiness Combination on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
Related Party Transactions
Investment in the PIPE
In connection with the execution of the Business Combination Agreement, CRIS entered into Subscription Agreements with a number of PIPE Investors, pursuant to which the PIPE Investors agreed to purchase, and CRIS agreed to sell to the PIPE Investors, an aggregate of 40,000,000 shares of Class A common stock, for a purchase price of $10.00 per share and an aggregate purchase price of $400,000,000, in the PIPE. CRIS PIPE ONE, LLC, which is affiliated with members of CRIS’s officers and directors, will be purchasingpurchased 500,000 shares of Class A common stock in the PIPE for a total purchase price of $5.0 million. In addition, private funds affiliated Pacific Investment Management Company LLC (“PIMCO”), which are investors in the Sponsor, or their affiliates will be purchasingpurchased 5,000,000 shares of Class A common stock in the PIPE for a total purchase price of $50.0 million. The PIPE concurrently closed with the consummation of the Business Combination.
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Payments to an Affiliate
Commencing as of March 2021, CRIS has been and will continue to makemade payments of approximately $45,000 per month on an annualized basis to Climate Real Impact Solutions Services LLC, an entity owned by John Cavalier, our former Chief Financial Officer and David Crane, our former Chief Executive Officer and managed by Ms. Frank-Shapiro, our former Chief Operating Officer, for consulting services rendered to CRIS. Messrs. Cavalier and Crane also receive health insurance benefits from Climate Real Impact Solutions Services LLC. UponSuch payments ceased upon completion of the proposed business combination, it is expected that CRIS would cease to make any further payments.
Off-Balance Sheet Arrangements
We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of March 31,June 30, 2021. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as “variable interest entities,” which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.
Contractual Obligations
We did not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than as described below.
The underwriters are entitled to a deferred fee of $0.35 per unit, or $8.1 million in the aggregate. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that we consummate an initial business combination,Initial Business Combination, subject to the terms of the underwriting agreement.
We entered into various consulting arrangements with several service provider for administrative services and potential target financial analysis and due diligence services to us. These arrangements provide for aggregate monthly fees of approximately $90.0 thousand.
Critical Accounting Policies
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:
Class A Common Stock Subject to Possible Redemption
We account for our Class A common stock subject to possible redemption in accordance with the guidance in ASC Topic 480, “Distinguishing Liabilities from Equity.” Shares of Class A common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that feature redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. Our Class A common stock features certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, shares of Class A common stock subject to possible redemption are presented as temporary equity, outside of the stockholders’ equity section of our balance sheet.
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Warrant Liability
We account for the warrants in accordance with the guidance contained in ASC 815-40-15-7DTopic 815, “Derivatives and 7FHedging” under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, we classify the warrants as liabilities at their fair value and adjust the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. The fair value of the warrants issued in the IPO has been estimated using a Monte Carlo simulation methodology as of the date of the IPO and such warrants’ quoted market price as of March 31,June 30, 2021. The private placement warrantsPrivate Placement Warrants were valued using a Modified Black Scholes Option Pricing Model.
Net Income (Loss) per Common Share
We apply the two-class method in calculating earnings per share. Net income per common share, basic and diluted for Class A redeemable common stock is calculated by dividing the interest income earned on the Trust Account, net of applicable franchise and income taxes, by the weighted average number of Class A redeemable common stock outstanding for the period. Net loss per common share, basic and diluted for Class B non-redeemable common stock is calculated by dividing the net income, less income attributable to Class A redeemable common stock, by the weighted average number of Class B non-redeemable common stock outstanding for the period presented.
Recent Accounting Standards
Our management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements.
Item 3.Quantitative and Qualitative Disclosures About Market Risk
As of March 31,June 30, 2021, we were not subject to any market or interest rate risk. The net proceeds of our IPO, including amounts in the Trust Account, have beenwere invested in U.S. government treasury obligations with a maturity of 185 days or less or in certain money market funds that invest solely in U.S. treasuries. Due to the short-term nature of these investments, we believe there will bewas no associated material exposure to interest rate risk.
Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Quarterly Report, is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and the chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
Our management evaluated, with the participation of our current chief executive officer and chief financial officer, our “certifying officers,” the effectiveness of our disclosure controls and procedures as of March 31,June 30, 2021, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our certifying officers concluded that our disclosure controls and procedures were not effective as March 31,June 30, 2021 due to a material weakness in internal control over financial reporting with respect to the classification of the Company’s warrants as components of equity instead of as derivative liabilities.
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if
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any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
On April 25, 2021, we revised our prior position on accounting for our warrants and concluded that our previously issued financial statements as of December 31, 2020 and for the period from August 4, 2020 (inception) through December 31, 2020 should not be relied on because of a misapplication in the guidance on warrant accounting. However, the non-cash adjustments to the financial statements do not impact the amounts previously reported for our cash and cash equivalents, total assets, revenue or cash flows.
In light of the restatement of our financial statements included in the Annual Report, we plan to enhance our processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards that apply to our financial statements. Our plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.
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Item 1.Legal Proceedings.
We, are, and from time to time, may become involved in legal and regulatory proceedings or subject to claims arising in the ordinary course of our business. We are not presently a party to any legal or regulatory proceedings that in the opinion of our management, if determined adversely to us, would individually or taken together have a material adverse effect on our business, results of operations and financial condition.
Item 1A.Risk Factors.
Factors that could cause our actual results to differ materially from those in this Quarterly Report include the risk factors described in our Annual Report. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in our Annual Report.
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds. None. |
Item 3.Defaults Upon Senior Securities.
None.
Item 4.Mine Safety Disclosures.
Not Applicable.
Item 5.Other Information.
None.
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Item 6.Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report.
| | |
No. | Description of Exhibit | |
| ||
| ||
31.1** | | |
31.2** | | |
32*** | | |
101.INS** | | XBRL Instance Document |
101.CAL** | | XBRL Taxonomy Extension Calculation Linkbase Document |
101.SCH** | | XBRL Taxonomy Extension Schema Document |
101.DEF** | | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB** | | XBRL Taxonomy Extension Labels Linkbase Document |
101.PRE** | | XBRL Taxonomy Extension Presentation Linkbase Document |
104** | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
** | Filed herewith. |
*** | Furnished. |
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | |
EVgo Inc. (f/k/a CLIMATE CHANGE CRISIS REAL IMPACT I ACQUISITION | ||
Date: | By: | /s/ |
Name: | Cathy Zoi | |
Title: | Chief Executive Officer | |
(Principal Executive Officer) | ||
Date: | By: | /s/ |
Name: | Olga Shevorenkova | |
Title: | Chief Financial Officer | |
(Principal | ||
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