UNITED STATES

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 1934

For the quarterly period ended ~~June 30, 2022~~March 31, 2023

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 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 Number)

11835 West Olympic Boulevard, Suite 900E, Los Angeles, CA 90064

(Address of Principal Executive Offices)

(877) 494-3833

(Registrant’s telephone number)

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 ☒

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading ~~symbol~~Symbol(s)	Name of Each Exchange on ~~which registered~~Which Registered
Class A common stock, $0.0001 par value per share	EVGO	~~NASDAQ~~The Nasdaq Global Select Market
Redeemable warrants included as part of the units, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50	EVGOW	~~NASDAQ~~The Nasdaq Global Select Market

As of ~~August 5, 2022, there were 69,078,584~~May 1, 2023, the Registrant had 72,637,313 shares of ~~the registrant’s~~ Class A common stock~~$.0001 par value per share,~~ and 195,800,000 shares of ~~the registrant’s~~ Class B common stock ~~par value $0.0001 per share, issued and~~ outstanding.

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TABLE OF CONTENTS

		Page

	Cautionary Statement Regarding Forward-Looking Statements	3

	Frequently Used Terms	45

Part I. Financial Information

Item 1.	Financial Statements	67

	Condensed Consolidated Balance Sheets as of ~~June 30, 2022~~March 31, 2023 (unaudited) and December 31, ~~2021~~2022	67

	Condensed Consolidated Statements of Operations ~~and Comprehensive Income (Loss)~~ for the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~(unaudited)	89

	Condensed Consolidated Statements of Stockholders’ ~~and Member’s Equity (Deficit)~~Deficit for the Three ~~and Six~~ Months Ended ~~June 30,~~ March 31, 2023 and 2022 ~~and 2021~~(unaudited)	910

	Condensed Consolidated Statements of Cash Flows for the ~~Six~~Three Months Ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~(unaudited)	11

	Notes to Condensed Consolidated Financial Statements (unaudited)	1312

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3429

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5447

Item 4.	Controls and Procedures	5448

Part II. Other Information

Item 1.	Legal Proceedings	5750

Item 1A.	Risk Factors	5750

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5850

Item 3.	Defaults Upon Senior Securities	5850

Item 4.	Mine Safety Disclosures	5850

Item 5.	Other Information	5850

Item 6.	Exhibits	5850

Signatures		6052

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Quarterly Report”), including Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part I, Item 2, contains ~~statements that are forward-looking and as such are not historical facts. These~~ forward-looking statements ~~include,~~within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements contained in this document other than statements of historical fact, including, without limitation, statements regarding future financial performance, business strategies, market size and opportunity, expansion plans, future results of operations, factors affecting EVgo’s performance, estimated revenues, losses, projected costs, prospects, plans and objectives of ~~management. These~~management, are forward-looking ~~statements are based on EVgo’s current expectations, estimates, projections and beliefs, as well as a number of assumptions concerning future events, and are not guarantees of performance.~~statements. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this Quarterly Report, words such as “may,” “will,” “might,” “should,” “could,” “would,” “can,” “expect,” “plan,” “objective,” “seek,” “grow,” “possible,” “potential,” “outlook,” “forecast,” “target,” “if,” “predict,” “anticipate,” “intend,” “believe,” “estimate,” “continue,” “project” orand the negative of such terms or other similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements are based on EVgo’s current expectations, estimates, projections and beliefs, as well as a number of assumptions concerning future events, and are not guarantees of performance. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including the risk factors described in EVgo’s filings with the Securities and Exchange Commission (the “SEC”). Moreover, EVgo operates in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for EVgo to predict all risks, nor can it assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements EVgo may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this document may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Accordingly, you should not rely upon forward-looking statements as predictions of future events. Forward-looking statements in this Quarterly Report may include, ~~for example,~~without limitation, statements about:

●

changes adversely affecting EVgo’s business;

●

the risks associated with cyclical demand for EVgo’s services and vulnerability to industry downturns and regional or national downturns;

●

fluctuations in EVgo’s revenue and operating results;

●

unfavorable conditions or further disruptions in the capital and credit markets;

●

EVgo’s ability to generate cash, service indebtedness and incur additional indebtedness;

●

competition from existing and new competitors;

●

the growth of the electric vehicle (“EV”) market;

●

EVgo’s ability to expand into new service markets, grow its customer base and manage its operations;

●

EVgo’s ability to develop new features and functionality that meet market needs and achieve market acceptance;

●

EVgo’s ability to integrate any businesses it acquires;

●

EVgo’s ability to recruit and retain experienced personnel;

●

risks related to legal proceedings or claims, including liability claims;

●

EVgo’s dependence on third-party contractors to provide various ~~services;~~services and hardware;

●

EVgo’s ability to obtain additional capital on commercially reasonable terms;

●

~~the impact of COVID-19, including COVID-19 related~~ supply chain disruptions, inflation and ~~expense increases;~~other increases in expenses, including due to the continued impact of the COVID-19 pandemic;

●

safety and environmental requirements that may subject EVgo to unanticipated liabilities;

●

any current, pending or future legislation, regulators or policies that could impact EVgo’s business, results of operations and financial condition, including regulations impacting the EV charging market and government programs designed to drive broader adoption of EVs;

●

partnerships with ~~Site Hosts (defined below)~~commercial or public-entity property owners, landlords and/or tenants (collectively “Site Hosts”), original equipment manufacturers (“OEMs”), fleet operators and suppliers;

●

EVgo’s ability to maintain, protect and enhance EVgo’s intellectual property;

●

general economic or political conditions, including the armed conflict in Ukraine, the impact of the COVID-19 pandemic and continued inflation and the associated changes in monetary policy; and

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●

other factors detailed under the section entitled ~~“Part II. Item 1A, Risk~~“Risk Factors” ~~and~~ in EVgo’s periodic filings with the SEC.

EVgo’s SEC filings are available publicly on the ~~SEC~~SEC’s website at www.sec.gov. The forward-looking statements contained in this Quarterly Report are based on EVgo’s current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting EVgo will be those that the Company has anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond EVgo’s 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. Should one or more of these risks or uncertainties materialize, or should any of EVgo’s assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. ~~Accordingly, forward-looking~~Forward-looking statements in this Quarterly Report and in any document incorporated herein by reference should not be relied upon as representing EVgo’s views as of any subsequent date and the Company undertakes 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.

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FREQUENTLY USED TERMS

Unless the context indicates otherwise, the following terms have the following meanings when used in this Quarterly Report:

“Board of Directors” means the board of directors of EVgo Inc.

“Business Combination Agreement” means that business combination agreement entered into on January 21, 2021 by and among CRIS, Thunder Sub and the EVgo Parties, as may be amended from time to time.

“Class A common stock” means Class A common stock of EVgo Inc., par value $0.0001 per share.

“Class B common stock” means Class B common stock of EVgo Inc., par value $0.0001 per share.

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

“common stock” means Class A common stock and Class B common stock.

“Company” means EVgo Inc. and its subsidiaries.

“Company Group” means EVgo Inc., Thunder Sub or any of their subsidiaries (other than EVgo OpCo and its subsidiaries).

“CRIS” means Climate Change Crisis Real Impact I Acquisition Corporation.

“CRIS Business Combination” means the transactions contemplated by the Business Combination Agreement.

“CRIS Close Date” means the closing of the CRIS Business Combination on July 1, 2021.

“DCFC” means direct current fast charging.

“EV” means electric vehicle.

“EVgo” means, prior to the CRIS Close Date, EVgo Holdings and its subsidiaries and, following the CRIS Close Date, EVgo Inc. and its subsidiaries.

“EVgo Holdco” means EVgo Holdco, LLC, a Delaware limited liability company.

“EVgo Holdings” means EVgo Holdings, LLC, a Delaware limited liability company.

“EVgo OpCo” means EVgo OpCo, LLC, a Delaware limited liability company.

“EVgo OpCo A&R LLC Agreement” means the amended and restated limited liability company agreement of EVgo OpCo entered into on July 1, 2021.

“EVgo OpCo Units” means the equity interests of EVgo OpCo.

“EVgo Parties” means EVgo OpCo, EVgo Holdco and EVgo Holdings.

“EVgo ~~Services”~~Services” means EVgo Services LLC, a Delaware limited liability company.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“GAAP” means accounting principles generally accepted in the United States, consistently applied, as in effect from time to time.

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“GWh” means gigawatt hour, a unit of energy that represents one billion watt-hours and is equal to one million kilowatt-hours.

“Initial Public Offering” means CRIS’s initial public offering of units consummated on October 2, 2020.

“JOBS Act” means the Jumpstart Our Business Startups Act of 2012, as amended.

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“~~“LLC Interests”~~ kWh” means ~~the limited liability company interests of EVgo Holdings.~~kilowatt-hour.

“LS Power” means LS Power Equity Partners IV, L.P. and its affiliates, unless the context otherwise requires.

“OEM” means original equipment manufacturer.

“PlugShare” means PlugShare LLC, a California limited liability company.

“~~PlugShare Acquisition Date~~~~” means July 9, 2021, the date EVgo and PlugShare entered into the PlugShare Agreement.~~

“~~PlugShare Agreement~~~~” means the stock purchase agreement entered into between EVgo and PlugShare on the PlugShare Acquisition Date.~~

“Private Placement Warrants” means the 6,600,000 warrants purchased by the Sponsor in a private placement simultaneously with the closing of the Initial Public Offering, 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, generating gross proceeds of $6,600,000.

“Public Warrants” means the 11,499,988 redeemable warrants sold as part of the units in the Initial Public Offering.

“SEC” means the U.S. Securities and Exchange Commission.

“Sponsor” means CRIS’s sponsor, Climate Change Crisis Real Impact I Acquisition Holdings, LLC, a Delaware limited liability company.

“Tax Receivable Agreement” means the tax receivable agreement, entered into on the CRIS Close Date, by and among CRIS, Thunder Sub, EVgo Holdings and LS Power Equity Advisors, LLC, as agent.

“Thunder Sub” means CRIS Thunder Merger LLC, a Delaware limited liability company and wholly owned subsidiary of EVgo Inc.

USE OF TRADEMARKS

This Quarterly Report may include trademarks, trade names, and service marks owned by EVgo. EVgo’s trademarks include EVgo^®, EVgo Advantage^®, EVgo Basic^™, EVgo eXtend^™, EVgo Inside^™, EVgo PlusMAX^™, EVgo ReNew^™, EVgo Reservations^™, EVgo Rewards^®, EVgo Optima^™, Pay with PlugShare^™, PlugShare^®, and PlugShare^® Premium^™. EVgo’s trademarks are either registered or have been used as common law trademarks by EVgo. This Quarterly Report may contain additional trademarks, trade names, and service marks of others, which are, to EVgo’s knowledge, the property of their respective owners. Solely for convenience, trademarks, trade names, and service marks referred to in this Quarterly Report appear without the ®, ™ or SM symbols, but such references are not intended to indicate, in any way, that EVgo will not assert, to the fullest extent under applicable law, its rights or the rights of the applicable licensor to these trademarks, trade names, and service marks. EVgo does not intend its use of other parties’ trademarks, trade names, or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of EVgo by, such other parties.

AVAILABLE INFORMATION

As soon as reasonably practicable after they are filed electronically with the SEC, EVgo’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports are available without charge on EVgo’s website, investors.evgo.com, which EVgo also uses to announce material information to the public. EVgo is providing the address to EVgo’s website solely for the information of investors. EVgo does not intend the address to be an active link or to otherwise incorporate the contents of the website into this Quarterly Report.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

EVgo Inc. and Subsidiaries

Condensed Consolidated Balance Sheets


	June 30,		December 31,		March 31,
	2022		2021		2023		December 31,
(in thousands)	(unaudited)				(unaudited)		2022
Assets
Current assets
Cash, restricted cash and cash equivalents	$	344,707	$	484,881
Short-term investments		27,776		—
Total cash, restricted cash, cash equivalents and short-term investments		372,483		484,881
Accounts receivable, net of allowance of $858,870 and $718,396 as of June 30, 2022 and December 31, 2021, respectively		4,860		2,559
Accounts receivable, capital build		8,923		9,621
Receivable from related party		—		1,500
Cash, cash equivalents and restricted cash					$	163,512	$	246,193
Accounts receivable, net of allowance of $782 and $687 as of March 31, 2023 and December 31, 2022, respectively						29,263		11,075
Accounts receivable, capital-build						9,418		8,011
Prepaid expenses		2,333		6,395		4,077		4,953
Other current assets		1,295		1,389		10,501		5,252
Total current assets		389,894		506,345		216,771		275,484
Property, equipment and software, net		209,089		133,282		367,195		308,112
Operating lease right-of-use assets		34,433		—		54,670		51,856
Restricted cash		300		300		300		300
Long-term investments		6,797		—
Other assets		2,419		3,115		2,137		2,308
Intangible assets, net		66,420		72,227		57,708		60,612
Goodwill		31,052		31,052		31,052		31,052
Total assets	$	740,404	$	746,321	$	729,833	$	729,724

Liabilities, redeemable noncontrolling interest and stockholders' deficit
Liabilities, redeemable noncontrolling interest and stockholders’ deficit
Current liabilities
Accounts payable	$	1,716	$	2,946	$	18,640	$	9,128
Payables to related parties		24		—
Accrued liabilities		43,426		27,078		40,126		39,233
Operating lease liabilities, current		3,954		—		5,590		4,958
Deferred revenue, current		4,681		5,144		24,529		16,023
Customer deposits		9,482		11,592		12,833		17,867
Other current liabilities		136		111		415		136
Total current liabilities		63,419		46,871		102,133		87,345
Operating lease liabilities, noncurrent		28,814		—		48,234		45,689
Earnout liability, at fair value		2,584		5,211		3,793		1,730
Asset retirement obligations		16,274		12,833		17,371		15,473
Capital-build liability		25,070		23,169		28,152		26,157
Deferred revenue, noncurrent		21,600		21,709		37,175		23,900
Warrant liability, at fair value		22,621		48,461
Other liabilities		—		146
Warrant liabilities, at fair value						18,684		12,304
Total liabilities		180,382		158,400	$	255,542	$	212,598

Commitments and contingencies (Note 9)
Commitments and contingencies (Note 8)

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

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EVgo Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (continued)

June 30,

December 31,

2022

2021
(in thousands, except share data)

(unaudited)

Redeemable noncontrolling interest

1,176,758

1,946,252

Stockholders’ deficit

Preferred stock, $0.0001 par value; 10,000,000 shares authorized as of June 30, 2022 and December 31, 2021; NaN issued and outstanding

—

—
Class A common stock, $0.0001 par value; 1,200,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 68,578,324 and 68,020,630 shares issued and outstanding (excluding 718,750 shares subject to possible forfeiture) as of June 30, 2022 and December 31, 2021, respectively

7

7
Class B common stock, $0.0001 par value; 400,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 195,800,000 shares issued and outstanding as of June 30, 2022 and December 31, 2021

20

20
Additional paid-in capital

6,583

—
Accumulated deficit

(623,299)

(1,358,358)
Accumulated other comprehensive loss

(47)

—
Total stockholders' deficit

(616,736)

(1,358,331)
Total liabilities, redeemable noncontrolling interest and stockholders’ deficit

$
740,404

$
746,321


	March 31,
	2023		December 31,
(in thousands, except share data)	(unaudited)		2022
Redeemable noncontrolling interest	$	1,525,282	$	875,226

Stockholders’ deficit
Preferred stock, $0.0001 par value; 10,000,000 shares authorized as of March 31, 2023 and December 31, 2022; none issued and outstanding		—		—
Class A common stock, $0.0001 par value; 1,200,000,000 shares authorized as of March 31, 2023 and December 31, 2022; 71,403,860 and 70,247,726 shares outstanding (excluding 718,750 shares subject to possible forfeiture) as of March 31, 2023 and December 31, 2022, respectively		7		7
Class B common stock, $0.0001 par value; 400,000,000 shares authorized as of March 31, 2023 and December 31, 2022; 195,800,000 shares issued and outstanding as of March 31, 2023 and December 31, 2022		20		20
Additional paid-in capital		—		17,533
Accumulated deficit		(1,051,018)		(375,660)
Total stockholders’ deficit		(1,050,991)		(358,100)
Total liabilities, redeemable noncontrolling interest and stockholders’ deficit	$	729,833	$	729,724

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

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EVgo Inc. and Subsidiaries

Condensed Consolidated Statements of Operations ~~and Comprehensive Income (Loss)~~

(unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,
(in thousands, except per share data)

2022

2021

2022

2021
Revenue

$
9,076

$
4,783

$
16,776

$
8,352
Revenue from related party

—

—

—

562
Total revenue

9,076

4,783

16,776

8,914
Cost of revenue

5,719

3,752

10,565

7,113
Depreciation and amortization

4,101

2,705

7,555

5,152
Cost of sales

9,820

6,457

18,120

12,265
Gross loss

(744)

(1,674)

(1,344)

(3,351)

General and administrative

32,178

13,338

57,606

25,344
Depreciation, amortization and accretion

4,132

2,545

8,019

5,055
Total operating expenses

36,310

15,883

65,625

30,399
Operating loss

(37,054)

(17,557)

(66,969)

(33,750)

Interest expense

(13)

—

(13)

—
Interest expense, related party

—

(1,039)

—

(1,915)
Interest income

636

1

691

1
Other (expense) income, net

(158)

174

(422)

632
Change in fair value of earnout liability

4,891

—

2,627

—
Change in fair value of warrant liability

48,712

—

25,839

—
Total other income (expense), net

54,068

(864)

28,722

(1,282)
Income (loss) before income tax expense

17,014

(18,421)

(38,247)

(35,032)
Income tax expense

(17)

—

(22)

—
Net income (loss)

16,997

(18,421)

(38,269)

(35,032)
Less: net income (loss) attributable to redeemable noncontrolling interest

12,518

(18,421)

(28,349)

(35,032)
Net income (loss) attributable to Class A common stockholders

$
4,479

$
—

$
(9,920)

$
—

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

$
0.06

N/A

$
(0.14)

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

$
0.06

N/A

$
(0.14)

N/A

Net income (loss)

$
16,997

$
(18,421)

$
(38,269)

$
(35,032)
Other comprehensive loss, net of tax:

Net unrealized loss on available-for-sale securities

(47)

—

(47)

—
Comprehensive income (loss)

16,950

(18,421)

(38,316)

(35,032)
Less: comprehensive income (loss) attributable to redeemable noncontrolling interest

12,483

(18,421)

(28,384)

(35,032)
Comprehensive income (loss) attributable to Class A common stockholders

$
4,467

$
—

$
(9,932)

$
—


	Three Months Ended
	March 31,
(in thousands, except per share data)	2023		2022
Revenue	$	25,300	$	7,700

Cost of revenue		18,917		4,846
Depreciation, net of capital-build amortization		6,342		3,454
Cost of sales		25,259		8,300
Gross profit (loss)		41		(600)

General and administrative expenses		37,889		25,428
Depreciation, amortization and accretion		4,784		3,887
Total operating expenses		42,673		29,315
Operating loss		(42,632)		(29,915)

Interest income		1,998		55
Other income (expense), net		1		(263)
Change in fair value of earnout liability		(2,063)		(2,264)
Change in fair value of warrant liabilities		(6,380)		(22,874)
Total other expense, net		(6,444)		(25,346)
Loss before income tax expense		(49,076)		(55,261)
Income tax expense		(5)		(5)
Net loss		(49,081)		(55,266)
Less: net loss attributable to redeemable noncontrolling interest		(36,005)		(40,867)
Net loss attributable to Class A common stockholders	$	(13,076)	$	(14,399)

Net loss per share to Class A common stockholders, basic and diluted	$	(0.18)	$	(0.21)

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

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EVgo Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Deficit

For the Three Months Ended March 31, 2023 and ~~Member’s Equity (Deficit)~~2022

(unaudited)


	For the Six Months Ended June 30, 2022
													Accumulated
									Additional				Other												Additional
	Class A Common Stock				Class B Common Stock				Paid-In		Accumulated		Comprehensive		Stockholders’		Class A Common Stock				Class B Common Stock				Paid-In		Accumulated		Stockholders’
(in thousands)	Shares		Amount		Shares		Amount		Capital		Deficit		Loss		Deficit		Shares		Amount		Shares		Amount		Capital		Deficit		Deficit
Balance, December 31, 2022																		70,248	$	7		195,800	$	20	$	17,533	$	(375,660)	$	(358,100)
Share-based compensation																		—		—		—		—		5,797		—		5,797
Issuance of stock under share-based compensation plans																		1,156		0		—		—		0		—		—
Net loss¹																		—		—		—		—		—		(13,076)		(13,076)
Redeemable noncontrolling interest adjustment to fair value																		—		—		—		—		(23,330)		(662,282)		(685,612)
Balance, March 31, 2023																		71,404	$	7		195,800	$	20	$	—	$	(1,051,018)	$	(1,050,991)

Balance, December 31, 2021		68,021	$	7		195,800	$	20	$	—	$	(1,358,358)	$	—	$	(1,358,331)		68,021	$	7		195,800	$	20	$	—	$	(1,358,358)	$	(1,358,331)
Share-based compensation		—		—		—		—		2,999		—		—		2,999		—		—		—		—		2,999		—		2,999
Warrants exercised and release of warrant liability		0		0		—		—		2		—		—		2
Issuance of stock under share-based compensation plans, including income tax effect		248		0		—		—		0		—		—		0
Warrants exercised																		—		—		—		—		2		—		2
Release of warrant liability																		—		—		—		—		0		—		0
Issuance of stock under share-based compensation plans																		248		0		—		—		0		—		—
Net loss²																		—		—		—		—		—		(14,399)		(14,399)
Redeemable noncontrolling interest adjustment to fair value		—		—		—		—		(3,001)		(609,095)		—		(612,096)		—		—		—		—		(3,001)		(609,095)		(612,096)
Net loss¹		—		—		—		—		—		(14,399)		—		(14,399)
Balance, March 31, 2022		68,269		7		195,800		20		—		(1,981,852)		—		(1,981,825)		68,269	$	7		195,800	$	20	$	—	$	(1,981,852)	$	(1,981,825)
Share-based compensation		—		—		—		—		6,582		—		—		6,582
Warrants exercised and release of warrant liability		0		0		—		—		1		—		—		1
Issuance of stock under share-based compensation plans, including income tax effect		309		0		—		—		0		—		—		0
Net unrealized loss on available-for-sale securities		—		—		—		—		—		—		(47)		(47)
Redeemable noncontrolling interest adjustment to fair value		—		—		—		—		—		1,354,074		—		1,354,074
Net income²		—		—		—		—		—		4,479		—		4,479
Balance, June 30, 2022		68,578	$	7		195,800	$	20	$	6,583	$	(623,299)	$	(47)	$	(616,736)

¹Excludes ~~$40.9~~$36.0 million of net loss attributable to redeemable noncontrolling interest.

²Excludes ~~$12.5~~$40.9 million of net income attributable to redeemable noncontrolling interest.

~~Table of Contents~~

~~EVgo Inc. and Subsidiaries~~

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

~~(unaudited)~~

For the Six Months Ended June 30, 2021

Additional

LLC Interests

Paid-In

Accumulated

Member's
(in thousands)



Shares

Amount

Capital

Deficit

Equity
Balance, December 31, 2020 (as previously reported)

—

$
136,348

$
929

$
(47,790)

$
89,487
Retroactive application of recapitalization

195,800

—

—

—

—
Balance, December 31, 2020 (as adjusted)



195,800


136,348


929


(47,790)


89,487
Share-based compensation

—

—

480

—

480
Net loss

—

—

—

(16,610)

(16,610)
Balance, March 31, 2021

195,800

136,348

1,409

(64,400)

73,357
Share-based compensation

—

—

531

—

531
Net loss

—

—

—

(18,421)

(18,421)
Balance, June 30, 2021

195,800

$
136,348

$
1,940

$
(82,821)

$
55,467

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

Table of Contents

EVgo Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(unaudited)

Six Months Ended

June 30,
(in thousands)

2022

2021
Cash flows from operating activities

Net loss

$
(38,269)

$
(35,032)
Adjustments to reconcile net loss to net cash used in operating activities

Depreciation, amortization and accretion

15,574

10,207
Net loss on disposal of property and equipment

2,889

347
Share-based compensation

10,548

1,010
Interest expense, related party

—

1,915
Change in fair value of earnout liability

(2,627)

—
Change in fair value of warrant liability

(25,839)

—
Other

474

97
Changes in operating assets and liabilities

Accounts receivable, net

(2,302)

(161)
Receivables from related parties

1,499

—
Prepaid expenses and other current and noncurrent assets

3,735

279
Operating lease assets and liabilities, net

(808)

—
Accounts payable

(100)

(1,339)
Payables to related parties

24

1,419
Accrued liabilities

358

1,285
Deferred revenue

(572)

20,778
Customer deposits

(2,110)

(1,123)
Other current and noncurrent liabilities

(844)

(1,039)
Net cash used in operating activities

(38,370)

(1,357)
Cash flows from investing activities

Purchases of property, equipment and software

(72,291)

(23,341)
Proceeds from insurance for property losses

202

—
Purchases of investments

(34,747)

—
Net cash used in investing activities

(106,836)

(23,341)
Cash flows from financing activities

Proceeds from note payable, related party

—

24,000
Payments on note payable, related party

—

(5,500)
Proceeds from exercise of warrants

3

—
Capital-build funding, net

5,029

1,337
Payment of transaction costs for CRIS Business Combination

—

(1,652)
Net cash provided by financing activities

5,032

18,185
Net decrease in cash, restricted cash and cash equivalents

(140,174)

(6,513)
Cash, restricted cash and cash equivalents, beginning of period

485,181

7,914
Cash, restricted cash and cash equivalents, end of period

$
345,007

$
1,401


	Three Months Ended
	March 31,
(in thousands)	2023		2022
Cash flows from operating activities
Net loss	$	(49,081)	$	(55,266)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation, amortization and accretion		11,126		7,341
Net loss on disposal of property and equipment and impairment expense		3,460		1,010
Share-based compensation		6,427		3,506
Change in fair value of earnout liability		2,063		2,264
Change in fair value of warrant liabilities		6,380		22,874
Other		—		288
Changes in operating assets and liabilities
Accounts receivable, net		(18,188)		(257)
Receivables from related parties		—		1,499
Prepaid expenses and other current and noncurrent assets		(4,415)		3,538
Operating lease assets and liabilities, net		365		(2,135)
Accounts payable		6,493		154
Payables to related parties		—		25
Accrued liabilities		(799)		(2,596)
Deferred revenue		21,781		(561)
Customer deposits		(5,034)		(862)
Other current and noncurrent liabilities		79		(653)
Net cash used in operating activities		(19,343)		(19,831)
Cash flows from investing activities
Purchases of property, equipment and software		(65,246)		(28,274)
Proceeds from insurance for property losses		—		202
Net cash used in investing activities		(65,246)		(28,072)
Cash flows from financing activities
Proceeds from capital-build funding		2,216		4,099
Proceeds from exercise of warrants		—		2
Payments of issuance costs and deferred transaction costs		(308)		—
Net cash provided by financing activities		1,908		4,101
Net decrease in cash, cash equivalents and restricted cash		(82,681)		(43,802)
Cash, cash equivalents and restricted cash, beginning of period		246,493		485,181
Cash, cash equivalents and restricted cash, end of period	$	163,812	$	441,379

Supplemental disclosure of noncash investing and financing activities
Fair value adjustment to redeemable noncontrolling interest	$	685,612	$	612,096
Purchases of property and equipment in accounts payable and accrued liabilities	$	26,840	$	24,454
Non-cash increase in accounts receivable, capital-build, and capital-build liability	$	3,624	$	2,380
Non-cash increase in asset retirement obligations	$	1,377	$	1,001
Accrued transaction costs	$	—	$	182

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

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~~EVgo Inc. and Subsidiaries~~

~~Condensed Consolidated Statements of Cash Flows (continued)~~

~~(unaudited)~~

Six Months Ended

June 30,
(in thousands)

2022

2021
Supplemental disclosure of noncash investing and financing activities

Accrued transaction costs

$
—

$
4,870
Asset retirement obligations incurred

$
3,111

$
787
Non-cash increase in accounts receivable, capital-build and capital-build liability

$
4,330

$
—
Purchases of property and equipment in accounts payable and accrued liabilities

$
29,510

$
9,077
Fair value adjustment to redeemable noncontrolling interest

$
741,978

$
—

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

~~Table of Contents~~

EVgo Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(unaudited)

Note 1 – Description of Business and Nature of Operations

EVgo Inc. (“EVgo”) owns and operates a public direct current (“DC”) fast charging network for electric vehicles (“EVs”) in the United States (“U.S.”). ~~EVgo was founded in October 2010 as NRG EV Services, LLC, a Delaware corporation and wholly owned subsidiary of NRG Energy, Inc., an integrated power company based in Houston, Texas.~~ EVgo’s network of charging stations provides EV charging infrastructure to consumers and businesses. Its network is capable of ~~natively~~ charging ~~(i.e., charging without an adaptor)~~ all EV models and charging standards currently available in the U.S. EVgo partners with ~~national~~automotive original equipment manufacturers (“OEMs”), fleet and ~~regional chains of~~rideshare operators, retail hosts such as grocery stores, ~~automotive OEMs, hotels,~~ shopping centers, gas stations, parking lot operators, ~~local~~ governments and ~~independent~~other organizations and property owners in order to locate and deploy its EV charging infrastructure.

~~COVID-19 Outbreak~~EVgo Services LLC (“EVgo Services”) was formed in October 2010 as NRG EV Services, LLC, a Delaware limited liability company and wholly owned subsidiary of NRG Energy, Inc., an integrated power company based in Houston, Texas (“NRG”). On June 17, 2016, NRG sold a majority interest in EVgo Services to Vision Ridge Partners. On January 16, 2020 (the “Holdco Merger Date”), EVgo Holdco, LLC (“EVgo Holdco”), a Delaware limited liability company and a subsidiary of LS Power Equity Partners IV, L.P. (“LS Power”), completed an acquisition of EVgo Services, pursuant to the merger agreement (the “Holdco Merger Agreement”) among EVgo Services, its investors and EVgo Holdco, whereby EVgo Services became a wholly-owned subsidiary of EVgo Holdco, resulting in a change in control of EVgo Services (the “Holdco Merger”). EVgo Holdco had no operations prior to the Holdco Merger. The Company (as defined below) elected push-down accounting and all of the Company’s assets and liabilities related to LS Power were remeasured at fair value on the Holdco Merger Date. LS Power was considered to be the accounting acquirer and formed EVgo Holdings, LLC (“EVgo Holdings”) and EVgo Holdco as part of the transaction.

EVgo Inc. (the “Company,” or “EVgo”) was incorporated in Delaware on August 4, 2020 under the name Climate Change Crisis Real Impact I Acquisition Corporation (“CRIS”). The ~~global outbreak~~Company was formed for the purpose of ~~COVID-19 has resulted~~entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Initial Business Combination”). On October 2, 2020, the Company completed its initial public offering (the “Initial Public Offering”). Simultaneously with the closing of the Initial Public Offering, the Company completed the sale of 6,600,000 warrants (the “Private Placement Warrants”) at $1.00 in ~~significant volatility~~a private placement to Climate Change Crisis Real Impact I Acquisition Holdings, LLC (the “Sponsor”), generating gross proceeds of $6,600,000.

On July 1, 2021 (the “CRIS Close Date”), the Company consummated the business combination (the “CRIS Business Combination”) with CRIS, CRIS Thunder Merger LLC (“Thunder Sub”), EVgo Holdings, EVgo Holdco and EVgo OpCo, LLC (“EVgo OpCo” and together with EVgo Holdings and EVgo Holdco, the “EVgo Parties”) pursuant to the business combination agreement dated January 21, 2021 (the “Business Combination Agreement”). Following the CRIS Close Date, the combined company is organized in an “Up-C” structure in which the ~~global~~business of EVgo Holdco and ~~domestic economies, changes~~its subsidiaries is held by EVgo OpCo and continues to operate through the subsidiaries of EVgo Holdco and in ~~consumer~~which the Company’s only direct assets consist of equity interests in Thunder Sub, which, in turn, holds only common units in EVgo OpCo (“EVgo OpCo Units”).

As of March 31, 2023, the Company, through Thunder Sub, owned 26.8% of the EVgo OpCo Units. As the sole managing member of EVgo OpCo, Thunder Sub operates and ~~business behavior, market downturns and restrictions on~~controls all of the business and ~~individual activities, which has led~~affairs of EVgo OpCo and through EVgo OpCo and its subsidiaries, conducts its business. As a result, beginning on July 1, 2021 (the CRIS Close Date), the Company consolidated the financial results of EVgo OpCo and recorded a redeemable noncontrolling interest in its consolidated financial statements to ~~overall reduced economic activity. The COVID-19 pandemic also impacted~~reflect the EVgo OpCo Units that are owned by EVgo Holdings after the CRIS Close Date. As of March 31, 2023, EVgo Holdings held 195,800,000 EVgo OpCo Units, representing 73.2% of the total outstanding EVgo OpCo Units and an equal number of shares of the Company’s ~~operations through construction delays~~Class B common stock.

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Each EVgo OpCo Unit, together with one share of Class B common stock, is redeemable, subject to certain conditions, for either one share of Class A common stock, or, at EVgo OpCo’s election, the cash equivalent to the market value of one share of Class A common stock, pursuant to the Amended and ~~supply chain and shipping constraints.~~Restated LLC Agreement of EVgo ~~also experienced delays in its negotiations with commercial or public-entity property owners, landlords and/or tenants (collectively, the “Site Hosts”~~OpCo dated July 1, 2021 (the “EVgo OpCo A&R LLC Agreement”) as they devoted more time to day-to-day operations and employee health and safety. Finally, for some contractual commitments, EVgo is required to adhere to a construction schedule over specific timeframes. Those timelines were impacted due to delays associated with COVID-19, and it is possible that the ongoing pandemic could continue to impact these timelines in the future.

How COVID-19 will affect EVgo’s future business results is unclear. While the disruption is expected to be temporary, there is considerable uncertainty around the duration and magnitude of this disruption. Development and commissioning lead times may be extended as a result of the measures taken by the state and local governments to mitigate the spread of COVID-19. The extent of the financial impact and duration cannot be reasonably estimated at this time..

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The accompanying condensed consolidated financial statements are unaudited and ~~prepared~~are presented in accordance with GAAP for interim financial information, as set by the Financial Accounting Standards Board (“FASB”), and pursuant to the rules and regulations of the SEC. References to GAAP issued by the FASB in these notes to the condensed consolidated financial statements are to the FASB Accounting Standards Codification (“ASC”). The ~~unaudited~~ condensed consolidated financial statements include the accounts of the Company and its subsidiaries and all intercompany transactions have been eliminated in consolidation. These ~~unaudited~~ condensed consolidated financial statements include all adjustments considered necessary, in the opinion of management, for a fair presentation of the condensed consolidated balance sheets, condensed consolidated statements of operations, ~~and comprehensive income (loss),~~ condensed consolidated statements of stockholders’ ~~and member’s equity (deficit)~~deficit and condensed consolidated statements of cash flows for the periods presented.

The results of operations for the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 are not necessarily indicative of the operating results for the full year ending December 31, ~~2022~~2023 or any other period. These ~~unaudited~~ condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2021~~2022 (the “Annual Report”).

~~Table of Contents~~

GAAP defines subsequent events as events or transactions that occur after the balance sheet date but before financial statements are issued or are available to be issued. Based on their nature, magnitude and timing, certain subsequent events may be required to be reflected in the condensed consolidated financial statements at the balance sheet date and/or required to be disclosed in the notes to the condensed consolidated financial statements. The Company has evaluated subsequent events accordingly.

~~Reclassifications~~

During the third quarter of 2021, the Company changed its presentation of certain costs, including network platform service fees, certain storage and freight costs, pre-operational rent/license fees, call center expenses and certain costs related to field and customer operations. In previous periods, these costs were included as a component of cost of sales. The Company now presents these costs as a component of general and administrative expenses. Management believes this presentation better reflects the nature of the costs, financial performance of the Company, enables better alignment between revenues and cost of sales and provides more clarity about the changes in cost of sales and general and administrative expenses, resulting in improved financial reporting and comparability and consistency of financial results.

All periods presented have been retrospectively revised to reflect the effects of the change to cost of sales and general and administrative expenses. There was no net impact to loss from operations, net loss attributable to the Company or net loss per share for any periods presented. The condensed consolidated balance sheets, condensed consolidated statements of stockholders’ and member’s equity (deficit), and the condensed consolidated statements of cash flows are not affected by changes in the presentation of certain costs.

~~The following is a reconciliation for the respective periods:~~

General and

Administrative
(in thousands)

Cost of Sales

Expenses
For the three months ended June 30, 2022




Computed under previous method

$
11,582

$
30,416
Change in presentation

(1,762)

1,762
As adjusted

$
9,820

$
32,178

For the three months ended June 30, 2021




As previously reported

$
7,548

$
12,247
Change in presentation

(1,091)

1,091
As adjusted

$
6,457

$
13,338

For the six months ended June 30, 2022




Computed under previous method

$
21,617

$
54,109
Change in presentation

(3,497)

3,497
As adjusted

$
18,120

$
57,606

For the six months ended June 30, 2021

As previously reported

$
14,288

$
23,321
Change in presentation

(2,023)

2,023
As adjusted

$
12,265

$
25,344

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

~~Table of Contents~~

Use of Estimates

The ~~preparation of~~ condensed consolidated financial statements have been prepared in ~~conformity~~accordance with ~~GAAP~~GAAP. The preparation of EVgo’s condensed consolidated financial statements requires ~~management~~the Company to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, income and ~~disclosures. Accordingly, actual results could differ from those estimates.~~expenses and related disclosures of contingent assets and liabilities. Significant estimates made by management include, but are not limited to, ~~charging station~~variable consideration estimates and stand-alone selling prices for performance obligations for revenue, depreciable lives of property and equipment and intangible assets, costs associated with asset retirement obligations, the fair value of ~~the~~operating lease right-of-use assets and liabilities, reporting units used in goodwill impairment tests, share-based compensation, earnout liability, and warrant ~~liability~~liabilities. Management bases these estimates on its historical experience and various other assumptions that it believes to be reasonable under the ~~fair value measurements of assets~~circumstances. Actual results experienced may vary materially and ~~liabilities allocated for acquired businesses. Accordingly, the actual results could differ significantly~~adversely from ~~those~~EVgo’s estimates. Revisions to estimates are recognized prospectively.

Concentration of Business and Credit Risk

The Company maintains its cash accounts in a commercial ~~bank. The total cash~~banks. Cash balances held in a commercial bank are secured by the Federal Deposit Insurance Corporation up to $250,000. At ~~various~~ times, ~~throughout the period, the Company had uninsured balances.~~a portion of deposit balances may be in excess of federal insurance limits. The Company has not experienced any losses on such accounts and believes it is not exposed to any significant credit risk on ~~cash.~~its cash balances. The Company mitigates its risk with respect to cash by maintaining its deposits at high-quality financial institutions and monitoring the credit ratings of those institutions.

Table of Contents

The Company had 3two customers that collectively comprised ~~44.4%~~57.6% of the Company’s total net accounts receivable as of ~~June 30, 2022.~~March 31, 2023. The Company had ~~2 customers~~one customer that comprised ~~32.4%~~20.5% of the Company’s total net accounts receivable as of December 31, ~~2021.~~2022. For the ~~six~~three months ended ~~June 30,~~March 31, 2023, two customers collectively represented 51.4% of revenue. For the three months ended March 31, 2022, ~~and 2021, 2~~two customers collectively represented ~~31.9% and 1 customer represented 15.0%~~28.6% of ~~total revenue, respectively.~~revenue.

For the ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022, EVgo had 4one and four vendors, respectively, that provided ~~84.8%~~more than 10% of EVgo’s total charging equipment. For each of the three months ended March 31, 2023 and 2022, the percentage of EVgo’s total charging equipment ~~and services~~provided by these vendors collectively was 84.3%.

Reclassifications

The Company has made certain reclassifications to ~~the Company. For the six months ended June 30, 2021, EVgo had 3 vendors that provided 71.8% of total charging equipment and services~~prior period amounts to ~~the Company.~~conform to current period presentation.

Cash, Cash Equivalents and Restricted Cash

Cash and ~~Cash Equivalents~~

~~Cash,~~ restricted cash ~~and cash equivalents~~ include cash held in cash depository accounts in major banks in the U.S. and are stated at cost. ~~EVgo considers all highly liquid instruments with original maturities of three months or less~~Cash equivalents are carried at ~~the time of purchase to be cash equivalents. The Company holds $4.4 million of investments that~~fair value and are ~~considered cash equivalents as of June 30, 2022.~~primarily invested in money market funds. Cash that is held by a ~~major bank~~financial institution and has restrictions on its availability to the Company is classified as restricted cash.

The Company had unused letters of credit, which were collateralized with cash, classified as restricted cash on the Company’s condensed consolidated balance sheets, of $0.7 million as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, associated with the construction of its charging stations and in connection with one of its operating leases. ~~Cash balances collateralizing these letters of credit are considered restricted cash.~~

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are amounts due from customers under normal trade terms. Payment terms for accounts receivable related to capital-build agreements are specified in the individual agreements and vary depending on the counterparty. Management reviews accounts receivable on a recurring basis to determine if any accounts receivable will potentially be uncollectible. The Company reserves for any accounts receivable balances that are determined to be uncollectible in the allowance for doubtful accounts. After all attempts to collect an account receivable have failed, the account receivable is written off against the allowance for doubtful accounts. Other accounts receivable of $1.2 million and $1.3 million were included in accounts receivable, net, on the condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022, respectively.

Newly Adopted Accounting Standards

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), as if it had originated the contracts. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. The adoption of the standard will impact future business combinations and require the Company to measure acquired contract assets and liabilities in accordance with ASC 606. The standard will not impact acquired contract assets or liabilities from business combinations occurring prior to the effective date of adoption. The Company adopted ASU 2021-08 prospectively on January 1, 2023. The adoption of this standard did not have any impact on the condensed consolidated financial statements.

1514

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~~Investments~~

~~Available-for-sale Debt Securities~~

The Company’s short-term and long-term investments consist primarily of investment-grade debt securities, all of which are classified as available-for-sale. Available-for-sale debt securities are recorded at fair value, and unrealized gains and losses that are considered to be temporary are recorded, net of tax, as a component of accumulated other comprehensive income. EVgo considers all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents. In general, investments with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments. All other investments are classified as long-term. The Company evaluates the available-for-sale securities for other-than-temporary impairment on a quarterly basis. Unrealized losses are charged against net earnings when a decline in fair value is determined to be other than temporary. The Company reviews several factors to determine whether a loss is other than temporary, such as the length and extent of the fair value decline, the financial condition and near-term prospects of the issuer and whether the Company has the intent to sell or will more likely than not be required to sell the securities before the securities' anticipated recovery, which may be at maturity. Realized gains and losses are accounted for using the specific identification method. Purchases and sales of securities are recorded on a trade-date basis.

~~EVgo’s investment portfolio primarily includes corporate debt securities, asset backed securities, U.S. government treasury securities, certificates of deposit and commercial paper.~~

~~Newly Adopted Accounting Standards~~

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases (Topic 842)~~ (“ASC 842”). Subsequent to the initial ASU, the FASB issued various related corrective and clarifying ASUs for this topic, all of which have been codified in ASC 842. ASC 842 requires lessees to report most leases as assets and liabilities on the balance sheet. The Company adopted ASC 842 effective January 1, 2022, using the modified retrospective transition method as allowed under ASU 2018-11, ~~Leases (Topic 842): Targeted Improvements~~, which includes the ability for the Company to recognize the cumulative effect of the adoption being recorded as an adjustment to retained earnings on the adoption date. The Company elected to apply the package of practical expedients which allows the Company to carry forward its identification of contracts that are or contain leases, its historical lease classification and its initial direct costs for existing leases. The Company did not elect the hindsight practical expedient. The Company also elected to recognize leases with an initial term of 12 months or less on a straight-line basis without recognizing a right-of-use asset or lease liability. As of the adoption date, the Company recorded operating lease right-of-use assets and operating lease liabilities of $19.1 million and $18.4 million, respectively. The difference between the right-of-use assets and lease liabilities was primarily due to existing prepaid and accrued rent balances. There was no impact to opening retained earnings as a result of the Company’s adoption of the guidance. The adoption of this standard for both lessee and lessor accounting did not materially impact the Company’s condensed consolidated statements of cash flows or operating loss in the Company’s condensed consolidated statements of operations and comprehensive income (loss). Refer to Note 5 for additional information.

~~On May 3, 2021, the FASB issued ASU 2021-04,~~ ~~Earnings Per Shar~~~~e (Topic 260),~~ Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”). This new standard provides clarification and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (such as warrants) that remain equity classified after modification or exchange. The Company adopted ASU 2021-04 as of January 1, 2022, to be applied prospectively to modifications or exchanges occurring after the effective date, which did not have a material impact on the Company’s condensed consolidated financial statements or disclosures.

~~Table of Contents~~

~~Recently Issued Accounting Standards~~

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASC 326”). The amendments in ASC 326 will provide more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. Subsequent to the initial ASU, the FASB issued various related corrective and clarifying ASUs for this topic, all of which have been codified in ASC 326. ~~The ASU is effective for annual~~For public companies that are considered “smaller reporting ~~periods beginning after December 15, 2022. The Company is currently evaluating the potential impact of adopting this guidance on its condensed consolidated financial statements.~~

~~In October 2021, the FASB issued ASU 2021-08,~~ ~~Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers~~~~, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured~~companies” as defined by the ~~acquirer on the acquisition date in accordance with~~SEC, ASC ~~Topic 606,~~ ~~Revenue From Contracts With Customers~~ ~~(“ASC 606”), as if it had originated the contracts. The new standard~~326 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. ~~Early adoption is permitted.~~The Company adopted ASC 326 prospectively as of January 1, 2023. The adoption of ~~the~~this standard ~~will~~did not materially impact future business combinations and require the Company to measure acquired contract assets and liabilities in accordance with ASC 606. The Company expects the adoption of the standard to result in measuring acquired contract assets and liabilities as if it had originated the contracts. The standard will not impact acquired contract assets or liabilities from business combinations occurring prior to the effective date of adoption.

~~In November 2021, the FASB issued ASU 2021-10,~~ ~~Government Assistance~~~~(Topic 832), Disclosures by Business Entities about Government Assistance~~. This ASU provided guidance to increase the transparency of government assistance including the disclosure of (1) the types of assistance, (2) an entity’s accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements. Under the new guidance, an entity is required to provide the following annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy: (1) information about the nature of the transactions and the related accounting policy used to account for the transactions, (2) the line items on the balance sheet and income statement that are affected by the transactions, and the amounts applicable to each financial statement line item and, (3) significant terms and conditions of the transactions, including commitments and contingencies. This update will be effective for the Company’s ~~financial statements as of and for the year ended December 31, 2022. The Company does not expect this accounting guidance to materially impact its~~condensed consolidated results of operations or financial position.

Recently Issued Accounting Standards

~~Note 3 – Acquisition~~

~~PlugShare LLC~~

~~On July 9, 2021,~~In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), as amended in December 2022 by ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 (“ASU 2022-06”). ASU 2020-04 provides guidance to alleviate the burden in accounting for reference rate reform by allowing certain expedients and exceptions in applying GAAP to contracts, hedging relationships and other transactions impacted by reference rate reform. The provisions apply only to those transactions that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. Adoption of the provisions of ASU 2020-04 are optional and are effective from March 12, 2020 through December 31, 2024, as amended by ASU 2022-06. As of March 31, 2023, the Company entered into the PlugShare Agreement to acquire 100% of the outstanding common stock of PlugShare (f/k/a Recargo, Inc.). Effective as of December 29, 2021, Recargo Inc., a California corporation, converted into EVgo Recargo, LLC, a California limited liability company. Effective as of March 16, 2022, EVgo Recargo, LLC changed its name to PlugShare LLC. PlugShare operates as a cloud-based data solutions provider in the EV sectorhas not adopted any expedients and ~~generates revenue through a variety of services that leverage its user base and its generated data.~~exceptions under ASU 2020-04. The Company ~~believes that~~will continue to evaluate the ~~acquisition~~impact of ~~PlugShare has allowed it to expand~~ASU 2020-04 on its ~~revenue base and has resulted in certain synergies within its operations.~~

~~The Company accounted for the acquisition of PlugShare as a business combination under ASC 805,~~ ~~Business Combinations~~ (“ASC 805”). Pursuant to ASC 805, the purchase price was allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. Any excess of the amount paid over the estimated fair values of the identifiable net assets acquired was allocated to goodwill. The total purchase price was $25.0 million per the terms of the PlugShare Agreement, none of which was contingent upon future financial results.

~~Table of Contents~~

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

Three Months Ended

Six Months Ended
(in thousands)

June 30, 2021

June 30, 2021
Pro forma revenue

$
5,204

$
9,709
Pro forma net loss

$
(21,364)

$
(38,845)

The above unaudited pro forma results have been calculated by combining the historical results of the Company and PlugShare, as if the acquisition had occurred as of the beginning of the earliest period presented in the Company’s condensed consolidated financial statements and exclude the impact of acquisition-related expenses. The pro forma table above also includes estimates for additional depreciation, amortization and accretion related to the fair values of property, plant and equipment, intangible assets, capital build liability, and asset retirement obligations that were included as the basis of those assets acquired and liabilities assumed in the business acquisition. Pro forma net loss was adjusted to exclude acquisition-related costs incurred during the periods presented. No other material pro forma adjustments were deemed necessary. The pro forma financial information is not necessarily indicative of the results that would have been achieved had the transactions occurred on the date indicated or that may be achieved in the future.statements.

Note 43 – Revenue Recognition

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


	Three Months Ended				Six Months Ended				Three Months Ended
	June 30,		June 30,		June 30,		June 30,		March 31,
(in thousands)	2022		2021		2022		2021		2023		2022
Charging revenue, retail	$	4,389	$	2,498	$	7,891	$	4,302	$	6,615	$	3,502
Charging revenue, commercial										1,715		709
Charging revenue, OEM		189		150		340		482		552		151
Charging revenue, commercial		654		546		1,363		1,037
Regulatory credit sales										1,215		1,378
Network revenue, OEM		887		275		1,377		807		2,699		490
eXtend revenue										10,292		80
Ancillary revenue		829		639		2,299		1,043		2,212		1,390
Regulatory credit sales		2,128		675		3,506		1,243
Total revenue	$	9,076	$	4,783	$	16,776	$	8,914	$	25,300	$	7,700

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


	June 30,		December 31,		March 31,		December 31,		Change
(in thousands)	2022		2021
(dollars in thousands)					2023		2022		$		%
Contract assets	$	536	$	32	$	—	$	2,861	$	(2,861)	(100)	%
Contract liabilities	$	35,763	$	38,445	$	74,537	$	57,790	$	16,747	29	%

~~The following table provides~~There were no contract assets as of March 31, 2023 compared to $2.9 million as of December 31, 2022 which was driven by the ~~activity for contract~~difference between the timing of when revenue is recognized from performance obligations satisfied in the current reporting period and when amounts are invoiced to the customer. Contract liabilities ~~during~~as of March 31, 2023 increased $16.7 million, or 29%, to $74.5 million compared to $57.8 million as of December 31, 2022 due to receipt of cash payments partially offset by the ~~period presented:~~satisfaction of performance obligations.

Six Months Ended

June 30,
(in thousands)

2022
Balance as of December 31, 2021

$
38,445
Additions

860
Recognized in revenue

(2,814)
Marketing activities

(728)
Balance as of June 30, 2022

$
35,763

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


(in thousands)
Balance as of December 31, 2022	$	57,790
Additions		27,471
Recognized in revenue		(10,654)
Marketing activities recognized on a net basis		(70)
Balance as of March 31, 2023	$	74,537

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


	Three Months Ended
	March 31,
(in thousands)	2023		2022
Amounts included in the beginning of period contract liability balance	$	4,000	$	1,202
Amounts associated with performance obligations satisfied in previous periods	$	25	$	5

It is anticipated that deferred revenue ~~excluding variable consideration allocated entirely to wholly unsatisfied performance obligations,~~ as of ~~June 30, 2022~~March 31, 2023 will be recognized for the ~~years~~following periods ending December 31, as follows:


(in thousands)
2022	$	849
2023		1,261	$	18,978
2024		836		10,636
2025		9		14,371
2026				7,164
	$	2,955	$	51,149

ASC 606 does not require disclosure of ~~and the table above does not include,~~ the transaction price ~~allocated~~ to remaining performance obligations if the contract contains variable consideration allocated entirely to a wholly unsatisfied performance obligation. Under many customer contracts, each unit of product represents a separate performance obligation and therefore future volumes are wholly unsatisfied and thus disclosure of the transaction price allocated to a wholly unsatisfied performance obligations is not required. Under these contracts, variability arises as both volume and pricing are not known until the product is delivered. As of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, there was ~~$23.3~~$10.6 million and ~~$22.9~~$8.7 million, respectively, in variable consideration for wholly unsatisfied performance obligations, which is included in deferred revenue on the condensed consolidated balance sheets.

Note 54 – Lease Accounting

As disclosed in Note 2, the Company adopted ASC 842 as of January 1, 2022. As a lessee, the Company enters into agreements with various Site Hosts, which allow the Company to lease space to operate the charging stations on their property, and with various parties to lease its office and laboratory space. The Company, at the inception of the contract, determines whether a contract is or contains a lease. For leases with an initial contractual term in excess of 12 months, the Company records the related operating or finance right-of-use asset and lease liability. Some leases also include renewal and/or early termination options, which can be exercised under specific conditions. Renewal and termination options are not included in the measurement of the right-of-use assets and lease liabilities unless the Company is reasonably certain to exercise the options.

The Company’s lease agreements primarily require lease payments based on a minimum annual rental amount, a percentage of annual sales volume, periodic adjustments related to inflation or a combination of such lease payments. In addition to minimum lease payments, the Company’s lease agreements may contain variable lease payments based on revenue sharing or inflation adjustments. The Company has elected the practical expedient to not separate non-lease components from lease components in the measurement of liabilities for all asset classes. Lease liabilities are recognized at the present value of the fixed lease payments using an implicit rate and, if not available, an incremental borrowing rate based on estimated collateralized borrowings available to the Company. The Company incurs initial direct costs and receives landlord incentives that increase or decrease the calculated right-of-use asset, respectively. The Company recognizes lease expense for operating leases on a straight-line basis over the lease term. The Company expenses variable lease payments as incurred. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company has not entered into any finance leases.

As a lessor, the Company has entered into agreements to lease charging equipment, charging stations and other technical installations or sublease properties leased from Site Hosts to third parties. The Company, at the inception of a lease contract, determines if it is an operating, sales-type or direct financing lease. The leases provide for fixed monthly payments and sometimes include provisions for contingent variable rent based on the number of charging sessions and minutes used, which are recognized when earned. Fixed payments received under lease agreements for operating leases are recognized on a straight-line basis over the lease term and are reported in revenue in the condensed consolidated statements of operations and comprehensive income (loss).

~~Table of Contents~~

Lessee Accounting

The Company has entered into agreements with Site Hosts, which allow the Company to operate ~~the~~ charging stations on the Site Hosts’ property. Additionally, the Company leases offices, off-site charging hubs, a warehouse and laboratory space under agreements with third-party landlords. The agreements with the Site Hosts and landlords are deemed to be operating ~~leases and contain~~leases. Original lease terms ~~ranging~~generally range from one to ~~11 years. Certain~~15 years and generally leases contain renewal options that can extend the term for up to an additional ~~one~~ ~~to 10~~five years. The Company has not entered into any finance leases.

The Company has estimated operating lease commitments of ~~$56.5~~$49.2 million for leases where the Company has not yet taken possession of the underlying asset as of ~~June 30, 2022.~~March 31, 2023. As such, the related operating lease right-of-use assets and operating lease liabilities have not been recognized in the Company’s condensed consolidated balance sheet as of ~~June 30, 2022.~~

~~For the three and six months ended June 30, 2022, the Company’s lease costs consisted of the following:~~

Three

Six

Months Ended

Months Ended

June 30,

June 30,
(in thousands)

2022

2022
Operating lease costs¹

Cost of sales

$
730

$
1,091
Selling, general and administrative expenses

607

1,280
Variable lease costs

Cost of sales

97

187
Selling, general and administrative expenses

15

36
Short-term lease costs

32

44

$
1,481

$
2,638

¹~~Rental expense for operating leases was $0.6 million and $1.1 million for the three and six months ended June 30, 2021, respectively.~~

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

(in thousands)

2022

$
2,786
2023

6,361
2024

5,746
2025

4,849
2026

4,430
2027

3,755
Thereafter

14,616
Total undiscounted operating lease payments

42,543
Less: imputed interest

(9,775)
Total discounted operating lease liabilities

$
32,768

2023.

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~~The following table shows future minimum payments under noncancellable operating leases with initial terms of greater than one year, based on~~For the ~~expected due dates~~three months ended March 31, 2023 and 2022, the Company’s lease costs consisted of the ~~various installments as of December 31, 2021, as previously reported in the Company’s Annual Report, prior to the adoption of ASC 842:~~following:

(in thousands)

2022

$
3,486
2023

3,515
2024

2,987
2025

2,093
2026

1,767
Thereafter

5,570

$
19,418


	Three Months Ended
	March 31,
(in thousands)	2023		2022
Operating lease costs
Cost of sales	$	1,319	$	361
General and administrative expenses		1,219		673
Variable lease costs
Cost of sales		39		90
General and administrative expenses		36		21
Short-term lease costs		33		12
	$	2,646	$	1,157

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


(in thousands)
2023	$	7,386
2024		9,685
2025		8,798
2026		8,305
2027		7,667
Thereafter		38,613
Total undiscounted operating lease payments		80,454
Less: imputed interest		(26,630)
Total discounted operating lease liabilities	$	53,824

Other supplemental and cash flow information, ~~as of June 30,~~for the three months ended March 31, 2023 and 2022, consisted of the following:


	~~June 30,~~
	~~2022~~
~~Weighted-average remaining lease term~~	~~8.0 years~~
~~Weighted-average discount rate~~		~~6.41~~	%

~~Other supplemental cash flow information, for the six months ended June 30, 2022, consisted of the following:~~


	Six		Three Months Ended
	Months Ended		March 31,
	June 30,
(in thousands)	2022
(dollars in thousands)			2023			2022
Weighted-average remaining lease term (in years)				8.9			7.6
Weighted-average discount rate				9.16	%		5.71	%
Cash paid for amounts included in measurement of operating lease liabilities	$	2,378	$	1,849		$	910
Right-of-use assets obtained in exchange for new operating lease liabilities	$	15,651	$	3,409		$	5,008

Lessor Accounting

The Company leases charging equipment, charging stations and other technical installations and subleases properties leased from Site Hosts to third parties under operating leases where EVgo is the lessor. Initial lease terms are generally ~~five~~one to 10five years with renewal options.

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

~~For the three and six months ended June 30, 2022, the Company’s lease income consisted of the following components:~~

Three

Six

Months Ended

Months Ended

June 30,

June 30,
(in thousands)

2022

2022
Operating lease income:

Fixed lease income

$
203

$
464
Variable lease income

128

298
Total lease income¹

$
331

$
762

¹~~Lease income was $0.1 million and $0.5 million for the three and six months ended June 30, 2021, respectively.~~sheets.

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~~As of June 30, 2022, future minimum rental payments due to the Company as lessor under operating leases (including subleases) for the fiscal years ending December 31, are as follows:~~

(in thousands)

2022

$
242
2023

485
2024

485
2025

485
2026

242

$
1,939

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

June 30,
(in thousands)

2022
Charging station equipment and construction costs

$
2,512
Less: accumulated depreciation

(346)

$
2,166

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


	Three Months Ended
	March 31,
(in thousands)	2023		2022
Operating lease income:
Fixed lease income	$	458	$	261
Sublease income		267		170
Total lease income	$	725	$	431

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


(in thousands)
2023	$	1,971
2024		1,618
2025		663
2026		242
	$	4,494

The components of charging equipment, charging stations, land, and subleased host sites leased to third parties under operating leases, which are included within the Company’s property, equipment and software, net, and operating lease right-of-use-assets were as follows as of March 31, 2023 and December 31, 2022:


	March 31,		December 31,
(in thousands)	2023		2022
Charging station equipment and construction costs	$	3,558	$	3,557
Land and building		10,507		10,507
Less: accumulated depreciation		(1,094)		(980)
Property, equipment and software, net	$	12,971	$	13,084

Operating lease right-of-use assets	$	5,357	$	5,554

Note 65 – Property, Equipment and Software, Net

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

June 30,

December 31,
(in thousands)

2022

2021
Construction in process

$
70,129

$
39,116
Charging equipment

12,975

8,611
Charging station equipment

59,017

42,799
Charging station installation costs

91,653

63,932
Software

11,323

5,295
Office equipment, vehicles and other

1,121

846

246,218

160,599
Less accumulated depreciation and amortization

(37,129)

(27,317)
Total property, equipment and software, net

$
209,089

$
133,282

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



	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,		March 31,		December 31,
(in thousands)	2022		2021		2022		2021		2023		2022
Cost of sales
Depreciation of property and equipment	$	5,367	$	3,538	$	9,985	$	6,781
Amortization of capital-build liability		(1,266)		(833)		(2,430)		(1,629)
General and administrative expenses
Depreciation of property and equipment		69		44		132		78
Amortization of software		660		—		1,121		—
	$	4,830	$	2,749	$	8,808	$	5,230
Charging station installation costs									$	138,764	$	121,820
Construction in process										120,011		104,395
Charging station equipment										92,068		79,031
Charging equipment										42,610		20,596
Land and building										15,932		15,932
Software										14,590		14,289
Office equipment, vehicles and other										1,769		1,647
Total property, equipment and software										425,744		357,710
Less accumulated depreciation and amortization										(58,549)		(49,598)
Property, equipment and software, net									$	367,195	$	308,112

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


	Three Months Ended
	March 31,
(in thousands)	2023		2022
Cost of sales
Depreciation of property and equipment	$	7,971	$	4,618
Amortization of capital-build liability		(1,629)		(1,164)
General and administrative expenses
Depreciation of property and equipment		126		63
Amortization of software		1,215		461
Impairment expense		3,433		534
Loss on disposal of property and equipment, net of insurance recoveries		27		274
	$	11,143	$	4,786

Note 76 – Intangible Assets, Net

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


	June 30, 2022							March 31, 2023
							Remaining							Remaining
							Weighted							Weighted
	Gross				Net		Average	Gross				Net		Average
	Carrying		Accumulated		Carrying		Amortization	Carrying		Accumulated		Carrying		Amortization
(in thousands)	Amount		Amortization		Value		Period	Amount		Amortization		Value		Period
Trade name	$	5,000	$	(693)	$	4,307	14.0 years
Site Host relationships		41,500		(8,506)		32,994	9.6 years	$	41,500	$	(11,100)	$	30,400	8.8 years
Customer relationships		19,000		(10,048)		8,952	2.3 years		19,000		(13,112)		5,888	1.5 years
Developed technology		14,000		(2,150)		11,850	12.0 years		14,000		(2,905)		11,095	11.3 years
User base		11,000		(2,683)		8,317	3.1 years		11,000		(4,746)		6,254	2.3 years
Trade name									5,000		(929)		4,071	13.3 years
	$	90,500	$	(24,080)	$	66,420		$	90,500	$	(32,792)	$	57,708

Amortization of intangible assets was $2.9 million for each of the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 and ~~2021 was as follows:~~

Three Months Ended

Six Months Ended

June 30,

June 30,

June 30,

June 30,
(in thousands)

2022

2021

2022

2021
Amortization of intangible assets

$
2,903

$
2,148

$
5,807

$
4,295

2022.

Note 87 – Asset Retirement Obligations

Asset retirement obligations represent the present value of the estimated costs to remove the commercial charging stations and restore the sites to the condition prior to installation. The Company reviews estimates of removal costs on an ongoing basis.

~~Accretion expense~~ Asset retirement obligation activity for the three ~~and six~~ months ended ~~June 30, 2022 and 2021~~March 31, 2023 was as follows:

Three Months Ended

Six Months Ended

June 30,

June 30,

June 30,

June 30,
(in thousands)

2022

2021

2022

2021
Accretion expense

$
499

$
354

$
958

$
683

~~Asset retirement obligation activity for the six months ended June 30, 2022 was as follows:~~


	Six Months Ended
(in thousands)	June 30, 2022
Beginning balance	$	12,833
Balance as of December 31, 2022			$	15,473
Liabilities incurred		3,111		1,391
Accretion expense		958		539
Change in estimate		(51)		(14)
Liabilities settled		(577)		(18)
Ending balance	$	16,274
Balance as of March 31, 2023			$	17,371

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Note 98 – Commitments and Contingencies

Pilot Infrastructure Agreement

On July 5, 2022, EVgo entered into a charging infrastructure agreement (the “Pilot Infrastructure ~~Agreement)~~Agreement”) and an operations and maintenance agreement (the “Pilot O&M”) with Pilot Travel Centers LLC ~~(“Pilot~~(the “Pilot Company”) and General

~~Table of Contents~~

Motors LLC (“GM”) to build, operate, and maintain up to 2,000 stalls served by DC chargers that the Pilot Company will own. The stalls will be located at ~~approximately 500~~the Pilot Company sites across ~~more than 40 states.~~

the U.S.

Pursuant to the Pilot Infrastructure Agreement, EVgo is required to meet certain construction milestones measured by the number of sites commissioned, and the Pilot Company is required to make certain payments each month based on completion of pre-engineering and development work, the progress of construction at each site and for each charger procured by EVgo. Subject to extensions of time for specified excusable events, if EVgo is unable to meet its commissioning obligations, the Pilot Company will be entitled to liquidated damages calculated per day, subject to a cap of $30,000 at each site. The Pilot Infrastructure Agreement contains various provisions that may permit or cause early termination, including ~~Pilot’s~~the Pilot Company’s right to terminate after 1,000 stalls have been completed, the inability of EVgo to secure certain chargers and a material increase in the price of chargers due to a change in law. If the Pilot Company elects to terminate the Pilot Infrastructure Agreement after 1,000 stalls have been completed, the Pilot Company must pay EVgo a termination fee per stall for those not built; such fee varies based on the number of stalls already built. If EVgo is wholly or partially unable to perform its obligations under the Pilot Infrastructure Agreement due to certain circumstances outside its control, including delays by permitting authorities and utilities or certain force majeure events, such inability will not be considered a breach or default under the Pilot Infrastructure Agreement.

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

Delta Charger Supply Agreement and Purchase Order

On July 12, 2022, EVgo entered into a General Terms and Conditions for Sale of EV Charger Products (the “Delta Charger Supply Agreement”) with Delta Electronics, Inc. (“Delta”), including an initial purchase order (the “Purchase Order”), pursuant to which EVgo will purchase and Delta will sell EV chargers manufactured by Delta in specified quantities at certain delivery dates. EVgo expects to use a portion of the chargers purchased under the Purchase Order to meet the requirements of the Pilot Infrastructure Agreement. EVgo is required to purchase a minimum of 1,000 chargers ~~(which will enable the construction of 2,000 stalls)~~ from Delta under the Purchase Order and may, at EVgo’s election, increase the number of chargers it purchases from Delta to 1,100.

~~Nissan Agreements~~

~~EVgo has executed two program services agreements with Nissan North America, Inc. (“Nissan”).~~These agreements provide for a capital build program, joint marketing activities and charging credit programs for purchasers or lessees of Nissan EVs. Under the joint-marketing activities provisions of the first agreement (the “Nissan Agreement”), EVgo was to spend a specified amount annually on joint-marketing activities that were mutually agreed-upon with Nissan. Credits for charging were allocated annually to purchasers or lessees of Nissan EVs and allowed each participant to charge their vehicle for 12 to 24 months at no charge to the participant, up to the amount of the charging credit allocated to such participant. In the event a participant did not use the entire amount of its charging credit within 12 or 24 months, a portion of the remaining dollar value of such credit rolled over to subsequent periods and a portion was retained by the Company.

Under the terms of the Nissan Agreement, purchasers or lessees of Nissan LEAF EVs in certain markets could receive charging services at an EVgo station or a participating third-party charging station. Pursuant to the Nissan Agreement, the Company was required to support, maintain and make available at least 850 chargers through July 7, 2021. The Company fulfilled all build, support and maintenance obligations under the Nissan Agreement.

On June 13, 2019, EVgo entered into a second agreement with Nissan (the “Nissan 2.0 Agreement”). The Nissan 2.0 Agreement includes a capital-build program requiring the Company to install, operate and maintain public, high-power dual-standard chargers in specified markets pursuant to a schedule that outlines the build timelines for the chargers to be constructed (the “Build Schedule”). Under the terms of the Nissan 2.0 Agreement, the Build Schedule is negotiated at the beginning of each year. In 2021, EVgo worked with Nissan to revise the annual Build Schedule to extend the milestone dates. All chargers for each program year must be installed by November 30. Furthermore, Nissan waived penalties for installation delays in program year one.

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EVgo’s ability to meet Build Schedule obligations may be impacted by delays in permitting, slower than expected third-party approvals of certain site acquisitions, delays in utility interconnection resulting from industry adaptation to the requirements of high-powered charger installation, as well as supply chain issues. Going forward, EVgo is uncertain if these, or other potential issues in the procurement, installation, or energization of DCFC, will be resolved in a timely fashion. At this time, EVgo’s ability to meet future Build Schedule obligations may continue to be impacted by circumstances similar to those experienced during the first half of 2021, or other potential issues including, but not limited to, equipment design and procurement, timing of third-party funding agreements, and the siting, permitting, construction, energizing of DCFC or delays in releasing public grant funding.

The contract is accounted for under ASC 606, which includes performance obligations related to memberships, charging credits and joint marketing activities. The capital-build program is considered a set-up activity and not a performance obligation under ASC 606. Nissan has the right to terminate the Nissan 2.0 Agreement, without penalty or obligation of any kind, upon 30 days’ written notice if it is unable to secure funding to make payments required under the Nissan 2.0 Agreement. Nissan receives budget approvals annually from Nissan Motor Company Limited. As of June 30, 2022, Nissan has fulfilled its annual payment obligations under the Nissan 2.0 Agreement. If Nissan terminates the Nissan 2.0 Agreement due to a lack of funding, EVgo will still be required to perform the following: (i) meet charger installation milestones through the date of termination; (ii) provide an aggregate of $1.6 million in joint marketing activities and (iii) provide $4.8 million worth of charging credits that shall continue to be administered.

Pursuant to the Nissan 2.0 Agreement, as modified by the aforementioned extension and other amendments, EVgo is required to install an aggregate of 210 chargers by February 29, 2024 at a number of sites to be mutually agreed upon during each Build Schedule. Pursuant to the current Build Schedule, EVgo is required to install 58 chargers by November 30, 2022. If the Company fails to meet future Build Schedule obligations, Nissan may invoke a penalty of up to $70,000 per delayed site beyond a designated cure period, up to 52 sites, which would result in an adjustment to the consideration received for the Company’s performance obligations under the Nissan 2.0 Agreement.

General Motors Agreement

On July 20, 2020, EVgo entered into a five-year contract ~~(the~~with GM (as amended from time to time, the “GM Agreement”) ~~with GM~~ to build ~~2,750~~ fast ~~chargers~~charger stalls that EVgo will own and operate as part of the Company’s public network. ~~On November 2, 2021, EVgo entered into an amendment agreement with~~The GM ~~in order~~Agreement has been amended several times to ~~adjust stall installation targets and~~ expand the overall number of ~~chargers~~charger stalls to be installed from 2,750 to 3,250, adjust charger stall installation targets, extend the completion deadline to March 31, 2026, and provide for a payment of $7,000,000 in December 2022 in exchange for EVgo’s agreement to apply certain branding decals on the fast ~~chargers. EVgo believes this agreement will serve~~chargers funded by GM pursuant to ~~accelerate~~ the ~~Company’s development plans~~GM Agreement and ~~enhance customer acquisition and brand equity among retail drivers.~~maintain a specified uptime percentage (described below) over the term of the agreement. Pursuant to the GM Agreement, EVgo is required to meet certain quarterly milestones measured by the number of charger stalls installed, and GM is required to make certain payments based on ~~chargers~~charger stalls installed.

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Under the GM Agreement, EVgo is required to install a total of 3,250 ~~chargers~~charger stalls by ~~December~~March 31, ~~2025, 72%~~2026, 44% of which are required to be installed by December 31, 2023. Meeting these milestones will require additional funds beyond the amounts committed by GM, and EVgo may face delays in construction, ~~commission~~commissioning or aspects of installation of the ~~chargers~~charger stalls the Company is obligated to develop. EVgo is also required to maintain network availability (i.e., the percentage of time a charger is operational and available on the network) of at least ~~93%.~~95% across the GM network. In addition to the ~~capital build~~capital-build program, EVgo is committed to providing ~~a certain number of new~~ GM EV ~~cars~~customers with ~~an EVgo charging credit~~reservations and ~~limited time access to other~~certain EVgo services at a discounted ~~rate.~~rate and branding on chargers. The contract is accounted for under ASC 606, which includes performance obligations related to reservations, memberships, and branding. The capital-build program is considered a set-up activity and not a performance obligation under ASC 606.

The GM Agreement is subject to early termination in certain circumstances, including in the event EVgo fails to meet the quarterly ~~charger-installation~~charger stall-installation milestones or maintain the specified level of network availability. If GM opts to terminate the agreement, EVgo may not be entitled to receive continued payments from GM and instead may be required to pay liquidated damages to GM. In the event EVgo fails to meet a ~~charger-installation~~charger stall-installation milestone or maintain the required network availability in a calendar quarter, GM has the right to provide EVgo with a notice of such deficiency within 30 days of the end of the quarter. If the same deficiency still exists at the end of the quarter immediately following the quarter for which a deficiency notification was delivered, GM may immediately terminate the agreement and seek pre-agreed liquidated damages of up to $15.0 million.

As of June 30, 2022, there were approximately 2,615 stalls that had been approved by GM, of which approximately 3,100 stalls were already in the active engineering and construction development pipeline. As of June 30, 2022,If EVgo ~~had~~

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~~221 stalls left to install in order to~~does not meet its ~~charger-installation milestone. EVgo is required to open to the public 428 additional stalls by September 30, 2022 or~~charger stall-installation milestone in any period, GM will have the right, if it so chooses, to send EVgo a charger stall count breach notice, which would trigger a cure ~~period through December 31, 2022.~~period. It is possible that EVgo ~~may~~will not meet the ~~charger-installation~~charger stall-installation milestones under the GM Agreement in the future, particularly as a consequence of delays in permitting, commissioning and utility interconnection ~~resulting from~~including delays associated with the COVID-19 ~~and supply chain disruptions in business operations across the utility, engineering and permitting chain,~~pandemic, as well as industry and regulatory adaptation to the requirements of high-powered charger installation, including slower than expected third-party approvals ~~between~~of certain site acquisitions and site plans by utilities and landowners, ~~of sites where charger stations will be located.~~and supply chain issues.

NissanAgreements

EVgo executed an agreement with Nissan North America, Inc. (“Nissan”) in June 2019 (the “Nissan Agreement”), that provides for joint marketing activities, charging credit programs for purchasers or lessees of Nissan EVs, and a capital-build program. The Nissan Agreement has been amended several times, including most recently in the fourth quarter of 2022 (the “Nissan Amendment”) to, among other things, adjust the allocation of the value of unused charging credits and to provide new offerings for purchasers or lessees of certain Nissan EV models. Under the joint-marketing activities provisions of the Nissan Agreement, EVgo is obligated to spend a specified amount annually on joint-marketing activities that are mutually agreed-upon with Nissan. Under the charging credit program provisions in the Nissan Agreement, credits for charging are allocated to purchasers or lessees of Nissan EVs, and such purchasers or lessees are permitted to charge their EV for 12 months at no charge to the participant, up to the amount of the charging credit allocated to such participant or on an unlimited basis, depending on the model of Nissan EV purchased or leased. In the event a participant does not use the entire amount of the allocated charging credit or if the annual charging credit pool is not exhausted within a specific period, a portion of the remaining dollar value of such credit rolls over to subsequent periods, and a portion is retained by the Company. For Nissan EV purchasers or lessees receiving unlimited charging, the Company receives an upfront activation fee for each purchaser or lessee as well as a usage-based fee. The capital-build program provided for in the Nissan Agreement requires the Company to install, operate and maintain public, high-power dual-standard chargers in specified markets pursuant to a schedule that outlines the build timelines for the chargers to be constructed (the “Build Schedule”). If the Company fails to meet its Build Schedule obligations, Nissan may invoke a penalty of up to $70,000 per delayed site beyond a designated cure period, which could result in an adjustment to the consideration received by the Company under the Nissan Agreement. EVgo and Nissan previously agreed to amend the Nissan Agreement to extend the installation deadlines under the Build Schedule by up to 12 months, and Nissan has waived penalties for installation delays relating to program year one. The contract is accounted for under ASC 606, which includes performance obligations related to memberships, charging credits and joint marketing activities. The capital-build program is considered a set-up activity and not a performance obligation under ASC 606.

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EVgo’s ability to meet its Build Schedule obligations may be impacted by delays in permitting, commissioning and utility interconnection, including delays associated with the COVID-19 pandemic, as well as industry and regulatory adaptation to the requirements of high-powered charger installation, including slower than expected third-party approvals of certain site acquisitions and site plans by utilities and landowners, and supply chain issues.

Nissan has the right to terminate the Nissan Agreement, without penalty or obligation of any kind, upon 30 days’ written notice if it is unable to secure funding to make payments required under the Nissan Agreement. Nissan receives budget approvals annually from Nissan Motor Company Limited. Nissan has fulfilled its annual payment obligations under the Nissan Agreement.

Legal Proceedings

In the ordinary course of the Company’s business, the Company may be subject to lawsuits, investigations, claims and proceedings, including, but not limited to, contractual disputes orwith vendors and customers and liabilities related to employment, health and safety matters. ~~Although~~The Company accrues for losses that are both probable and reasonably estimable. Loss contingencies are subject to significant uncertainties and, therefore, determining the ~~outcome~~likelihood of a loss and/or the measurement of any ~~potential future~~loss can be complex and subject to change.

Contingent liabilities arising from ordinary course litigation ~~is uncertain,~~are not expected to have a material adverse effect on the ~~Company believes it has adequate insurance coverage in the event of any future litigation or disputes. Although the Company is not currently facing any material pending or threatened litigation,~~Company’s financial position. However, future events or circumstances, currently unknown to management, may potentially have a material effect on ~~its~~the Company’s financial position, liquidity or results of operations in any future reporting period.

~~Note 10 – Related Party Transactions~~Purchase Commitments

~~Receivable from Related Party~~

As of ~~December~~March 31, ~~2021, the Company~~2023, EVgo had ~~a $1.5~~$66.0 million ~~receivable from~~in outstanding purchase order commitments to EVgo’s contract manufacturers and component suppliers for charging equipment, all of which were short-term. In certain instances, EVgo ~~Holdings for its indemnification relating~~is permitted to ~~a matter settled between SAF Partners II, LLC and EV Holdings Investments, LLC on January 14, 2022.~~

~~Payables to Related Parties~~

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

~~Note Payable, Related Party~~

On January 16, 2020, EVgo Services entered into the Secured Demand Grid Promissory Note (“Demand Note”) with EVgo Holdings whereby EVgo Services funded the operations of EVgo Holdco with loans upon request at an interest rate of the Federal Reserve discount rate plus 7.0% (compounded annually) with a maturity date of January 16, 2027. The Demand Note was secured by the assets of EVgo Holdco and did not have a stated credit limit. Interest expense incurred was $1.0 million and $1.9 million for the three and six months ended June 30, 2021, respectively. On July 1, 2021, the outstanding balance of the Demand Note (including accrued interest of $1.9 million) of $59.6 million was converted to equity of EVgo Services, which was contributed by EVgo Holdings to EVgo Holdco immediately thereafter in connection with the CRIS Business Combination.

~~Consulting Services~~

LS Power Equity Advisors, LLC provides consulting and corporate development services to the Company from time to time. There were 0 such services rendered during the three and six months ended June 30, 2022. The Company recorded $0.5 million and $1.2 million for consulting and corporate development services rendered by LS Power Equity Advisors, LLC to general and administrative expenses in the condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2021, respectively.

~~Low Carbon Fuel Standards~~

The Company may enter into agreements to facilitate the purchase and sale of California Low Carbon Fuel Standard Credits (“LCFS”) with a subsidiary of LS Power at prevailing market prices. For the three and six months ended June 30, 2022 and the three months ended June 30, 2021, there was 0 regulatory credit income recognized from related parties.

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For the six months ended June 30, 2021, the Company recognized $0.6 million of such regulatory credit income, which is included in revenue from related party in the condensed consolidated statement of operations and comprehensive income (loss).cancel, reschedule or adjust these orders.

Note 119 – 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 table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicates the level within the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value as of ~~June 30,~~March 31, 2023 and December 31, 2022:

Adjusted

Unrealized

Unrealized

Fair
(in thousands)

Level

Cost Basis

Gains

Losses

Value
Assets

Cash equivalents:

Commercial paper

2

$
3,112

$
—

$
—

$
3,112
Corporate debt securities

2

1,258

—

—

1,258
Total cash equivalents

4,370

—

—

4,370
Short-term investments:

Certificates of deposit

2

3,279

—

(20)

3,259
Commercial paper

2

1,611

—

—

1,611
U.S. government treasury securities

2

5,999

—

(32)

5,967
Corporate debt securities

2

17,026

1

(88)

16,939
Total short-term investments

27,915

1

(140)

27,776
Long-term investments:

Corporate debt securities

2

5,265

—

(35)

5,230
Asset-backed securities

2

1,575

—

(8)

1,567
Total long-term investments

6,840

—

(43)

6,797
Total

$
39,125

$
1

$
(183)

$
38,943

~~The following table presents the fair value and net carrying amount of debt securities by contractual maturity as of June 30, 2022:~~

Adjusted

Fair
(in thousands)

Cost Basis

Value
Due within one year

$
32,285

$
32,146
Due after one year through five years

6,840

6,797
Total

$
39,125

$
38,943

The Company’s available-for-sale debt securities are valued using the representative “bid” quotation for long positions and “ask” quotation for short positions from independent, third-party pricing services. These prices are generally based on bid/ask data from exchanges or trading systems, recent transactions from exchanges or trading systems, or quotes from market makers and dealers. This is categorized as Level 2 in the fair value hierarchy.


	March 31,			December 31,
	2023			2022
(in thousands)	Level	Balance		Level	Balance
Cash equivalents
Money market funds	1	$	125,125	1	$	150,125
Liabilities
Earnout liability	3	$	3,793	3	$	1,730
Warrant liability – Public Warrants	1		15,399	1		10,164
Warrant liability – Private Placement Warrants	3		3,285	2		2,140
Total liabilities		$	22,477		$	14,034

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The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis and indicates the level within the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value as of June 30, 2022:

June 30,
(in thousands)

Level

2022
Earnout liability

3

$
2,584
Warrant liability – Public Warrants

1

$
18,686
Warrant liability – Private Placement Warrants

2

$
3,935

The earnout liability was valued using a Monte Carlo simulation methodology. Assumptions used in the valuation of the earnout liability are as follows:


	March 31,
	2023
Stock price	$	7.79
Risk-free interest rate		3.75	%
Expected term (in years)		2.5
Expected volatility		100	%
Dividend rate		—	%

The warrants are accounted for as liabilities in accordance with ASC 815,Derivatives and Hedging, and are presented as warrant liabilities on the condensed consolidated balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant ~~liability~~liabilities in the condensed consolidated statements of ~~operations and comprehensive income (loss).~~operations. The close price of the Public Warrants was used as ~~the~~its fair value as of each ~~reporting~~relevant date.

As of March 31, 2023, the ~~June 30, 2022~~ ~~and~~Private Placement Warrants were valued using a Monte Carlo simulation methodology, which is considered a Level 3 fair value measurement. As of December 31, ~~2021, the carrying values of certain accounts such as accounts receivable, accounts payable and accrued expenses are deemed to approximate their~~2022, the fair ~~values due to their short-term nature. There were no assets measured on a recurring basis using significant unobservable inputs (Level 3) as of June 30, 2022 or December 31, 2021. There were 0~~ ~~othertransfersbetween~~ ~~levels~~value of the ~~hierarchy for~~Private Placement Warrants was measured by reference to the ~~six months ended June 30, 2022.~~trading price of the Public Warrants, which is considered a Level 2 fair value measurement. Assumptions used in the valuation of the Private Placement Warrant liability are as follows:


	March 31,
	2023
Stock price	$	7.79
Risk-free interest rate		3.78	%
Expected term (in years)		3.3
Expected volatility		33	%
Dividend rate		—	%
Exercise price	$	11.50

The following table presents a reconciliation for all liabilities measured and recognized at fair value on a recurring basis using significant unobservable inputs (Level 3) for the ~~six~~three months ended ~~June 30, 2022:~~March 31, 2023:


	Private				Private
	Placement				Placement
	Warrant		Earnout		Warrant		Earnout
(in thousands)	Liability		Liability		Liability		Liability
Fair value as of December 31, 2021	$	8,847	$	5,211
Fair value as of December 31, 2022					$	—	$	1,730
Change in fair value of liability		(4,912)		(2,627)		—		2,063
Transfers out of Level 3		(3,935)		—
Fair value as of June 30, 2022	$	—	$	2,584

Net change in unrealized gain (loss) for investments still held at June 30, 2022	$	—	$	(2,627)
Transfers into Level 3						3,285		—
Fair value as of March 31, 2023					$	3,285	$	3,793

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

The carrying values of certain accounts such as accounts receivable, accounts payable and accrued expenses are deemed to approximate their fair values due to their short-term nature. The fair ~~value~~values of the ~~Private Placement Warrants issued was initially~~Company’s money market funds are based on quoted prices in active markets for identical assets. There were no assets measured on a recurring basis using ~~a Monte Carlo simulation model. The fair value of the Private Placement Warrants was measured~~significant unobservable inputs (Level 3) as of ~~June 30, 2022 by reference to the trading price of the Public Warrants, which is considered to be a Level 2 fair value measurement.~~March 31, 2023 or December 31, 2022.

~~Earnout Liability~~

The estimated fair value of the 1,437,500 shares of Class A common stock held by the Company’s initial stockholders that are subject to potential forfeiture (the “Earnout Shares”) issued and outstanding at the closing of the CRIS Business Combination on the CRIS Close Date was $18.3 million based on a Monte Carlo simulation valuation model using a distribution of potential outcomes on a monthly basis over the earnout period between the CRIS Close Date and the five-year anniversary of the CRIS Close Date using the most reliable information available. On July 2, 2021, the volume-weighted average price (“VWAP”) of shares of Class A common stock equaled or exceeded $12.50 for 20 trading days within a 30-trading day period within five years of the CRIS Close Date and, as a result, 718,750 Earnout Shares valued at $10.9 million were deemed to be earned and reclassified into equity on that date. The estimated fair value of the earnout liability related to the 718,750 Earnout Shares subject to a VWAP of $15.00 (the “$15.00 Triggering Event”) originally valued at $8.8 million was remeasured to $5.2 million as of December 31, 2021 and to $2.6 million as of June 30, 2022.

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

June 30,

2022
Stock price

$
6.01

Risk-free interest rate

3.00
%
Expected term

3.4 years

Expected volatility

80.0
%
Dividend rate

—
%

Note 1210 – Income Taxes

The Company’s provision for income taxes consists primarily of income taxes inrelated to federal and state jurisdictions where ~~EVgo OpCo and its subsidiaries conduct~~ business ~~that are incurred by the Company as a result of~~is conducted related to the Company’s ownership ~~interest~~ in EVgo OpCo. All income (loss) before income taxes is generated in the U.S. For the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ the Company’s provision for income taxes and effective tax ~~rate~~rates were ~~deemed~~de minimis primarily due to ~~be de minimis.~~the Company’s full valuation allowance on its deferred tax assets and a significant portion of income (loss) being allocated to a nontaxable partnership. Prior to July 1, 2021, ~~EVgo Holdco and its subsidiaries were~~the Company was not a taxable ~~entities~~entity for U.S. federal income tax purposes or for any of the states in which ~~such entities~~the Company operated. On July 1, 2021, pursuant to the CRIS Business Combination, the Company ~~acquired an interest in EVgo Holdco and its subsidiaries through EVgo OpCo, and the Company’s allocable share of EVgo OpCo’s income~~ became ~~subject to~~a taxable entity for U.S. federal income tax purposes and ~~state income taxes in jurisdictions~~for all of the states in which ~~EVgo OpCo and its subsidiaries operate.~~

the Company operates.

In assessing the realization of its deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Management considered all available material evidence, both positive and negative, in assessing the appropriateness of a valuation allowance for the Company’s deferred tax assets, including the generation of future taxable income, the scheduled reversal of deferred tax liabilities and other available material evidence. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore ~~maintained~~established a full valuation allowance against its net deferred tax assets as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022.

~~In addition,~~The Company files income tax returns in the U.S. at the federal level and in various state and local jurisdictions and is subject to examination by the various taxing authorities for all periods since its inception. As of March 31, 2023 and December 31, 2022, there were 0no unrecognized tax benefits for uncertain tax positions, nor any amounts accrued for interest and ~~penalties as of June 30, 2022 or December 31, 2021.~~penalties.

Note 1311 – Tax Receivable Agreement

In connection with the CRIS Business Combination, EVgo entered into ~~the Tax~~a tax receivable agreement (the “Tax Receivable ~~Agreement~~Agreement”) with EVgo Holdings (along with permitted assigns, the “TRA Holders”) and LS Power Equity Advisors, LLC, as agent. The Tax Receivable Agreement generally provides for payment by the Company ~~Group~~, Thunder Sub or any of their subsidiaries (other than EVgo OpCo and its subsidiaries) (“Company Group”) to the TRA Holders of 85% of the net cash savings, if any, in U.S. federal, state and local income tax or franchise tax that the Company ~~Group~~ actually realizes or is deemed to realize in certain circumstances after the CRIS Business Combination as a result of (i) certain increases in tax basis that occur as a result of the Company Group’s acquisition (or deemed acquisition for U.S. federal income tax purposes) of all or a portion of the TRA Holders’ EVgo OpCo Units pursuant to the CRIS Business Combination or the exercise of the redemption or ~~call rights~~Call Rights set forth in the EVgo OpCo A&R LLC Agreement and (ii) imputed interest deemed to be paid by the Company Group as a result of, and additional tax basis arising from, any payments the Company Group makes under the Tax Receivable Agreement. The Company Group will retain the benefit of any remaining net cash savings. If the Company Group elects to terminate the Tax Receivable Agreement early (or it is terminated early due to the Company Group’s failure to honor a material obligation thereunder or due to certain mergers, asset sales, other forms of business combinations or other changes of control), the Company Group is required to make an immediate payment equal to the present value of the anticipated future payments to be made by it under the Tax Receivable Agreement (based upon certain assumptions and deemed events set forth in the Tax Receivable Agreement, including (i) that the Company Group has sufficient taxable income on a current basis to fully utilize the tax benefits covered by the Tax Receivable Agreement and (ii) that any EVgo OpCo Units (other than those held by the Company Group) outstanding on the termination date or change of control date, as applicable, are deemed to be redeemed on such date).

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Amounts payable by the Company under the Tax Receivable Agreement are accrued through a charge to income when it is probable that a liability has been incurred and the amount is estimable. As of ~~June 30, 2022 and December~~March 31, ~~2021,~~2023, no transactions have occurred that would result in a cash tax savings benefit that would trigger the recording of a liability by the Company based on the terms of the Tax Receivable Agreement.

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Note 1412 – Net ~~Income (Loss)~~Loss Per Share

The following table sets forth the computation of basic and diluted ~~earnings~~net loss per share for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022:


	Three Months Ended		Six Months Ended		Three Months Ended
	June 30,		June 30,		March 31,
(in thousands, except per share data)	2022		2022		2023		2022
Numerator
Net income (loss)	$	16,997	$	(38,269)
Less: net income (loss) attributable to redeemable noncontrolling interest		12,518		(28,349)
Net income (loss) attributable to Class A common stockholders		4,479		(9,920)
Less: net income (loss) attributable to participating securities		46		(103)
Net income (loss) attributable to Class A common stockholders, basic and diluted	$	4,433	$	(9,817)
Net loss					$	(49,081)	$	(55,266)
Less: net loss attributable to redeemable noncontrolling interest						(36,005)		(40,867)
Net loss attributable to Class A common stockholders						(13,076)		(14,399)
Less: net loss attributable to participating securities						(131)		(151)
Net loss attributable to Class A common stockholders, basic and diluted					$	(12,945)	$	(14,248)

Denominator
Weighted average common stock outstanding		69,264		69,168		71,713		68,742
Less: weighted average unvested Earnout Shares outstanding		(719)		(719)		(719)		(719)
Weighted average common stock outstanding, basic		68,545		68,449
Dilutive effect of restricted stock units		777		—
Weighted average common stock outstanding, diluted		69,322		68,449
Weighted average common stock outstanding, basic and diluted						70,994		68,023

Net income (loss) per share – basic	$	0.06	$	(0.14)
Net income (loss) per share – diluted	$	0.06	$	(0.14)
Net loss per share – basic and diluted					$	(0.18)	$	(0.21)

Prior to the consummation of the CRIS Business Combination, EVgo OpCo was wholly owned by EVgo Holdings. In connection with the CRIS Business Combination, EVgo Holdings contributed all of the equity interests in EVgo Holdco to EVgo OpCo in exchange for 195,800,000 EVgo OpCo Units, the Company contributed all of its assets and 195,800,000 shares of Class B common stock to Thunder Sub, Thunder Sub transferred 195,800,000 shares of Class B common stock and the right to enter into the Tax Receivable Agreement to EVgo Holdings, and Thunder Sub contributed all of its remaining assets to EVgo OpCo in exchange for EVgo OpCo Units equal to the number of shares of Class A common stock outstanding. The shares of Class B common stock owned by EVgo Holdings have been evaluated and are excluded from net income or loss per share calculations as they do not participate in earnings or loss of the Company. Therefore, retrospective application of the conversion of these ownership interests into shares of Class B common stock would not result in an appropriate or meaningful presentation of earnings (loss) per common share (“EPS”). Therefore, the EPS information presented only relates to the periods subsequent to the consummation of the CRIS Business Combination on July 1, 2021 and has not been presented for the three and six months ended June 30, 2021.

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The Company’s potentially dilutive securities consist of the Company’s Public Warrants, Private Placement Warrants, restricted stock units (“RSUs”), stock options and unvested Earnout Shares. For the periods in which ~~EPS~~net loss per share is presented, the Company excluded the following potential shares, presented based on amounts outstanding at each period end, from the computation of diluted net ~~income (loss)~~loss per share attributable to Class A common stockholders since their impact would have been antidilutive:


	Three	Six	Three Months Ended
	Months Ended	Months Ended	March 31,
(in thousands)	June 30, 2022	June 30, 2022	2023	2022
Public Warrants	14,949	14,949	14,949	14,949
Private Placement Warrants	3,149	3,149	3,149	3,149
RSUs	1,907	3,343	7,237	1,781
Stock options	375	375	473	—
	20,380	21,816	25,808	19,879

Additionally, 718,750 unvested Earnout Shares ~~(participating securities)~~ were excluded from the computation of diluted ~~EPS~~net loss per share since their vesting threshold (i.e., the $15.00 Triggering Event) had not yet been met as of ~~June 30,~~March 31, 2023 and 2022.

Note 1513 – Share-Based Compensation

On July 1, 2021, concurrent with the closing of the CRIS Business Combination, the stockholders also approved the board approved EVgo Inc. 2021 Long Term Incentive Plan (the “2021 Incentive Plan”), effective March 26, 2021 (the “Effective Date”). The 2021 Incentive Plan reserves 33,918,000 shares of Class A common stock for issuance to employees, non-employee directors and other service providers. As of June 30, 2022, there were 29,767,792 shares of Class A common stock available for grant.

The 2021 Incentive Plan provides for potential grants of: (i) incentive stock options qualified as such under U.S. Federal income tax laws; (ii) stock options that do not qualify as incentive stock options; (iii) stock appreciation rights; (iv) restricted stock awards; (v) RSUs; (vi) vested stock awards; (vii) dividend equivalents; (viii) other share- or cash-based awards; (ix) cash awards; and (x) substitute awards. Unless earlier terminated by action of the Company’s Board of Directors, the 2021 Incentive Plan will terminate on the tenth anniversary of the Effective Date.

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


	Three Months Ended				Six Months Ended				Three Months Ended
	June 30,		June 30,		June 30,		June 30,		March 31,
(in thousands)	2022		2021		2022		2021		2023		2022
Cost of sales	$	26	$	3	$	37	$	6	$	22	$	11
General and administrative		7,016		527		10,511		1,004
General and administrative expenses										6,405		3,495
Total share-based compensation expense	$	7,042	$	530	$	10,548	$	1,010	$	6,427	$	3,506

~~Stock Options~~

~~On April 1, 2022, the Company granted stock options covering 375,428 underlying shares of Class A common stock to~~ ~~employees~~. Compensation expense related to stock-based awards is measured and recognized in the financial statements based on the fair value of the awards granted. The fair value of each option award is estimated on the grant date using the Black-Scholes option-pricing model and recognized on a straight-line basis over the requisite service period. The options vest annually over a three-year period and have a term of 10 years.

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2021 Long Term Incentive Plan

On July 1, 2021, concurrent with the closing of the CRIS Business Combination, stockholders approved the Board of Directors-approved 2021 Long Term Incentive Plan (the “2021 Incentive Plan”). The 2021 Incentive Plan reserves 33,918,000 shares of Class A common stock for issuance to employees, non-employee directors and other service providers. As of March 31, 2023, there were 24,407,475 shares of Class A common stock available for grant.

Stock Options

The following table summarizes stock option activity for the ~~six~~three months ended ~~June 30, 2022:~~March 31, 2023:


					Weighted Average				Shares Underlying				Weighted Average		Aggregate
	Shares Underlying		Weighted Average		Remaining		Aggregate		Options		Weighted Average		Remaining		Intrinsic Value
(shares in thousands)	Options		Exercise Price		Contractual Life		Intrinsic Value
Outstanding as of December 31, 2021		—
									(in 000's)		Exercise Price		Contractual Life		(in 000's)
Outstanding as of December 31, 2022										375	$	12.86		9.2 years	$	—
Granted		375	$	12.86			$	—		98	$	6.13
Outstanding as of June 30, 2022		375	$	12.86		9.8 years	$	—
Outstanding as of March 31, 2023										473	$	11.47		9.2 years	$	162
Outstanding and exercisable as of March 31, 2023										125	$	12.86		9.0 years	$	—

As of ~~June 30, 2022,~~March 31, 2023, the Company’s unrecognized share-based compensation expense related to stock options was approximately ~~$2.7~~$1.6 million, which is expected to be recognized over a period of ~~1.7~~1.5 years. ~~The weighted average grant date fair value per share of~~No stock options ~~granted for~~were exercised during the three ~~and six~~ months ended ~~June 30, 2022 was $8.79. There were 0 stock options vested or exercisable as of June 30, 2022.~~March 31, 2023.

The fair value of the stock options granted ~~on April 1, 2022~~during the three months ended March 31, 2023 was computed using Black-Scholes option-pricing model using the following key assumptions:


Risk-free interest rate	~~2.5~~3.5	%
Dividend yield	—	%
Expected volatility	~~81.4~~79	%
Expected life (in years)	~~5.67~~5.7

~~Risk-free interest rate.~~ Restricted Stock Units

The ~~risk-free interest rate~~table below represents the Company’s RSU activity under the 2021 Incentive Plan during the three months ended March 31, 2023:


		Weighted
		Average
	Number of	Grant Date
(shares in thousands)	Shares	Fair Value
Unvested as of December 31, 2022	3,930	$	10.85
Granted	4,706	$	5.77
Vested	(1,156)	$	11.57
Forfeited	(243)	$	8.90
Unvested as of March 31, 2023	7,237	$	7.50
Vested but not released	491	$	10.83
Outstanding as of March 31, 2023	7,728	$	7.71

The total fair value of RSUs vested during the three months ended March 31, 2023 was ~~based on~~$7.7 million. As of March 31, 2023, the ~~implied yield currently available in U.S. Treasury securities at maturity with an equivalent term.~~Company’s unrecognized share-based compensation expense related to unvested RSUs was approximately $39.3 million, which is expected to be recognized over a period of 1.7 years.

~~Dividend yield.~~ ~~The Company has not declared or paid any dividends through June 30, 2022 and does not currently expect to do so in the future.~~

~~Expected volatility.~~ The Company based its estimate of expected volatility on the historical and implied volatility of comparable companies from a representative peer group selected based on industry and market capitalization data. The Company uses the average expected volatility rates reported by the comparable group for an expected term that approximated the expected term estimated by the Company.

~~Expected life.~~ The Company did not have sufficient exercise history to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior. The expected term for stock options, calculated using the simplified method due to limited exercise data, was the midpoint of the stock option vesting term and the expiration date of the stock option.

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~~Restricted Stock Units~~

RSUs typically vest annually over a period of three years from the date of grant. The fair value of RSUs is based on the closing price of the Company’s Class A common stock on the grant date. The table below represents the Company’s RSU activity under the 2021 Incentive Plan during the six months ended June 30, 2022:

Weighted

Average

Number of

Grant Date
(in thousands)

Shares

Fair Value
Outstanding as of December 31, 2021

1,955

$
11.40
Granted

2,195

12.20
Vested

(557)

11.55
Forfeited

(250)

11.93
Outstanding as of June 30, 2022

3,343

$
11.86

~~As of June 30, 2022, the Company’s unrecognized share-based compensation expense related to unvested RSUs was approximately $28.2 million, which is expected to be recognized over a period of~~ ~~1.6~~ ~~years.~~

EVgo Management Holdings, LLC Incentive Units

~~Certain~~Following the Holdco Merger and prior to the CRIS Business Combination, all employees of EVgo Services ~~have~~ received share-based compensation in the form of units in EVgo Management Holdings, LLC (“EVgo Management”) that track incentive units issued by EVgo Holdings to EVgo Management (“Incentive Units”). Of each individual grant of Incentive Units, 65% of the grant was designated as time vesting (the “Time Vesting Incentive Units”) and the remaining portion (35% of the grant) was designated as sale vesting (the “Sale Vesting Incentive Units”). The Time Vesting Incentive

Units ~~typically~~ vest annually and equally over a period of four years from the date of grant. Sale Vesting Incentive Units vest based upon the achievement of certain trigger events relating to the sale of EVgo Holdings. Presented below is a summary of the activity of the Company’s Incentive Units during the ~~six~~three months ended ~~June 30, 2022:~~March 31, 2023:


			Weighted			Weighted
			Average			Average
			Grant Date			Grant Date
(units in thousands)	Units		Fair Value		Units	Fair Value
Outstanding and expected to vest as of December 31, 2021		659	$	18.19
Outstanding as of December 31, 2022					471	$	18.68
Vested		(122)		17.09	(108)	$	17.29
Forfeited		(46)		17.55	(12)	$	17.64
Outstanding and expected to vest as of June 30, 2022		491	$	18.52
Outstanding as of March 31, 2023					351	$	19.13

As of ~~June 30, 2022, there was $8.2 million of~~March 31, 2023, the Company’s unrecognized share-based compensation expense related to unvested Incentive Units was approximately $6.4 million, which is expected to be recognized over a period of ~~2.2~~1.4 years.

Liability-Classified Awards

In February 2023, the Company’s Board of Directors approved grants of $4.4 million in stock options underlying shares of Class A common stock to certain employees. The number of options subject to the grants was to be determined based on the Black-Scholes value of the Company’s common stock on the trading day period prior to the award date. The awards were accounted for as liability-classified awards as of March 31, 2023 and compensation expense for the three months ended March 31, 2023 was recognized using the accelerated attribution method over the service period. As of March 31, 2023, the Company had $4.2 million of unrecognized costs related to unvested liability-classified awards which were expected to be recognized over a weighted average period of 1.9 years. In April 2023, the number of shares became fixed on the award date and the Company accordingly reclassified these awards as equity-classified awards on the award date.

Note 1614 – Redeemable Noncontrolling Interest

As of ~~June 30, 2022,~~March 31, 2023, EVgo Holdings ~~owns~~held 195,800,000 EVgo OpCo Units, representing a ~~73.9%~~73.3% economic ownership interest in EVgo OpCo (reflecting the exclusion of 718,750 shares of Class A common stock held by other entities that were subject to possible forfeiture) and a corresponding number of shares of Class B common stock, representing a ~~73.9%~~73.2% voting interest in the Company. EVgo Holdings is entitled to 1 vote per share of Class B common stock but is not entitled to receive dividends or any assets upon liquidation, dissolution, distribution or winding-up of the Company. Each EVgo OpCo Unit is redeemable, together with 1 share of Class B common stock, for either one share of Class A common stock or, at EVgo OpCo’s election, the cash equivalent market value of one share of Class A common stock in accordance with the terms of the EVgo OpCo A&R LLC Agreement.

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The EVgo OpCo Units held by EVgo Holdings have been classified as a redeemable noncontrolling interest in the Company. The cash redemption feature of the EVgo OpCo Units, together with a corresponding number of shares of Class B common stock, at the option of EVgo OpCo is considered outside of the control of the Company. Therefore, in accordance with ASC Topic 480, ~~Distinguishing Liabilities from Equity~~~~, the EVgo OpCo Units are classified as temporary equity in the Company’s condensed consolidated balance sheets.~~

The redeemable noncontrolling interest held by EVgo Holdings in EVgo OpCo, through its ownership of EVgo OpCo Units, was initially measured at its carrying amount on the CRIS Close Date. Net income or loss and other comprehensive income or loss are attributed to the redeemable noncontrolling interest during each reporting period based on its ownership percentage, as appropriate. Subsequent to that, the redeemable noncontrolling interest is measured at its fair value (i.e., based on the Class A common stock price) at the end of each reporting period, with the remeasurement amount being no less than the initial carrying amount, as adjusted for the redeemable noncontrolling interest’s share of net income or loss and other comprehensive income or loss. The offset of any fair value adjustment is recorded to equity, with no impact to net income or loss.

The table below presents the reconciliation of changes in redeemable noncontrolling interest for the ~~six~~three months ended ~~June 30, 2022:~~March 31, 2023:


(in thousands)
Balance as of December 31, 2021	$	1,946,252
Net income attributable to redeemable noncontrolling interest for the period		(28,349)
Balance as of December 31, 2022			$	875,226
Net loss attributable to redeemable noncontrolling interest for the period				(36,005)
Equity-based compensation attributable to redeemable noncontrolling interest during the period		968		449
Net unrealized loss on available-for-sale securities attributable to redeemable noncontrolling interest during the period		(135)
Adjustment to revise redeemable noncontrolling interest to its redemption value at period-end		(741,978)		685,612
Balance as of June 30, 2022	$	1,176,758
Balance as of March 31, 2023			$	1,525,282

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Note 1715 – Subsequent Events

~~During July~~Issuance of Common Stock

As previously announced, on November 10, 2022, EVgo entered into ~~the Pilot Infrastructure~~a Distribution Agreement ~~the Pilot O&M, the Delta Charger Supply Agreement~~with J.P. Morgan Securities LLC, Evercore Group L.L.C. and ~~the Purchase Order. See Note 9 for additional information. In addition, during July 2022,~~Goldman Sachs & Co. LLC as sales agents, pursuant to which the Company may sell up to $200.0 million of shares of Class A common stock in “at the market” transactions at prevailing market prices (the “ATM Program”).In April 2023, EVgo sold ~~all~~889,340 shares of ~~its debt securities.~~Class A common stock pursuant to the ATM Program, with aggregate gross proceeds of $5.8 million. After deducting commissions of $0.1 million, the Company received net proceeds of approximately $5.7 million.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of EVgo’s consolidated results of operations and financial condition. The discussion should be read in conjunction with EVgo’s unaudited condensed consolidated financial statements and related notes thereto as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 and for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021,~~ included elsewhere in this Quarterly Report, and the audited consolidated financial statements and related notes thereto as of and for the years ended December 31, 2022 and 2021 contained in the Annual Report. In addition to historical information, this discussion contains forward-looking statements that involve numerous risks, uncertainties, and assumptions that could cause EVgo’s actual results to differ materially from management’s expectations due to a number of factors, including those discussed in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in this Quarterly Report. Factors which could cause such differences are discussed therein.

Overview

EVgo ~~owns and operates the U.S.’ largest public DC fast charging network and the first to be powered by 100% renewable electricity through the purchase of renewable energy credits. Founded in 2010 and~~is a key leader in ~~fast~~ charging ~~EVgo’s network~~solutions, building and operating the infrastructure and tools to expedite the mass adoption of ~~charging stations provides EV charging infrastructure to consumers~~EVs for individual drivers, rideshare and commercial fleets, and businesses. ~~With a rapid rise in electrification expected over~~Since 2019 EVgo has purchased renewable energy certificates to match the ~~next two decades, EVgo offers the essential infrastructure technology and services required to help the world transition to a cleaner, more sustainable future.~~electricity that powers its network.

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EVgo has a flexible business model that derives value through multiple revenue streams. The foundation of the Company’s business is the development and operation of EV charging sites through which it dispenses electricity to EVs driven by individuals, commercial drivers, and fleet operators. EVgo’s principal revenue stream is from the provision of charging services for EVs of all types on EVgo’s network. In addition, a variety of business-to-business commercial relationships provide EVgo with revenue or cash payments based on commitments to build new infrastructure, provide guaranteed access to charging, and offer marketing, data and software-driven services. EVgo also earns revenue from the sale of regulatory credits generated through sales of electricity and its operation and ownership of its DCFC network. ~~This~~EVgo believes this combination of revenue streams can drive long-term margin expansion and customer retention.

Specifically, revenue is earned through the following streams:

●

Charging Revenue, Retail: EVgo sells electricity directly to drivers who access EVgo’s publicly available networked chargers. Various pricing plans exist for customers and drivers have the choice to charge as members (with monthly fees and reduced ~~per minute~~per-minute or ~~Kilowatt-hour (“kWh”)~~kWh pricing), through a subscription service, or as non-members. Drivers can locate the chargers through EVgo’s mobile application, their vehicle’s in-dash navigation system or third-party databases that license charger-location information from EVgo. EVgo generally installs its chargers in parking spaces owned or leased by commercial or public-entity Site Hosts that desire to provide EV charging services at their respective locations. Commercial Site Hosts include retail and grocery stores, hotels, offices, medical complexes, airports and convenience stores. EVgo believes its offerings are well aligned with the goals of Site Hosts, as many commercial businesses increasingly view EV charging capabilities as essential to attract tenants, employees, customers and visitors, and achieve sustainability goals. Site Hosts are generally able to obtain these benefits at no cost when partnering with EVgo through EVgo’s owner and/or operator model, as EVgo is responsible for the installation and operation of chargers located on Site Hosts’ properties. In many cases, Site Hosts will earn additional revenue from license payments made by the Company in exchange for use of the site. EVgo also incorporates flexible ownership models through EVgo eXtend,^TM, through which ~~helps~~certain Site Hosts can invest in and build EV charging stations ~~for their customers.~~that the Site Host owns and EVgo operates.

●

Charging Revenue, ~~OEM:~~Commercial: High volume fleet customers, such as transportation network companies or delivery services, can access EVgo’s charging infrastructure through EVgo’s public network. Pricing for charging services is most often negotiated directly between EVgo and the fleet owner based on the business needs and usage patterns of the fleet. In these arrangements EVgo contracts with and bills, either the fleet owner directly or an individual fleet driver utilizing EVgo’s chargers. Access to EVgo’s public network allows fleet and rideshare operators to support mass adoption of transportation electrification and achieve sustainability goals without needing to directly invest capital in charging infrastructure or incur operating costs associated with charging equipment.

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●

Charging Revenue, OEM: EVgo is a key leader in OEM charging programs with revenue models to meet a wide variety of OEM objectives related to the availability of charging infrastructure and the provision of charging services for EV drivers. EVgo contracts directly with OEMs to provide charging services to drivers who have purchased or leased such OEMs’ EVs and who access EVgo’s public charger network, to expand EVgo’s network of owned DCFCs and to provide other related services. Other related services currently provided to OEMs by EVgo include co-marketing, data services and digital application services. EVgo views its OEM relationships as a core customer acquisition channel.

●

~~Charging Revenue, Commercial~~: High volume fleet customers, such as transportation network companies (“TNCs”) or delivery services, can access EVgo’s charging infrastructure through EVgo’s public network. Pricing for charging services is most often negotiated directly between EVgo and the fleet owner based on the business needs and usage patterns of the fleet. In these arrangements EVgo contracts with, and bills, either the fleet owner directly or an individual fleet driver utilizing EVgo’s chargers. Access to EVgo’s public network allows fleet and rideshare operators to support mass adoption of transportation electrification and achieve sustainability goals without needing to directly invest capital in charging infrastructure or incur operating costs associated with charging equipment.

In addition to offering access to its public network, EVgo offers dedicated charging solutions to fleets. As part of this offering, EVgo typically builds, owns and operates charging infrastructure for the exclusive use of a dedicated customer and is currently offering flexible ownership models, such as its charging as a service (“ChaaS”) offering. EVgo’s dedicated and ChaaS offerings provide a value proposition for fleets who might otherwise feel compelled to procure, install and manage their own electric vehicle supply ~~equipment (“EVSE”).~~equipment. EVgo offers a variety of pricing models for its dedicated charging solutions, including a mix of volumetric commitments and variable and fixed payments to EVgo for provision of its services. ChaaS and dedicated charging allow for tailored fleet charging solutions without requiring fleets to directly incur capital expenditures or operating and management costs related to charging EVs. Together, EVgo’s dedicated charging solutions and public fleet charging services provide fleets with a more robust and flexible charging solution.

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●

Regulatory Credit Sales: As a charging station owner and operator, EVgo earns regulatory credits, such as Low Carbon Fuel Standard (“LCFS”) credits and other regulatory credits, in states where such programs are enacted currently, including the Fast Charging Infrastructure (“FCI”) program in California. These credits are generated through charging station operations based on the volume of kWh sold. EVgo earns additional revenue through the sale of these credits to buyers obligated to purchase the credits to comply with the program mandates.

●

Network Revenue, OEM: ~~Revenue~~This revenue stream represents revenue related to contracts that have significant charger infrastructure build programs, which represent set-up costs under Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC ~~606.~~606”). Proceeds from these contracts are allocated to performance obligations including marketing activities, memberships, reservations and the expiration of unused charging credits. Marketing activities are recognized at a point in time as the services are performed and measurement is based on amounts spent. For memberships and reservations, revenue is recognized over time and measured based on the charging activity of subscriber members at each measurement period. Any unused charging credits are recognized as breakage using the proportional method or, for programs where there is not enough information to determine the pattern of rights exercised by the customer, the remote method.

●

eXtend Revenue: Through EVgo eXtend, EVgo provides hardware, design, and construction services for charging sites, as well as ongoing operations, maintenance and networking and software integration solutions, while EVgo’s customers purchase and retain ownership of the charging assets. For some eXtend customers, EVgo also provides grant application support and related services. In 2022, EVgo announced an eXtend deal with the Pilot Company to deploy up to 2,000 fast charging stalls that the Pilot Company will own and EVgo will build, network, operate and maintain.

●

Ancillary Revenue: ~~In addition to charging services,~~ EVgo offers a variety of software-driven digital, development and operations services to its customers. ~~These~~EVgo has offerings that currently include customization of digital applications, ~~and~~ charging data ~~integration. EVgo currently pilots~~integration, micro-targeted advertising services, smart charging reservations, loyalty programs, ~~and~~ access to chargers behind parking lot pay ~~gates. EVgo also offers maintenance~~gates, and equipment procurement and operations services ~~and development and project management services, including EVSE installation, networking and operations.~~for customers operating dedicated networks. EVgo also continues to evaluate and engage on potential market opportunities beyond these business models.

●

~~Regulatory Credit Sales~~: As a charging station owner and operator, EVgo earns regulatory credits, such as LCFS and other regulatory credits, in states where such programs are enacted currently, Fast Charging Infrastructure in California and Clean Fuel Standards in Oregon. These credits are generated through charging station operations based on the amount of kWh sold. EVgo earns additional revenue through the sale of these credits to buyers obligated to purchase the credits to comply with the program mandates.

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Recent Developments

Geopolitical and Macroeconomic Environment

During the last several years, the global economy has experienced disruption and sustained volatility ~~from~~due to a number of factors. In particular, the global outbreak of COVID-19 resulted in significant volatility in the global and domestic economies, changes in consumer and business behavior, market downturns and restrictions on business and individual activities, ~~which led to~~resulting in overall reduced economic activity.

The COVID-19 pandemic impacted EVgo’s operations through reduced network throughput, construction delays and supply chain and shipping constraints. EVgo also experienced delays in its Site Host negotiations as ~~they~~Site Hosts devoted more time to day-to-day operations and employee health and safety. Finally, for some contractual commitments, EVgo is required to adhere to a construction schedule over ~~specific~~specified timeframes. Those timelines were impacted due to delays associated with COVID-19 and broader supply chain disruptions and it is possible that the pandemic and its ongoing ~~pandemic~~effects could continue to impact these timelines in the future.

~~More recently,~~ Russia’s military invasion of Ukraine and the subsequent sanctions imposed on Russia, Belarus, the ~~so called~~so-called Donetsk People’s Republic and the ~~so called~~so-called Luhansk People’s Republic have led to and will likely continue to lead to, geopolitical instability, market uncertainty and supply disruptions. ~~Finally,~~Additionally, rising inflation has increased operating costs for many businesses and, together with slowing economic growth and fear of a recession, has led governments to change monetary policy in response. Finally, recent concerns regarding the stability of the U.S. and international financial systems has raised concerns regarding the ability of companies to access deposits; potential losses of uninsured deposits and other financial assets; the potential loss of access to working capital sources and access to favorable commercial financing terms (including terms related to interest rates and restrictive financial or operating covenants); and systemic limitations on access to credit and liquidity sources.

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

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Government EV Initiatives

In order to encourage the use of EVs, the U.S. federal government ~~as well as~~and some state and local governments ~~offer a variety~~provide incentives to end users and purchasers of EVs and EV charging stations in the form of rebates, tax credits and other financial incentives that promote EV adoption and ~~rebates. In November 2021, Congress passed~~related EV charging infrastructure. EVgo believes the increase in promotion of EVs and the ~~President signed~~installation of related EV charging infrastructure will continue in part due to the ongoing implementation of the Infrastructure Investment and Jobs Act (the “Bipartisan Infrastructure Law”) and the recently enacted Inflation Reduction Act of 2022 (the “Inflation Reduction Act”), which included extensions, expansions and revisions of various tax credits relating to EVs and EV charging infrastructure and may provide more flexibility and options in monetizing such credits. In particular, the Inflation Reduction Act (i) expanded and extended tax credits for EV charging infrastructure and new EVs while also imposing new limitations and requirements for such credits, (ii) introduced tax credits for used EVs and commercial EVs and (iii) introduced the concept of transferability for certain tax credits, providing an additional option to monetize such credits.

However, the impact of the Inflation Reduction Act and other government EV initiatives, including regulatory requirements and restrictions that may impact the ability of EVgo and its competitors to take advantage of such initiatives, cannot be known aswith any certainty at this time, and EVgo may not reap any or all of the expected benefits of the Inflation Reduction Act or the Bipartisan Infrastructure Law. ~~Among other provisions, this legislation included up~~For example, federal guidance on Buy America requirements (effective as of March 23, 2023) applicable to ~~$7.5 billion~~the National Electric Vehicle Infrastructure (“NEVI”) Program, which was established by the Bipartisan Infrastructure Law, requires immediate domestic assembly and U.S. steel requirements for chargers to qualify for funding under the NEVI program, with higher domestic content percentages required in 2024. EVgo’s suppliers may experience delays in bringing their U.S. facilities online, and EVgo may be unable to source Buy

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America-compliant chargers in time to take advantage of early NEVI funding ~~for EV charging infrastructure through the Department~~opportunities or only at increased costs. EVgo may be at a disadvantage to competitors that have already implemented domestic assembly and content standards into their supply chain. EVgo’s customers may request delays or adjustments to their build-out plans in order to accommodate these added Buy America requirements, which could result in delays in receipt of Transportation. The U.S. federal government offers a tax credit for qualified plug-in EVs; the minimum credit is $2,500, and the maximum credit is $7,500, depending on vehicle weight and battery capacity. These credits will begin to phase out when the vehicle manufacturer reaches certain production levels (with several manufacturers, such as Toyota, hitting such production levels this year or in the future), and such credit has already been completely phased out for EVs manufactured by GM and Tesla, Inc. (“Tesla”), but legislation under consideration in Congress, if enacted as currently proposed, would alleviate the manufacturer cap and expand the credit both for used and new EVs. However, it is uncertain whether such legislation will be enacted, and, if enacted, whether such legislation will be enacted as proposed. In July 2022, the Department of Energy announced funding of $96 million to support the decarbonization of the domestic transportation system, to include the expansion of EV charging accessibility and the development of electric drive components and materials to aid both EV efficiency and affordability. revenue from customers.

States including (but not limited to) California, Colorado, Delaware, Massachusetts, New Jersey and New York also offer various rebates, grants and tax credits to incentivize both EV and EVSE purchases. ~~EVs are also gaining momentum~~

Granting of EVgo’s 205 Petition

On February 3, 2023, EVgo filed a petition in the ~~Midwest, and soon states like Illinois will also begin to offer vehicle and EVSE incentives.~~

~~Demand for EVs has also been encouraged by regulatory developments and changes~~Court of Chancery under Section 205 of the Delaware General Corporation Law seeking (i) the validation of the stockholder vote approving CRIS’s certificate of incorporation in ~~consumer habits. Several states — including California, Oregon, New Jersey, New York, Maryland and Massachusetts — have adopted or proposed mandates for EVs~~connection with the ~~goal~~CRIS Business Combination and (ii) the validation and declaration of ~~more than 8.0 million EVs~~effectiveness of (a) EVgo’s Charter (including its filing and effectiveness, in each case as of July 1, 2021) and (b) the securities issued or to be issued in reliance on such approval and/or the ~~road by 2030. In September 2020, California Governor Gavin Newsom~~validity of EVgo’s Charter, as of the respective dates of their issuance (including the 5,750,000 shares of Class A common stock into which the shares of Class B common stock converted upon the consummation of the CRIS Business Combination). EVgo filed the petition due in part to a recent ruling of the Court of Chancery that created uncertainty as to the validity and effectiveness of these corporate acts and, consequently, as to its capital structure.

Such purported uncertainty was eliminated on February 21, 2023, when, following a hearing on EVgo’s petition, the Court of Chancery issued an ~~executive~~ order ~~announcing a target for all in-state sales~~validating each of ~~new passenger cars and trucks to be zero-emission by 2035. And,~~the corporate acts described above, effective as of the time each such act was originally taken, notwithstanding any failures of authorization or potential failures of authorization described in, January 2022, Governor Newsom introduced a $10 billion zero-emission vehicle package to accelerate this transition. Additionally, California has enacted its Clean Miles Standard aiming to reduce greenhouse gas emissionsor resulting from ~~TNCs, such as rideshare vehicles, through electrification and other means. In 2021, California also approved~~ the ~~Advanced Clean Truck Rule (“ACT rule”), a regulation that requires an increasing percentage of medium- and heavy-duty trucks sold~~matters described in, the ~~state to be zero emissions. Washington, New York, New Jersey, Massachusetts and Oregon have also adopted the ACT rule.~~petition.

EVgo believes these regulations, combined with a shift toward car-sharing and mobility as a service offering as well as broader fleet sustainability trends, will rapidly accelerate EV adoption by fleets in the coming years.

Key Components of Results of Operations

Revenue

EVgo’s ~~revenues are~~revenue is generated across various business lines. The majority of EVgo’s revenue is generated from the sale of charging services, which are comprised of retail, OEM and ~~fleet~~commercial business ~~lines.~~lines, and its eXtend offering. In addition, EVgo generates ancillary ~~revenues~~revenue through the sale of data services and consumer retail ~~services and the development and project management of third-party owned charging sites.~~services. EVgo also offers network services to OEM customers, including memberships and marketing. Finally, as a result of owning and operating the EV charging stations, EVgo earns regulatory credits such as ~~California~~ LCFS credits, which are sold to generate additional revenue.

~~Revenue From Related Party~~

~~EVgo entered into various agreements with an affiliate of LS Power for the purchase and sale of California LCFS credits at prevailing market prices.~~

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Cost of Sales

Cost of ~~Revenue~~Revenue.

Cost of revenue consists primarily of energy usage fees, site operating and maintenance expenses, warranty and repair services, and site lease and rent expense associated with charging equipment.

Depreciation, ~~and Amortization~~Net of Capital-Build Amortization.

Depreciation, ~~and~~net of capital-build amortization, consists of depreciation related to EVgo’s property and equipment associated with charging equipment and installation and ~~includes~~is partially offset by the amortization of EVgo’s ~~capital build liabilities.~~capital-build liabilities associated with third-party funding received for charging stations and other programs.

Gross Profit (Loss) and Gross Margin

Gross profit (loss) consists of EVgo’s revenue less its cost of ~~revenues~~revenue and depreciation, ~~and~~net of capital-build amortization. Gross margin is gross profit (loss) as a percentage of revenue.

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Operating Expenses

General and Administrative ~~Expenses~~Expenses.

General and administrative expenses primarily consist of payroll and related personnel expenses, IT and office services, customer service and network charges, office rent expense and professional services. EVgo expects its general and administrative expenses to increase in absolute dollars as it continues to grow its ~~business but to decrease over time as a percentage of revenue.~~business. EVgo also expects to continue to incur additional expenses ~~as a result of operating as a public company, including expenses necessary to comply with the rules and regulations applicable to companies listed on a national securities exchange and~~ related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, ~~as well as higher expenses for~~ general insurance and ~~director~~directors’ and ~~officer~~officers’ insurance, investor relations and other professional services.

Depreciation, Amortization and ~~Accretion~~Accretion.

Depreciation, amortization and accretion consists of depreciation related to EVgo’s property, equipment and software not associated with charging equipment and, therefore, not included in the depreciation, ~~and~~net of capital-build amortization expenses recorded in cost of sales. This also includes amortization of EVgo’s intangible assets and accretion related to EVgo’s asset retirement obligations.

Operating Profit (Loss) and Operating Margin

Operating profit (loss) consists of EVgo’s gross profit or loss less general and administrative expenses ~~transaction bonus expense,~~ and depreciation, amortization and accretion in operating expenses. Operating margin is operating ~~loss~~profit (loss) as a percentage of revenue.

~~Interest Expense~~

~~Interest expense consists of amounts paid upon the purchase of debt securities.~~

~~Interest Expense, Related Party~~

Interest expense, related party consists primarily of interest due under the Secured Grid Demand Promissory Note, dated January 16, 2020, by and between EVgo Services and EVgo Holdings (the “LS Power Note”). Pursuant to the terms of the Business Combination Agreement, the LS Power Note was cancelled immediately prior to the CRIS Close Date and deemed to be an equity contribution to the Company, immediately followed by a contribution of such equity interest by EVgo Holdings to EVgo Holdco.

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Interest Income

Interest income consists primarily of ~~the~~ interest earned on cash and cash ~~equivalents and debt securities.~~equivalents.

Other ~~(Expense)~~ Income (Expense), Net

Other income (expense) ~~income,~~, net, consists primarily of unrealized gains and losses on marketable securities.

Change in Fair Values of Warrant and Earnout Liabilities

The change in the fair values of the warrant and earnout liabilities ~~represents~~reflects the ~~gain (loss) resulting from adjusting warrant~~mark-to-market adjustments associated with warrants to purchase shares of the Company’s common stock and earnout liabilities ~~to fair value~~ for each reporting period.

Income Taxes

EVgo’s provision for income taxes consists primarily of income taxes related to federal and state jurisdictions where business is conducted related to the Company’s ownership in EVgo OpCo.

Net Earnings (Loss) Attributable to Redeemable Noncontrolling Interest

Net earnings (loss) attributable to redeemable noncontrolling interest represents the share of net earnings or loss that is attributable to the holder of EVgo’s Class B common stock.

Key Performance Indicators

EVgo management uses several performance metrics to manage the business and evaluate financial and operating performance. EVgo considers the following indicators to be of critical importance:

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Network Throughput

Network throughput represents the total amount of ~~Gigawatt hours (“GWh”)~~GWh that was consumed by EVs using chargers and charging stations on EVgo’s network. EVgo typically monitors GWh sales by three components: business line, customer and customer class. EVgo believes monitoring of component trends and contributions is the appropriate way to monitor and measure business-related health.

Number of DC Stalls on EVgo’s Network ~~and Customer Accounts~~

Number of DC stalls represents the total number of DC stalls that EVgo has operational on its ~~network.~~network (energized, inspected and commissioned). One stall can charge one vehicle at a time. There are certain configurations of EVgo sites where one DC charger is capable of charging only one vehicle at a time; all chargers at such a site are counted as one stall per one charger. There are certain configurations of EVgo sites where one DC charger is capable of charging two vehicles simultaneously; all chargers at such a site are counted as two stalls per one charger. The following table ~~represented~~represents network throughput and the number of DC stalls on EVgo’s network:


	June 30,	June 30,	March 31,
	2022	2021	2023	2022
Network throughput (GWh) for the three months ended	10.1	6.1	17.9	8.0
Network throughput (GWh) for the six months ended	18.1	10.2

Number of DC stalls on EVgo network as of	1,937	1,548	2,352	1,772

Receipts

EVgo defines Receipts as total revenue plus change in deferred revenue over the same period. Pursuant to the term of certain OEM contracts, EVgo is paid well in advance of when revenue can be recognized according to ASC Topic 606; usually, the payment is tied to the number of stalls that commence operations under the applicable contract arrangement. EVgo believes that its Receipts metric provides investors valuable insight into cash that has been generated from EVgo’s customers and EVgo’s periodic performance. EVgo uses Receipts to monitor and measure EVgo’s commercial performance, liquidity and growth as EVgo’s OEM customers pay EVgo in advance for placing stalls in operation and then EVgo recognizes a portion of the related revenue over time.

The following table presents the calculation of Receipts for the three months ended March 31, 2023 and 2022:


	Three Months Ended
	March 31,
(in thousands)	2023		2022
GAAP revenue¹	$	25,300	$	7,700
GAAP changes in deferred revenue²		21,781		(561)
Total Receipts	$	47,081	$	7,139

Year-over-year percentage change in total Receipts		559%

¹As presented in the condensed consolidated statements of operations.

²As presented in the condensed consolidated statements of cash flows.

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Factors Affecting EVgo’s Operating Results

EVgo believes its performance and future success depend on ~~several~~a number of factors, including those discussed below and in “Part II, Item 1A., Risk Factors.”

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EV Sales

EVgo’s revenue growth is directly tied to the adoption and continued acceptance and usage of passenger and commercial EVs, ~~sold,~~ which it believes drives the demand for electricity, charging infrastructure and charging services. The market for EVs is still rapidly evolving and, although demand for EVs has grown in recent years, there is no guarantee of such future demand. Additionally, as demand increases, the supply must keep pace for adoption to continue to accelerate at a rapid pace. Factors impacting the adoption of EVs include perceptions about EV features, quality, safety, performance and cost; perceptions about the limited range over which EVs may be driven on a single battery charge; availability of services for EVs; consumers’ perception about the convenience, speed, reliability and cost of EV charging; volatility in the price of gasoline and diesel; EV supply chain shortages and disruptions including, but not limited to, availability of certain components (e.g. ~~semiconductors)~~, semiconductors and critical raw materials necessary for the production of EVs and EV batteries), the ability of EV OEMs to ramp-up EV production and/or allocate sufficient quantities of EV models to the U.S. market; domestic content requirements or other policy constraints; availability of batteries and battery materials; availability, cost and desirability of other alternative fuel vehicles, including plug-in hybrid EVs and high fuel-economy gasoline and diesel-powered vehicles; and increases in fuel efficiency. In addition, macroeconomic factors could impact demand for EVs, particularly since the sales price of EVs can be more expensive than traditional gasoline-powered vehicles. If the market for EVs does not develop as expected or if there is any slowdown or delay in overall adoption of EVs, EVgo’s operating results may be adversely affected.

Electrification of Fleets

EVgo faces competition in the emerging fleet electrification segment, including from certain fleet customers who may opt to install and own ~~the~~ charging equipment on their ~~property, but~~property; however, EVgo believes its unique set of offerings to fleets and its existing charging network position EVgo advantageously to win business from fleets. Fleet owners are generally more sensitive to the total cost of ownership of a vehicle than private-vehicle owners. As such, electrification of vehicle fleets may occur more slowly or more rapidly than management forecasts based on the cost to purchase, operate and maintain EVs and the general availability of such vehicles relative to those of ~~legacy~~ internal combustion engine vehicles. ~~EVgo’s,~~The ability of EVgo and ~~other~~its competitors’~~, ability~~ to offer competitive charging services and value-added ancillary services may impact the ~~cadence~~pace at which fleets electrify and may impact EVgo’s ability to capture market share in fleets. Additionally, federal, state and local government support and regulations directed at fleets (or lack thereof) may accelerate or delay fleet electrification and increase or reduce EVgo’s business opportunity. EVgo’s management is currently monitoring several key rules that may encourage fleet electrification, including California’s ~~ACT~~Advanced Clean Truck rule and similar programs recently adopted by Massachusetts, New Jersey, New York, Oregon and Washington and the implementation of California’s Clean Miles Standard, as well as similar proposals in other zero emission vehicle states and potential action at the federal level.

Competition

The EV charging industry is increasingly competitive. The principal competitive factors in the industry include charger count, locations, accessibility and ~~accessibility;~~reliability; charger connectivity to EVs and ability to charge all standards; speed of charging relative to expected vehicle dwell times at the location; DCFC network reliability, scale and local density; software-enabled ~~services offering~~service offerings and overall customer experience; operator brand, track record and reputation; and access to equipment vendors and service ~~providers,~~providers; policy ~~incentives~~incentives; and pricing. Existing competitors may expand their product offerings and sales strategies, new competitors may enter the market and certain fleet customers may choose to install and operate their own charging infrastructure. If EVgo’s market share decreases due to increased competition, its revenue and ability to generate profits in the future may be impacted.

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Government Mandates, Incentives and Programs

The U.S. federal government and some state and local governments ~~and certain utilities~~ provide incentives to end-users and purchasers of EVs and EV charging stations in the form of rebates, tax credits ~~grants~~ and other financial ~~incentives.~~incentives, such as payments for regulatory credits. The EV market relies on these governmental rebates, tax credits and other financial incentives to significantly lower the effective price of EVs and EV charging stations. ~~For example,~~However, these incentives may expire on a particular date, end when the allocated funding is exhausted, or may be reduced or terminated as a matter of regulatory or legislative policy. In particular, EVgo has historically benefitted from the availability of federal tax credits under Section 30C of the ~~Code.~~Code, which effectively subsidizes the cost of placing in service EVgo’s charging stations. The ~~credits~~Inflation Reduction Act revised the credit under Section 30C ofto extend the ~~Code expired on~~credit until December 31, ~~2021,~~2032, introduce the concept of transferability of such tax credits, expand the credit such that it is capped at $100,000 per item and ~~thus, are not available going forward for~~increase eligibility requirements to require installation of EV charging stations in certain census tracts along with meeting prevailing wage and apprenticeship requirements, among other changes. There can be no assurance that the EV charging stations placed in service ~~after such date unless such credits are extended retroactively. Current legislation under consideration in Congress includes an extension of~~by EVgo will meet the ~~credits under~~revised requirements for the Section 30C ~~of the Code as of~~credits, and ~~after December 31, 2021 as well as an expansion of the credit starting in 2023 going forward to 2032. In addition, in November 2021, Congress passed~~compliance with such requirements could increase EVgo’s labor and the President signed the Infrastructure Investment and Jobs Act, also known as the Bipartisan Infrastructure Law, which included up to $7.5 billion in funding for EV charging infrastructure through the Department of Transportation. The U.S. federal government offers a tax credit for qualified plug-in EVs; the minimum credit is $2,500 and the maximum credit is $7,500, depending on vehicle weight and battery capacity. These credits will begin to phase out when the vehicle manufacturer reaches certain production levels (with several manufacturers, such as Toyota, hitting such production levels this year or in the near future), and such credit has already been completely phased out for EVs manufactured by GM and Tesla, but legislation under consideration in Congress, if enacted as currently proposed, would alleviate the manufacturer cap and expand the credit both for used and new EVs. However, it is uncertain whether such legislation will be enacted, and if enacted, whether such legislation will be enacted as proposed. Various states also offer various rebates, grants and tax credits to incentivize both EV and EVSE purchases and have adopted or proposed mandates for EVs as well as mandates that aim to reduce greenhouse gas emissions through electrification such as California’s Clean Miles Standard and the ACT rule.other costs.

There can be no assurance that any of these programs will have sufficient availability or be extended, or if extended, that such extension will be effective retroactively or that these programs will not be otherwise reduced.

Any reduction in rebates, tax credits ~~grants~~ or other financial incentives available to buyers or owners of EVs or EV charging stations could negatively affect the EV market and adversely impact EVgo’s business operations and expansion potential. In addition, there iscan be no assurance that EVgo will have the necessary tax attributes to utilize any such credits that are available and may not ~~be able to monetize them given the nascent state of the market for such credits or~~ be able to monetize such credits on favorable terms. Further, certain features of EVgo OpCo’s ownership may limit the available tax credit that can be monetized or utilized. New tariffs and policies that could incentivize overbuilding of infrastructure may also have a negative impact on the economics of EVgo’s stations. Furthermore, ~~future~~new tariffs and policy incentives ~~may~~could be put in place that favor equipment manufactured by or assembled at American factories, which may ~~or may not~~ put EVgo’s fast charging equipment vendors at a competitive disadvantage, including by increasing the cost or delaying the availability of charging equipment, by challenging or eliminating EVgo’s ability to apply or qualify for grants and other government incentives, or by disqualifying ~~EVgo~~the Company from the ability to compete for certain charging infrastructure ~~buildout~~build-out solicitations and programs, including those initiated by federal government agencies.

Moreover, a variety of incentives and rebates offered by the U.S. federal government as well as state and local governments in order to encourage the use of EVs may be limited or reduced. In particular, the U.S. federal government offers a tax credit, the maximum amount of which is $7,500, for qualified new plug-in EVs. The Inflation Reduction Act modified the tax credit for new plug-in EVs and added new tax credits for used and commercial EVs. The Inflation Reduction Act removed the phase-out of tax credits for new plug-in EVs with respect to vehicle manufacturers that reached certain production levels beginning in 2023. However, the tax credit is subject to additional requirements and limitations, such as certain adjusted gross income limits for consumers claiming the credit, domestic content requirements for critical minerals and batteries and a requirement for final assembly to occur in North America. Such additional requirements and limitations for such tax credits may reduce incentives available to encourage the adoption of EVs, which could negatively affect the EV market and adversely impact EVgo’s business operations and expansion potential.

Technology Risks

EVgo relies on numerous internally developed and externally sourced hardware and software technologies to operate its network and generate earnings. EVgo engages a variety of third-party vendors for non-proprietary hardware and software components. The ability of EVgo to continue to integrate its technology stack with technological advances in the wider EV ecosystem including EV model characteristics, charging standards, charging hardware, software and battery chemistries and value-added customer services will determine EVgo’s sustained competitiveness in offering charging services. There is a risk that some or all of the components of the EV technology ecosystem become obsolete and that EVgo will be required to make significant ~~investment~~investments to continue to effectively operate its business. EVgo’s management believes EVgo’s business model is well-positioned to enable EVgo to remain technology-, vendor- and OEM-agnostic over time and allow the business to remain competitive regardless of long-term technological shifts in EVs, batteries or modes of charging.

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~~Sale~~Sales of Regulatory Credits

EVgo derives revenue from selling regulatory credits earned for participating in ~~low carbon fuel standard~~LCFS programs, or other similar carbon or emissions trading schemes, in various ~~states and~~ jurisdictions in the U.S. EVgo currently sells these credits at market prices. These credits are exposed to various market and supply and demand dynamics which can drive price volatility and which are difficult to predict. Price fluctuations in credits may have a material effect on future ~~earnings.~~

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operations. The availability of such credits depends on continued governmental support for these programs. If these programs are modified, reduced or eliminated, EVgo’s ability to generate this revenue in the future would be adversely impacted. In addition to current programs, EVgo’s management is currently monitoring ~~proposed programs~~the implementation of Washington’s program and additional proposals in ~~Colorado,~~varying stages of discussions including in New York, ~~Massachusetts, Washington, New Mexico and several other states,~~ along with a potential ~~federal program, as potential future revenue streams.~~changes to the Renewable Fuels Standard.

Results of Operations

~~Three Months Ended June 30, 2022 and 2021~~

The table below presents EVgo’s results of operations for the three months ended ~~June 30, 2022~~March 31, 2023 and ~~2021:~~2022.


	Three Months Ended June 30,						Change				Three Months Ended March 31,						Change
(dollars in thousands)	2022			2021			$		%		2023			2022			$		%
Revenue	$	9,076		$	4,783		$	4,293	90	%
Revenue from related party		—			—			—	—
Total revenue		9,076			4,783			4,293	90	%	$	25,300		$	7,700		$	17,600	229	%
Cost of revenue		(5,719)			(3,752)			(1,967)	52	%		(18,917)			(4,846)			(14,071)	290	%
Depreciation and amortization		(4,101)			(2,705)			(1,396)	52	%
Gross loss		(744)			(1,674)			930	56	%
General and administrative		32,178			13,338			18,840	141	%
Depreciation, net of capital-build amortization												(6,342)			(3,454)			(2,888)	84	%
Gross profit (loss)												41			(600)			641	107	%
General and administrative expenses												37,889			25,428			12,461	49	%
Depreciation, amortization and accretion		4,132			2,545			1,587	62	%		4,784			3,887			897	23	%
Operating loss		(37,054)			(17,557)			(19,497)	(111)	%		(42,632)			(29,915)			(12,717)	(43)	%
Interest expense		(13)			—			(13)
Interest expense, related party		—			(1,039)			1,039	100	%
Interest income		636			1			635	999+	%		1,998			55			1,943	*
Other (expense) income, net		(158)			174			(332)	(191)	%
Other income (expense), net												1			(263)			264	100	%
Change in fair value of earnout liability		4,891			—			4,891				(2,063)			(2,264)			201	9	%
Change in fair value of warrant liability		48,712			—			48,712
Income (loss) before income tax expense		17,014			(18,421)			35,435	192	%
Change in fair value of warrant liabilities												(6,380)			(22,874)			16,494	72	%
Loss before income tax expense												(49,076)			(55,261)			6,185	11	%
Income tax expense		(17)			—			(17)				(5)			(5)			—	—	%
Net income (loss)		16,997			(18,421)			35,418	192	%
Less: net income (loss) attributable to redeemable noncontrolling interest		12,518			(18,421)			30,939	168	%
Net income attributable to Class A common stockholders	$	4,479		$	—		$	4,479
Net loss												(49,081)			(55,266)			6,185	11	%
Less: net loss attributable to redeemable noncontrolling interest												(36,005)			(40,867)			4,862	12	%
Net loss attributable to Class A common stockholders											$	(13,076)		$	(14,399)		$	1,323	9	%

Gross margin		(8.2)	%		(35.0)	%						0.2	%		(7.8)	%
Operating margin		(408.3)	%		(367.1)	%						(168.5)	%		(388.5)	%
Network throughput (GWh)		10.1			6.1							17.9			8.0
Number of DC stalls		1,937			1,548							2,352			1,772

*Percentage greater than 999% or not meaningful

~~The table below presents EVgo’s revenue for the three months ended June 30, 2022 and 2021:~~

Three Months Ended June 30,

Change
(dollars in thousands)
2022

2021

$


%
Revenue









Charging revenue, retail
$
4,389

$
2,498

$
1,891

76
%
Charging revenue, OEM

189

150

39

26
%
Charging revenue, commercial

654

546

108

20
%
Network revenue, OEM

887

275

612

223
%
Ancillary revenue

829

639

190

30
%
Regulatory credit sales

2,128

675

1,453

215
%
Total revenue
$
9,076

$
4,783

$
4,293

90
%

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


	Three Months Ended March 31,				Change
(dollars in thousands)	2023		2022		$		%
Charging revenue, retail	$	6,615	$	3,502	$	3,113	89	%
Charging revenue, commercial		1,715		709		1,006	142	%
Charging revenue, OEM		552		151		401	266	%
Regulatory credit sales		1,215		1,378		(163)	(12)	%
Network revenue, OEM		2,699		490		2,209	451	%
eXtend revenue		10,292		80		10,212	*
Ancillary revenue		2,212		1,390		822	59	%
Total revenue	$	25,300	$	7,700	$	17,600	229	%

*Percentage greater than 999% or not meaningful

Total revenue for the three months ended ~~June 30, 2022~~March 31, 2023 increased ~~$4.3~~$17.6 million, or ~~90%~~229%, to ~~$9.1~~$25.3 million compared to $7.7 million for the three months ended March 31, 2022. As further discussed below, the increase in revenue was primarily due to a $10.2 million increase in eXtend revenue, a $3.1 million increase in retail charging revenue resulting from increased throughput and subscription fees, a $2.2 million increase in network revenue, and a $1.0 million increase in commercial charging revenue.

Charging Revenue, Retail. Charging revenue, retail, for the three months ended March 31, 2023 increased $3.1 million, or 89%, to $6.6 million compared to $3.5 million for the three months ended March 31, 2022. Period-over-period growth was due to an overall increase in throughput and subscription fees driven primarily by increased charging volume and a growing number of customers.

Charging Revenue, Commercial. Charging revenue, commercial, for the three months ended March 31, 2023 increased $1.0 million, or 142%, to $1.7 million compared to $0.7 million for the three months ended March 31, 2022. Period-over-period growth was due to higher charging volumes by the Company’s public fleet customers and reclassification of pass-through electricity expense as revenue.

Charging Revenue, OEM. Charging revenue, OEM, for the three months ended March 31, 2023 increased $0.4 million, or 266%, to $0.6 million compared to $0.2 million for the three months ended March 31, 2022. Period-over-period growth was primarily due to the addition of a new OEM partner and higher vehicle sales by the Company’s OEM partners.

Regulatory Credit Sales. Regulatory credit sales for the three months ended March 31, 2023 decreased $0.2 million, or 12%, to $1.2 million compared to $1.4 million for the three months ended March 31, 2022. The period-over-period decrease was primarily due to accelerated LCFS recognition in the first quarter of 2022.

Network Revenue, OEM. Network revenue, OEM, for the three months ended March 31, 2023 increased $2.2 million, or 451%, to $2.7 million compared to $0.5 million the three months ended March 31, 2022 The period-over-period increase was due to increased breakage associated with prepaid charging credits and marketing activities.

eXtend Revenue. eXtend revenue for the three months ended March 31, 2023 increased $10.2 million to $10.3 million compared to $0.1 million for the three months ended March 31, 2022 primarily as a result of the new agreement that was executed in 2022 with the Pilot Company.

Ancillary Revenue. Ancillary revenue for the three months ended March 31, 2023 increased $0.8 million, or 59%, to $2.2 million compared to $1.4 million for the three months ended March 31, 2022. The increase was primarily due to increased equipment and project sales and higher advertising revenue.

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Cost of Sales

Cost of Revenue. Cost of revenue for the three months ended March 31, 2023 increased $14.1 million, or 290%, to $18.9 million compared to $4.8 million for the three months ended June 30, 2021. As further discussed below, the increase in revenue during the three months ended June 30, 2022 was primarily due to a 76% increase in retail charging revenue as a result of the increased throughput, as well as a 215% increase in regulatory credit sales.

~~Charging Revenue, Retail~~

Charging revenue, retail, for the three months ended June 30, 2022 increased $1.9 million, or 76%, to $4.4 million compared to $2.5 million for the three months ended June 30, 2021. Period-over-period growth was due to an overall increase in usage and subscription fees driven primarily by a growing number of customers and increased charging volume as well as the ongoing recovery from COVID-19.

~~Charging Revenue, OEM~~

Charging revenue, OEM, for the three months ended June 30, 2022 stayed flat at $0.2 million compared to the three months ended June 30, 2021 as there was no material change to agreements and limited pick up of driver activity.

~~Charging Revenue, Commercial~~

Charging revenue, commercial, for the three months ended June 30, 2022 increased $0.1 million, or 20%, to $0.7 million compared to $0.5 million for the three months ended June 30, 2021. The increase was attributable to new fleet contracts that became effective towards the end of the three months ended June 30, 2021, increased charging volume by EVgo’s public fleet customers as well as the ongoing recovery from COVID-19.

~~Network Revenue, OEM~~

Network revenue, OEM, for the three months ended June 30, 2022 increased $0.6 million, or 223%, to $0.9 million compared to $0.3 million for the three months ended June 30, 2021 primarily due to increased membership fees, and breakage of prepaid charging credits as a result of increased membership activity and increased joint marketing activity under the OEM agreements.

~~Ancillary Revenue~~

Ancillary revenue for the three months ended June 30, 2022 increased $0.2 million, or 30%, to $0.8 million compared to $0.6 million for the three months ended June 30, 2021. The increase was primarily due to the acquisition of PlugShare and subsequent inclusion of PlugShare’s revenues in ancillary revenue partially offset by reduced equipment sales revenue.

~~Regulatory Credit Sales~~

Regulatory credit sales for the three months ended June 30, 2022 increased $1.5 million, or 215%, to $2.1 million compared to $0.7 million for the three months ended June 30, 2021. The period-over-period increase was primarily due to a new contract with a buyer who will purchase all of EVgo’s regulatory credits on an ongoing basis as well as the sales of credits generated in prior fiscal year, partially offset by the decrease in price per credit.

~~Cost of Sales~~

~~Cost of Revenue (Exclusive of Depreciation and Amortization Shown Separately Below)~~

~~Cost of revenue for the three months ended June 30, 2022 increased $2.0 million, or 52%, to $5.7 million compared to $3.8 million for the three months ended June 30, 2021.~~March 31, 2022. The increase in cost of ~~revenues~~revenue was primarily due to an increase of ~~$1.3~~$8.3 million in ~~non-energy~~ costs ~~due~~ to ~~an increased stall count and $0.8~~support eXtend revenue, $2.9 million in increased energy and other variable costs ~~due to~~resulting from increased throughput ~~partially offset~~and $2.5 million in increased non-energy costs driven by ~~lower cost of equipment sales.~~increased stall count.

~~Table of Contents~~

Depreciation, ~~and~~Net of Capital-Build Amortization

. Depreciation, ~~and~~net of capital-build amortization for the three months ended ~~June 30, 2022~~March 31, 2023 increased ~~$1.4~~$2.9 million, or ~~52%~~84%, to ~~$4.1~~$6.3 million compared to ~~$2.7~~$3.5 million for the three months ended ~~June 30, 2021~~March 31, 2022 due to growth in EVgo’s fixed asset base.

Gross ~~Loss~~Profit (Loss) and Gross Margin

Gross ~~loss~~profit (loss) for the three months ended ~~June 30, 2022~~March 31, 2023 improved ~~$0.9~~$0.6 million, or ~~56%~~107%, to ~~$0.7 million~~close to break even compared to ~~$1.7~~a gross loss of $0.6 million for the three months ended ~~June 30, 2021.~~March 31, 2022. Gross margin for the three months ended ~~June 30, 2022~~March 31, 2023 improved ~~26.8%~~ to ~~negative 8.2%~~0.2% compared to negative ~~35.0%~~7.8% for the three months ended ~~June 30, 2021~~March 31, 2022 primarily due to breakage revenue and, to a lesser extent, a significant increase in eXtend revenues which have higher gross margin than most of the ~~improved leveraging of both energy and non-energy related costs due to higher revenue, as well as improved ancillary margin and higher regulatory credit sales.~~Company’s other business lines.

Operating Expenses

General and Administrative Expenses.

General and administrative ~~costs~~expenses for the three months ended ~~June 30, 2022~~March 31, 2023 increased ~~$18.8~~$12.5 million, or ~~141%~~49%, to ~~$32.2~~$37.9 million compared to ~~$13.3~~$25.4 million for the three months ended ~~June 30, 2021.~~March 31, 2022. The ~~difference~~increase was primarily driven by ~~an $11.7~~a $7.8 million increase in payroll expenses due to higher headcount and higher share-based compensation, a ~~$1.8~~$2.9 million increase in ~~loss on fixed asset disposals,~~impairment expense, and a ~~$1.6 million increase in insurance expenses, a $2.1~~$1.0 million increase in legal service and professional service ~~expenses, as well as a $1.4 million increase in software~~ expenses.

Depreciation, Amortization and ~~Accretion~~Accretion.

Depreciation, amortization and accretion expenses for the three months ended March 31, 2023 increased ~~by $1.6~~$0.9 million, or ~~62%~~23%, ~~and was $4.1~~to $4.8 million ~~and $2.5~~compared to $3.9 million for the three months ended ~~June 30, 2022 and 2021.~~March 31, 2023. The increase was primarily due to higher ~~intangible asset~~ amortization related to ~~the PlugShare acquisition and software amortization.~~software.

Operating Loss ~~and Operating Margin~~

During the three months ended ~~June 30, 2022,~~March 31, 2023, EVgo had an operating loss of ~~$37.1~~$42.6 million, an increase of ~~$19.5~~$12.7 million, or ~~111%~~43%, compared to ~~$17.6~~$29.9 million for the three months ended ~~June 30, 2021.~~March 31, 2022. The increase in operating loss was driven primarily by an increase in general and administrative expenses. Operating margin for the three months ended ~~June 30, 2022 decreased to~~March 31, 2023 was negative ~~408.3%~~168.5% compared to negative ~~367.1%~~388.5% for the three months ended ~~June 30, 2021. The increase in operating loss period-over-period was primarily due to an increase in general and administrative expenses, partially offset by the improvement in gross margin.~~

~~Interest Expense~~

~~For the three months ended June 30, 2022, interest expense was de minimis. There was no interest expense for the three months ended June 30, 2021.~~

~~Interest Expense, Related Party~~

~~There was no interest expense for the three months ended June 30,~~March 31, 2022. ~~Interest expense for the three months ended June 30, 2021 was $1.0 million. The decrease was related to conversion of the borrowings under the LS Power Note to equity on the CRIS Close Date.~~

Interest Income

Interest income for the three months ended ~~June 30, 2022~~March 31, 2023 was ~~$0.6~~$2.0 million. Interest income for the three months ended ~~June 30, 2021~~March 31, 2022 was de minimis. The increase was a result of ~~the~~higher interest earned on ~~debt securities~~cash and cash equivalents held in a high interest rate account by the Company during the three months ended ~~June 30, 2022.~~March 31, 2023 compared to the same prior year period.

~~Table of Contents~~

Other Income (Expense) ~~Income,~~, Net

Other income (expense) ~~income,~~, net, for the three months ended ~~June 30, 2022 decreased by $0.3 million, or 191%, to $0.2 million of other expense, net, compared to $0.2 million~~March 31, 2023 was a de minimis amount of other income, net, ~~for the three months ended June 30, 2021. The decrease was primarily due to unrealized losses on marketable equity securities.~~

~~Changes in Fair Values of Warrant and Earnout Liabilities~~

The change in the fair values of the warrant and earnout liabilities relates to the liabilities that were assumed in connection with the CRIS Business Combination. For the three months ended June 30, 2022, there was a $53.6 million gain primarily due to a reduction in the fair values of the liabilities during the second quarter of 2022. See “Part I, Item 1. Financial Statements – Note 11 – Fair Value Measurements” for more information.

~~Income Taxes~~

For the three months ended June 30, 2022 and 2021, EVgo’s provision for income taxes and effective tax rates were de minimis as the current income tax benefit was offset by the change in the valuation allowance.

~~Net Income (Loss)~~

~~Net income for the three months ended June 30, 2022 was $17.0 million, a $35.4 million, or 192%, improvement~~ compared to aother expense, net, ~~loss~~ of ~~$18.4~~$0.3 million for the three months ended ~~June 30, 2021.~~March 31, 2022. The change to net income was primarily driven by a $53.6 million decrease in the fair value of the warrant and earnout liabilities during the three months ended June 30, 2022, as well as improved gross loss, partially offset by increased general and administrative expenses incurred to support growth, increased depreciation, amortization and accretion expenses incurred due to the PlugShare acquisition and an increased number of chargers in EVgo’s network.

~~Table of Contents~~

~~Six Months Ended June 30, 2022 and 2021~~

~~The table below presents EVgo’s results of operations for the six months ended June 30, 2022 and 2021:~~

Six Months Ended June 30,

Change
(dollars in thousands)

2022

2021


$

%
Revenue

$
16,776

$
8,352

$
8,424

101
%
Revenue from related party

—

562

(562)

(100)
%
Total revenue

16,776

8,914

7,862

88
%
Cost of revenue

(10,565)

(7,113)

(3,452)

49
%
Depreciation and amortization

(7,555)

(5,152)

(2,403)

47
%
Gross loss

(1,344)

(3,351)

2,007

60
%
General and administrative

57,606

25,344

32,262

127
%
Depreciation, amortization and accretion

8,019

5,055

2,964

59
%
Operating loss

(66,969)

(33,750)

(33,219)

(98)
%
Interest expense

(13)

—

(13)

Interest expense, related party

—

(1,915)

1,915

100
%
Interest income

691

1

690

999+
%
Other (expense) income, net

(422)

632

(1,054)

(167)
%
Change in fair value of earnout liability

2,627

—

2,627

Change in fair value of warrant liability

25,839

—

25,839

Loss before income tax expense

(38,247)

(35,032)

(3,215)

(9)
%
Income tax expense

(22)

—

(22)

Net loss

(38,269)

(35,032)

(3,237)

(9)
%
Less: net loss attributable to redeemable noncontrolling interest

(28,349)

(35,032)

6,683

19
%
Net loss attributable to Class A common stockholders

$
(9,920)

$
—

$
(9,920)

Gross margin

(8.0)
%

(37.6)
%

Operating margin

(399.2)
%

(378.6)
%




Network throughput (GWh)

18.1

10.2




Number of DC stalls

1,937

1,548

~~The table below presents EVgo’s revenue for the six months ended June 30, 2022 and 2021:~~

Six Months Ended June 30,

Change
(dollars in thousands)
2022

2021

$


%
Revenue









Charging revenue, retail
$
7,891

$
4,302

$
3,589

83
%
Charging revenue, OEM

340

482

(142)

(29)
%
Charging revenue, commercial

1,363

1,037

326

31
%
Network revenue, OEM

1,377

807

570

71
%
Ancillary revenue

2,299

1,043

1,256

120
%
Regulatory credit sales

3,506

1,243

2,263

182
%
Total revenue
$
16,776

$
8,914

$
7,862

88
%

Total revenue for the six months ended June 30, 2022 increased $7.9 million, or 88%, to $16.8 million compared to $8.9 million for the six months ended June 30, 2021. As further discussed below, the increase in revenue during the six months ended June 30, 2022 was primarily due to an 83% increase in retail charging revenue, a 182% increase in regulatory credit sales, as well as a 120% increase in ancillary revenue.

~~Table of Contents~~

~~Charging Revenue, Retail~~

Charging revenue, retail, for the six months ended June 30, 2022 increased $3.6 million, or 83%, to $7.9 million compared to $4.3 million for the six months ended June 30, 2021. Period-over-period growth was due to an overall increase in usage and subscription fees driven primarily by a growing number of customers and increased charging volume as well as the ongoing recovery from COVID-19.

~~Charging Revenue, OEM~~

Charging revenue, OEM, for the six months ended June 30, 2022 decreased $0.1 million, or 29%, to $0.3 million compared to $0.5 million for the six months ended June 30, 2021. The decrease was primarily driven by the expiration of one of EVgo’s OEM programs.

~~Charging Revenue, Commercial~~

Charging revenue, commercial, for the six months ended June 30, 2022 increased $0.3 million, or 31%, to $1.4 million compared to $1.0 million for the six months ended June 30, 2021. The increase was attributable to new fleet contracts that became effective during 2021, increased charging volumes by the Company’s public fleet customers and also due to the ongoing recovery from COVID-19.

~~Network Revenue, OEM~~

Network revenue, OEM, for the six months ended June 30, 2022 increased $0.6 million, or 71%, to $1.4 million compared to $0.8 million due to increased membership fees, and breakage of prepaid charging credits as a result of increased membership activity and increased joint marketing activity under the OEM agreements.

~~Ancillary Revenue~~

Ancillary revenue for the six months ended June 30, 2022 increased $1.3 million, or 120%, to $2.3 million compared to $1.0 million for the six months ended June 30, 2021. The increase was primarily due to the acquisition of PlugShare and subsequent inclusion of PlugShare’s revenues in ancillary revenue, partially offset by reduced equipment sales and engineering, procurement and construction revenue.

~~Regulatory Credit Sales~~

Regulatory credits for the six months ended June 30, 2022 increased $2.3 million, or 182%, to $3.5 million compared to $1.2 million for the six months ended June 30, 2021. The period-over-period increase was primarily due to a ~~new contract with a buyer who will purchase all of EVgo’s regulatory credits on an ongoing basis as well as the sales of credits generated in prior fiscal year, partially offset by the~~$0.3 million decrease in ~~price per credit.~~

~~Cost of Sales~~

~~Cost of Revenue (Exclusive of Depreciation and Amortization Shown Separately Below)~~

Cost of revenue for the six months ended June 30, 2022 increased $3.5 million, or 49%, to $10.6 million compared to $7.1 million for the six months ended June 30, 2021. The increase in cost of sales during the six months ended June 30, 2022 was due to an increase of $2.1 million in non-energy costs from an increased stall count, $1.5 million in increased energy and other variable costs due to increased throughput, partially offset by a decrease of $0.3 million in equipment cost of sales and engineering and construction costs.

~~Depreciation and Amortization~~

Depreciation and amortization for the six months ended June 30, 2022 increased $2.4 million, or 47%, to $7.6 million compared to $5.2 million for the six months ended June 30, 2021 due to a higher stall count.

~~Table of Contents~~

~~Gross Loss and Gross Margin~~

Gross loss for the six months ended June 30, 2022 improved by $2.0 million, or 60%, to $1.3 million compared to $3.4 million for the six months ended June 30, 2021. Gross margin for the six months ended June 30, 2022 improved 29.6% to negative 8.0% compared to negative 37.6% for the six months ended June 30, 2021 due to the improved leveraging of energy and non-energy related costs, increased regulatory credit sales, as well as improved ancillary margin.

~~Operating Expenses~~

~~General and Administrative~~

General and administrative costs for the six months ended June 30, 2022 increased $32.3 million, or 127%, to $57.6 million compared to $25.3 million for the six months ended June 30, 2021. The difference was driven by a $19.9 million increase in payroll expenses due to higher headcount and higher share-based compensation, a $3.2 million increase in insurance expenses, a $3.0 million increase in software expenses, a $3.0 million increase in legal service and professional service expenses, as well as a $2.5 million increase in loss on fixed asset disposals.

~~Depreciation, Amortization and Accretion~~

Depreciation, amortization and accretion expenses for the six months ended June 30, 2022 increased $3.0 million, or 59%, to $8.0 million compared to $5.1 million for the six months ended June 30, 2021. The increase was primarily due to higher intangible asset amortization as a result of the PlugShare acquisition and software amortization.

~~Operating Loss and Operating Margin~~

During the six months ended June 30, 2022, EVgo had an operating loss of $67.0 million, an increase of $33.2 million, or 98%, compared to $33.8 million for the six months ended June 30, 2021. Operating margin for the six months ended June 30, 2022 decreased to negative 399.2% compared to negative 378.6% for the six months ended June 30, 2021. The increase in operating loss period-over-period was primarily due to an increase in general and administrative expenses, partially offset by the improvement in gross margin.

~~Interest Expense~~

~~For the six months ended June 30, 2022, interest expense was de minimis. There was no interest expense for the six months ended June 30, 2021.~~

~~Interest Expense, Related Party~~

There was no interest expense for the six months ended June 30, 2022. For the six months ended June 30, 2021, interest expense was $1.9 million. The decrease was related to conversion of the borrowings under the LS Power Note that was converted to equity on the CRIS Close Date.

~~Interest Income~~

Interest income for the six months ended June 30, 2022 was $0.7 million. Interest income for the six months ended June 30, 2021 was de minimis. The increase was a result of the interest earned on investments made in the six months ended June 30, 2022.

~~Other (Expense) Income, Net~~

Other (expense) income, net, for the six months ended June 30, 2022 decreased $1.1 million, or 167%, to $0.4 million of other expense, net, compared to $0.6 million of other income, net, for the six months ended June 30, 2021. The decrease was primarily due to unrealized losses on ~~marketable equity securities.~~

investments.

4839

Table of Contents

Changes in Fair Values of Warrant and Earnout Liabilities

~~The~~For the three months ended March 31, 2023, there was an $8.4 million loss on change in ~~the~~ fair values of ~~the~~ warrant and earnout liabilities ~~were due~~compared to a $25.1 million loss for the ~~liabilities that were assumed in connection with the CRIS Business Combination. For the six~~three months ended ~~June 30, 2022, there~~March 31, 2022. The change between periods was ~~a $28.5 million gain~~ primarily due to a ~~reduction~~lower increase in the fair ~~values~~value of the warrant liabilities during the first ~~six months~~quarter of ~~2022~~.2023 compared to the same prior year period. See ~~“Part~~“Part I, Item 1. Financial Statements – Note 118 – Fair Value ~~Measurements”~~Measurements” for more information.

Income Taxes

For the ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ EVgo’s provision for income taxes and effective tax rates were deemed to be de ~~minimis as the current income~~minimis. As of March 31, 2023 and 2022, EVgo maintained a full valuation allowance on EVgo’s net deferred tax ~~benefit was offset by the change in the valuation allowance.~~assets.

Net Loss

Net loss for the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 was ~~$38.3~~$49.1 million, ~~a $3.2 million, or 9% increase~~ compared to ~~$35.0~~$55.3 million for the ~~six~~three months ended ~~June 30, 2021.~~March 31, 2022. The ~~increased loss~~change was primarily ~~due to~~driven by decreases in the change in fair values of the warrant liabilities, which was partially offset by increased general and administrative expenses incurred to support growth; the depreciation, amortization and accretion expenses incurred due to an increased number of chargers in EVgo’s network and the PlugShare acquisition, partially offset by improved gross loss and change in fair value of warrant and earnout liabilities.

growth.

Non-GAAP Financial Measures

This Quarterly Report includes the following non-GAAP financial ~~measures:~~measures, in each case as defined below: “Adjusted Cost of Sales,” “Adjusted Cost of Sales as a Percentage of Revenue,” “Adjusted Gross Profit (Loss),” “Adjusted Gross Margin,” “Adjusted General and Administrative Expenses,” “Adjusted General and Administrative Expenses as a Percentage of Revenue,” “EBITDA,” “EBITDA Margin,” “Adjusted EBITDA” and ~~“Receipts.~~“Adjusted EBITDA Margin.” EVgo believes these measures are useful to investors in evaluating EVgo’s ~~financial~~ performance. In addition, EVgo management uses these measures internally to establish forecasts, budgets and operational goals to manage and monitor its business. Further, due to the nature of certain OEM contracts, there is a significant timing difference between cash receipt and revenue recognition, therefore, EVgo believes Receipts (defined below) provides valuable insight to the ongoing performance and liquidity of the business. EVgo believes that these ~~non-GAAP financial~~ measures help to depict a more ~~realistic~~meaningful representation of the performance of the underlying business, enabling EVgo to evaluate and plan more effectively for the future. ~~EVgo believes that investors should have access to the same set of tools that its management uses in analyzing operating results.~~

Adjusted Cost of Sales, ~~(defined below),~~Adjusted Cost of Sales as a Percentage of Revenue, Adjusted Gross Profit (Loss) ~~(defined below)~~, Adjusted Gross Margin, ~~(defined below),~~Adjusted General and Administrative Expenses, Adjusted General and Administrative Expenses as a Percentage of Revenue, EBITDA, EBITDA Margin, Adjusted EBITDA ~~(defined below)~~ and ~~Receipts~~Adjusted EBITDA Margin are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. These measures should not be considered as measures of financial performance under GAAP and the items excluded from or included in these metrics are significant components in understanding and assessing EVgo’s financial performance. These metrics should not be considered as alternatives to net income (loss) or any other performance measures derived in accordance with GAAP.

~~Adjusted Cost~~Table of ~~Sales, Adjusted Gross Profit (Loss), Adjusted Gross Margin, EBITDA and Adjusted EBITDA.~~ Contents

EVgo defines Adjusted Cost of Sales as cost of sales before: (i) depreciation, net of capital-build amortization, and ~~amortization,~~ (ii) share-based ~~compensation, and (iii) OEM reimbursement.~~compensation. EVgo defines Adjusted Cost of Sales as a Percentage of Revenue as Adjusted Cost of Sales as a percentage of revenue. EVgo defines Adjusted Gross Profit (Loss) ~~is defined~~ as ~~revenues~~revenue less Adjusted Cost of Sales. EVgo defines Adjusted Gross Margin ~~is defined~~ as Adjusted Gross Profit (Loss) as a percentage of ~~revenues.~~revenue. EVgo defines Adjusted General and Administrative Expenses as general and administrative expenses before (i) share-based compensation, (ii) loss on disposal of property and equipment and impairment expense, (iii) bad debt expense and (iv) certain other items that management believes are not indicative of EVgo’s ongoing performance. EVgo defines Adjusted General and Administrative Expenses as a Percentage of Revenue as Adjusted General and Administrative Expenses as a percentage of revenue. EVgo defines EBITDA as net income (loss) before (i) depreciation, net of capital-build amortization, (ii) amortization, (iii) accretion, (iv) interest ~~expense, (ii)~~ income, ~~taxes~~ and ~~(iii) depreciation and amortization.~~(v) income tax expense. EVgo defines EBITDA Margin as EBITDA as a percentage of revenue. EVgo defines Adjusted EBITDA as EBITDA plus (i) share-based compensation, ~~expense,~~ (ii) loss on disposal of ~~assets~~property and equipment and impairment expense, (iii) ~~other unusual or nonrecurring income (expenses) such as~~(gain) loss on investments, (iv) bad debt ~~expense.~~

~~Table~~expense, (v) change in fair value of ~~Contents~~earnout liability, (vi) change in fair value of warrant liabilities, and (vii) certain other items that management believes are not indicative of EVgo’s ongoing performance. EVgo defines Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of revenue.

The following isunaudited table presents a reconciliation of ~~adjusted cost~~Adjusted Cost of ~~sales~~Sales, Adjusted Cost of Sales as a Percentage of Revenue, Adjusted Gross Profit (Loss) and ~~adjusted gross profit~~Adjusted Gross Margin to the most directly comparable GAAP measures, in each case, for the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 and ~~2021:~~2022:

Three Months Ended June 30,

Six Months Ended June 30,

(dollars in thousands)
2022

2021

2022

2021

Total revenue
$
9,076

$
4,783

$
16,776

$
8,914

Cost of sales

9,820

6,457

18,120

12,265

Less: Depreciation and amortization in cost of sales

(4,101)

(2,705)

(7,555)

(5,152)

Less: Share-based compensation and other

(18)

6

(20)

12

Adjusted cost of sales
$
5,701

$
3,758

$
10,545

$
7,125

Adjusted gross profit
$
3,375

$
1,025

$
6,231

$
1,789

~~The following is a reconciliation of adjusted gross margin for the three and six months ended June 30, 2022 and 2021:~~

Three Months Ended June 30,

Six Months Ended June 30,

2022

2021

2022

2021

Gross margin

(8.2)
%

(35.0)
%

(8.0)
%

(37.6)
%
Depreciation and amortization in cost of sales

45.4

56.4

45.1

57.7

Less: Share-based compensation and other

0.0

0.0

0.0

0.0

Adjusted gross margin

37.2
%

21.4
%

37.1
%

20.1
%

During the third quarter of 2021, the Company changed its presentation of certain costs that were included as a component of cost of sales in previous periods. The Company now presents these costs as a component of general and administrative expenses. The following is a reconciliation of the previous and current presentation of cost of sales:

Three Months Ended

Six Months Ended

June 30,

June 30,
(dollars in thousands)
2022

2021

2022

2021
Cost of sales, under previous method¹
$
11,582

$
7,548

$
21,617

$
14,288
Reclassification

(1,762)

(1,091)

(3,497)

(2,023)
Cost of sales, as reported
$
9,820

$
6,457

$
18,120

$
12,265

¹	~~The three and six months ended June 30, 2021 are presented as previously reported.~~


	Three Months Ended
	March 31,
(dollars in thousands)	2023		2022
GAAP revenue	$	25,300	$	7,700
GAAP cost of sales		25,259		8,300
GAAP gross profit (loss)	$	41	$	(600)
GAAP cost of sales as a percentage of revenue		99.8%		107.8%
GAAP gross margin		0.2%		(7.8%)

Adjustments:
Depreciation, net of capital-build amortization	$	6,342	$	3,454
Share-based compensation		22		11
Total adjustments		6,364		3,465
Adjusted Cost of Sales	$	18,895	$	4,835
Adjusted Cost of Sales as a Percentage of Revenue		74.7%		62.8%
Adjusted Gross Profit	$	6,405	$	2,865
Adjusted Gross Margin		25.3%		37.2%

5041

Table of Contents

The following unaudited table presents ~~the~~a reconciliation of ~~net income (loss)~~Adjusted General and Administrative Expenses and Adjusted General and Administrative Expenses as a Percentage of Revenue to the most directly comparable GAAP measures for the three months ended March 31, 2023 and 2022:


	Three Months Ended
	March 31,
(dollars in thousands)	2023		2022
GAAP revenue	$	25,300	$	7,700
GAAP general and administrative expenses	$	37,889	$	25,428
GAAP general and administrative expenses as a percentage of revenue		149.8%		330.2%
Adjustments:
Share-based compensation	$	6,405	$	3,495
Loss on disposal of property and equipment and impairment expense		3,460		1,010
Bad debt expense		97		116
Other¹		1,455		(226)
Total adjustments		11,417		4,395
Adjusted General and Administrative Expenses	$	26,472	$	21,033
Adjusted General and Administrative Expenses as a Percentage of Revenue		104.6%		273.2%

For the three months ended March 31, 2023, comprised primarily of costs related to the reorganization of Company resources previously announced by the Company on February 23, 2023 and the petition filed by EVgo in the Delaware Court of Chancery in February 2023 seeking validation of EVgo's charter and share structure (the “205 Petition”), which are not expected to recur. For the three months ended March 31, 2022, comprised primarily of insurance proceeds for property losses.

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The following unaudited table presents a reconciliation of EBITDA, EBITDA Margin, Adjusted EBITDA, and Adjusted EBITDA Margin to the most directly comparable GAAP measure, ~~to EBITDA and Adjusted EBITDA~~in each case, for the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 and ~~2021:~~2022:

Three Months Ended

Six Months Ended

June 30,

June 30,
(dollars in thousands)
2022

2021

2022

2021
Net income (loss)
$
16,997

$
(18,421)

$
(38,269)

$
(35,032)
Adjustments:




Depreciation, net of capital-build amortization

4,170

2,749

7,687

5,230
Amortization

3,564

2,147

6,929

4,294
Accretion

499

354

958

683
Interest income

(636)

(1)

(691)

(1)
Interest expense

13

1,039

13

1,915
State income tax

17

—

22

—
EBITDA

24,624

(12,133)

(23,351)

(22,911)
Share-based compensation

7,042

531

10,548

1,010
Loss on disposal of property and equipment

1,879

116

2,889

347
Unrealized loss (gain) on equity securities

150

(175)

405

(577)
Bad debt expense

35

98

151

168
Change in fair value of earnout liability

(4,891)

—

(2,627)

—
Change in fair value of warrant liability

(48,712)

—

(25,839)

—
Nonrecurring costs

36

554

(189)

1,175
Adjusted EBITDA
$
(19,837)

$
(11,009)

$
(38,013)

$
(20,788)

~~Receipts~~. EVgo defines Receipts, a non-GAAP financial measure, as total revenue plus change in deferred revenue over the same period. Pursuant to the term of certain OEM contracts, EVgo is paid well in advance of when revenue can be recognized according to ASC 606; usually, the payment is tied to the number of stalls that commence operations under the applicable contract arrangement. EVgo believes that Receipts provide investors insight into cash generated from EVgo’s customers and EVgo’s periodic performance and liquidity. EVgo uses Receipts to monitor and measure EVgo’s commercial performance, liquidity and growth as EVgo’s OEM customers pay EVgo in advance for placing stalls in operation, and then EVgo recognizes a portion of the related revenue over time. The calculation of Receipts is set forth in the table below for the following periods:

Three Months Ended

Six Months Ended

June 30,

June 30,
(dollars in thousands)
2022

2021

2022

2021
Receipts

Total revenues
$
9,076

$
4,783

$
16,776

$
8,914
Change in deferred revenue¹

(11)

225

(572)

20,778
Total Receipts
$
9,065

$
5,008

$
16,204

$
29,692
Year-over-year percentage change in total Receipts

81%

(45)%


	Three Months Ended
	March 31,
(dollars in thousands)	2023		2022
GAAP revenue	$	25,300	$	7,700

GAAP net loss	$	(49,081)	$	(55,266)
GAAP net loss margin		(194.0%)		(717.7%)
Adjustments:
Depreciation, net of capital-build amortization		6,468		3,517
Amortization		4,119		3,365
Accretion		539		459
Interest income		(1,998)		(55)
Income tax expense		5		5
EBITDA	$	(39,948)	$	(47,975)
EBITDA Margin		(157.9%)		(623.1%)
Adjustments:
Share-based compensation		6,427		3,506
Loss on disposal of property and equipment and impairment expense		3,460		1,010
(Gain) loss on investments		(1)		255
Bad debt expense		97		116
Change in fair value of earnout liability		2,063		2,264
Change in fair value of warrant liabilities		6,380		22,874
Other¹		1,455		(226)
Adjusted EBITDA	$	(20,067)	$	(18,176)
Adjusted EBITDA Margin		(79.3%)		(236.1%)

¹~~Change in deferred revenue for~~

For the ~~six~~three months ended ~~June 30, 2021 includes~~March 31, 2023, comprised primarily of costs related to the ~~first payment received in~~reorganization of Company resources previously announced by the Company on February 23, 2023 and the 205 Petition, which are not expected to recur. For the three months ended March ~~2021~~31, 2022, comprised primarily of ~~$20.0 million under one of EVgo’s OEM agreements.~~insurance proceeds for property losses.

Liquidity and Capital Resources

EVgo has a history of operating losses and negative operating cash flows. As of ~~June 30, 2022,~~March 31, 2023, EVgo had a$163.8 million of cash, ~~restricted cash and~~ cash equivalents ~~balance of $345.0 million~~and restricted cash and working capital of ~~$326.5~~$114.6 million. As of December 31, ~~2021,~~2022, EVgo had a$246.5 million of cash, ~~restricted cash and~~ cash equivalents ~~balance of $485.2 million~~and restricted cash and working capital of ~~$459.5~~$188.1 million. The Company’s net cash outflow for the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 was ~~$140.2~~$82.7 million. EVgo believes its cash and cash equivalents on hand as of ~~June 30, 2022 is~~March 31, 2023 are sufficient to meet EVgo’s current working capital and capital expenditure requirements for a period of at least twelve months from the filing date of this Quarterly Report.

~~Table of Contents~~

To date, EVgo’s primary sources of liquidity have been cash flows from the CRIS Business Combination, revenues from its various revenue streams, government grants, ~~strategic relationships with OEMs~~proceeds from sales of EVgo’s Class A common stock, including under the ATM Program, and loans and equity contributions from its previous owners. EVgo’s primary cash requirements include operating expenses, satisfaction of commitments to various counterparties and suppliers and capital expenditures (including property and equipment). EVgo’s principal uses of cash in recent periods have been funding its operations and investing in capital expenditures, including the purchase of EV chargers for installation.

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In July 2022, EVgo entered into the Delta Charger Supply Agreement and the Purchase Order with Delta, pursuant to which EVgo will purchase and Delta will sell EV chargers manufactured by Delta from time to time in specified quantities at certain delivery dates over a period of four years. EVgo is obligated to purchase at least 1,000 chargers (which will enable the construction of 2,000 stalls) pursuant to the Delta Charger Supply Agreement and the Purchase Order with the option, at EVgo’s election, to increase the number of chargers purchased to 1,100. Under the terms of the Purchase Order, EVgo will receive delivery of 600 chargers in the 11 months following July 12, 2022 and is required to make full payment on such chargers within sixty (60) days of receipt. EVgo’s obligations under the Purchase Order are take-or-pay obligations; however, EVgo’s liability is capped at a maximum of the greater of $30.0 million or 50% of the value of any outstanding firm orders. EVgo entered into the Delta Charger Supply Agreement and Purchase Order in order to meet its obligations under the Pilot Infrastructure Agreement, other potential contractual commitments and its own needs and intends to fund the capital expenditure required under the Delta Charger Supply Agreement and Purchase Order with proceeds from the Pilot Infrastructure Agreement as well as cash and cash equivalents on hand.

~~Following~~The term of the ~~consummation~~Tax Receivable Agreement commenced upon the completion of the CRIS Business Combination ~~the Company Group is obligated~~and will continue until all tax benefits that are subject to ~~make payments under~~ the Tax Receivable ~~Agreement.~~Agreement have been utilized or expired and all required payments are made, unless the Tax Receivable Agreement is terminated early (including upon a change of control). The actual timing and amount of any payments that may be made under the Tax Receivable Agreement are unknown at this time and will vary based on a number of factors. However, the Company Group expects that the payments that it will be required to make to TRA Holders in connection with the Tax Receivable Agreement will be substantial. Any payments made by the Company Group to TRA Holders under the Tax Receivable Agreement will generally reduce the amount of cash that might have otherwise been available to EVgo or EVgo OpCo. To the extent EVgo OpCo has available cash and subject to the terms of any current or future debt or other agreements, the EVgo OpCo A&R LLC Agreement will require EVgo OpCo to make pro rata cash distributions to holders of EVgo OpCo Units, including Thunder Sub, in an amount sufficient to allow the Company Group to pay its taxes and to make payments under the Tax Receivable Agreement. EVgo generally expects EVgo OpCo to fund such distributions out of available cash. However, except in cases where the Company Group elects to terminate the Tax Receivable Agreement early, the Tax Receivable Agreement is terminated early due to certain mergers or other changes of control, or the Company Group has available cash but fails to make payments when due, generally the Company Group may elect to defer payments due under the Tax Receivable Agreement if it does not have available cash to satisfy its payment obligations under the Tax Receivable Agreement or if its contractual obligations limit its ability to make these payments. Any such deferred payments under the Tax Receivable Agreement generally will accrue interest at the rate provided for in the Tax Receivable Agreement and such interest may significantly exceed the Company Group’s other costs of capital. In certain circumstances (including an early termination of the Tax Receivable Agreement due to a change of control or otherwise), payments under the Tax Receivable Agreement may be accelerated and/or significantly exceed the actual benefits, if any, the Company Group realizes in respect of the tax attributes subject to the Tax Receivable Agreement. In the case of such an acceleration in connection with a change of control, where applicable, EVgo generally expects the accelerated payments due under the Tax Receivable Agreement to be funded out of the proceeds of the change of control transaction giving rise to such acceleration, which could have a significant impact on EVgo’s ability to consummate a change of control or the proceeds received by EVgo’s stockholders in connection with a change of control. However, the Company Group may be required to fund such payment from other sources and as a result, any early termination of the Tax Receivable Agreement could have a substantial negative impact on EVgo’s liquidity or financial condition.

Cash Flows

Six Months Ended June 30,
(dollars in thousands)
2022

2021
Cash flows used in operating activities
$
(38,370)

$
(1,357)
Cash flows used in investing activities

(106,836)

(23,341)
Cash flows provided by financing activities

5,032

18,185
Net decrease in cash, restricted cash and cash equivalents
$
(140,174)

$
(6,513)

The following table summarizes EVgo’s consolidated cash flows for the three months ended March 31, 2023 and 2022:


	Three Months Ended March 31,
(in thousands)	2023		2022
Cash flows used in operating activities	$	(19,343)	$	(19,831)
Cash flows used in investing activities		(65,246)		(28,072)
Cash flows provided by financing activities		1,908		4,101
Net decrease in cash, cash equivalents and restricted cash	$	(82,681)	$	(43,802)

5244

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Operating Activities. Cash used in operating activities for the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 was ~~$38.4~~$19.3 million compared to ~~cash used by operating activities of $1.4~~$19.8 million ~~during~~for the ~~six~~three months ended ~~June 30, 2021.~~March 31, 2022. The year-over-year change ~~was~~ primarily ~~due to~~reflected a ~~decrease of $21.4~~$22.3 million increase in cash ~~inflows~~flows from deferred revenue and an $6.3 million increase in cash ~~loss~~flows from ~~operations of $15.8 million. Offsetting these decreases~~accounts payable, which were ~~$3.5~~partially offset by a $17.9 million ~~of increased~~decrease in cash ~~inflows related to~~flows from accounts receivable and an $8.0 million decrease in cash flows from prepaid expenses and other current and ~~noncurrent assets and $1.5 million of increased cash inflows from receivables from related parties.~~long-term assets.

Investing Activities. Cash used in investing activities for the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 was ~~$106.8~~$65.2 million, ~~relating~~compared to ~~$34.7~~$28.1 million for ~~purchases of investments~~the three months ended March 31, 2022. The increase was primarily driven by an increase in ~~various debt securities and $72.3 million~~purchases of property, equipment and software, which was primarily comprised of costs for construction in process and charging equipment. During the six months ended June 30, 2021, cash used in investing activities was $23.3 million related to purchases of property and equipment, comprised of charging equipment and costs for construction in process.software.

Financing Activities. Cash provided by financing activities for the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 was ~~$5.0~~$1.9 million compared to $4.1 million for the three months ended March 31, 2022. The decrease was driven primarily ~~comprised of~~by a decrease in proceeds from capital-build ~~funding. Cash provided by financing activities~~funding received for ~~the six months ended June 30, 2021 was $18.2 million, consisting principally of proceeds from, and payments on, the related party note payable.~~charging stations.

Working Capital. EVgo’s working capital as of ~~June 30, 2022~~March 31, 2023 was ~~$326.5~~$114.6 million, compared to ~~a $459.5~~$188.1 million as of December 31, ~~2021. During~~2022. The decrease was driven primarily by an $82.7 million decrease in the ~~six months ended June 30, 2022, EVgo’s~~Company’s cash, cash equivalents and restricted cash balance, ~~decreased~~a $9.5 million increase in accounts payable, and an $8.5 million increase in deferred revenue, current, which were partially offset by ~~$140.2~~an $18.2 million ~~receivables from related party decreased $1.5~~increase in accounts receivable, net, a $5.2 million ~~prepaid expenses decreased by $4.1~~increase in other assets, and a $5.0 million ~~and accrued liabilities increased by $16.3 million. The~~ decrease in ~~assets was offset by~~customer deposits.

Contractual Obligations and Commitments. EVgo has material cash requirements for known contractual obligations and commitments in the form of operating leases, purchase ~~of short-term available-for-sale investments of $27.8 million.~~commitments and certain other liabilities that are disclosed in “Part I, Item 1. Financial Statements – Note 8 – Commitments and Contingencies.” EVgo generally expects to fund these obligations through its existing cash and cash equivalents and future financing or cash flows from operations.

Critical Accounting Policies and Estimates

The discussion and analysis of EVgo’s financial condition and results of operations is based upon EVgo’s ~~condensed~~ consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of EVgo’s financial statements requires the Company to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses and related disclosures of contingent assets and liabilities. ~~Managements~~Management bases these estimates on its historical experience and various other assumptions that it believes to be reasonable under the circumstances. Actual results experienced may vary materially and adversely from EVgo’s estimates. Revisions to estimates are recognized prospectively. ~~The Company’s significant accounting policies are discussed in Note 2 of the notes to the consolidated financial statements as of and~~ for ~~the fiscal years ended December 31, 2021 and 2020, included in the Company’s Annual Report.~~

~~There have been no significant changes to EVgo’s critical accounting policies other than the implementation of a comprehensive new lease standard during the six months ended June 30, 2022.~~more information See ~~“Part~~“Part I, Item 1. Financial Statements – Note 52 – ~~Lease Accounting”~~Summary of Significant Accounting Policies” for ~~further information on EVgo’s~~additional description of the significant accounting policies that have been followed in preparing EVgo’s consolidated financial statements.

The accounting policies described below are those EVgo considers to be the most critical to an understanding of its financial condition and results of operations and that require the most complex and subjective management judgment. EVgo considers its critical accounting estimates to be those related to ~~the implementation~~its revenue recognition, business combinations and warrant liabilities, which are described below.

Revenue Recognition

EVgo recognizes revenue in accordance with ASC 606. Recording revenue requires judgment, including determining whether an arrangement includes multiple performance obligations, whether any of those obligations are distinct and cannot be combined and allocation of the ~~comprehensive new lease standard.~~transaction price to each performance obligation based on the relative standalone selling prices (“SSP”). Revenue for performance obligations can be recognized over time or at a point in time depending on the nature of the performance obligation. Changes to the elements in an arrangement or, in EVgo’s determination, to the relative SSP for these elements, could materially affect the amount of earned and unearned revenue reflected in its consolidated financial statements.

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Understanding the complex terms of some of EVgo’s agreements and determining the appropriate time, amount and method under which the Company should recognize revenue for the related transactions requires significant judgment. The Company exercises judgment in determining which promises in a contract constitute performance obligations rather than set-up activities. The Company determines which activities under a contract transfer a good or service to a customer rather than activities that are required to fulfill a contract but do not transfer control of a good or service to the customer. Determining whether obligations in a contract are considered distinct performance obligations that should be accounted for separately or as a single performance obligation requires significant judgment. In reaching its conclusion, the Company assesses the nature of each individual service offering and how the services are provided in the context of the contract, including whether the services are significantly integrated which may require judgment based on the facts and circumstances of the contract. The Company does not disclose the transaction price allocated to remaining performance obligations for (i) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice and (ii) contracts with variable consideration allocated entirely to a single performance obligation. The Company’s remaining performance obligations under these contracts include providing charging services, branding services, and maintenance services which will generally be recognized over the contract term. The Company’s customer contracts may include variable consideration such as that due to the unknown number of users that will receive charging credits or an unknown number of sites that will receive maintenance services. For such variable consideration, the Company has determined it is not necessary to estimate variable consideration as the uncertainty resolves itself monthly in accordance with the contracts’ revenue recognition pattern. The timing and amount of revenue recognition in a period could vary if different judgments were made. The Company may also estimate variable consideration under the expected value method or the most likely amount method.

Additionally, where there are multiple performance obligations, judgment is required to determine revenue for each distinct performance obligation. Determining the relative SSP for contracts that contain multiple performance obligations requires significant judgment to appropriately determine the suitable method for estimating the SSP. EVgo determines SSP using observable pricing when available, which takes into consideration market conditions and customer specific factors.

At contract inception, EVgo determines whether EVgo satisfies the performance obligation over time or at a point in time. Revenues from charging – OEM are primarily recognized ratably over time or as fee-bearing usage occurs. Revenues from charging – retail, charging – commercial and LCFS are usage-based services and recognized over time or at a point in time upon the delivery of the charging products or services. eXtend and ancillary revenues are recognized over time based on a time-based or cost-based approach or at a point in time as performance obligations are satisfied.

Warrant Liabilities

EVgo accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480 and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to EVgo’s common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of EVgo’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end-date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance and remeasured to fair value at each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized in “changes in fair value of warrant liabilities” in the consolidated statements of operations. The fair value of the private placement warrants on the date of issuance and on each measurement date is estimated using a Monte Carlo simulation methodology, which includes inputs such as EVgo’s stock price, the risk-free interest rate, the expected term, the expected volatility, the dividend rate, the exercise price and the number of private placement warrants outstanding. Assumptions used in the model are subjective and require significant judgment.

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Recent Accounting Pronouncements

For a discussion of EVgo’s new or recently adopted accounting pronouncements, see ~~“Part~~“Part I, Item 1. Financial ~~Statements –~~Statements– Note 2 – Summary of Significant Accounting ~~Policies.~~Policies” as of and for the quarters ended March 31, 2023 and 2022.

~~Table of Contents~~

~~Jumpstart Our Business Startups~~JOBS Act ~~of 2012~~

On April 5, 2012, the JOBS Act was signed into law. The JOBS Act ~~contains~~includes provisions that, among other things, relax certain reporting requirements for qualifying public companies. Following the CRIS Business Combination, EVgo ishas qualified as an “emerging growth company” (“EGC”) under the JOBS Act and, as a result, is ~~allowed~~permitted to comply with new or revised accounting pronouncements based on the effective date for private ~~(not~~(i.e., not publicly traded) companies. EVgo elected to delay the adoption of new or revised accounting standards and as a result, EVgo may not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. As a result, EVgo’s financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

As an ~~“emerging growth company,”~~EGC, EVgo is not required to, among other things, (a) provide an auditor’s attestation report on EVgo’s system of internal control over financial reporting, (b) provide all of the compensation disclosure that may be required of ~~non-emerging growth~~non-EGC public companies, (c) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (d) disclose comparisons of the chief executive officer’s compensation to median employee compensation. These exemptions will apply for a period of five years following the completion of the Initial Public Offering or until EVgo otherwise no longer qualifies as an ~~“emerging growth company.”~~EGC.

~~Following~~Additionally, following the CRIS Business Combination, EVgo ~~was and currently is~~has qualified as a “smaller reporting company” as defined under the Exchange Act. EVgo may continue to be a smaller reporting company so long as either (i) the market value of shares of its common stock held by non-affiliates is less than $250 million or (ii) its annual revenue was less than $100 million during the most recently completed fiscal year and the market value of shares of its common stock held by non-affiliates is less than $700 million. If EVgo is a smaller reporting company at the time it ceases to be an ~~emerging growth company,~~EGC, EVgo may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company, EVgo may choose to present only the two most recent fiscal years of audited financial statements in its Annual Report on Form 10-K and ~~have~~has reduced disclosure obligations regarding executive compensation and, similar to ~~emerging growth companies,~~EGCs, if EVgo is a smaller reporting company under the requirements of (ii) above, EVgo would not be required to obtain an attestation report on internal control over financial reporting issued by its independent registered public accounting firm.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

EVgo is a ~~smaller~~“smaller reporting ~~company~~company” as defined in ~~Rule 12b-2 under the Exchange Act.~~Item 10(f)(1) of Regulation S-K. As a result, pursuant to Item 305(e) of Regulation S-K, the Company is not required to provide the information required by this ~~Item.~~Item 7A.

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Item 4. Controls and Procedures

Management’s Evaluation of Disclosure Controls and Procedures

~~Disclosure controls and procedures (as defined in~~Per Rules 13a-15(e) and 15d-15(e) under the Exchange ~~Act) are~~Act, the term disclosure controls and procedures means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the ~~Company’s~~ reports ~~filed~~that it files or ~~submitted~~submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. ~~Because~~Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Under the supervision of ~~inherent limitations,~~the Company’s Board of Directors and with the participation of management, including the Company’s Chief Executive Officer and Chief Financial Officer (the “certifying officers”), the Company conducted an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in and pursuant to Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2023. The certifying officers concluded that, as a result of the material weaknesses in internal control over financial reporting ~~may not prevent or detect misstatements and projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes~~described below in ~~conditions, or that the degree of compliance with the policies or procedures may deteriorate.~~

~~EVgo, with the participation of its chief executive officer and chief financial officer, evaluated, as of the end of the period covered by this Quarterly Report, the effectiveness of~~“Remediation Plan for Existing Material Weaknesses in Internal Control over Financial Reporting”, the Company’s disclosure controls and procedures ~~and determined that such controls~~ were not effective ~~at a reasonable assurance level~~ as of ~~June 30, 2022 due~~March 31, 2023; accordingly, the Company is implementing additional policies and procedures to remediate these shortcomings as outlined below.

Notwithstanding the identified material weaknesses, ~~in its internal control over financial reporting described below.~~

~~Table of Contents~~

~~Notwithstanding these material weaknesses, EVgo has concluded that~~the Company’s management believes the condensed consolidated financial statements included in this Quarterly Report ~~are~~present fairly, ~~stated~~ in all material respects, the Company’s financial position, results of operations and cash flows as of and for the periods presented, in accordance with U.S. GAAP.

Changes in Internal Control Over Financial Reporting

Other than the remediation efforts discussed below in “Remediation Plan for Existing Material ~~Weakness~~ Weaknesses in Internal Control over Financial Reporting,” there were no changes in the Company’s 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 quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

Remediation Plan for Existing Material Weaknesses in Internal Control over Financial Reporting

The Company’s management previously identified material weaknesses in the Company’s internal control over financial reporting, as identified below and discussed further in “Part II, Item 9A. Controls and Procedures” in the Annual Report. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of ~~its~~the Company’s annual or interim financial statements ~~would~~will not be prevented or detected on a timely basis. ~~During the three months ended June 30, 2022, the Company identified multiple control deficiencies aggregating to a material weakness in the retail charging revenue cycle.~~

The deficiencies resulted from ineffective control over the completeness and accuracy of retail charging revenue transactions combined with complexity in managing the high volume, low dollar value nature of such transactions. As previously described in the Company’s Annual Report under the section titled “Risk Factors,” EVgo has determined that the Company hadfollowing material weaknesses in ~~its~~ internal control over financial reporting were identified: as a result of the Company lacking a sufficient number of trained resources to fulfill internal control responsibilities, the Company did not have an effective risk assessment process that evaluated risks at a sufficient level of detail to identify all relevant risks of material misstatement across the entity and the Company did not have an effective information and communication process that identified and assessed the controls necessary to ensure the reliability of information used in financial reporting. ~~Specifically, material weaknesses were identified with respect~~As a consequence, the Company did not effectively design, implement and operate process-level controls and effective general information technology (“IT”) controls relevant to ~~segregation~~all of ~~duties and review; account reconciliations, preparation~~its financial reporting processes.

Table of supporting documentation and analysis; effective review of technical accounting matters; separate review and approval of journal entries; and review of key inputs for estimates of asset retirement obligations. As of December 31, 2021, EVgo remediated the material weakness related to the review and approval of journal entries.Contents

In order to address the ~~remaining~~ identified material weaknesses, the Company has established a remediation plan which includes the following measures:

●

~~Increasing resources within its organization, including the expansion of its~~Evaluating skill set gaps and hiring additional accounting, ~~control~~financial reporting, and compliance ~~functions~~personnel (including both internal and external resources), as needed, with public company experience to develop and implement ~~continued improvements~~additional policies, procedures and ~~enhancements to address the overall deficiencies that led to the material weaknesses;~~controls;

●

~~Documenting existing,~~Providing ongoing training for key personnel responsible for accounting, financial reporting and ~~implementing additional,~~ internal ~~controls~~control over financial reporting;

●

~~Engaging external consultants to assist with documentation~~Designing and implementing a comprehensive and continuous risk assessment process that identifies and assesses risks of ~~its existing~~material misstatement across the entity and helps ensure that related internal controls ~~over~~are properly designed and in place to respond to those risks in the Company’s financial ~~reporting and identification of control gaps, including the existing material weaknesses, to be remediated;~~reporting;

●

~~Implementing additional training programs for~~Designing and implementing controls over the ~~finance~~completeness and ~~accounting staff related to the requirements~~accuracy of ~~being a public company and internal controls over~~information used in financial reporting; and

●

~~Developing a comprehensive plan~~Designing and implementing process-level controls and effective general IT controls relevant to ~~address deficiencies in~~all of the ~~retail charging revenue cycle.~~Company’s financial reporting processes.

~~EVgo~~The Company is ~~continuing~~committed to remediating the material weaknesses and is making progress in that effort. The actions the Company is taking are subject to ongoing senior management review, as well as oversight from the Company’s Board of Directors. When fully implemented and operational, the Company believes the measures described above will remediate the ~~remaining~~underlying causes of the control deficiencies that gave rise to the material weaknesses ~~as efficiently~~ and ~~effectively as possible, and~~strengthen the Company’s internal control over financial reporting. However, remediation efforts ~~could~~may continue beyond the fiscal year ending December 31, 2022. At this time, EVgo cannot provide an estimate of costs expected to be incurred in connection with implementing this remediation plan; however, these remediation measures will be time consuming, result in increased costs and place significant demands on the Company’s financial and operational resources.

~~Table of Contents~~

~~Changes in Internal Control Over Financial Reporting~~

In connection with the preparation of the audited consolidated financial statements of EVgo Holdco as of and for the year ended December 31, 2019, material weaknesses were identified in the Company’s internal control over financial reporting. Certain of these material weaknesses continued during the six months ended June 30, 2022 and have not yet been fully remediated. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of EVgo’s annual or interim consolidated financial statements2023. The Company will not be ~~prevented or detected on a timely basis. See the section entitled “~~~~Risk Factors— Financial, Tax and Accounting-Related Risks—EVgo has identified material weaknesses in its internal control over financial reporting. If EVgo is unable~~able to fully remediate these material weaknesses ~~or if EVgo identifies~~until these steps have been completed and have been operating effectively for a sufficient period of time. The Company may also identify additional measures that may be required to remediate the material weaknesses in the future or otherwise fails to maintain an effective system of internal control over financial reporting, this may result in material misstatements of EVgo’s consolidated financial statements or cause the Company to fail to meet EVgo’s periodic reporting obligations~~” in the Company’s Annual Report.~~

~~Other than as discussed above, there were no changes~~ in the Company’s internal control over financial reporting, ~~during the three months ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.~~necessitating further action.

5649

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, EVgo may be a party to legal proceedings or subject to claims arising in the ordinary course of business. EVgo is not currently a party to any material legal proceedings.

Item 1A. Risk Factors

~~Investing in~~In the course of conducting its business operations, EVgo is exposed to a variety of risks, any of which have affected or could materially adversely affect EVgo’s business, financial condition, and results of operations. The market price of EVgo’s securities ~~involves risks.~~could decline, possibly significantly or permanently, if one or more of these risks and uncertainties occurs. Before you make a decision to buy EVgo’s securities, in addition to the risks and uncertainties discussed above under “Cautionary Statement Regarding Forward-Looking Statements,” you should carefully consider the specific ~~risks~~risk factors set forth ~~herein. If any of these risks actually occur, it may materially harm EVgo’s business, financial condition, liquidity and results of operations. As a result,~~in the ~~market price of EVgo’s securities could decline, and you could lose all or part of your investment. Additionally,~~“Risk Factors” section in the ~~risks and uncertainties described in this Quarterly Report are not the only risks and uncertainties that EVgo faces. Additional risks and uncertainties not presently known~~Annual Report. There have been no material changes to the Company or that EVgo currently believes to be immaterial may become material and adversely affect EVgo’s business. Factors that could cause EVgo’s actual results to differ materially from those in this Quarterly Report include the risk factors ~~described~~disclosed in Part I, Item 1A of the Annual Report.

~~New climate disclosure rules proposed by the SEC may increase EVgo’s costs of compliance and adversely impact EVgo’s business.~~

On March 21, 2022, the SEC proposed new rules relating to the disclosure of a range of climate-related risks. Public comments were due by June 17, 2022 and the SEC is currently finalizing the new rules and is expected to be effective in December 2022. At this time, EVgo cannot predict the costs of implementation or any potential adverse impacts resulting from the rule. To the extent this rule is finalized as proposed, EVgo could incur increased costs relating to the assessment and disclosure of climate-related risks and costs related to greenhouse gas emissions accounting and disclosures regarding EVgo’s use of renewable energy certificates. EVgo may also face increased litigation risks related to disclosures made pursuant to the rule if finalized as proposed.

EVgo will be required to install a substantial number of charger stalls under EVgo’s agreement with Pilot Company and GM. If EVgo does not meet EVgo’s obligations under this agreement, EVgo may not be entitled to payments from Pilot Company and may be required to pay liquidated damages, which may be significant.

Pursuant to the Pilot Infrastructure Agreement, EVgo is required to meet certain milestones over two biennial periods measured by the number of chargers installed and charger sites serviced, and Pilot Company is required to make certain payments each month based on the progress of construction at each charger site and for each charger procured. Under the Pilot Infrastructure Agreement, EVgo is required to install approximately 500 chargers at 300 charger sites during the first two-year period and will be required to install approximately 500 chargers at an additional 200 to 250 charger sites during the second two-year period. EVgo may not be able to meet the charger installation milestones and may be subject to liquidated damages, modifications to the Pilot Infrastructure Agreement or termination of the Pilot Infrastructure Agreement.

Subject to certain excusable events, if EVgo is unable to meet its charger installation obligations in either of the two biennial periods, Pilot Company may be entitled to liquidated damages. Furthermore, depending on the length of the delay, Pilot Company may remove the charger site from the portfolio without designating a replacement charger site.

The Pilot Infrastructure Agreement is subject to early termination for several reasons including: (a) at Pilot Company’s election after 1,000 charging stalls (500 chargers) have been completed, subject to certain payments to EVgo, (b) the inability of EVgo to secure certain charger types in specified circumstances and (c) a material increase in the price of chargers due to a change in law.

~~Table of Contents~~

EVgo is committed to purchasing a large amount of chargers under the Delta Charger Supply Agreement and Purchase Order requiring significant capital expenditures, some of which may not be immediately offset by payment by EVgo’s counterparty under the Pilot Infrastructure Agreement.

EVgo entered into the Delta Charger Supply Agreement and Purchase Order in order to meet the charger requirements of the Pilot Infrastructure Agreement. Pursuant to the Delta Charger Supply Agreement and Purchase Order, EVgo will purchase a minimum of 1,000 chargers (which will enable the construction of 2,000 stalls) from Delta over a period of four years with the option, at EVgo’s election, to increase the number of chargers purchased to 1,100. Under the terms of the Purchase Order, EVgo is to receive delivery of the 600 chargers in the 11 months following July 12, 2022 and is required to make full payment on such chargers within 60 days of receipt.

If the counterparty under the Pilot Infrastructure Agreement does not meet its obligation to pay for chargers or the Pilot Infrastructure Agreement is otherwise terminated, EVgo’s cash flows may be negatively impacted by its obligation to continue to purchase chargers from Delta under the Purchase Order.

EVgo depends on a limited number of vendors for charging equipment, including Delta. The inability of Delta to fulfill its requirements under the Delta Charger Supply Agreement and Purchase Order will require EVgo to find an alternative supplier in order to meet its commitments under the Pilot Infrastructure Agreement which may not be available or may be at significantly higher cost.

Continuing or worsening inflationary issues and associated changes in monetary policy may result in increases to the cost of our charging equipment, other goods, services and personnel, which in turn could cause our capital expenditures and operating costs to rise.

The U.S. inflation rate has been steadily increasing since 2021 and into 2022. These inflationary pressures may result in increases to the costs of our charging equipment and personnel, which would in turn cause our capital expenditures and operating costs to rise. Sustained levels of high inflation have likewise caused the U.S. Federal Reserve and other central banks to increase interest rates, which could have the effects of raising the cost of capital and depressing economic growth, either of which—or the combination thereof—could hurt the financial and operating results of our business.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Item 6. Exhibits

See Exhibit Index.

5850

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EXHIBIT INDEX


Exhibit No.	Description

3.1	Second Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on July 8, ~~2021)~~2022).

3.2	Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on July 8, ~~2021)~~2022).

4.1	Specimen Class A Common Stock Certificate (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-1 (Registration No. 333-248718), filed with the Securities and Exchange Commission on September 10, 2020).

4.2	Specimen Warrant Certificate (incorporated by reference to Exhibit ~~4.3~~4.4 to the Company’s Registration Statement on Form S-1 (Registration No. 333-248718), filed with the Securities and Exchange Commission on September 10, 2020).

4.3	Warrant Agreement, dated September 29, 2020, between the Company and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 5, 2020).
10.1††	EVgo Inc. Executive Change in Control and Severance Plan (incorporated by reference to Exhibit 10.12 to the Company’s Annual Report, filed with the Securities and Exchange Commission on March 30, 2023).
~~31.1†~~31.1*	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Certification of Chief Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

~~31.2†~~31.2*	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Certification of Chief Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

~~32†~~32.1†	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

~~101.INS†~~101.INS	XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

~~101.SCH†~~101.SCH*	XBRL Taxonomy Extension Schema Document

~~101.CAL†~~101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document

~~101.DEF†~~101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document

~~101.LAB†~~101.LAB*	XBRL Taxonomy Extension Label Linkbase Document

~~101.PRE†~~101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

~~104†~~104	Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

†*	Filed herewith.

†	Furnished herewith.

††	Indicates a management contract or compensatory plan, contract or arrangement.

5951

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, duly authorized.

~~Date: August 10, 2022~~


	EVgo Inc.

Date: May 9, 2023	By:	/s/ ~~Cathy~~Catherine Zoi
	Name:	~~Cathy~~Catherine Zoi
	Title:	Chief Executive Officer
		(Principal Executive Officer)

Date: May 9, 2023	By:	/s/ Olga Shevorenkova
	Name:	Olga Shevorenkova
	Title:	Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

6052


	For the Six Months Ended June 30, 2021
					Additional
	LLC Interests				Paid-In		Accumulated		Member's
(in thousands)	Shares		Amount		Capital		Deficit		Equity
Balance, December 31, 2020 (as previously reported)		—	$	136,348	$	929	$	(47,790)	$	89,487
Retroactive application of recapitalization		195,800		—		—		—		—
Balance, December 31, 2020 (as adjusted)		195,800		136,348		929		(47,790)		89,487
Share-based compensation		—		—		480		—		480
Net loss		—		—		—		(16,610)		(16,610)
Balance, March 31, 2021		195,800		136,348		1,409		(64,400)		73,357
Share-based compensation		—		—		531		—		531
Net loss		—		—		—		(18,421)		(18,421)
Balance, June 30, 2021		195,800	$	136,348	$	1,940	$	(82,821)	$	55,467


			General and
			Administrative
(in thousands)	Cost of Sales		Expenses
For the three months ended June 30, 2022
Computed under previous method	$	11,582	$	30,416
Change in presentation		(1,762)		1,762
As adjusted	$	9,820	$	32,178

For the three months ended June 30, 2021
As previously reported	$	7,548	$	12,247
Change in presentation		(1,091)		1,091
As adjusted	$	6,457	$	13,338

For the six months ended June 30, 2022
Computed under previous method	$	21,617	$	54,109
Change in presentation		(3,497)		3,497
As adjusted	$	18,120	$	57,606

For the six months ended June 30, 2021
As previously reported	$	14,288	$	23,321
Change in presentation		(2,023)		2,023
As adjusted	$	12,265	$	25,344


(in thousands)
2022	$	2,786
2023		6,361
2024		5,746
2025		4,849
2026		4,430
2027		3,755
Thereafter		14,616
Total undiscounted operating lease payments		42,543
Less: imputed interest		(9,775)
Total discounted operating lease liabilities	$	32,768


(in thousands)
2022	$	3,486
2023		3,515
2024		2,987
2025		2,093
2026		1,767
Thereafter		5,570
	$	19,418


		Adjusted		Unrealized		Unrealized		Fair
(in thousands)	Level	Cost Basis		Gains		Losses		Value
Assets
Cash equivalents:
Commercial paper	2	$	3,112	$	—	$	—	$	3,112
Corporate debt securities	2		1,258		—		—		1,258
Total cash equivalents			4,370		—		—		4,370
Short-term investments:
Certificates of deposit	2		3,279		—		(20)		3,259
Commercial paper	2		1,611		—		—		1,611
U.S. government treasury securities	2		5,999		—		(32)		5,967
Corporate debt securities	2		17,026		1		(88)		16,939
Total short-term investments			27,915		1		(140)		27,776
Long-term investments:
Corporate debt securities	2		5,265		—		(35)		5,230
Asset-backed securities	2		1,575		—		(8)		1,567
Total long-term investments			6,840		—		(43)		6,797
Total		$	39,125	$	1	$	(183)	$	38,943



	Six Months Ended June 30,						Change
(dollars in thousands)	2022			2021			$		%
Revenue	$	16,776		$	8,352		$	8,424	101	%
Revenue from related party		—			562			(562)	(100)	%
Total revenue		16,776			8,914			7,862	88	%
Cost of revenue		(10,565)			(7,113)			(3,452)	49	%
Depreciation and amortization		(7,555)			(5,152)			(2,403)	47	%
Gross loss		(1,344)			(3,351)			2,007	60	%
General and administrative		57,606			25,344			32,262	127	%
Depreciation, amortization and accretion		8,019			5,055			2,964	59	%
Operating loss		(66,969)			(33,750)			(33,219)	(98)	%
Interest expense		(13)			—			(13)
Interest expense, related party		—			(1,915)			1,915	100	%
Interest income		691			1			690	999+	%
Other (expense) income, net		(422)			632			(1,054)	(167)	%
Change in fair value of earnout liability		2,627			—			2,627
Change in fair value of warrant liability		25,839			—			25,839
Loss before income tax expense		(38,247)			(35,032)			(3,215)	(9)	%
Income tax expense		(22)			—			(22)
Net loss		(38,269)			(35,032)			(3,237)	(9)	%
Less: net loss attributable to redeemable noncontrolling interest		(28,349)			(35,032)			6,683	19	%
Net loss attributable to Class A common stockholders	$	(9,920)		$	—		$	(9,920)

Gross margin		(8.0)	%		(37.6)	%
Operating margin		(399.2)	%		(378.6)	%
Network throughput (GWh)		18.1			10.2
Number of DC stalls		1,937			1,548