EVgo (EVGO) - 2021 Q1 - Quarterly Report

PART I – FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements and related notes for the period ended March 31, 2021 Financial Statements This section presents the unaudited condensed consolidated financial statements and comprehensive notes for the quarter ended March 31, 2021 Condensed Consolidated Balance Sheets The balance sheet as of March 31, 2021, shows approximately $230.0 million in the Trust Account and a significant increase in total liabilities to $72.1 million, driven by warrant liability revaluation Condensed Consolidated Balance Sheet Data (Unaudited) | Account | March 31, 2021 (USD) | December 31, 2020 (USD) | | :--- | :--- | :--- | | Assets | | | | Cash | $385,272 | $990,249 | | Investments held in Trust Account | $230,006,837 | $230,003,380 | | Total Assets | $230,812,755 | $231,255,125 | | Liabilities & Equity | | | | Warrant liability | $61,855,000 | $32,844,000 | | Deferred underwriting fee payable | $8,050,000 | $8,050,000 | | Total Liabilities | $72,121,885 | $41,642,277 | | Class A common stock subject to possible redemption | $153,690,860 | $184,612,840 | | Total Stockholders' Equity | $5,000,010 | $5,000,008 | Condensed Consolidated Statement of Operations For the three months ended March 31, 2021, the company reported a net loss of $30.9 million, primarily due to a $29.0 million non-cash charge from warrant liability revaluation and $1.9 million in operating costs Statement of Operations Highlights (For the three months ended March 31, 2021) | Item | Amount (USD) | | :--- | :--- | | Formation and operating costs | $1,914,450 | | Loss from operations | ($1,914,450) | | Change in fair value of warrant liability | ($29,011,000) | | Net loss | ($30,921,978) | | Basic and diluted net loss per share, Class B | ($5.38) | Condensed Consolidated Statement of Cash Flows Net cash used in operating activities was approximately $0.6 million for the three months ended March 31, 2021, resulting in a net decrease in cash of $604,977 and an ending balance of $385,272 Cash Flow Summary (For the three months ended March 31, 2021) | Cash Flow Activity | Amount (USD) | | :--- | :--- | | Net cash used in operating activities | ($579,977) | | Net cash used in financing activities | ($25,000) | | Net Change in Cash | ($604,977) | | Cash – End of period | $385,272 | Notes to Condensed Consolidated Financial Statements These notes provide comprehensive details on the company's SPAC status, the pending EVgo business combination, critical accounting policies, and fair value measurements of financial instruments - The company, a SPAC, entered into a business combination agreement with EVgo Parties on January 21, 2021[51][68] - The EVgo transaction included a $400.0 million PIPE financing through the sale of 40,000,000 Class A common shares at $10.00 per share[71] - A significant accounting policy involves treating warrants as liabilities at fair value, with changes recognized in the statement of operations[84] - The warrant liability's fair value increased from $32.8 million at December 31, 2020, to $61.9 million at March 31, 2021, resulting in a $29.0 million charge to earnings[133][43] Management's Discussion and Analysis of Financial Condition and Results of Operations This section discusses the company's operating results, liquidity, and capital resources, focusing on the pending EVgo merger, PIPE financing, and the $30.9 million net loss driven by warrant revaluation - The company, a blank check entity, entered into a definitive Business Combination Agreement with EVgo Parties on January 21, 2021[137][139] - For the quarter ended March 31, 2021, the company reported a net loss of $30.9 million, primarily from a $29.0 million non-cash change in warrant liability fair value and $1.9 million in operating costs[146] - As of March 31, 2021, the company held approximately $230.0 million in the Trust Account and $0.4 million in cash for operating purposes[150][151] - On March 31, 2021, the company borrowed $280,000 from Holdings (an EVgo party) via a promissory note to cover transaction expenses[157] - The accounting for warrants, classified as liabilities re-measured to fair value each period, is identified as a critical accounting policy[163] Quantitative and Qualitative Disclosures about Market Risk The company faces minimal market or interest rate risk as Trust Account funds are invested in short-term U.S. government treasury obligations - The company has minimal exposure to market or interest rate risk due to Trust Account funds being invested in short-term U.S. government treasury obligations or money market funds[167] Controls and Procedures Management concluded that disclosure controls and procedures were ineffective as of March 31, 2021, due to a material weakness in warrant accounting, with remediation plans underway - Management concluded that disclosure controls and procedures were not effective as of March 31, 2021[169] - The ineffectiveness stemmed from a material weakness in internal control over warrant accounting, which were misclassified as equity instead of derivative liabilities[169][173] - The company plans to remediate this weakness by improving access to accounting literature and enhancing communication with professionals on complex accounting matters[174] PART II – OTHER INFORMATION This section provides other required information, including legal proceedings, risk factors, and exhibit listings Legal Proceedings The company is not currently a party to any material legal or regulatory proceedings that would adversely affect its business or financial condition - The company is not presently a party to any material legal or regulatory proceedings[176] Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report - As of the date of this report, there have been no material changes to the risk factors disclosed in the company's Annual Report[177] Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities during the period - None[179] Defaults Upon Senior Securities There were no defaults upon senior securities during the period - None[181] Mine Safety Disclosures This item is not applicable to the company - Not Applicable[183] Other Information There is no other information to report for the period - None[185] Exhibits This section lists the exhibits filed as part of the Quarterly Report, including the Business Combination Agreement with EVgo and the PIPE financing subscription agreement - Key exhibits filed include the Business Combination Agreement with EVgo and the Form of Subscription Agreement for the PIPE investment[187]