Business context and reporting period
This is the unaudited Form 10-Q of Climate Change Crisis Real Impact I Acquisition Corporation (CRIS), a SPAC, for the quarter ended March 31, 2021—not an operating-company 10-Q for EVgo Inc. CRIS had not begun operations or generated revenue. It had signed a January 21, 2021 agreement to combine with EVgo, but the transaction was still pending at quarter-end.
Financial results and liquidity
| Metric | Quarter ended March 31, 2021 |
|---|---|
| Revenue | None |
| Formation and operating costs | $1.9 million |
| Change in fair value of warrant liability | $29.0 million expense, non-cash |
| Net loss | $30.9 million |
| Operating cash used | $0.6 million |
| Cash outside Trust Account | $0.4 million |
| Trust Account investments | $230.0 million |
| Warrant liability | $61.9 million |
Interest income was approximately $3,500. The reported loss principally reflects the fair-value remeasurement of warrants, rather than operating performance. No operating margins are meaningful or reported. The filing reports no long-term debt; it separately discloses a $280,000 related-party promissory note issued March 31 to fund transaction expenses, bearing 0.12% annual interest and payable upon completion of the business combination. The $8.05 million deferred underwriting fee is payable only if a business combination closes.
Changes versus prior period
There is no comparable first-quarter 2020 operating period presented. Compared with December 31, 2020, the warrant liability rose from $32.8 million to $61.9 million, primarily driving the quarter’s non-cash loss. Trust Account investments were nearly unchanged; cash outside the Trust Account declined from $990,249 to $385,272. Class A shares classified as subject to possible redemption declined from 18.46 million to 15.37 million.
Transaction, outlook, risks and unusual items
- The proposed EVgo transaction contemplated CRIS contributing Trust Account funds, PIPE proceeds and other available cash, net of redemptions and transaction expenses. The related PIPE commitments totaled $400 million for 40 million shares at $10 per share, contingent on closing; proceeds were intended for EVgo and its subsidiaries.
- CRIS expected continued transaction and public-company costs, and stated it might need additional financing if costs exceeded estimates or redemptions were significant. There is no EVgo operating guidance in this filing.
- CRIS had until October 2, 2022 to complete a business combination, subject to possible extension; otherwise it would liquidate and redeem public shares. Warrants could expire worthless if no transaction closed.
- Disclosure controls were deemed ineffective because of a material weakness in warrant accounting. CRIS disclosed that it had concluded its 2020 financial statements should not be relied upon and planned remediation; it gave no assurance that remediation would be effective.
- Management said COVID-19 could negatively affect CRIS’s financial position, results or search process, but the impact was not readily determinable. No material legal proceedings were reported.
Important facts for investors to verify
- Confirm transaction completion status, redemption levels, final cash delivered to EVgo and whether the $400 million PIPE funded.
- Review EVgo’s own operating-company filings for revenue, profitability, cash flow, debt, liquidity and outlook; CRIS’s figures above do not represent EVgo’s operating results.
- Assess the warrant valuation and control weakness, the 2020 restatement/non-reliance disclosure, and progress on remediation.
- Confirm treatment and repayment of the $280,000 related-party note, deferred underwriting fee and other transaction expenses at closing.