Fair Value Measurements

9 Months Ended

Oct. 31, 2022

The Company’s assets and liabilities that were measured at fair value on a recurring basis were as follows:


	Fair Value Measured as of October 31, 2022
	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets
Money market funds	$	92,475	$	—	$	—	$	92,475
U.S. Treasury securities	—		208,887		—		208,887
Total financial assets	$	92,475	$	208,887	$	—	$	301,362
Liabilities

Contingent earnout liability recognized upon acquisition of ViriCiti (ViriCiti Earnout)	—		—		5,337		5,337
Total financial liabilities	$	—	$	—	$	5,337	$	5,337


	Fair Value Measured as of January 31, 2022
	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets
Money market funds	$	254,716	$	—	$	—	$	254,716
Total financial assets	$	254,716	$	—	$	—	$	254,716
Liabilities
Common stock warrant liabilities (Private Placement)	$	—	$	—	$	25	$	25
Contingent earnout liability recognized upon acquisition of ViriCiti (ViriCiti Earnout)	—		—		5,993		5,993
Total financial liabilities	$	—	$	—	$	6,018	$	6,018

The money market funds were classified as cash and cash equivalents on the condensed consolidated balance sheets. The aggregate fair value of the Company’s money market funds approximated amortized cost and, as such, there were no unrealized gains or losses on money market funds as of October 31, 2022 and January 31, 2022. Realized gains and losses, net of tax, were not material for any of the periods presented. Short-term investments, consisting of U.S. treasury securities, were classified as available-for-sale on purchase date and recorded at fair value on the condensed consolidated balance sheets (See Note 6, Short-Term Investments).

As of October 31, 2022 and January 31, 2022, the Company had no investments with a contractual maturity of greater than one year.

The following table presents a summary of the changes in the fair value of the Company’s Level 3 financial instruments:


	Private placement warrant liability		ViriCiti Earnout liability
	(in thousands)
Fair value as of January 31, 2022	$	(25)	$	(5,993)


Change in fair value included in other income (expense), net	(23)		—
Effect of foreign currency translation	—		656
Reclassification of warrants to stockholders’ equity (deficit) due to exercise	48		—




Fair value as of October 31, 2022	$	—	$	(5,337)


	Redeemable convertible preferred stock warrant liability		Private placement warrant liability		Earnout liability		ViriCiti Earnout liability
	(in thousands)
Fair value as of January 31, 2021	$	(75,843)	$	—	$	—	$	—
Private placement warrant liability acquired as part of the Merger	—		(127,888)		—		—
Contingent earnout liability recognized upon the closing of the reverse recapitalization	—		—		(828,180)		—
Change in fair value included in other income (expense), net	9,237		46,835		84,420		—
Reclassification of warrants to stockholders’ equity (deficit) due to exercise	—		51,771		—		—
Reclassification of Legacy ChargePoint preferred stock warrant liability upon the reverse capitalization	66,606		—		—		—
Issuance of earnout shares upon triggering events	—		—		501,120		—
Reclassification of remaining contingent earnout liability upon triggering event	—		—		242,640		—
Contingent Earnout liability recognized upon the acquisition of ViriCiti (ViriCiti Earnout)	—		—		—		(3,856)
Fair value as of October 31, 2021	$	—	$	(29,282)	$	—	$	(3,856)

Private Placement Liability

The fair values of the private placement warrant liability is based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy. The significant unobservable inputs used in the fair value measurements of the private placement warrant liability include the expected volatility and dividend yield. In determining the fair value of the private placement warrant liability, the Company used the Binomial Lattice Model (“BLM”) that assumes optimal exercise of the Company's redemption option at the earliest possible date (see Note 11, Stock Warrants and Earnout).

ViriCiti Earnout Liability

On August 11, 2021, the Company acquired all of the outstanding shares of ViriCiti. The purchase price consideration included the ViriCiti Earnout, which was consideration contingent on meeting certain revenue targets through January 31, 2023. The fair value of the ViriCiti Earnout liability is based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy. The ViriCiti Earnout liability was valued using a Monte Carlo simulation valuation model using a distribution of potential outcomes over the earnout period based on the most reliable information available. The liability is remeasured to fair value based upon the attainment against the revenue targets and changes in the fair value of earnout liabilities is presented in the consolidated statements of operations using Level 3 fair value inputs.

During the three months ended October 31, 2022, the Company did not revalue the ViriCiti Earnout liability as updated revenue expectations for the earnout period through January 2023 did not materially change. The change in the fair value of the ViriCiti Earnout liability of $0.7 million is due to foreign currency translation.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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