Fair Value Measurements

12 Months Ended

Jan. 31, 2023

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


	Fair Value Measured as of January 31, 2023
	Level 1		Level 2		Level 3		Total
	( in thousands)
Assets
Money market funds	$	133,979	$	—	$	—	$	133,979
U.S. Treasury securities	—		104,966		—		104,966
Total financial assets	$	133,979	$	104,966	$	—	$	238,945


	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 consolidated balance sheets and were within Level 1 of the fair value hierarchy. 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 January 31, 2023 and 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 the purchase date and recorded at fair value on the consolidated balance sheets (see Note 4, Short-Term Investments, for more details).

As of January 31, 2023 and 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:


	Redeemable convertible preferred stock warrant liability		Private placement warrant liability		Earnout liability		ViriCiti Earnout liability
	(in thousands)
Fair value as of January 31, 2020	$	(2,718)	$	—	$	—	$	—
Change in fair value included in other income (expense), net	(73,125)		—		—		—
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)		—
Contingent earnout liability recognized upon the acquisition of ViriCiti (“ViriCiti Earnout”)	—		—		—		(3,856)
Change in fair value	9,237		63,746		84,420		(2,137)
Reclassification of warrants to stockholders’ equity (deficit) due to exercise	—		64,117		—		—
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		—
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	—		—		—		191
Reclassification of warrants to stockholder’s equity (deficit) due to exercise	—		48		—		—
Contingent earnout liability increase upon satisfaction of earnings goal of ViriCiti (ViriCiti Earnout)	—		—		—		(1,283)
Transfer out of Level 3 upon achievement of earnings target for the earnout period	—		—		—		7,085
Fair Value as of January 31, 2023	$	—	$	—	$	—	$	—

Redeemable Convertible Preferred Stock Warrant Liability, Private Placement Warrant Liability, and Earnout Liability

The fair values of the private placement warrant liability, redeemable convertible preferred stock warrant liability and earnout liability are 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, the redeemable convertible preferred stock warrant liability and the earnout 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. In determining the fair value of the redeemable convertible preferred stock warrant liability, the Company used the Black-Scholes Option Pricing Model (“Black-Scholes”) to estimate the fair value using unobservable inputs including the expected term, expected volatility, risk-free interest rate and dividend yield. In determining the fair value of the earnout liability, the Company used the Monte Carlo simulation valuation model using a distribution of potential outcomes on a monthly basis over the Earnout Period using the most reliable information available.

ViriCiti Earnout Liability

On August 11, 2021, the Company acquired all of the outstanding shares of ViriCiti Group B.V. (“ViriCiti”). The purchase price consideration included an earnout consideration contingent on meeting certain revenue targets through January 21, 2023. The fair value

of the ViriCiti Earnout liability was previously based on significant unobservable inputs, which represented Level 3 measurements within the fair value hierarchy. See Note 5, Reverse Capitalization and Business Combinations, for information on the valuation of the ViriCiti Earnout liability.

On January 31, 2023, the ViriCiti Earnout liability of $7.1 million, for the earnout period is based on the actual achievement of the revenue target and was subsequently paid in full on March 6, 2023 (see Note 18, Subsequent Events). Thus, the liability is no longer subject to fair value measurement and was accordingly transferred out of Level 3 fair value hierarchy, and is included in the “Accrued and other current liabilities” on the Company’s consolidated balance sheets.

Non-Recurring Fair Value Measurements

The Company has certain assets, including goodwill and other intangible assets, which are measured at fair value on a non-recurring basis and are adjusted to fair value only if an impairment charge is recognized. The categorization of the framework used to measure fair value of the assets is considered to be within the Level 3 valuation hierarchy due to the subjective nature of the unobservable inputs used.

Disclosure of Fair Values

The Company has financial instruments that are not re-measured at fair value including accounts receivable, accounts payable, and accrued and other current liabilities. The carrying values of these financial instruments approximate their fair values.

- 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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