Stock Warrants and Earnout

12 Months Ended

Jan. 31, 2023

Redeemable Convertible Preferred Stock Warrants

Warrants to purchase shares of redeemable convertible preferred stock were initially recognized as a liability recorded at fair value upon issuance and were subject to remeasurement to fair value at each balance sheet date. As part of the Merger, Legacy ChargePoint redeemable convertible preferred stock was converted into Legacy ChargePoint common stock pursuant to the conversion rate effective immediately prior to the Merger while all related Legacy ChargePoint preferred stock warrants were converted into warrants exercisable for shares of Common Stock with terms consistent with the Legacy ChargePoint preferred stock warrants except for the number of shares exercisable therefor and the exercise price, each of which was adjusted using the Exchange Ratio (see Note 5, Reverse Capitalization and Business Combinations, for more details). At that time, the redeemable convertible preferred stock warrant liability was remeasured and reclassified to additional paid-in capital.

The liability associated with these warrants was subject to remeasurement at each balance sheet date using the Level 3 fair value inputs. See Note 3, Fair Value Measurements, for further details.

The Level 3 fair value inputs used in the recurring valuation of the redeemable convertible preferred stock warrant liability were as follows:


	February 26, 2021 (Merger Date)		January 31, 2021		January 31, 2020
Expected volatility	84.3	%	80.5	%	58.4	%
Risk-free interest rate	0.0	%	0.1	%	1.6	%
Dividend rate	0.0	%	0.0	%	0.0	%
Expected term (years)	0		1.4		2.0

Common Stock Warrants

Legacy ChargePoint had outstanding warrants to purchase shares of Legacy ChargePoint common stock (collectively, “Legacy Warrants”), which now represent warrants to purchase Common Stock. Immediately following the Merger, there were 38,761,031 Legacy Warrants outstanding which are classified as equity.

During the fiscal year ended January 31, 2023 and 2022, 1,039,153 and 3,222,442 Legacy Warrants were exercised resulting in the issuance of 1,037,808 and 2,906,689 shares of Common Stock. During the fiscal year ended January 31, 2023 and 2022, proceeds received from the exercise of Legacy Warrants were $6.9 million and $1.2 million, respectively.

As of January 31, 2023, there were 34,499,436 Legacy Warrants outstanding which are classified as equity.


	January 31, 2023
	Outstanding Warrants			Expiration Date
	Number of Warrants	Exercise Price
Common Stock	20,922,215	$	6.03	7/31/2030 – 8/4/2030
Common Stock	13,577,221	$	9.04	11/16/2028 – 2/13/2029
Total outstanding common stock warrants	34,499,436

January 31, 2022

Outstanding Warrants

Expiration Date

Number of

Warrants

Exercise

Price

Common Stock

21,727,177

$1.25 - $6.03

3/4/2022 - 8/6/2030

Common Stock

13,811,412

9.04

11/16/2028 – 2/14/2029

Total outstanding common stock warrants

35,538,589

Private Placement Warrants

The Private Placement Warrants were initially recognized as a liability on February 26, 2021, at a fair value of $127.9 million and the Private Placement Warrant liability was remeasured to fair value as of any respective exercise dates. The Company recorded an immaterial loss and a gain of $63.7 million for the fiscal years ended January 31, 2023 and 2022, respectively, classified within change in fair value of warrant liabilities in the consolidated statements of operations.

The Private Placement Warrants were valued using the assumptions under the BLM that assumes optimal exercise of the Company’s redemption option at the earliest possible date. On February 21, 2022, the Company redeemed the remaining Private Placement Warrants for 0.355 shares of Common Stock per warrant. As of January 31, 2023, there were zero Private Placement Warrants outstanding.


	January 31, 2022			February 26, 2021 (Merger Date)
Market price of public stock	$	13.85		$	30.83
Exercise price	$	11.50		$	11.50
Expected term (years)	4.1			5.0
Volatility	70.5		%	73.5		%
Risk-free interest rate	1.0		%	0.8		%
Dividend rate	0.0		%	0.0		%

Public Warrants

The Public Warrants were initially recognized as a liability on February 26, 2021 at a fair value of $153.7 million and the public warrant liability was remeasured to fair value based upon the market price as warrants were exercised. On June 4, 2021 the Company issued a redemption notice pursuant to which all but 244,481 Public Warrants were exercised by the Public Warrant holders. At the conclusion of the redemption notice period on July 6, 2021, the Company redeemed the remaining 244,481 Public Warrants outstanding for $0.01 per warrant. As of January 31, 2023, no Public Warrants remained outstanding.

The Company recognized no gain or loss for the fiscal year ended January 31, 2023, and a loss of $15.9 million for the fiscal year ended January 31, 2022, classified within change in fair value of warrant liabilities in the consolidated statements of operations.

During the fiscal years ended January 31, 2023 and 2022, proceeds received from the exercise of Public Warrants were zero and $117.6 million, respectively.

Warrant Activity

Activity of warrants is set forth below:


	Legacy Warrants	Private Placement Warrants	Total Common Stock Warrants
Outstanding as of January 31, 2022	35,538,589	10,435	35,549,024

Warrants Exercised	(1,039,153)	(10,435)	(1,049,588)

Outstanding as of January 31, 2023	34,499,436	—	34,499,436

Contingent Earnout Liability

During the five year period starting at the closing of the Merger (“Earnout Period”), eligible former equity holders of Legacy ChargePoint were eligible to receive up to 27,000,000 additional shares of Common Stock (“Earnout Shares”) in three equal tranches if the Earnout Triggering Events (as described in the Merger Agreement) were fully satisfied. The three Earnout Triggering Events were the dates on which the closing volume weighted-average price (“VWAP”) per share of common stock quoted on the NYSE (or the exchange on which the shares of the Company’s Common Stock are then listed) is greater or equal to $15.00, $20.00 and $30.00, respectively, for any ten trading days within any 20 consecutive trading day period within the Earnout Period.

Upon the closing of the Merger, the contingent obligation to issue Earnout Shares was accounted for as a liability because the Earnout Triggering Events that determine the number of Earnout Shares required to be issued include events that are not solely indexed to the Common Stock of ChargePoint. The estimated fair value of the total Earnout Shares at the closing of the Merger on February 26, 2021, was $828.2 million based on a 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. Assumptions used in the valuation are described below.


	March 12, 2021			February 26, 2021
Current stock price	$	27.84		$	30.83
Expected volatility	72.00		%	71.60		%
Risk-free interest rate	0.85		%	0.75		%
Dividend rate	0.00		%	0.00		%
Expected term (years)	4.96			5.00

The first two Earnout Triggering Events for up to 18,000,000 of the Earnout Shares occurred on March 12, 2021, and, after withholding some of these Earnout Shares to cover employee withholding tax obligations, 17,539,657 Earnout Shares were issued on March 19, 2021, and the estimated fair value of the earnout liability was remeasured to $743.7 million, including (i) $501.1 million related to the Earnout Shares issuable upon the occurrence of the Earnout Triggering Event associated with the $15.00 and $20.00 VWAP per share thresholds based on the Common Stock price as of March 12, 2021, and (ii) $242.6 million related to the estimated fair value of earnout liability related to the remaining 9,000,000 Earnout Shares issuable upon the occurrence of the Earnout Triggering Event associated with the $30.00 VWAP per share threshold based on a Monte Carlo simulation valuation model as of March 12, 2021, as described above. The change in fair value resulted in a gain of $84.4 million recognized in the consolidated statement of operations for the three months ended April 30, 2021. Upon settlement of the first two tranches, the classification of the remaining 9,000,000 Earnout Shares of the third tranche was changed to equity on March 12, 2021, because the Earnout Shares became an instrument contingently issuable upon the occurrence of the Earnout Triggering Event into a fixed number of Common Shares that is not based on an observable market price or index other than the Company’s own stock price.

The third and final Earnout Triggering Event for up to 9,000,000 of the Earnout Shares associated with the $30.00 VWAP per share threshold occurred on June 29, 2021, and, after the withholding of some of these Earnout Shares to cover employee withholding tax obligations, 8,773,596 Earnout Shares were issued on July 1, 2021.

No further Earnout Shares remained contingently issuable as of January 31, 2023 and 2022.