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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30,October 31, 2021

OR

☐

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission file number 001-39004

ChargePoint Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware84-1747686

(State or other jurisdiction

of incorporation or organization)

(IRS Employer


Identification No.)

240 East Hacienda Avenue Campbell, CA95008
(Address of principal executive offices)(Zip Code)

(408) 841-4500

(Registrant’sRegistrant's telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.0001CHPTNew York Stock Exchange
Warrants, each whole warrant exercisable for Common Stock at an exercise price of $11.50 per shareCHPT WSNew York Stock Exchange

Title of each class          ��  Trading Symbol(s)        Name of each exchange on which registered

Common Stock, par value $0.0001              CHPT                 New York Stock Exchange



Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒x   No  ☐

o


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒x   No  ☐

o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filero☐Accelerated filero
Non-accelerated filer☐xSmaller reporting companyx

Non-accelerated filer☒Smaller reporting company☒
Emerging growth company☒x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     Yes   ☐o     No  ☒

x


The registrant had outstanding 306,261,388331,027,104 shares of common stock as of June 5,November 30, 2021.


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CHARGEPOINT HOLDINGS, INC.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS


This quarterly report on Form 10-Q (this “Quarterly Report”) includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of present or historical fact included in this Quarterly Report, regarding the future financial performance of ChargePoint Holdings, Inc. (“ChargePoint” or the “Company”), as well as ChargePoint’s strategy, future operations, future operating results, financial position, expectations regarding revenue, losses, and costs, margins, prospects, plans and objectives of management are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “continue,” “project” or the negative of such terms and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These statements are based on various assumptions, whether or not identified herein, and on the current expectations of ChargePoint’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of, fact or probability. Actual events and circumstances are difficult or impossible to predict and may differ from assumptions, and such differences may be material. Many actual events and circumstances are beyond the control of ChargePoint. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about ChargePoint that may cause the actual results, level of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. If any of these risks materialize or ChargePoint’s assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that ChargePoint does not presently know or that ChargePoint currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect ChargePoint’s expectations, plans or forecasts of future events and views as of the date hereof. The Company anticipates that subsequent events and developments will cause ChargePoint’s assessments to change. These forward-looking statements should not be relied upon as representing ChargePoint’s assessments as of any date subsequent to the date hereof. Accordingly, undue reliance should not be placed upon the forward-looking statements. The Company cautions you that these forward-looking statements are subject to numerous risk and uncertainties, most of which are all difficult to predict and many of which are beyond the control of ChargePoint.

The following factors, among others, could cause actual results to differ materially from forward-looking statements:

•ChargePoint’s success in retaining or recruiting, or changes in, its officers, key employees or directors;

•changes in applicable laws or regulations;

•the possibility that COVID-19 may adversely affectimpact of the coronavirus (“COVID-19”) pandemic on the overall economy and ChargePoint’s results of operations, financial position and cash flows of ChargePoint;

flows;

•COVID-19-related supply chain disruptions and expense increases;

•delays in new product introductions;
•ChargePoint’s ability to expand its business in Europe;

•ChargePoint’s ability tointegrate newly acquired assets and businesses into ChargePoint’s own businessand the expected benefits from newly acquired assets to ChargePoint, its customers and its market position;

•the electric vehicle (“EV”) market may not continue to grow as expected;

•ChargePoint may not attract a sufficient number of fleet owners or operators as customers;

•incentives from governments or utilities may not materialize or may be reduced, which could reduce demand for EVs;

EVs, or the portion of regulatory credits that customers claim may increase, which would reduce ChargePoint’s revenue from this source;

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•the impact of competing technologies thator technological changes could reduce the demand for EVs;

EVs or otherwise adversely affect the EV market or our business;

technological changes;

•data security breaches or other network outages;

•ChargePoint’s ability to remediate its material weaknesses in internal control over financial reporting;

•the possibility that ChargePoint may be adversely affected by other economic, business or competitive factors; and

•any further changes to ourChargePoint’s financial statements that may be required due to SEC comments to the Form 10-K, as amended, or further guidance regarding the accounting treatment of the Public Warrants and the Private Placement Warrants (each as defined below), and the quantitative effects of the restatement of Switchback Energy Acquisition Corporation’s (“Switchback”) consolidated historical financial statements.

The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other risk factors included herein. Forward-looking statements reflect current views about ChargePoint’s plans, strategies and prospects, which are based on information available as of the date of this Quarterly Report. Except to the extent required by applicable law, ChargePoint undertakes no obligation (and expressly disclaims any such obligation) to update or revise the forward-looking statements whether as a result of new information, future events or otherwise.


4
Table of ContentsPART I. FINANCIAL INFORMATION


ITEM 1.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ITEM 1.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ChargePoint Holdings, Inc. Unaudited Condensed Consolidated Financial Statements

Condensed Consolidated Balance Sheets as of April  30,October 31, 2021 and January 31, 2021 (unaudited)

6

7

8

9

Condensed Consolidated Statements of Cash Flows for the ThreeNine Months Ended April 30,October 31, 2021 and 2020 (unaudited)

10
11

12
13

5

ChargePoint Holdings, Inc.

Condensed Consolidated Balance Sheets

(unaudited)

   April 30,
2021		  January 31,
2021		 
   (in thousands, except share
and per share data)		 

Assets

   

Current assets:

   

Cash and cash equivalents

  $609,809 $145,491

Restricted cash

   400  400

Accounts receivable, net of allowance of $2,100 and $2,000 as of April 30, 2021 and January 31, 2021, respectively

   34,932  35,075

Inventories

   28,868  33,592

Prepaid expenses and other current assets

   19,906  12,074
  

 

 

  

 

 

 

Total current assets

   693,915  226,632

Property and equipment, net

   31,211  29,988

Operating lease right-of-use assets

   21,750  21,817

Goodwill

   1,215  1,215

Other assets

   4,980  10,468
  

 

 

  

 

 

 

Total assets

  $753,071 $290,120
  

 

 

  

 

 

 

Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

   

Current liabilities:

   

Accounts payable

  $18,103 $19,784

Accrued and other current liabilities

   42,930  47,162

Deferred revenue

   43,864  40,934

Debt, current

   —     10,208
  

 

 

  

 

 

 

Total current liabilities

   104,897  118,088

Deferred revenue, noncurrent

   53,763  48,896

Debt, noncurrent

   —     24,686

Operating lease liabilities

   22,866  22,459

Common stock warrant liabilities

   86,209  —   

Redeemable convertible preferred stock warrant liability

   —     75,843

Other long-term liabilities

   996  972
  

 

 

  

 

 

 

Total liabilities

   268,731  290,944
  

 

 

  

 

 

 

Commitments and contingencies (Note 7)

   

Redeemable convertible preferred stock: $0.0001 par value; 0 and 185,180,248 shares authorized as of April 30, 2021 and January 31, 2021, respectively; 0 and 182,934,257 shares issued and outstanding as of April 30, 2021 and January 31, 2021, respectively (liquidation value: $0 and $17,492,964 as of April 30, 2021 and January 31, 2021, respectively)

   —     615,697

Stockholders’ equity (deficit):

   

Common stock: $0.0001 par value; 1,000,000,000 and 299,771,284 shares authorized as of April 30, 2021 and January 31, 2021, respectively; 305,073,200 and 22,961,032 shares issued and outstanding as of April 30, 2021 and January 31, 2021, respectively

   31  2

Preferred stock, $0.0001 par value; 10,000,000 and 0 shares authorized as of April 30, 2021 and January 31, 2021, respectively; 0 issued and outstanding as of April 30, 2021 and January 31, 2021

   —     —   

Additional paid-in capital

   1,081,272  62,736

Accumulated other comprehensive income

   162  155

Accumulated deficit

   (597,125)   (679,414) 
  

 

 

  

 

 

 

Total stockholders’ equity (deficit)

   484,340  (616,521) 
  

 

 

  

 

 

 

Total liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit)

  $753,071 $290,120
  

 

 

  

 

 

 

October 31,
2021		January 31,
2021
(in thousands, except share and per share data)
Assets
Current assets:
Cash and cash equivalents$365,491 $145,491 
Restricted cash400 400 
Accounts receivable, net of allowance of $2,643 as of October 31, 2021 and $2,000 as of January 31, 202166,104 35,075 
Inventories29,893 33,592 
Prepaid expenses and other current assets32,695 12,074 
Total current assets494,583 226,632 
Property and equipment, net34,726 29,988 
Intangible assets, net142,539 — 
Operating lease right-of-use assets23,621 21,817 
Goodwill200,681 1,215 
Other assets5,327 10,468 
Total assets$901,477 $290,120 
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable32,084 19,784 
Accrued and other current liabilities76,473 47,162 
Deferred revenue58,877 40,934 
Debt, current— 10,208 
Total current liabilities167,434 118,088 
Deferred revenue, noncurrent62,364 48,896 
Debt, noncurrent— 24,686 
Operating lease liabilities23,795 22,459 
Deferred tax liabilities28,351 — 
Common stock warrant liabilities29,282 — 
Redeemable convertible preferred stock warrant liability— 75,843 
Other long-term liabilities4,852 972 
Total liabilities316,078 290,944 
Commitments and contingencies (Note 7)00
Redeemable convertible preferred stock: $0.0001 par value; 0 and 185,180,248 shares authorized as of October 31, 2021 and January 31, 2021, respectively; 0 and 182,934,257 shares issued and outstanding as of October 31, 2021 and January 31, 2021, respectively (liquidation value: $— and $17,492,964 as of October 31, 2021 and January 31, 2021, respectively)— 615,697 
Stockholders’ equity (deficit):
Common stock: $0.0001 par value; 1,000,000,000 and 299,771,284 shares authorized as of October 31, 2021 and January 31, 2021, respectively; 330,964,104 and 22,961,032 shares issued and outstanding as of October 31, 2021 and January 31, 2021, respectively33 2 
Preferred stock, $0.0001 par value; 10,000,000 and 0 shares authorized as of October 31, 2021 and January 31, 2021, respectively; 0 issued and outstanding as of October 31, 2021 and January 31, 2021— — 
Additional paid-in capital1,337,247 62,736 
Accumulated other comprehensive income (loss)(376)155 
Accumulated deficit(751,505)(679,414)
Total stockholders’ equity (deficit)585,399 (616,521)
Total liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit)$901,477 $290,120 
The accompanying notes are an integral part of these condensed consolidated financial statements.

6

ChargePoint Holdings, Inc.

Condensed Consolidated Statements of Operations

(unaudited)

   Three Months Ended
April 30,		 
   2021  2020 
   (in thousands, except share and
per share data)		 

Revenue

   

Networked charging systems

  $26,800 $19,657

Subscriptions

   10,824  9,004

Other

   2,886  4,115
  

 

 

  

 

 

 

Total revenue

   40,510  32,776

Cost of revenue

   

Networked charging systems

   23,742  18,616

Subscriptions

   5,640  4,773

Other

   1,911  1,623
  

 

 

  

 

 

 

Total cost of revenue

   31,293  25,012
  

 

 

  

 

 

 

Gross profit

   9,217  7,764
  

 

 

  

 

 

 

Operating expenses

   

Research and development

   25,374  18,026

Sales and marketing

   15,974  14,201

General and administrative

   14,467  5,089
  

 

 

  

 

 

 

Total operating expenses

   55,815  37,316
  

 

 

  

 

 

 

Loss from operations

   (46,598)   (29,552) 

Interest income

   22  243

Interest expense

   (1,499)   (835) 

Change in fair value of redeemable convertible preferred stock warrant liability

   9,237  535

Change in fair value of common stock warrant liabilities

   43,761  —   

Change in fair value of contingent earnout liability

   84,420  —   

Transaction costs expensed

   (7,031)   —   

Other income (expense), net

   15  (432) 
  

 

 

  

 

 

 

Net income (loss) before income taxes

   82,327  (30,041) 

Provision for income taxes

   38  57
  

 

 

  

 

 

 

Net income (loss)

   82,289  (30,098) 
  

 

 

  

 

 

 

Cumulative dividends on redeemable convertible preferred stock

   (4,292)   —   

Deemed dividends attributable to vested option holders

   (51,855)   —   

Deemed dividends attributable to common stock warrant holders

   (110,635)   —   
  

 

 

  

 

 

 

Net loss attributable to common stockholders - Basic

   (84,493)   (30,098) 
  

 

 

  

 

 

 

Gain attributable to earnout shares issued

   (53,820)   —   

Change in fair value of dilutive warrants

   (49,471)   —   
  

 

 

  

 

 

 

Net loss attributable to common stockholders - Diluted

  $(187,784)  $(30,098) 
  

 

 

  

 

 

 

Weighted average shares outstanding - Basic

   218,615,863  12,253,092

Weighted average shares outstanding - Diluted

   225,533,389  12,253,092

Net loss per share - Basic

  $(0.39)  $(2.46) 

Net loss per share - Diluted

  $(0.83)  $(2.46) 

Three Months Ended
October 31,		Nine Months Ended
October 31,
2021202020212020
(in thousands, except share and per share data)(in thousands, except share and per share data)
Revenue
Networked charging systems$47,511 $22,566 $115,185 $63,591 
Subscriptions13,397 10,782 36,303 29,597 
Other4,126 3,017 10,177 10,910 
Total revenue65,034 36,365 161,665 104,098 
Cost of revenue
Networked charging systems38,720 22,382 97,846 61,406 
Subscriptions7,637 5,322 21,107 14,547 
Other2,621 1,408 6,662 4,100 
Total cost of revenue48,978 29,112 125,615 80,053 
Gross profit16,056 7,253 36,050 24,045 
Operating expenses
Research and development36,751 18,919 102,535 54,071 
Sales and marketing24,361 12,134 62,258 37,301 
General and administrative20,268 8,790 57,467 18,345 
Total operating expenses81,380 39,843 222,260 109,717 
Loss from operations(65,324)(32,590)(186,210)(85,672)
Interest income25 18 72 298 
Interest expense(3)(815)(1,502)(2,443)
Change in fair value of redeemable convertible preferred stock warrant liability— (7,320)9,237 (18,301)
Change in fair value of common stock warrant liabilities(2,429)— 30,911 — 
Change in fair value of contingent earnout liability— — 84,420 — 
Transaction costs expensed— — (7,031)— 
Other (expense) income, net(2,025)(85)(2,200)46 
Net loss before income taxes(69,756)(40,792)(72,303)(106,072)
Provision for (benefit from) income taxes(314)98 (211)203 
Net loss$(69,442)$(40,890)$(72,092)$(106,275)
Accretion of beneficial conversion feature of redeemable convertible preferred stock— (1,752)— (60,377)
Cumulative dividends on redeemable convertible preferred stock— (3,960)(4,292)(3,960)
Deemed dividends attributable to vested option holders— — (51,855)— 
Deemed dividends attributable to common stock warrant holders— — (110,635)— 
Net loss attributable to common stockholders - Basic$(69,442)$(46,602)$(238,874)$(170,612)
Gain attributable to earnout shares issued— — (84,420)— 
Change in fair value of dilutive warrants— — (51,106)— 
Net loss attributable to common stockholders - Diluted$(69,442)$(46,602)$(374,400)$(170,612)
Weighted average shares outstanding - Basic325,034,920 14,990,866 286,025,483 13,550,552 
Weighted average shares outstanding - Diluted325,034,920 14,990,866 292,575,318 13,550,552 
Net loss per share - Basic$(0.21)$(3.11)$(0.84)$(12.59)
Net loss per share - Diluted$(0.21)$(3.11)$(1.28)$(12.59)
The accompanying notes are an integral part of these condensed consolidated financial statements.

7

ChargePoint Holdings, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(unaudited)

   Three Months Ended
April 30,		 
   2021   2020 
   (in thousands) 

Net income (loss)

  $82,289  $(30,098) 

Other comprehensive income (loss):

    

Foreign currency translation adjustment

   7   (56) 
  

 

 

   

 

 

 

Other comprehensive income (loss)

   7   (56) 
  

 

 

   

 

 

 

Comprehensive income (loss)

  $82,296  $(30,154) 
  

 

 

   

 

 

 

Three Months Ended
October 31,		Nine Months Ended
October 31,
2021202020212020
(in thousands)(in thousands)
Net loss$(69,442)$(40,890)$(72,092)$(106,275)
Other comprehensive income (loss):
Foreign currency translation adjustment(526)(22)(531)14 
Unrealized loss on short-term investments, net of tax— — — (23)
Other comprehensive (loss) income(526)(22)(531)(9)
Comprehensive loss$(69,968)$(40,912)$(72,623)$(106,284)

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

ChargePoint Holdings, Inc.

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(unaudited)

   Redeemable Convertible
Preferred Stock		  Common Stock   Additional
Paid-In
Capital		  Accumulated
Other
Comprehensive
Income		   Accumulated
Deficit		  Total
Stockholders’
(Deficit)
Equity		 
   Shares(1)  Amount  Shares(1)  Amount 
   

 

  

 

  (in thousands, except share data) 

Balances as of January 31, 2021

   182,934,257 $615,697  22,961,032 $2  $62,736 $155  $(679,414)  $(616,521) 

Conversion of redeemable convertible preferred stock into common stock in connection with the reverse recapitalization, including impact of Series H-1 paid in kind dividend

   (182,934,257)   (615,697)   194,060,336  20   615,677  —      —     615,697

Reclassification of Legacy ChargePoint preferred stock warrant liability upon the reverse recapitalization

   —     —     —     —      66,606  —      —     66,606

Issuance of common stock upon the reverse recapitalization, net of issuance costs

   —     —     60,746,989  6   200,460  —      —     200,466

Issuance of common stock upon exercise of warrants

   —     —     9,766,774  1   225,375  —      —     225,376

Contingent earnout liability recognized upon the closing of the reverse recapitalization

   —     —     —     —      (828,180)   —      —     (828,180) 

Issuance of earnout shares upon triggering events, net of tax withholding

   —     —     17,539,657  2   488,303  —      —     488,305

Reclassification of remaining contingent earnout liability upon triggering event

   —     —     —     —      242,640  —      —     242,640

Vesting of early exercised stock options

   —     —     —     —      78  —      —     78

Repurchase of early exercised common stock

   —     —     (1,588)   —      —     —      —     —   

Stock-based compensation

   —     —     —     —      7,577  —      —     7,577

Net income

   —     —     —     —      —     —      82,289  82,289

Other comprehensive income

   —     —     —     —      —     7   —     7
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

   

 

 

  

 

 

 

Balances as of April 30, 2021

   —    $—     305,073,200 $31  $1,081,272 $162  $(597,125)  $484,340
  

 

 

  

 

 

  

 

 

  

 

 

   

 

 

  

 

 

   

 

 

  

 

 

 

   Redeemable Convertible
Preferred Stock		   Common Stock   Additional
Paid-In
Capital		   Accumulated
Other
Comprehensive
Income (Loss)		  Accumulated
Deficit		  Total
Stockholders’
Deficit		 
   Shares(1)   Amount   Shares(1)   Amount 
   

 

   

 

   (in thousands, except share data) 

Balances as of January 31, 2020

   160,583,203  $520,241    11,918,418  $1  $20,331   $37  (482,390)  $(462,021) 

Issuance of common stock upon exercise of vested stock options

   —      —      1,071,203   —      436   —     —     436

Vesting of early exercised stock options

   —      —      —      —      10   —     —     10

Stock-based compensation

   —      —      —      —      910   —     —     910

Net loss

   —      —      —      —      —      —     (30,098)   (30,098) 

Other comprehensive loss

   —      —      —      —      —      (56)   —     (56) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

  

 

 

  

 

 

 

Balances as of April 30, 2020

   160,583,203  $520,241    12,989,621  $1  $21,687   $(19)  $(512,488)  $(490,819) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

  

 

 

  

 

 

 

(1)

The shares of the Company’s common and redeemable convertible preferred stock, prior to the Merger (as defined in Note 1) have been retroactively restated to reflect the exchange ratio of approximately 0.9966 established in the Merger as described in Note 3.


Redeemable Convertible Preferred StockCommon StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Accumulated DeficitTotal Stockholders’ (Deficit) Equity
 
Shares(1)
Amount
Shares(1)
Amount
 (in thousands, except share data)
Balances as of January 31, 2021182,934,257 $615,697 22,961,032 $2 $62,736 $155 $(679,414)$(616,521)
Conversion of redeemable convertible preferred stock into common stock in connection with the reverse recapitalization, including impact of Series H-1 paid in kind dividend(182,934,257)(615,697)194,060,336 20 615,677 — — 615,697 
Reclassification of Legacy ChargePoint preferred stock warrant liability upon the reverse recapitalization— — — — 66,606 — — 66,606 
Issuance of common stock upon the reverse recapitalization, net of issuance costs— — 60,746,989 6 200,460 — — 200,466 
Issuance of common stock upon exercise of warrants— — 9,766,774 1 225,375 — — 225,376 
Contingent earnout liability recognized upon the closing of the reverse recapitalization— — — — (828,180)— — (828,180)
Issuance of earnout shares upon triggering events, net of tax withholding— — 17,539,657 2 488,303 — — 488,305 
Reclassification of remaining contingent earnout liability upon triggering event— — — — 242,640 — — 242,640 
Vesting of early exercised stock options— — — — 78 — — 78 
Repurchase of early exercised common stock— — (1,588)— — — — — 
Stock-based compensation— — — — 7,577 — — 7,577 
Net income— — — — — — 82,289 82,289 
Other comprehensive income— — — — — 7 — 7 
Balances as of April 30, 2021— $— 305,073,200 $31 $1,081,272 $162 $(597,125)$484,340 
Issuance of common stock upon release of restricted stock units— — 652,901 — — — — — 
Issuance of common stock upon exercise of warrants— — 4,378,568 — 113,608 — — 113,608 
Issuance of common stock upon exercise of vested stock options— — 3,292,219 — 1,761 — — 1,761 
Issuance of earnout shares upon triggering events, net of tax withholding— — 8,773,596 1 (8,081)— — (8,080)
Vesting of early exercised stock options— — — — 40 — — 40 
Stock-based compensation— — — — 28,293 — — 28,293 
Net loss— — — — — — (84,938)(84,938)
Other comprehensive loss— — — — — (12)— (12)
Balances as of July 31, 2021— $— 322,170,484 $32 $1,216,893 $150 $(682,063)$535,012 
Issuance of common stock under stock plans, net of tax withholding— — 1,741,713 — 976 — — 976 
Issuance of common stock upon exercise of warrants— — 1,379,800 — 1,264 — — 1,264 
Issuance of common stock pursuant to business combinations— — 5,695,176 1 102,057 — — 102,058 
Vesting of early exercised stock options— — — — 35 — — 35 
Stock-based compensation— — — — 16,022 — — 16,022 
Other comprehensive loss— — — — — (526)— (526)
Net loss— — — — — — (69,442)(69,442)
Balances as of October 31, 2021— $— 330,987,173 $33 $1,337,247 $(376)$(751,505)$585,399 
9

Redeemable Convertible Preferred StockCommon StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Accumulated DeficitTotal Stockholders’ Deficit
 
Shares(1)
Amount
Shares(1)
Amount
  (in thousands, except share data)
Balances as of January 31, 2020160,583,203 $520,241 11,918,418 $1 $20,331 $37 (482,390)$(462,021)
Issuance of common stock upon exercise of vested stock options— — 1,071,203 — 436 — — 436 
Vesting of early exercised stock options— — — — 10 — — 10 
Stock-based compensation— — — — 910 — — 910 
Net loss— — — — — — (30,098)(30,098)
Other comprehensive loss— — — — — (56)— (56)
Balances as of April 30, 2020160,583,203 $520,241 12,989,621 $1 $21,687 $(19)$(512,488)$(490,819)
Issuance of redeemable convertible preferred stock and common warrants, net of issuance costs21,783,334 92,433 — — — — — — 
Issuance of common stock warrants in connection with Series H-1 redeemable convertible preferred stock— — — — 31,390 — — 31,390 
Beneficial conversion feature in connection with Series H-1 redeemable preferred stock— (58,625)— — 58,625 — — 58,625 
Accretion of beneficial conversion feature in connection with Series H-1 redeemable preferred stock— 58,625 — — (58,625)— — (58,625)
Issuance of common stock upon exercise of vested stock options— — 1,523,641 — 1,095 — — 1,095 
Issuance of common stock related to early exercise of stock options— — 66,440 — — — — — 
Vesting of early exercised stock options— — — — 1 — — 1 
Stock-based compensation— — — — 1,190 — — 1,190 
Net loss— — — — — — (35,287)(35,287)
Other comprehensive income— — — — — 69 — 69 
Balances as of July 31, 2020182,366,537 $612,674 14,579,702 $1 $55,363 $50 $(547,775)$(492,361)
Redeemable convertible preferred stock and common warrants567,720 3,081 — — — — — — 
Fair Value of warrants issued in connection with series H-1 convertible preferred Stock— — — — 155 — — 155 
Beneficial conversion feature Series H-1 preferred warrants— (1,752)— — 1,752 — — 1,752 
Accretion of beneficial conversion feature Series H-1 warrant— 1,752 — — (1,752)— — (1,752)
Issuance of common stock upon exercise of vested stock options— — 1,240,498 1 889 — — 890 
Issuance of common stock related to early exercise of stock options— — 34,100 — — — — — 
Vesting of early exercised stock options— — — — 4 — — 4 
Stock-based compensation— — — — 1,207 — — 1,207 
Foreign currency translation adjustment— — — — — (22)— (22)
Net loss— — — — — — (40,890)(40,890)
Balances as of October 31, 2020182,934,257 $615,755 15,854,300 $2 $57,618 $28 $(588,665)$(531,017)

(1)The shares of the Company’s common and redeemable convertible preferred stock prior to the Merger (as defined in Note 1) have been retroactively restated to reflect the exchange ratio of approximately 0.9966 established in the Merger as described in Note 3.

The accompanying notes are an integral part of these condensed consolidated financial statements.

10

ChargePoint Holdings, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

   Three Months Ended
April 30,		 
   2021  2020 
   (in thousands) 

Cash flows from operating activities

   

Net income (loss)

  $82,289 $(30,098) 

Adjustments to reconcile net income (loss) to net cash used in operating activities:

   

Depreciation and amortization

   2,741  2,257

Non-cash operating lease cost

   977  831

Stock-based compensation

   7,577  910

Amortization of deferred contract acquisition costs

   399  253

Change in fair value of redeemable convertible preferred stock warrant liability

   (9,237)   (535) 

Change in fair value of common stock warrant liabilities

   (43,761)   —   

Change in fair value of contingent earnout liability

   (84,420)   —   

Transaction costs expensed

   7,031  —   

Other

   1,096  74

Changes in operating assets and liabilities, net of effect of acquisitions:

   

Accounts receivable, net

   32  9,214

Inventories

   4,894  (4,092) 

Prepaid expenses and other assets

   (6,166)   (1,211) 

Operating lease liabilities

   (373)   (1,863) 

Accounts payable

   (3,463)   (10,318) 

Accrued and other liabilities

   (4,952)   (1,898) 

Deferred revenue

   7,797  1,782
  

 

 

  

 

 

 

Net cash used in operating activities

   (37,539)   (34,694) 
  

 

 

  

 

 

 

Cash flows from investing activities

   

Purchases of property and equipment

   (4,138)   (2,772) 

Maturities of investments

   —     42,403
  

 

 

  

 

 

 

Net cash (used in) provided by investing activities

   (4,138)   39,631
  

 

 

  

 

 

 

Cash flows from financing activities

   

Proceeds from the exercise of public warrants

   73,323  —   

Merger and PIPE financing

   511,646  —   

Payment of transaction costs related to Merger

   (30,115)   —   

Payment of tax withholding obligations on settlement of earnout shares

   (12,815)   —   

Repayment of borrowings

   (36,051)   —   

Proceeds from exercises of vested and unvested stock options

   —     446
  

 

 

  

 

 

 

Net cash provided by financing activities

   505,988  446
  

 

 

  

 

 

 

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

   7  (56) 

Net increase in cash, cash equivalents, and restricted cash

   464,318  5,327

Cash, cash equivalents, and restricted cash at beginning of period

   145,891  73,153
  

 

 

  

 

 

 

Cash, cash equivalents, and restricted cash at end of period

  $610,209 $78,480
  

 

 

  

 

 

 

Nine Months Ended
October 31,
20212020
(in thousands)
Cash flows from operating activities
Net loss$(72,092)$(106,275)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization10,158 7,463 
Non-cash operating lease cost3,066 2,865 
Stock-based compensation51,893 3,308 
Amortization of deferred contract acquisition costs1,291 858 
Deferred tax benefit(370)— 
Change in fair value of redeemable convertible preferred stock warrant liability(9,237)18,301 
Change in fair value of common stock warrant liabilities(30,911)— 
Change in fair value of contingent earnout liability(84,420)— 
Transaction costs expensed7,031 — 
Other2,203 1,043 
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net(26,579)10,053 
Inventories3,498 (5,975)
Prepaid expenses and other assets(18,879)(8,388)
Operating lease liabilities(2,193)(2,431)
Accounts payable10,633 (2,397)
Accrued and other liabilities16,110 1,569 
Deferred revenue29,715 9,085 
Net cash used in operating activities(109,083)(70,921)
Cash flows from investing activities
Purchases of property and equipment(12,064)(8,913)
Maturities of investments— 47,014 
Cash paid for acquisitions, net of cash acquired(205,329)— 
Net cash (used in) provided by investing activities(217,393)38,101 
Cash flows from financing activities
Proceeds from issuance of redeemable convertible preferred stock— 95,514 
Proceeds from issuance of common stock warrants— 31,545 
Proceeds from the exercise of warrants118,845 — 
Merger and PIPE financing511,646 — 
Payment of deferred transaction costs— (513)
Payments of transaction costs related to Merger(32,468)— 
Payment of tax withholding obligations on settlement of earnout shares(20,895)— 
Repayment of borrowings(36,051)— 
Proceeds from exercises of vested and unvested stock options4,214 2,201 
Change in driver funds and amounts due to customers1,933 — 
Net cash provided by financing activities547,224 128,747 
Effect of exchange rate changes on cash, cash equivalents, and restricted cash(748)13 
Net increase in cash, cash equivalents, and restricted cash220,000 95,940 
Cash, cash equivalents, and restricted cash at beginning of period145,891 73,153 
Cash, cash equivalents, and restricted cash at end of period$365,891 $169,093 

11

ChargePoint Holdings, Inc.

Condensed Consolidated Statements of Cash Flows - (continued)

Three

Nine Months Ended April 30,October 31, 2021 and 2020 (Unaudited)

   Three Months Ended
April 30,		 
   2021   2020 
   (in thousands) 

Supplementary cash flow information

    

Cash paid for interest

  $344  $476

Cash paid for taxes

  $50  $68

Supplementary cash flow information on noncash investing and financing activities

    

Right-of-use assets obtained in exchange for lease liabilities

  $883  $—  

Acquisitions of property and equipment included in accounts payable and accrued liabilities

  $174  $237

Vesting of early exercised stock options

  $78  $10

Deferred transaction costs not yet paid

  $2,354  $—  

Conversion of redeemable convertible preferred stock into common stock in connection with the reverse recapitalization

  $615,697  $—  

Reclassification of Legacy ChargePoint redeemable convertible preferred stock warrant liability upon the reverse capitalization

  $66,606  $—  

Contingent earnout liability recognized upon the closing of the reverse recapitalization

  $828,180  $—  

Reclassification of remaining contingent earnout liability upon triggering event

  $242,640  $—  

(unaudited)

Nine Months Ended
October 31,
20212020
(in thousands)
Supplementary cash flow information
Cash paid for interest$346 $2,120 
Cash paid for taxes$119 $145 
Supplementary cash flow information on noncash investing and financing activities
Accretion of beneficial conversion feature of redeemable convertible preferred stock$— $60,377 
Right-of-use assets obtained in exchange for lease liabilities$4,737 $14,212 
Deferred transaction costs not yet paid$— $3,385 
Acquisitions of property and equipment included in accounts payable and accrued and other current liabilities$1,939 $914 
Vesting of early exercised stock options$— $15 
Conversion of redeemable convertible preferred stock into common stock in connection with the reverse recapitalization$615,697 $— 
Reclassification of Legacy ChargePoint redeemable convertible preferred stock warrant liability upon the reverse capitalization$66,606 $— 
Contingent earnout liability recognized upon the closing of the reverse recapitalization$828,180 $— 
Reclassification of remaining contingent earnout liability upon triggering event$242,640 $— 
Issuance of common stock in connection with acquisitions$102,057 $— 

The accompanying notes are an integral part of these condensed consolidated financial statements.

12

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)


1.Description of Business and Basis of Presentation

ChargePoint Holdings, Inc. (“ChargePoint” or the “Company,” “it,” “its”) designs, develops and markets networked electric vehicle (“EV”) charging system infrastructure (“Networked Charging Systems”) and cloud-based services which enable consumers the ability to locate, reserve and authenticate Networked Charging Systems, and to transact EV charging sessions for EVs.on those systems (“Cloud” or “Cloud Services”). As part of its networked charging systems,ChargePoint’s Networked Charging Systems, subscriptions and other offerings, the Companyit provides an open platform that integrates with system hardware from multipleChargePoint and other manufacturers, connecting systems over an intelligent network that provides real-time information about charging systems.sessions and full control, support and management of the Networked Charging Systems. This network also provides multiple web-based portals for charging system owners, fleet managers, drivers and utilities.

In addition, the Company offers a range of extended parts and labor warranty (“Assure”) that includes proactive monitoring, fast response times, expert advice and robust reporting. The Company’s ChargePoint as a Service (“CPaaS”) program bundles use of ChargePoint owned and operated systems with Cloud Services, Assure and other benefits into one subscription.
The Company’s fiscal year ends on January 31. References to fiscal year 2021 relate to the fiscal year ended January 31, 2021 and to fiscal year 2022 refer to the fiscal year ending January 31, 2022.

Basis of Presentation

The condensed consolidated financial statements and accompanying notes are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial reporting. The Company’s condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended January 31, 2021, and the related notes included in the Company’s Current Reportregistration statement on Form 8-KS-1 filed with the SEC on March 1, 2021 and as amended and filed with the SEC on April 1,October 14, 2021, which provides a more complete discussion of the Company’s accounting policies and certain other information. The information as of January 31, 2021, included on the condensed consolidated balance sheets was derived from the Company’s audited consolidated financial statements. The condensed consolidated financial statements were prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary for a fair statement of the Company’s financial position as of April 30,October 31, 2021, and the results of operations for the three and nine months ended October 31, 2021 and 2020, and cash flows for the threenine months ended April 30,October 31, 2021 and 2020. The results of operations for the three and nine months ended April 30,October 31, 2021, are not necessarily indicative of the results that may be expected for the year ending January 31, 2022.

The Company’s condensed consolidated financial statements have been prepared on the basis of continuity of operations, the realization of assets, and the satisfaction of liabilities in the ordinary course of business. Since inception, the Company has been engaged in developing its product offerings, raising capital and recruiting personnel. The Company’s operating plan may change as a result of many factors currently unknown and there can be no assurance that the current operating plan will be achieved at the levels or in the time frame anticipated by the Company, and it may need to seek additional funds sooner than planned. If adequate funds are not available to the Company on a timely basis, it may be required to delay, limit, reduce, or terminate certain commercial efforts, or to pursue merger or acquisition strategies, all of which could adversely affect the holdings or the rights of the Company’s stockholders. The Company has incurred net operating losses and negative cash flows from operations in every year since inception and expects this to continue for the foreseeable future. As of April 30,October 31, 2021, the Company had an accumulated deficit of $597.1$751.5 million.

The Company has funded its operations primarily with proceeds from the issuance of redeemable convertible preferred stock, exercise proceeds from options and warrants, borrowings under its loan facilities, customer payments and proceeds from the Reverse Recapitalization (as defined below). The Company had cash, cash equivalents and restricted cash of $610.2$365.9 million as of April 30,October 31, 2021. As of June 11,December 15, 2021, the date on which these condensed consolidated financial statements were
13

ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
available to be issued, the Company believes that its cash on hand, together with cash generated from sales to customers, will satisfy its working capital and capital requirements for at least the next twelve months.

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

The Company’s assessment of the period of time through which its financial resources will be adequate to support its operations is a forward-looking statement and involves risks and uncertainties. The Company’s actual results could vary as a result of, and its near- and long-term future capital requirements will depend on, many factors, including its growth rate, subscription renewal activity, the timing and extent of spending to support its acquisitions, infrastructure and research and development efforts, the expansion of sales and marketing activities, the timing of new introductions of products or features, the continuing market adoption of its networked charging systemsNetworked Charging Systems and Cloud Services platform, and the overall market acceptance of EVs. The Company has and may in the future enter into arrangements to acquire or invest in complementary businesses, services, and technologies, including intellectual property rights, although it has no agreements or commitments to complete any material transactions as of June 11, 2021, the date on which these condensed consolidated financial statements were available to be issued.rights. The Company has based its estimates on assumptions that may prove to be wrong, and it could use its available capital resources sooner than it currently expects. The Company may be required to seek additional equity or debt financing. Future liquidity and cash requirements will depend on numerous factors, including market penetration, the introduction of new products, and potential acquisitions of related businesses or technology. In the event thatIf additional financing is required from outside sources, the Company may not be able to raise it on acceptable terms or at all. If the Company is unable to raise additional capital when desired, or if it cannot expand its operations or otherwise capitalize on its business opportunities because it lacks sufficient capital, its business, operating results and financial condition would be adversely affected.

On February 26, 2021 (“Closing Date”), Switchback Energy Acquisition Corporation (“Switchback”), consummated the previously announced merger with Switchback,transactions pursuant to which Lightning Merger Sub Inc., a wholly ownedwholly-owned subsidiary of Switchback incorporated in the State of Delaware and(“Lightning Merger Sub”), merged with ChargePoint, Inc., a Delaware corporation (“Legacy ChargePoint”) with the; Legacy ChargePoint surviving as the surviving company andsurvived as a wholly-owned subsidiary of Switchback (“Merger”such transaction, the “Merger,” and, collectively with the other transactions described in the Merger Agreement (as defined below), the “Reverse Recapitalization”). AsFurther as a result of the Merger, Switchback was renamed “ChargePoint Holdings, Inc.”

Please refer to Note 3 “Reverse Recapitalization”Recapitalization and Business Combinations” for further details of the Merger.


2.Summary of Significant Accounting Policies

Other than policies noted below, there have been no significant changes to the significant accounting policies disclosed in Note 2 of the audited consolidated financial statements as of January 31, 2021 and 2020 and for the years ended January 31, 2021, 2020, and 2019.

Common Stock WarrantsWarrant Liabilities

The Company assumed 10,470,562 publicly-traded warrants (“Public Warrants”) and 6,521,568 private placement warrants issued to NGP Switchback, LLC, the sponsor of Switchback (“Private Placement Warrants” and, together with the Public Warrants, the “Common Stock Warrants”) upon the Merger, all of which were issued in connection with Switchback’s initial public offering and subsequent overallotment (other than 1,000,000 Private Placement Warrants thatwhich were issued in connection with the closing of the Merger) and entitle the holder to purchase one share of the Company’s Common stock,Stock, par value $0.0001 (“Common Stock”), at an exercise price of $11.50 per share. During the threenine months ended April 30,October 31, 2021, 6,413,05710,226,081 Public Warrants and 4,347,7124,349,342 Private Placement Warrants were exercised.exercised and the remaining 244,481 Public Warrants outstanding as of July 6, 2021, were redeemed for cash. The Public Warrants, areprior to their redemption, were publicly traded and arewere exercisable for cash unless certain conditions occur,occurred, such as the redemption by the Company under certain conditions, at which time the warrants could be cashlessly exercised, or the Company’s failure to have an effective registration statement related to the shares issuable upon exercise or redemption by the Company under certain conditions, at which time the warrants may be cashless exercised.exercise. The Private Placement Warrants are non-redeemablenot redeemable for cash so long as they are held by the initial purchasers or their permitted transferees.transferees but may be redeemable for Common Stock if certain other conditions are met. If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants are redeemable by the Company and exercisable by such holders on the same basis as the PublicPublic Warrants.

14

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

The Company evaluated the Common Stock Warrants and concluded that they do not meet the criteria to be classified within stockholders’ equity. The agreement governing the Common Stock Warrants includes a provision (“Replacement of Securities Upon Reorganization”), the application of which could result in a different settlement value for the Common Stock Warrants depending on their holder. Because the holder of an instrument is not an input into the pricing of a fixed-for-fixed option on the Company’s ordinary shares, the Private Placement Warrants are not considered to be “indexed to the Company’s own stock.” In addition, the provision provides that in the event of a tender or exchange offer accepted by holders of more than 50% of the outstanding shares of the Company’s ordinary shares, all holders of the Common Stock Warrants (both the Public Warrants and the Private Placement Warrants) would be entitled to receive cash for all of their Common Stock Warrants. Specifically, in the event of a qualifying cash tender offer (which could be outside of the Company’s control), all Common Stock Warrant holders would be entitled to cash, while only certain of the holders of the Company’s ordinary shares may be entitled to cash. These provisions preclude the Company from classifying the Common Stock Warrants in stockholders’ equity. As the Common Stock Warrants meet the definition of a derivative, the Company recorded these warrants as liabilities on the consolidated balance sheet at fair value, with subsequent changes in their respective fair values recognized in the condensed consolidated statements of operations and comprehensive loss at each reporting date.

Contingent Earnout Liability

In connection with the Reverse Recapitalization and pursuant to the Merger Agreement and Plan of Merger dated as of September 23, 2020, by and among the Company, Lightning Merger Sub Inc., and Switchback (“Merger Agreement”), eligible ChargePoint equity holders arewere entitled to receive as additional merger consideration shares of the Company’s Common Stock upon the Company achieving certain Earnout Triggering Events (as described in the Merger Agreement and Note 9). In accordance with ASC 815-40, the earnout shares arewere not indexed to the Common Stock and therefore arewere accounted for as a liability at the reverse recapitalizationReverse Recapitalization date and subsequently remeasured at each reporting date with changes in fair value recorded as a component of other income (expense), net in the condensed consolidated statements of operations.

The estimated fair value of the contingent consideration was determined using a Monte Carlo simulation using a distribution of potential outcomes on a monthly basis over the Earnout Period (as defined in Note 9) prioritizing the most reliable information available. The assumptions utilized in the calculation arewere based on the achievement of certain stock price milestones, including the current Company Common Stock price, expected volatility, risk-free rate, expected term and dividend rate.

The

Until its settlement, the contingent earnout liability iswas categorized as a Level 3 fair value measurement (see Fair Value of Financial Instruments accounting policy as described above) because the Company estimatesestimated projections during the Earnout Period utilizing unobservable inputs. Contingent earnout payments involve certain assumptions requiring significant judgment and actual results maycan differ from assumed and estimated amounts.

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Use of Estimates

The preparation of the accompanying condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenue and expenses. Actual results and outcomes could differ significantly from the Company’s estimates, judgments and assumptions. Significant estimates include determining standalone selling price for performance obligations in contracts with customers, the estimated expected benefit period for deferred contract acquisition costs, allowances for doubtful accounts, inventory reserves, the useful lives of long-lived assets, the determination of the incremental borrowing rate used for operating lease liabilities, the valuation of redeemable convertible preferred stock warrants and common stockCommon Stock warrants, including Common Stock Warrants as a result of the Merger, contingent earnout liability, valuation of acquired goodwill and intangible assets, the value of common stockCommon Stock and other assumptions used to measure stock-based compensation, and the valuation of deferred income tax assets and uncertain tax positions. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods. As future events and their effects cannot be determined with precision, actual results could materially differ from those estimates and assumptions.

15

ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Concentration of Credit Risk and Other Risks and Uncertainties

Financial instruments that potentially subject the Company to credit risk consist primarily of cash and cash equivalents and accounts receivable. Cash and cash equivalents are held in domestic and foreign cash accounts with large, creditworthy financial institutions. The Company has not experienced any losses on its deposits of cash and cash equivalents through deposits with federally insured commercial banks and atbanks. At times cash deposit balances may be in excess of federal insurance limits. The Company has not experienced any losses on its deposits of cash and cash equivalents.

Accounts receivable are stated at the amount the Company expects to collect. The Company generally does not require collateral or other security in support of accounts receivable. To reduce credit risk, management performs ongoing credit evaluations of its customers’ financial condition.

Concentration of credit risk with respect to trade accounts receivable is considered to be limited due to the diversity of the Company’s customer base and geographic sales areas. As of April 30,October 31, 2021, and January 31, 2021, one customer individually accounted for 11%12% and 16% of accounts receivable, net, respectively. For the threenine months ended April 30,October 31, 2021 and 2020, there were no customers that represented 10% or more of total revenue.

The Company’s revenue is concentrated in the infrastructure needed for charging EVs, an industry which is highly competitive and rapidly changing. Significant technological changes within the industry or customer requirements, or the emergence of competitive products with new capabilities or technologies, could adversely affect the Company’s business, operating results.

results and financial condition.

Impact of COVID-19

In March 2020, the World Health Organization characterized COVID-19 as a pandemic. The impact of COVID-19, including changes in consumer and business behavior, pandemic fears and market downturns, and restrictions on business and individual activities, has created significant volatility in the global economy and led to reduced economic activity. The spread of COVID-19 has also created a disruption in thedisrupted ChargePoint’s supply chain and heightened its freight and logistic costs, and has similarly disrupted manufacturing, delivery and overall supply chain of vehicle manufacturers and suppliers, andwhich has led to a decreasefluctuations in EV sales in some markets.

around the world.

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

As a result of the COVID-19 pandemic, ChargePoint had initiallyhas modified its business practices (including reducing employee travel, recommending that all non-essential personnel work from home and cancellationcancelling or reduction ofreducing physical participation in sales activities, meetings, events and conferences), implemented additional safety protocols for essential workers, and implemented temporary cost cutting measures in order to reduce its operating costs, some of which it recently reversed, and itcosts. The Company may take further actions as may be required by government authorities or that it determines are in the best interests of its employees, customers, suppliers, vendors and business partners.

While the ultimate duration and extent of the COVID-19 pandemic depends on current and future developments that cannot be accurately predicted, such as the extent and effectiveness of containment actions and vaccinations, it has already had an adverse effect on the global economy, and the ultimate full societal and economic impact of the COVID-19 pandemic remains unknown. In particular,The effect of the COVID-19 pandemic can also vary over time and across the geographies in which ChargePoint operates. For example, variations in work-from-home policies can cause fluctuations in ChargePoint’s revenues, and the Company believes that since people are not yet fully returning to work office locations, it has not yet seen the full return of commercial customer demand for its products. The conditions caused by thisthe COVID-19 pandemic, such as more permanent work-from-home policies, are likely to affectcontinue affecting the rate of global infrastructure spending, suchand thus to continue to adversely impact ChargePoint’s commercial business and its overall gross margins as work-from-home policiesthe Company’s commercial customers are adopting,business presently contributes higher margins than its residential and fleet businesses. Further, the COVID-19 pandemic could continue to heighten supply chain pricing and logistics expenses, further adversely impacting ChargePoint’s gross margins, and could adversely affect demand for ChargePoint’s platforms, lengthen its product development and sales cycles, reduce the value, renewal rate or duration of subscriptions, negatively impact collections of accounts receivable, reduce expected spending from new customers, cause some of its paying customers to go out of business and limit the ability of its direct sales force to travel to customers and potential customers, all of which could adversely affect itsthe Company’s business, results of operations and financial condition during the fiscal year ended January 31, 2022 and potentially future periods.

condition.

16

ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Segment Reporting

The Company operates as one1 operating segment because its Chief Executive Officer, as the Company’s chief operating decision maker, who is its Chief Executive Officer, reviews its financial information on a consolidated basis for purposes of making decisions regarding allocating resources and assessing performance.

Fair Value of Financial Instruments

Fair value is defined as an exchange price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. Assets and liabilities measured at fair value are classified into the following categories based on the inputs used to measure fair value:

•(Level 1) — Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date;

•(Level 2) — Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly; and

•(Level 3) — Inputs that are unobservable for the asset or liability.

The Company classifies financial instruments in Level 3 of the fair value hierarchy when there is reliance on at least one significant unobservable input to the valuation model. In addition to these unobservable inputs, the valuation models for Level 3 financial instruments typically also rely on a number of inputs that are readily observable, either directly or indirectly. The Company’s assessment of a particular input to the fair value measurement requires management to make judgments and consider factors specific to the asset or liability. The fair value hierarchy requires the use of observable market data when available in determining fair value. The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each period. There were no transfers between levels during the periods presented. The Company had no material non-financial assets valued on a non-recurring basis that resulted in an impairment in any period presented.

The carrying values of the Company’s cash equivalents, accounts receivable, net, accounts payable, and accrued and other current liabilities approximate fair value based on the highly liquid, short-term nature of these instruments.

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Remaining Performance Obligations

Remaining performance obligations represents the amount of contracted future revenue not yet recognized as the amounts relate to undelivered performance obligations, including both deferred revenue and non-cancellable contracted amounts that will be invoiced and recognized as revenue in future periods. The Company’s Assure, Cloud and CPaaS subscription terms typically range from one to five years.years and are paid up-front. Revenue expected to be recognized from remaining performance obligations was $110.1$132.8 million as of April 30,October 31, 2021, of which 42%47% is expected to be recognized over the next twelve months and the remainder thereafter.

months.

Deferred Revenue

Deferred revenue represents billings or payments received in advance of revenue recognition and is recognized in revenue upon transfer of control. Balances consist primarily of software subscription servicesCloud and extended Assure maintenance services not yet providedrendered as of the balance sheet date. Contract assets, which represent services provided or products transferred to customers in advance of the date the Company has a right to invoice, are netted against deferred revenue on a customer-by-customer basis. Deferred Current deferred revenue represents deferred revenue that will be recognized during the succeeding twelve-month periodwithin twelve months, andnon-current is recorded as deferred revenue with the remainder recorded as deferred revenue, non-current on the condensed consolidated balance sheets.that will be recognized beyond that twelve-month period. Total deferred revenue was $97.6$121.2 million and $89.8 million as of April 30,October 31, 2021 and January 31, 2021, respectively. The Company recognized $15.2$9.2 million and $16.4$7.5 million of revenue during the three months ended April 30,October 31, 2021 and April 30,October 31, 2020, and $31.8 million and $24.9 million of revenue during the nine months ended October 31, 2021 and October 31, 2020, respectively, that was included in the deferred revenue balance at the beginning of the respective period.

Accounting Pronouncements

17

ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Business Combinations
The Company accounts for its acquisitions under ASC 805, Business Combinations. The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed and intangible assets acquired, based on their estimated fair values. The excess of the fair value of purchase consideration over the values of these identifiable assets and liabilities is providedrecorded as goodwill. When determining the optionfair value of assets acquired and liabilities assumed, management makes significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain identifiable assets include, but are not limited to, expected long-term market growth, future expected cost of revenue and operating expenses, and appropriate discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Acquisition costs, such as legal and consulting fees, are expensed as incurred. During the measurement period, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded in the consolidated statement of operations. The acquired intangible assets and goodwill are subject to impairment review at least annually on December 31. See Note 3 for additional information regarding the Company’s acquisitions.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under ASC 740, Income Taxes (“ASC 740”). Deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the financial reporting and tax bases of assets and liabilities. Deferred tax assets and liabilities are measured by applying enacted statutory tax rates applicable to the future years in which deferred tax assets or liabilities are expected to be settled or realized. Valuation allowances, if management deems them necessary, are established to reduce deferred tax assets to the amount that more likely than not will be realized and primarily relate to the ability to utilize losses in various tax jurisdictions.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be “more likely than not” to be sustained upon examination by taxing authorities. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company has no material uncertain tax position liabilities for any of the reporting periods presented.
Accounting Pronouncements
The Company can adopt new or revised accounting guidance as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”) either (1) within the same periods as those otherwise applicable to public business entities, or (2) within the same time periods as non-public business entities, including early adoption when permissible. With the exception of standards the Company elected to early adopt when permissible, the Company has elected to adopt new or revised accounting guidance within the same time period as non-public business entities, as indicated below.

Based on the Company’s public float as of July 31, 2021, it will become a large accelerated filer, and lose emerging growth company status, as of January 31, 2022. As of January 31, 2022, the Company will be required to adopt new or revised accounting standards when they are applicable to public companies that are not emerging growth companies.

Recently Issued Accounting Standards Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13,Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and has since released various amendments including ASU No. 2019-04. The guidance modifies the measurement of expected credit losses on certain financial instruments. This guidanceThe Company will bebecome a large accelerated filer effective January 31, 2022, at which point the Company will follow the timeline for adoption of new accounting pronouncements for public companies. As a result, the Company will adopt ASU 2016-13 for the January 31, 2022 annual reporting periods beginning after December 15, 2022. Early adoption is permitted. The Companyperiod, with a modified retrospective application to all outstanding instruments and a cumulative effect adjustment recorded to opening retained earnings as of February 1, 2021, and is currently assessing the impact of the guidance will have on its condensed consolidated financial statements and disclosures.

statements.

18

ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
In December 2019, the FASB issued ASU 2019-12,Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which enhances and simplifies various aspects of the income tax accounting guidance, including requirements such as the elimination of exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period, the recognition of deferred tax liabilities for outside basis differences, ownership changes in investments, and tax basis step-up in goodwill obtained in a transaction that is not a business combination. The guidance will be effective for annual reporting periods beginning after December 15, 2021. Early adoption is permitted. The2020, including interim periods therein. As a result, the Company will adopt ASU 2019-12 for the January 31, 2022 annual period and is currently assessing the impact of thisthe guidance will have on its condensed consolidated financial statements and disclosures andbut does not anticipate adoption to haveexpect a material impact on its condensed consolidated financial statements.

impact.

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

In August 2020, the FASB issued ASU 2020-06,Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40), which modifies and simplifies accounting for convertible instruments. The new guidance eliminates certain separation models that require separating embedded conversion features from convertible instruments. The guidance also addresses how convertible instruments are accounted for in the diluted earnings per share calculation. The guidance will be effective for annual reporting periods beginning after December 15, 2023. Early adoption is permitted, but no earlier than2020. As a result, the Company will adopt ASU 2020-06 for fiscal years beginning after December 15, 2020. The Companythe January 31, 2022 annual period and is currently assessing the impact of thisthe guidance will have on its condensed consolidated financial statements and disclosures.

statements.

Recently Issued Accounting Standards Adopted
In October 2020,2021, the FASB issued ASU 2020-08,Codification ImprovementsNo. 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”), which requires entities to Subtopic 310-20 — Receivables-Nonrefundable Feesrecognize and Other Costs, which clarifies the accounting for the amortization period for certain purchased callable debt securities held atmeasure contract assets and contract liabilities acquired in a premium by giving consideration to securities which have multiple call dates.business combination in accordance with ASC 606, Revenue from Contracts with Customers. The guidance will be effective for annual reporting periods beginning after December 15, 2021.2022, including interim periods therein. Early adoption is permitted, including in an interim period for annual reporting periods beginning after December 15, 2020. Thewhich the financial statements have not been issued. If early adopting in an interim period, the Company is currently assessingrequired to apply the amendments to all prior business combinations that have occurred since the beginning of the fiscal year that includes the interim period of application. As a result, the Company adopted ASU 2021-08 effective as of October 31, 2021, retroactively applying the new guidance for all business combinations that occurred since February 1, 2021. The adoption of ASU 2021-08 did not have a material impact of this guidance on itsthe Company’s condensed consolidated financial statementsstatements.
3.Reverse Recapitalization and disclosures.

3. Business Combinations

Reverse Recapitalization

On February 26, 2021, Lightning Merger Sub, a wholly-owned subsidiary of Switchback, merged with Legacy ChargePoint, with Legacy ChargePoint surviving as a wholly-owned subsidiary of Switchback. As a result of the Merger, Switchback was renamed “ChargePoint Holdings, Inc.” Immediately prior to the closing of the Merger:

•all 22,427,306 shares of Legacy ChargePoint’s outstanding Series H-1 redeemable convertible preferred stock waswere converted into an equivalent number of shares of Legacy ChargePoint common stock on a one-to-one1-to-one basis and an additional 1,026,084 shares of Common Stock were issued to settle the accumulated dividend to the Series H-1 redeemable convertible preferred stockholders of $21.1 million;

•all 160,925,957 shares of Legacy ChargePoint’s outstanding Series H, Series G, Series F, Series E, and Series D redeemable convertible preferred stock waswere converted into an equivalent number of shares of Legacy ChargePoint common stock on a one-to-one1-to-one basis;

•all 45,376 shares of Legacy ChargePoint’s outstanding Series C redeemable convertible preferred stock waswere converted into an equivalent number of shares of Legacy ChargePoint common stock on a 1:73.4403 basis;

•all 130,590 shares of Legacy ChargePoint’s outstanding Series B redeemable convertible preferred stock waswere converted into an equivalent number of shares of Legacy ChargePoint common stock on a 1:42.9220 basis; and

•all 29,126 shares of Legacy ChargePoint’s outstanding Series A redeemable convertible preferred stock waswere converted into an equivalent number of shares of Legacy ChargePoint common stock on a 1:48.2529 basis.

19

ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
At the Merger, eligible ChargePoint equity holders received or havehad the right to receive shares of Common Stock at a deemed value of $10.00 per share after giving effect to the exchange ratio of 0.9966 as defined in the Merger Agreement (“Exchange Ratio”). Accordingly, immediately following the consummation of the Merger, Legacy ChargePoint common stock exchanged into 217,021,368 shares of Common Stock, 68,896,516 shares were reserved for the issuance of Common Stock upon the potential future exercise of Legacy ChargePoint stock options and warrants that were exchanged into ChargePoint stock options and warrants, and 27,000,000 shares of Common Stock were reserved for the potential future issuance of the earnout shares.

In connection with the execution of the Merger Agreement, Switchback entered into separate subscription agreements (each a “Subscription Agreement”) with a number of investors (each a “New PIPE Investor”), pursuant to which the New PIPE Investors agreed to purchase, and Switchback agreed to sell to the New PIPE Investors, an aggregate of 22,500,000 shares of Common Stock (“PIPE Shares”), for a purchase price of $10.00 per share and an aggregate purchase price of $225.0 million, in a private placement pursuant to the subscription agreements (“PIPE Financing”). The PIPE Financing closed simultaneously with the consummation of the Merger.

Pursuant to the terms of a letter agreement the initial Switchback stockholders entered into in connection with the execution of the Merger Agreement (“Founders Stock Letter”), the initial stockholders surrendered 984,706 of Switchback Class B common stock shares purchased by NGP Switchback, LLC, a Delaware limited liability company (“Sponsor”) prior to the Switchback Public Offering on May 16, 2019 (“Founder( “Founder Shares”) for no consideration, whereupon such Founder Shares were immediately cancelled. Additionally, 900,000 Founder Earn Back Shares, which were previously subjected to potential forfeiture until the closing volume weighted average price per share of the Company’s Common Stock achievesachieved $12.00 for any ten10 trading days within any twenty20 consecutive trading day period during the five-year period following the Closing (“Founder Earn Back Triggering Event” and such Founder Shares the “Founder Earn Back Shares”), met the Founder Earn Back Triggering Event on March 12, 2021.

At the Closing, the Sponsor exercised its right to convert a portion of the working capital loans made by the Sponsor to Switchback into an additional 1,000,000 Private Placement Warrants at a price of $1.50 per warrant in satisfaction of $1.5 million principal amount of such loans.

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

The number of shares of Common Stock issued immediately following the consummation of the Merger was:

was as follows:
Shares

Common stock of Switchback, outstanding prior to Merger

39,264,704

Less redemption of Switchback shares

(33,009)(33,009) 

Less surrender of Switchback Founder Shares

(984,706)(984,706) 

Common stock of Switchback

38,246,989

Shares issued in PIPE

22,500,000

Merger and PIPE financing shares (1)

60,746,989

Legacy ChargePoint shares (2)

217,021,368

Total shares of common stock immediately after Merger

277,768,357

_______________
(1) This includes 900,000 contingently forfeitable Founder Earn Back Shares pending the occurrence of the Founder Earn Back Triggering Event, which was met on March 12, 2021
(2) The number of Legacy ChargePoint shares was determined by converting the 217,761,738 shares of Legacy ChargePoint common stock outstanding immediately prior to the closing of the Merger using the Exchange Ratio of 0.9966. All fractional shares were rounded down.
20

ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
The Merger is accounted for as a reverse recapitalization under U.S. GAAP. This determination is primarily based on Legacy ChargePoint stockholders comprising a relative majority of the voting power of ChargePoint and having the ability to nominate the members of the Board of Directors, Legacy ChargePoint’s operations prior to the acquisition comprising the only ongoing operations of ChargePoint, and Legacy ChargePoint’s senior management comprising a majority of the senior management of ChargePoint. Under this method of accounting, Switchback is treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the financial statements of ChargePoint represent a continuation of the financial statements of Legacy ChargePoint with the Merger being treated as the equivalent of ChargePoint issuing stock for the net assets of Switchback, accompanied by a recapitalization. The net assets of Switchback are stated at historical costs, with no goodwill or other intangible assets recorded. Operations prior to the Merger are presented as those of ChargePoint. All periods prior to the Merger have been retrospectively adjusted using the Exchange Ratio for the equivalent number of shares outstanding immediately after the Merger to effect the reverse recapitalization. Additionally, upon the consummation of the Merger, the Company gave effect to the issuanceissuance of 60,746,989 shares ofof Common Stock for the previously issued Switchback common stock and PIPE Shares that were outstanding at the Closing Date.

In connection with the Merger, the Company raised $511.6 million of proceeds including the contribution of $286.6 million of cash held in Switchback’s trust account from its initial public offering, net of redemptions of Switchback public stockholders of $0.3 million, and $225$225.0 million of cash in connection with the PIPE financing. The Company incurred $36.5 million of transaction costs, consisting of banking, legal, and other professional fees, of which $29.5 million was recorded as a reduction to additional paid-in capital of proceeds and the remaining $7.0 million was expensed in the condensed consolidated statements of operations.

(1)

This includes 900,000 contingently forfeitable Founder Earn Back Shares pending the occurrence of the Founder Earn Back Triggering Event.

(2)

The number of Legacy ChargePoint shares was determined from the 217,761,738 shares of Legacy ChargePoint common stock outstanding immediately prior to the closing of the Merger converted at the exchange ratio of 0.9966. All fractional shares were rounded.

Acquisitions

The Company acquired two companies in its third fiscal quarter ended October 31, 2021. The allocation of the purchase price consideration for each acquisition is preliminary and subject to revision as additional information about the fair value of assets and liabilities becomes available. Additional information that existed as of the respective acquisition dates, but at the time was unknown, may become known to the Company during the remainder of the remeasurement period, which is a period not to exceed 12 months from the respective acquisition dates. As of October 31, 2021, the Company continued to review the detailed valuation analyses to derive the fair value of assets acquired and liabilities assumed from the acquisitions, including developed technology, customer relationships and the related tax impacts; therefore, the purchase price allocations are based on provisional estimates and subject to continuing management analysis.
Acquisition of ViriCiti B.V.
On August 11, 2021, the Company acquired all of the outstanding shares of ViriCiti B.V. (“ViriCiti”) for $79.4 million in cash, subject to adjustments, as well as up to $7.7 million of additional earnout consideration contingent on meeting certain revenue targets through January 31, 2023 (“ViriCiti Earnout”). ViriCiti is a Netherlands-based provider of electrification solutions for eBus and commercial fleets with offices in the Netherlands and the United States. The acquisition is expected to enhance ChargePoint’s fleet solutions portfolio of hardware, software and services by integrating information sources to optimize electric fleet operations.
The acquisition of ViriCiti was considered a business combination and was accounted for under the acquisition method of accounting. The total purchase price was allocated to the net tangible and intangible assets acquired and liabilities assumed based on their respective fair values on the acquisition date and the excess was recorded as goodwill. 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. Assumptions used in the valuation are a risk-free interest rate of 0.8%, volatility of 34% and the currently forecasted applicable revenue. The liability will be remeasured to fair value based upon the attainment against the revenue targets and changes in the fair value of earnout liabilities will be presented in the condensed consolidated statements of operations.
The Company incurred acquisition-related expenses of $2.2 million, which were recorded as general and administrative expenses in the consolidated statement of operations.

21

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

The following table summarized the preliminary purchase consideration (in thousands):
Amount
Cash consideration$79,415 
ViriCiti Earnout consideration (1)3,908 
Total purchase consideration$83,323 
_______________
(1) Values are translated into U.S. Dollars at period-end foreign exchange rates.

The preliminary assets acquired and liabilities assumed in connection with the acquisition were recorded at their fair value at the acquisition date as follows (in thousands):

Amount
Cash and cash equivalents$623 
Accounts receivable, net1,248 
Other assets3,215 
Customer relationships17,683 
Developed technology6,558 
Goodwill62,703 
Deferred tax liabilities, net(3,378)
Other liabilities(5,329)
Total acquired assets and assumed liabilities$83,323 
The results of operations of ViriCiti are included in the accompanying consolidated statements of operations from the date of acquisition. ViriCiti’s results of operations since the date of acquisition were not material to the Company’s consolidated results of operations.
Acquisition of has•to•be gmbh
On October 6, 2021, the Company acquired all of the outstanding shares of has•to•be gmbh (“has.to.be” or “HTB”) for approximately $232.2 million, consisting of $130.1 million in cash, subject to further adjustments based on certain working capital positions and $102.1 million in the form of 5,695,176 shares of ChargePoint Common Stock valued at $17.92 per share on the acquisition date. Of these shares, 885,692, valued at $15.9 million, are held in escrow to cover indemnity claims the Company may make within eighteen months from the closing date. HTB is an Austria-based e-mobility provider with a European charging software platform. The acquisition is intended to expand the Company’s market share in Europe.
The acquisition of HTB was considered a business combination and was accounted for under the acquisition method of accounting. The total purchase price was allocated to the net tangible and intangible assets acquired and liabilities assumed based on their respective fair values on the acquisition date, and the excess was recorded as goodwill. The Company incurred acquisition-related expenses of $2.6 million, which were recorded as general and administrative expenses in the consolidated statement of operations.
The following table summarized the preliminary purchase consideration (in thousands):
Amount
Cash consideration$130,134 
Common Stock consideration102,057 
Total purchase consideration$232,191 

22

ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
The preliminary assets acquired and liabilities assumed in connection with the acquisition were recorded at their fair value at the acquisition date as follows (in thousands):

Amount
Cash and cash equivalents$3,663 
Accounts receivable, net3,764 
Other assets4,259 
Customer relationships103,072 
Technology16,621 
Goodwill136,638 
Other liabilities(10,509)
Deferred tax liability, net(25,317)
Total acquired assets and assumed liabilities$232,191 

Supplemental Pro Forma Information
The following unaudited pro forma financial information summarizes the combined results of operations for the Company and HTB as if the companies were combined as of February 1, 2020 (in thousands):
Three Months Ended October 31,Nine Months Ended October 31,
2021202020212020
Revenue$66,571 $38,176 $168,736 $109,251 
Net Loss$(70,559)$(44,807)$(80,708)$(119,334)
The unaudited pro forma information above include the following adjustments to net loss in the pro forma periods presented (in thousands):
Three Months Ended October 31,Nine Months Ended October 31,
2021202020212020
An increase in amortization expense$(2,402)$(3,407)$(9,889)$(9,694)
An (increase) decrease in expenses related to transaction2,556 — 2,556 (2,556)
An (increase) decrease in tax provision(38)852 1,833 3,062 
Overall (increase) decrease in net loss116 (2,555)(5,500)(9,188)
ChargePoint net loss(69,442)(40,890)(72,092)(106,275)
HTB net loss(1,233)(1,362)(3,116)(3,871)
Pro forma net loss$(70,559)$(44,807)$(80,708)$(119,334)
The unaudited supplemental pro forma information presented for HTB is for illustrative purposes only and is not necessarily indicative of results of operations that would have been achieved had the acquisitions taken place on the date indicated, or of the Company’s future consolidated results of operations. The supplemental pro forma information presented above has been derived from the Company’s historical consolidated financial statements and from the historical unaudited accounting records of HTB.
Pro forma results of operations for ViriCiti have not been presented because the effect of the acquisition was not material to the condensed consolidated statements of operations.

23

ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Goodwill and Intangible Assets
The following table summarizes the changes in carrying amounts of goodwill (in thousands):
Balance as of January 31, 2021$1,215 
Goodwill acquired with ViriCiti acquisition62,703 
Goodwill acquired with HTB acquisition136,638 
Foreign exchange fluctuations125 
Balance as of October 31, 2021$200,681 
Goodwill from these acquisitions represents the future economic benefits arising from other assets that could not be individually identified and separately recognized, such as the acquired assembled workforce. Goodwill is not deductible for tax purposes.
The following table presents the details of intangible assets (amounts in thousands, useful lives in years):
October 31, 2021
Cost (1)Accumulated Amortization (1)Net (1)Useful Life
ViriCiti
Customer relationships$17,683 $(390)$17,293 10
Developed technology6,558 (241)6,317 6
HTB
Customer relationships103,179 (703)102,476 10
Developed technology16,638 (185)16,453 6
$144,058 $(1,519)$142,539 
_______________
(1) Values are translated into U.S. Dollars at period-end foreign exchange rates.
The fair value assigned to customer relationships was determined using the income approach and the fair value assigned to developed technology was determined using relief from royalty rate method, based on analysis of royalty rate licensing data of market participants. Amortization expense for customer relationships and developed technology is shown as sales and marketing and cost of revenue, respectively, in the consolidated statement of operations. The acquired intangible assets and goodwill are subject to impairment review at least annually on December 31.
Acquisition-related intangible assets included in the above table are finite-lived and are carried at cost less accumulated amortization. Intangible assets are being amortized on a straight-line basis over their estimated lives, which approximates the pattern in which the economic benefits of the intangible assets are expected to be realized. Amortization expense was $1.5 million for the three and nine months ended October 31, 2021. There was no amortization expense for the three and nine months ended October 31, 2020.
The Company recorded net deferred tax liabilities of $3.4 million on August 11, 2021 and $25.3 million on October 6, 2021, associated with the acquisitions of ViriCiti and HTB, respectively. Deferred tax assets and liabilities are netted and presented in the condensed consolidated balance sheets.
24

ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
4.Fair Value Measurements

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

   Fair Value Measured as of April 30, 2021 
   Level 1   Level 2   Level 3   Total 
   (in thousands) 

Assets

        

Money market funds

  $454,710  $—    $—     $454,710
  

 

 

   

 

 

   

 

 

   

 

 

 

Total financial assets

  $454,710  $—     $—     $454,710
  

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities

        

Common stock warrant liabilities (Public)

  $55,710  $—     $—     $55,710

Common stock warrant liabilities (Private Placement)

   —      —      30,499   30,499
  

 

 

   

 

 

   

 

 

   

 

 

 

Total financial liabilities

  $55,710  $—     $30,499  $86,209
  

 

 

   

 

 

   

 

 

   

 

 

 

   Fair Value Measured as of January 31, 2021 
   Level 1   Level 2   Level 3   Total 
   (in thousands) 

Assets

        

Money market funds

  $109,703  $—     $—     $109,703
  

 

 

   

 

 

   

 

 

   

 

 

 

Total financial assets

  $109,703  $—     $—     $109,703
  

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities

        

Redeemable convertible preferred stock warrant liability

  $—     $—     $75,843  $75,843
  

 

 

   

 

 

   

 

 

   

 

 

 

Total financial liabilities

  $—     $—     $75,843  $75,843
  

 

 

   

 

 

   

 

 

   

 

 

 

Fair Value Measured as of October 31, 2021
Level 1Level 2Level 3Total
(in thousands)
Assets
Money market funds$254,714 $— $— $254,714 
Total financial assets$254,714 $— $— $254,714 
Liabilities
Common stock warrant liabilities (Private Placement)$— $— $29,282 $29,282 
Contingent earnout liability recognized upon acquisition of ViriCiti (ViriCiti Earnout)— — 3,856 3,856 
Total financial liabilities$— $— $33,138 $33,138 

Fair Value Measured as of January 31, 2021
Level 1Level 2Level 3Total
(in thousands)
Assets
Money market funds$109,703 $— $— $109,703 
Total financial assets$109,703 $— $— $109,703 
Liabilities
Redeemable convertible preferred stock warrant liability$— $— $75,843 $75,843 
Total financial liabilities$— $— $75,843 $75,843 
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 April 30,October 31, 2021 and January 31, 2021. Realized gains and losses, net of tax, were not material for any of the periods presented.

As of April 30,October 31, 2021 and January 31, 2021, the Company had no investments with a contractual maturity of greater than one year.


25

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

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 
   (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   45,434   84,420

Reclassification of option warrants to stockholders’ equity (deficit) due to exercise

   —      51,955   —   

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 April 30, 2021

  $—    $(30,499)   $—  
  

 

 

   

 

 

   

 

 

 


Redeemable convertible preferred stock warrant liabilityPrivate placement warrant liabilityEarnout liability and ViriCiti Earnout liability
(in thousands)
Fair value as of January 31, 2021$(75,843)$— $— 
Private placement warrant liability acquired as part of the merger— (127,888)— 
Contingent earnout liability recognized upon the closing of the reverse recapitalization— — (828,180)
Change in fair value included in other income (expense), net9,237 46,835 84,420 
Reclassification of warrants to stockholders’ equity (deficit) due to exercise— 51,771 — 
Reclassification of Legacy ChargePoint preferred stock warrant liability upon the reverse capitalization66,606 — — 
Issuance of earnout shares upon triggering events— — 501,120 
Reclassification of remaining contingent earnout liability upon triggering event— — 242,640 
Contingent earnout liability recognized upon the acquisition of ViriCiti (ViriCiti Earnout)— — (3,856)
Fair value as of October 31, 2021$— $(29,282)$(3,856)
Redeemable convertible preferred stock warrant liability, Private Placement Liability and the Earnout Liability
The fair valuevalues 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-LatticeBinomial Lattice Model (“BLM”) model that assumes optimal exercise of the Company’sCompany's redemption option at the earliest possible date (Note 9). In determining the fair value of the redeemable convertible preferred stock warrant liability, the Company used the Black-Scholes option pricing modelOption 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 (see Note 9). 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 (see Note 9).

ViriCiti Earnout Liability
Refer to Note 3 for the valuation of the ViriCiti Earnout liability.

26

ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
5.Composition of Certain Financial Statement Items

Inventories

Inventories consisted of the following:

   April 30,
2021		   January 31,
2021		 
   (in thousands) 

Raw materials

  $9,135  $13,029

Work-in-progress

   1   68

Finished goods

   19,732   20,495
  

 

 

   

 

 

 

Total Inventories

  $28,868  $33,592
  

 

 

   

 

 

 

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

October 31,
2021		January 31,
2021
(in thousands)
Raw materials$7,489 $13,029 
Work-in-progress199 68 
Finished goods22,205 20,495 
Total Inventories$29,893 $33,592 

Property and equipment, net

Property and equipment, net consisted of the following:

   April 30,
2021		   January 31,
2021		 
   (in thousands) 

Furniture and fixtures

  $901  $1,594

Computers and software

   5,394   5,384

Machinery and equipment

   11,583   10,605

Tooling

   7,991   7,705

Leasehold improvements

   9,582   9,398

Owned and operated systems

   19,733   17,703

Construction in progress

   2,629   2,462
  

 

 

   

 

 

 
   57,813   54,851
  

 

 

   

 

 

 

Less: Accumulated depreciation

   (26,602)    (24,863) 
  

 

 

   

 

 

 

Total Property and Equipment, Net

  $31,211  $29,988
  

 

 

   

 

 

 

October 31,
2021		January 31,
2021
(in thousands)
Furniture and fixtures$893 $1,594 
Computers and software5,786 5,384 
Machinery and equipment14,776 10,605 
Tooling10,506 7,705 
Leasehold improvements10,644 9,398 
Owned and operated systems21,236 17,703 
Construction in progress3,460 2,462 
67,301 54,851 
Less: Accumulated depreciation(32,575)(24,863)
Total Property and Equipment, Net$34,726 $29,988 
Depreciation expense for the three months ended April 30,October 31, 2021 and 2020 was $2.7$3.1 million and $2.3$2.8 million, respectively.

Depreciation expense for the nine months ended October 31, 2021 and 2020 was $8.6 million and $7.5 million, respectively.

27

ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Accrued and other current liabilities

Accrued and other current liabilities consisted of the following:

   April 30,
2021		   January 31,
2021		 
   (in thousands) 

Accrued expenses

  $14,592  $18,404

Refundable customer deposits

   6,950   6,482

Taxes payable

   5,977   5,213

Payroll and related expenses

   5,545   7,547

Warranty accruals

   3,000   3,000

Operating lease liabilities, current

   2,494   2,393

Other liabilities

   4,372   4,123
  

 

 

   

 

 

 

Total Accrued and Other Current Liabilities

  $42,930  $47,162
  

 

 

   

 

 

 

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)


October 31,
2021		January 31,
2021
(in thousands)
Accrued expenses$28,673 $18,404 
Refundable customer deposits8,286 6,482 
Taxes payable9,760 5,213 
Payroll and related expenses12,917 7,547 
Warranty accruals3,766 3,000 
Operating lease liabilities, current3,665 2,393 
Other liabilities9,406 4,123 
Total Accrued and Other Current Liabilities$76,473 $47,162 

Revenue

Revenue consisted of the following:

   Three Months Ended April 30, 
   2021   2020 
   (in thousands) 

United States

  $35,110  $30,291

Rest of World

   5,400   2,485
  

 

 

   

 

 

 

Total revenue

  $40,510  $32,776
  

 

 

   

 

 

 


Three Months Ended October 31,Nine Months Ended October 31,
2021202020212020
(in thousands)(in thousands)
United States$54,561 $29,681 $139,321 $92,319 
Rest of World10,473 6,684 22,344 11,779 
Total revenue$65,034 $36,365 $161,665 $104,098 

6.Debt

In July 2018, the Company entered into a term loan facility with certain lenders (“2018 Loan”) with a borrowing capacity of $45.0 million to finance working capital and repay all outstanding amounts owed under the previous loans, of which $10.0 million expired unused in June 2019.loans. The Company borrowed $35.0 million, with issuance costs of $1.1 million and net proceeds of $33.9 million. The 2018 Loan was secured by substantially all of the Company’s assets, contained customary affirmative and negative covenants, and required the Company to maintain minimum cash balances and attain certain customer billing targets. The 2018 Loan had a five-year maturity and interest was calculated at LIBOR plus 6.55%. The 2018 Loan agreement was amended on March 20, 2019, to extend the interest only monthly payments through June 30, 2021, to be followed by equal monthly payments of principal and interest. As of January 31, 2021, the Company was in compliance with all financial and non-financial debt covenants.

Transaction costs upon entering into the 2018 Loan were recorded as debt discount and were amortized over the term of the 2018 Loan.

Total

There was no interest expense incurred during the three months ending October 31, 2021; the interest expense incurred during the three months ended April 30,October 31, 2020 was $0.8 million.
Total interest expense incurred during the nine months ended October 31, 2021 and 2020 was $1.5 million and $0.8$2.4 million, respectively. There was no accrued interest as of April 30, 2021 and January 31, 2021.

In March 2021, the Company repaid the entire loan balance of $35.0 million plus accrued interest and prepayment fees of $1.2 million.


28

ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

7.Commitments and Contingencies

Purchase Commitments

Open purchase commitments are for the purchase of goods and services related to, but not limited to, manufacturing, facilities and professional services under non-cancellable contracts. As of April 30,October 31, 2021, the Company had open purchase commitments for goods and services of $100.5$157.8 million, all of which are expected to be received by January 31,June 30, 2024.

Legal Proceedings

The Company may be involved in various lawsuits, claims, and proceedings, including intellectual property, commercial, securities, and employment matters that arise in the normal course of business. The Company accrues a liability when management believes information available prior to the issuance of the condensed consolidated financial statements indicates it is probable a loss has been incurred as of the date of the condensed consolidated financial statements and the amount of loss can be reasonably estimated. The Company adjusts its accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. Legal costs are expensed as incurred.

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

The Company believes it has recorded adequate provisions for any such lawsuits, claims, and proceedings and, as of April 30,October 31, 2021, it was not reasonably possible that a material loss had been incurred in excess of the amounts recognized in the condensed consolidated financial statements. Based on its experience, the Company believes that damage amounts claimed in these matters are not meaningful indicators of potential liability. Given the inherent uncertainties of litigation, the ultimate outcome of the ongoing matters described herein cannot be predicted with certainty. While litigation is inherently unpredictable, the Company believes it has valid defenses with respect to the legal matters pending against it. Nevertheless, the condensed consolidated financial statements could be materially adversely affected in a particular period by the resolution of one or more of these contingencies. Liabilities established to provide for contingencies are adjusted as further information develops, circumstances change, or contingencies are resolved; and such changes are recorded in the accompanying condensed consolidated statements of operations during the period of the change and reflected in accrued and other current liabilities on the accompanying condensed consolidated balance sheets.

Guarantees and Indemnifications

The Company has service level commitments to certain of its customers warranting certain levels of uptime reliability and performance and permitting those customers to receive credits in the event thatif the Company fails to meet those levels. To date, the Company has not incurred any material costs as a result of such commitments.

The Company’s arrangements generally include certain provisions for indemnifying customers against liabilities if its products or services infringe a third-party’s intellectual property rights. Additionally, the Company may be required to indemnify for claims caused by its negligence or willful misconduct. It is not possible to determine the maximum potential amount under these indemnification obligations due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. To date, the Company has not incurred any material costs as a result of such obligations and has not accrued any liabilities related to such obligations in the condensed consolidated financial statements.

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

The Company has also agreed to indemnify its directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by them in any action or proceeding to which any of them are, or are threatened to be, made a party by reason of their service as a director or officer. The Company maintains director and officer insurance coverage that would generally enable it to recover a portion of any future amounts paid. The Company also may be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions.

Leases

The Company leases its office facilities under non-cancellablenon-cancelable operating leases with various lease terms. The Company also leases certain office equipment under operating lease agreements.

29

ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

The Company’sfollowing table presents future payments of lease liabilities under the non-cancellableCompany's non-cancelable operating lease areleases as follows:

Years Ending January 31,  (in thousands) 

2022 (remaining nine months)

  $3,835

2023

   5,118

2024

   4,331

2025

   4,154

2026

   3,838

Thereafter

   13,871
  

 

 

 

Total undiscounted operating lease payments

   35,147

Less: imputed interest

   (9,787) 
  

 

 

 

Total operating lease liabilities

   25,360

Less: current portion of operating lease liabilities

   (2,494) 
  

 

 

 

Operating lease liabilities, noncurrent

  $22,866
  

 

 

 

of October 31, 2021 (in thousands):

(in thousands)
2022 (remaining three months)$1,680 
20236,388 
20245,764 
20255,328 
20264,404 
Thereafter14,683 
Total undiscounted operating lease payments38,247 
Less: imputed interest(10,799)
Total operating lease liabilities27,448 
Less: current portion of operating lease liabilities(3,653)
Operating lease liabilities, noncurrent$23,795 

8.Common Stock

On February 26, 2021, the Merger was consummated and the Company issued 60,746,989 shares for an aggregate purchase price of $200.5 million, net of issuance costs of $29.4 million. Immediately following the Merger, there were 277,768,357 shares of Common Stock outstanding with a par value of $0.0001. The holder of each share of Common Stock is entitled to one vote.

The Company has retroactively adjusted the shares issued and outstanding prior to February 26, 2021, to give effect to the exchange ratioExchange Ratio established in the Merger Agreement to determine the number of shares of Common Stock into which they were converted. Immediately prior to the Merger, 484,951,532 shares were authorized to issue at $0.0001 par value, with 299,771,284 shares designated as Common Stock and 185,180,248 shares of redeemable convertible preferred stock.

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Common Stock Reserved for Future Issuance

Shares of Common Stock reserved for future issuance, on an as-if converted basis, were as follows:

October 31,
2021		April 30,
2021

Common stock reserved for Earnout

9,000,000

Stock options issued and outstanding

24,855,043 29,795,964

Restricted stock units outstanding

3,906,058 
Common stock warrants outstanding

37,756,829 43,895,087

Shares available for grant under 2021 Equity Incentive Plan

36,436,447 41,429,526

Shares available for grant under 2021 ESPP

8,177,683 8,177,683

Total shares of common stockCommon Stock reserved

111,132,060132,298,260

On February 26, 2021, upon the closing of the Merger (Note 3), all of the outstanding redeemable convertible preferred stock was converted to Common Stock pursuant to the conversion rate effective immediately prior to the Merger, and the remaining amount was reclassified to additional paid-in capital.


30

ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

9.Stock Warrants and Earnouts

Earnout

Redeemable Convertible Preferred Stock Warrants

Warrants to purchase a total of 2,358,528 shares of Series B, D and E 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. At that time, the ChargePoint redeemable convertible preferred stock warrant liability was remeasured and reclassified to Legacy ChargePoint 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 4 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		 

Expected volatility

   84.3%   80.5% 

Risk-free interest rate

   0.0%   0.1% 

Dividend rate

   0.0%   0.0% 

Expected term (years)

   0.0   1.4 

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

February 26, 2021
(Merger Date)		January 31,
2021
Expected volatility84.3 %80.5 %
Risk-free interest rate0.0 %0.1 %
Dividend rate0.0 %0.0 %
Expected term (years)0.01.4

Common Stock Warrants

In addition to the warrants to purchase 2,358,528 shares of Legacy ChargePoint preferred stock described above, Legacy ChargePoint had outstanding warrants to purchase 36,402,503 shares of Legacy ChargePoint common stock (collectively, “Legacy Warrants”), which now represent warrants to purchase Common Stock.

During the three months ended October 31, 2021, 1,491,243 Legacy Warrants were exercised resulting in the issuance of 1,379,036 shares of Common Stock. During the nine months ended October 31, 2021, 3,176,428 Legacy Warrants were net exercised resulting in the issuance of 2,866,560 shares of Common Stock. During the three and nine months ended October 31, 2021, proceeds received for the exercise of Legacy Warrants were $1.2 million. As of October 31, 2021, there were 35,584,603 Legacy Warrants outstanding which are classified as equity.

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 and as of April 30, 2021, resulting inOctober 31, 2021. The Company recorded a gain (loss) of $45.4$(2.4) million and $30.9 million for the three and nine months ended April 30,October 31, 2021, respectively, classified within change in fair value of warrant liabilities in the condensed consolidated statements of operations.

As of October 31, 2021, there were 2,172,226 Private Placement Warrants outstanding.

31

ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

The Private Placement Warrants were valued using the following assumptions under the Binomial-Lattice Model (“BLM”)BLM that assumes optimal exercise of the Company’s redemption option at the earliest possible date:

   April 30,
2021		  February 26,
2021		 

Market price of public stock

   25.3   30.8 

Exercise price

   11.5   11.5 

Expected term (years)

   4.8   5.0 

Volatility

   73.2%   73.5% 

Risk-free interest rate

   0.8%   0.8% 

Dividend rate

   0.0%   0.0% 

October 31,
2021		February 26,
2021
Market price of public stock$24.78$30.83
Exercise price$11.50$11.50
Expected term (years)4.35.0
Volatility70.5 %73.5 %
Risk-free interest rate1.0 %0.8 %
Dividend rate0.0 %0.0 %
Public Warrants

The Public Warrants may only be exercised for a whole number of shares. The Public Warrants became exercisable 30 days after the completion of the Merger.

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 and asby the Public Warrant holders. At the conclusion of April 30,the redemption notice period on July 6, 2021, resulting in athe Company redeemed the remaining 244,481 Public Warrants outstanding for $0.01 per warrant. The Company recognized no gain or loss of $1.6 million for the three months ended April 30,October 31, 2021, and recognized a loss of $15.9 million for the nine months ended October 31, 2021, classified within change in fair value of warrant liabilities in the condensed consolidated statements of operations.

During the threenine months ended April 30,October 31, 2021, net proceeds received for exercisedthe exercise of Public Warrants were $73.3$117.6 million.

As of October 31, 2021, no Public Warrants remained outstanding.

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Activity of warrants is set forth below:

   Legacy Common
and Preferred Stock
Warrants (1)		   Private
Placement
Warrants		   Public
Warrants		   Total
Common Stock
Warrants (1)		 

Outstanding as of January 31, 2021

   38,761,031    —      —      38,761,031 

Common Stock Warrants as Part of the Merger

   —      6,521,568    10,470,562    16,992,130 

Warrants Exercised

   (1,097,305)    (4,347,712)    (6,413,057)    (11,858,074) 
  

 

 

   

 

 

   

 

 

   

 

 

 

Outstanding as of April 30, 2021

   37,663,726    2,173,856    4,057,505    43,895,087 
  

 

 

   

 

 

   

 

 

   

 

 

 

(1)

The shares (and the warrants’ exercise prices) subject to the Company’s Legacy common and preferred stock warrants were restated to reflect the exchange ratio of approximately 0.9966 established in the Merger Agreement as discussed in Note 3.


 
Legacy Warrants (1)
Private Placement WarrantsPublic Warrants
Total
Common Stock Warrants (1)
Outstanding as of January 31, 202138,761,031——38,761,031
Common Stock Warrants as Part of the Merger—6,521,56810,470,56216,992,130
Warrants Exercised(3,176,428)(4,349,342)(10,226,081)(17,751,851)
Warrants Redeemed——(244,481)(244,481)
Outstanding as of October 31, 202135,584,6032,172,226—37,756,829
_______________
(1) The shares (and the warrants' exercise prices) subject to the Company's Legacy Warrants were restated to reflect the Exchange Ratio of approximately 0.9966 established in the Merger Agreement as discussed in Note 3.

Contingent Earnout Liability

During the five year period starting at the closing of the Merger (“Earnout Period”), eligible former equity holders of Legacy ChargePoint maywere eligible to receive up to 27,000,000 additional shares of Common Stock (“Earnout Shares”) in the aggregate in three equal tranches if certainthe Earnout Triggering Events (as described in the Merger Agreement) arewere fully satisfied. An “EarnoutThe three Earnout Triggering Event” meansEvents were the datedates 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 common stockthe Company’s Common Stock are then listed) is greater or equal to $15.00, $20.00 and $30.00, respectively, for any ten10 trading days within any 20 consecutive trading day period within the Earnout Period.

32

ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

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 stockCommon 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 


March 12,
2021		February 26,
2021
Current stock price$27.84$30.83
Expected volatility72.00 %71.60 %
Risk-free interest rate0.85 %0.75 %
Dividend rate0.00 %0.00 %
Expected term (years)4.965.00
The first two Earnout Triggering Events for up to 18,000,000 of the Earnout Shares occurred on March 12, 2021, and, after the withholding of some of these Earnout Shares forto cover employee withholding tax withholding,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 condensed 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 October 31, 2021.

10.Equity Plans and Stock-based Compensation

On February 25, 2021, the stockholders of the Company approved the 2021 Equity Incentive Plan (“2021 EIP”) and the 2021 Employee Stock Purchase Plan (“2021 ESPP”). As of April 30,October 31, 2021, 41,429,52636,436,447 and 8,177,683 shares of Common Stock were available under the 2021 EIP and 2021 ESPP, respectively. On
2021 Employee Stock Purchase Plan
The 2021 ESPP permits participants to purchase shares of the Company’s Common Stock, up to the IRS allowable limit, through contributions (in the form of payroll deductions or otherwise to the extent permitted by the administrator) of up to 15% of their eligible compensation. The 2021 ESPP provides for consecutive, overlapping 24-month offering periods, subject to certain rollover and reset mechanisms as defined in the ESPP. Participants are permitted to purchase shares of the Company’s Common Stock at the end of each 6-month purchase period at 85% of the lower of the fair market value of the Company’s Common Stock on the first trading day of each March, beginning on March 1, 2021 and continuing through March 1, 2030, the 2021 EIP reserve will automatically increase by a number of shares equal to the lesser of (a) 5% of the total number of shares actually issued and outstandingan offering period or on the last daytrading date in each purchase period. A participant may purchase a maximum of 10,000 shares of the preceding monthCompany’s Common Stock during a purchase period. Participants may end their participation at any time during an offering and (b) a number determined by our Boardwill be paid their accrued contributions that have not yet been used to purchase shares. Participation ends automatically upon termination of Directors. employment with the Company. The initial offering period is from October 1, 2021 through September 9, 2023.
33

ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

Further, on the first day of each March during the term of the 2021 ESPP, commencing on March 1, 2021 and ending on (and including) March 1, 2040, the aggregate number of shares of stockCommon Stock that may be issued under the 2021 ESPP shall automatically increase by a number equal to the lesser of (i) one percent (1%) of the total number of shares of stockCommon Stock issued and outstanding on the last day of the preceding month, (ii) 5,400,000 shares of stock (subject to standard anti-dilution adjustments), or (iii) a number of shares of stock determined by the Board.

Company’s Board of Directors.

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

2021 Equity Incentive Plan

Under the 2021 EIP, the Company can grant stock options, stock appreciation rights, restricted stock, restricted stock units (“RSU”) and certain other awards which are settled in the form of common shares of Common Stock issued under this 2021 EIP. UnderOn the first day of each March, beginning on March 1, 2021 and continuing through March 1, 2030, the 2021 ESPP,EIP reserve will automatically increase by a number equal to the Company can grant stock options to purchase shareslesser of Common Stock at a purchase price which shall not be less either than 85%(a) 5% of the fair market valuetotal number of such shareshares actually issued and outstanding on the first tradinglast day of an offering period or 85%the preceding month and (b) a number of shares determined by the fair market valueCompany’s Board of such share on the purchase date.

Directors.

2017 Plan and 2007 Plan
No further awards will be granted under Legacy ChargePoint’s 2017 Stock Plan (“2017 Plan”) and 24,259,23821,412,248 shares of Common Stock remain reserved for outstanding awards issued under the 2017 Plan at the timeas of adoption of the 2021 EIP and the 2021 ESPP.October 31, 2021. Additionally, no other awards can be granted under Legacy ChargePoint’s 2007 Stock Incentive Plan (“2007 Plan”) and 5,143,8493,442,795 shares of Common Stock remained reserved for outstanding awards issued under the 2007 Plan at the timeas of the adoption of the 2021 EIP and the 2021 ESPP.

Activity under theOctober 31, 2021.

The Company’s equity plansstock option awards activity is set forth below:

   Number of
Stock Option
Awards		   Weighted
Average
Exercise Price		   Weighted
Average
Remaining
Contractual
term (in years)		   Aggregate
Intrinsic Value
(in thousands)		 

Outstanding as of January 31, 2021

   30,166,792  $0.71   7.3   $1,064,539

Forfeited

   (353,478)   $0.74    

Expired

   (17,350)   $58.74    
  

 

 

       

Outstanding as of April 30, 2021

   29,795,964  $0.67   6.9   $734,460
  

 

 

       

Options vested and expected to vest as of April 30, 2021

   29,795,964  $0.67   6.9   $734,460
  

 

 

       

Exercisable as of April 30, 2021

   18,248,059  $0.64   6.0   $450,546
  

 

 

       

Activity for exercised awards includes early exercises of stock options such that these awards are not considered outstanding stock options upon exercise.

 Number of Stock Option AwardsWeighted Average Exercise PriceWeighted Average Remaining Contractual term (in years)Aggregate Intrinsic Value (in thousands)
Outstanding as of January 31, 202130,166,792 $0.71 7.3$1,064,539 
Options exercised(4,666,083)$0.59 
Options forfeited(624,618)$0.74 
Options expired(21,048)$53.26 
Outstanding as of October 31, 202124,855,043 $0.69 6.8$598,912 
Options vested and expected to vest as of October 31, 202124,314,890 $0.68 6.7$585,934 
Exercisable as of October 31, 202116,523,251 $0.66 6.2$398,582 
The options outstanding as of April 30,October 31, 2021, also includesinclude the June 2020 grant of a stock option under the 2017 Plan to the Company’s Chief Executive Officer to purchase a total of 1.5 million shares of Common Stock (“CEO Award”) originally subject to both service and performance-based vesting conditions to the Chief Executive Officer under the 2017 Plan (“CEO Awards”).conditions. No stock-based compensation expense had been recorded prior to the Merger as the CEO awardsAwards were improbable of vesting before and after two modifications in each of September 2020 and December 2020, because the performance-based vesting condition was contingent upon the closing of the Merger. Accordingly, the Company commenced recognition of stock-based compensation expense for suchthe CEO AwardsAward following the Merger in February 2021.2021 when the only remaining vesting condition was service-based. As of April 30,October 31, 2021, the total unrecognized compensation expense related to thesethe unvested portion of the CEO AwardsAward was $38.8 million.

Total$31.7 million, which is expected to be recognized over a period of 2.25 years.

34

ChargePoint Holdings, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)

The Company’s RSU activity is set forth below:
 Number of SharesWeighted Average Grant Date Fair Value per Share
Outstanding as of January 31, 2021— $— 
RSU granted5,042,559 $26.94 
RSU vested(1,019,817)$27.36 
RSU forfeited(116,684)$27.17 
Outstanding as of October 31, 20213,906,058 $26.82 
As of October 31, 2021, unrecognized stock-based compensation expense for stock awards recognized during the three months ended April 30, 2021 and 2020employee equity plans was $7.6 million and $0.9 million, respectively. As of April 30, 2021, total unrecognized stock-based compensation cost related to stock awards was $45.0$125.2 million and is expected to be recognized over a weighted-average period of 2.1 years.

2.6 years

The following sets forth the total stock-based compensation expense for the Company’s stock options (including the CEO Awards) and restricted common stockemployee equity plans included in the Company’s condensed consolidated statements of operations:

   Three Months Ended
April 30,		 
   2021   2020 
   (in thousands) 

Cost of revenue

  $24  $23

Research and development

   675   302

Sales and marketing

   598   299

General and administrative

   6,280   286
  

 

 

   

 

 

 

Total stock-based compensation expense

  $7,577  $910
  

 

 

   

 

 

 

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Three Months Ended
October 31,		Nine Months Ended
October 31,
2021202020212020
(in thousands)(in thousands)
Cost of revenue$885 $29 $3,073 $93 
Research and development5,840 448 20,198 1,205 
Sales and marketing2,251 333 7,018 988 
General and administrative7,046 398 21,604 1,022 
Total stock-based compensation expense$16,022 $1,208 $51,893 $3,308 

11.Income Taxes

The income tax provision for interim periods is determined using an estimate of the Company’s annual effective tax rate as adjusted for discrete items arising in that quarter. The effective income tax rate was nilNaN for the three and nine months ended April 30,October 31, 2021 and 2020. The effective tax rate differs from the U.S. statutory rate primarily due to the full valuation allowances on the Company’s net domestic deferred tax assets as it is more likely than not that all of the deferred tax assets will not be realized.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was enacted and signed into law in the United States. The CARES Act includes measures to assist companies, including temporary changes to income and non-income-based tax laws. The Company did not receive a stimulus payment related to the CARES Act.

12.Related Party Transactions

Daimler AG and its affiliated entities (“Daimler”) are investors in the Company and one of its employees is a member of the Company’s Board of Directors. The following revenue transactions took place between the Company and Daimler during the three months ended April 30, 2021 and 2020:

   Three Months Ended
April 30,		 
   2021   2020 
   (in thousands) 

Daimler

  $1,335  $726
  

 

 

   

 

 

 

Revenue from related parties

  $1,335  $726
  

 

 

   

 

 

 

periods presented:

Three Months Ended
October 31,		Nine Months Ended
October 31,
2021202020212020
(in thousands)(in thousands)
Daimler$1,290 $953 $4,696 $2,529 
Revenue from related parties$1,290 $953 $4,696 $2,529 
Related party accounts receivable as of April 30,October 31, 2021 and January 31, 2021 from Daimler was $1.7$2.3 million and $1.2 million, respectively.


35

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)


13.Basic and Diluted Net Loss per Share


The following table sets forth the computation of the Company’s basic and diluted net loss per share attributable to common stockholders for the three and nine months ended April 30,October 31, 2021 and 2020:

   Three Months Ended
April 30,		 
   2021   2020 
   (in thousands, except share and per
share data)		 

Numerator:

    

Net income (loss)

  $82,289  $(30,098) 

Adjust: Cumulative dividends on redeemable convertible preferred stock

   (4,292)    —   

Adjust: Deemed dividends attributable to vested option holders

   (51,855)    —   

Adjust: Deemed dividends attributable to common stock warrant holders

   (110,635)    —   
  

 

 

   

 

 

 

Net loss attributable to common stockholders - Basic

   (84,493)    (30,098) 

Less: Gain attributable to earnout shares issued

   (53,820)    —   

Less: Change in fair value of dilutive warrants

   (49,471)    —   
  

 

 

   

 

 

 

Net loss attributable to common stockholders - Diluted

  $(187,784)   $(30,098) 
  

 

 

   

 

 

 

Denominator:

    

Weighted average common shares outstanding

   218,932,121    12,432,519 

Less: Weighted-average unvested restricted shares and shares subject to repurchase

   (316,258)    (179,427) 
  

 

 

   

 

 

 

Weighted average shares outstanding - Basic

   218,615,863    12,253,092 

Add: Earnout Shares under the treasury stock method

   2,956,122    0 

Add: Public and Private Placement Warrants under the treasury stock method

   3,961,404    0 
  

 

 

   

 

 

 

Weighted average shares outstanding - Diluted

   225,533,389    12,253,092 
  

 

 

   

 

 

 

Net loss per share - Basic

  $(0.39)   $(2.46) 
  

 

 

   

 

 

 

Net loss per share - Diluted

  $(0.83)   $(2.46) 
  

 

 

   

 

 

 

Three Months Ended
October 31,		Nine Months Ended
October 31,
2021202020212020
(in thousands, except share and per share data)(in thousands, except share and per share data)
Numerator:
Net income (loss)$(69,442)$(40,890)$(72,092)$(106,275)
Adjust: Accretion of beneficial conversion feature of redeemable convertible preferred stock
— (1,752)— (60,377)
Adjust: Cumulative dividends on redeemable convertible preferred stock
— (3,960)(4,292)(3,960)
Adjust: Deemed dividends attributable to vested option holders
— — (51,855)— 
Adjust: Deemed dividends attributable to common stock warrant holders
— — (110,635)— 
Net loss attributable to common stockholders - Basic(69,442)(46,602)(238,874)(170,612)
Less: Gain attributable to earnout shares issued
— — (84,420)— 
Less: Change in fair value of dilutive warrants
— — (51,106)— 
Net loss attributable to common stockholders - Diluted$(69,442)$(46,602)$(374,400)$(170,612)
Denominator:
Weighted average common shares outstanding325,223,132 15,102,625 286,272,04513,550,552
Less: Weighted-average unvested restricted shares and shares subject to repurchase
(188,212)(111,759)(246,562)— 
Weighted average shares outstanding - Basic325,034,920 14,990,866 286,025,48313,550,552
Add: Earnout Shares under the treasury stock method
— — 4,948,794— 
Add: Public and Private Placement Warrants under the treasury stock method
— — 1,601,041— 
Weighted average shares outstanding - Diluted325,034,920 14,990,866 292,575,31813,550,552
Net loss per share - Basic$(0.21)$(3.11)$(0.84)$(12.59)
Net loss per share - Diluted$(0.21)$(3.11)$(1.28)$(12.59)
As a result of the Merger, the Company has retroactively adjusted the weighted-average number of shares of Common Stock outstanding prior to February 26, 2021 (“the Closing Date”)Date by multiplying them by the exchange ratioExchange Ratio of 0.9966 used to determine the number of shares of Common Stock into which they converted. The Common Stock issued as a result of the redeemable convertible preferred stock conversion on the Closing Date was included in the basic net loss per share calculation on a prospective basis.

Redeemable convertible preferred stock and preferred stock warrants outstanding prior to the Merger Closing Date were excluded from the diluted net loss per share calculation for the three-monthsnine-months period ended April 30,October 31, 2021, because including them would have had an antidilutive effect. Additionally, the remaining 9,000,000 Earnout Shares for which the Earnout Triggering Event has not occurred yet were excluded from the diluted net loss per share calculation for the three-months period ended April 30, 2021, because the Earnout Triggering Event was not met at the end of the reporting period.

36

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)


The potential shares of Common Stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presentedat each period end because including them would have had an antidilutive effect were as follows:

April 30, 2021

Options to purchase common stock

29,795,964

Unvested early exercised common stock options

263,982

Common stock warrants

43,895,087

Total potentially dilutive common share equivalents

73,955,033

14. Subsequent Events

On June 4, 2021, the Company issued a notice of the redemption of all of its outstanding Public Warrants that remain outstanding on July 6, 2021 for a redemption price of $0.01 per warrant. The Private Placement Warrants that are still held by the initial holders thereof or their permitted transferees are not subject to the redemption.

October 31,
2021		October 31,
2020
Redeemable convertible preferred stock (on an as-converted basis)— 193,484,162 
Options to purchase common stock24,855,043 37,547,865 
Restricted stock units3,906,058 — 
Unvested early exercised common stock options164,778 129,717 
Common stock and preferred stock warrants35,584,603 38,761,061 
Employee stock purchase plan942,335 — 
Total potentially dilutive common share equivalents65,452,817 269,922,805 
37


ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the financial condition and results of operations and financial condition of ChargePoint Holdings, Inc. (“ChargePoint” or the “Company”) should be read in conjunction with ChargePoint’s condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report, and the audited consolidated financial statements for the year ended January 31, 2021 and the related notes included in the Company’s Current Reportregistration statement on Form 8-KS-1 filed with the SEC on March 1, 2021 and as amended and filed with the SEC on April 1,October 14, 2021. This discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. ChargePoint’s actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” in Part II, Item 1A of this report.


Overview

ChargePoint designs, develops and markets networked electric vehicle (“EV”) charging system infrastructure (“Networked Charging Systems”) and cloud-based services which enable consumers the ability to locate, reserve, authenticate and transact EV charging sessions (“Cloud” or “Cloud Services”). As part of ChargePoint’s networked charging systems,Networked Charging Systems, subscriptions and other offerings, it provides an open platform that integrates with system hardware from ChargePoint and other manufacturers, connecting systems over an intelligent network that provides real-time information about charging sessions and full control, support and management of the networked charging systems.Networked Charging Systems. This network provides multiple web-based portals for charging system owners, fleet managers, drivers and utilities.

ChargePoint generates revenue primarily through the sale of networked charging systems,Networked Charging Systems, Cloud Services and extended parts and labor warranty (“Assure”), which are typically paid for upfront. Assure also includes proactive monitoring, fast response times, parts and labor warranty, expert advice and robust reporting. The ChargePoint as a Service (“CPaaS”) program combines the customer’s use of ChargePoint’s owned and operated systems with Cloud Services, Assure and other benefits available to subscribers into one subscription. ChargePoint targets three key customer markets: commercial, fleet and residential. Commercial customers have parking places largely within their workplaces.workplaces and includes retail, hospitality and parking lot operators. Fleet includes municipal buses, delivery and work vehicles, port/airport/warehouse and other industrial applications, ridesharing services, and, is expected to eventually include, autonomous transportation. Residential includes single family homes and multifamily residences.

Since ChargePoint’s inception in 2007, it has been engaged in developing and marketing its networked charging systems,Networked Charging Systems, subscriptions and other offerings, raising capital and recruiting personnel. ChargePoint has incurred net operating losses and negative cash flows from operations every year since its inception. As of April 30,October 31, 2021, ChargePoint had an accumulated deficit of $597.1$751.5 million. ChargePoint has funded its operations primarily from sales of its solutions, with proceeds fromcustomer payments, the issuance of redeemable convertible preferred stock, exercise proceeds from options and warrants, borrowings under loan facilities and proceeds from the Reverse Recapitalization.

Recent Developments
Acquisitions
On August 11, 2021, ChargePoint acquired all of the outstanding shares of ViriCiti B.V. (“ViriCiti”) for $79.4 million in cash, subject to adjustment, as well as up to $7.7 million of additional earnout consideration contingent on meeting certain revenue targets through January 31, 2023. ViriCiti is a Netherlands-based provider of electrification solutions for eBus and commercial fleets with offices in the Netherlands and the United States. The acquisition is expected to enhance ChargePoint’s fleet solutions portfolio of hardware, software and services by integrating information sources to optimize electric fleet operations.
On October 6, 2021, ChargePoint acquired all of the outstanding shares of has•to•be gmbh (“has•to•be” or “HTB”) for approximately $232.2 million, consisting of $130.1 million paid in cash, subject to further adjustments based on certain working capital positions, and $102.1 million in the form of 5,695,176 shares of the Company’s common stock, and borrowings under its loan facilities.

Recent Developments

Closingpar value $0.0001 per share (“Common Stock”), of Merger

which 885,592 shares, valued at $15.9 million, are subject to escrow to secure potential future indemnification claims. Has•to•be is an Austria-based e-mobility provider with a European charging software platform. The acquisition is intended to expand ChargePoint’s market share in Europe.


38


Earnout Shares
On February 26, 2021 (“Closing Date”), Switchback Energy Acquisition Corporation (“Switchback”), consummated the previously announced merger with Switchback,transactions pursuant to which Lightning Merger Sub Inc., a wholly owned subsidiary of Switchback incorporated in the State of Delaware (“Lightning Merger Sub”) and, merged with ChargePoint, Inc., a Delaware corporation (“Legacy ChargePoint”), with the; Legacy ChargePoint surviving as the surviving company andsurvived as a wholly-owned subsidiary of Switchback. On the Closing Date,Switchback (“Merger,” and, in connectioncollectively with the closingother transactions described in the Merger Agreement (as defined below), the “Reverse Recapitalization”). Further, as a result of the Merger, (“Closing”), Switchback Energy Acquisition Corporation changed its name to ChargePointwas renamed “ChargePoint Holdings, Inc.

”

Pursuant to the terms of the Merger Agreement, each stockholder of Legacy ChargePoint received 0.9966 shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”)Stock and the contingent right to receive as additional merger consideration certain Earnout Shares (as defined below), for each share of Legacy ChargePoint common stock, par value $0.0001 per share, owned by such Legacy ChargePoint stockholder that was outstanding immediately prior to the Closing (other than any shares of Legacy ChargePoint restricted stock). In addition, certain investors purchased an aggregate of 22,500,000 shares of Common Stock (such investors, the “PIPE Investors”) concurrently with the Closing for an aggregate purchase price of $225,000,000. Additionally, at the Closing, after giving effect to the forfeiture contemplated by the Founders Stock Letter (as defined below), each outstanding share of the Company’s Class B common stock, par value $0.0001 per share (“Founder Shares”), was converted into a share of Common Stock on a one-for-one basis and the Founder Shares ceased to exist.

In addition, pursuant to the terms of the Merger Agreement, at the effective time of the Merger (“Effective Time”), (1) warrants to purchase shares of capital stock of Legacy ChargePoint were converted into warrants to purchase an aggregate of 38,761,031 shares of Common Stock and the contingent right to receive certain Earnout Shares, (2) options to purchase shares of common stock of Legacy ChargePoint were converted into options to purchase an aggregate of 30,135,695 shares of Common Stock and, with respect to vested options, the contingent right to receive certain Earnout Shares and (3) unvested restricted shares of common stock of Legacy ChargePoint that were outstanding pursuant to the “early exercise” of Legacy ChargePoint options were converted into an aggregate of 345,689 restricted shares of ChargePoint (“Restricted Shares”).

Also at the Closing, NGP Switchback, LLC (“Sponsor”) exercised its right to convert a portion of the working capital loans made by the Sponsor to Switchback into an additional 1,000,000 private placement warrants at a price of $1.50 per warrant in satisfaction of $1,500,000 principal amount of such loans.

During the time period between the Closing and the five-year anniversary of the Closing Date, eligible former equity holders maycould receive up to 27,000,000 additional shares of ChargePoint’s common stockCommon Stock (“Earnout Shares”) in the aggregate in three equal tranches if the volume-weighted average closing sale price of our Common Stock iswas greater than or equal to $15.00, $20.00 and $30.00 for any 10 trading days within any 20 consecutive trading day period (“Trigger Events”(each an “Earnout Triggering Event”). On March 19, 2021, a total of approximately 18,000,000 shares of Common Stock were released to eligible former equity holders of Legacy ChargePoint pursuant to the Earnout Shares provisions of the Merger Agreement, as the first two TriggerEarnout Triggering Events had been met. The TriggerEarnout Triggering Events were met by virtue of the volume-weighted average closing sale price of Common Stock having been greater than or equal to $15.00 and $20.00 for ten (10) trading days out of twenty (20) consecutive trading days following the closing of the Merger. The holders of Legacy ChargePoint common stockCommon Stock (other than restricted stock), warrants and vested options as of the closing of the Merger received their pro rata portion of the Earnout Shares. TheseOn July 1, 2021, a total of approximately 9,000,000 shares of Common Stock were released to eligible former equity holders of Legacy ChargePoint pursuant to the Earnout Shares are not subject to a lock-up agreement and may be sold publicly following receipt. Aprovision of the Merger Agreement, as the third TriggerEarnout Triggering Event will be achieved and 9 million more shares will be released ifhad been met. The Earnout Triggering Event was met by virtue of the volume-weighted average closing sale price of the Common Stock ishaving been greater than or equal to $30.00 for ten (10) trading days within anyout of twenty (20) consecutive trading day period prior to February 26, 2026.

days following the closing of the Merger.


Key Factors Affecting Operating Results

ChargePoint believes its performance and future success depend on several factors that present significant opportunities for it but also pose risks and challenges, including but not limited to those discussed below.

Growth in EV Adoption

ChargePoint’s revenue growth is directly tied to the continued acceptancenumber of passenger and commercial EVs sold, which it believes drives the demand for charging infrastructure. The market for EVs is still rapidly evolving and although demand for EVs has grown in recent years, there is no guarantee of such future demand. Factors impacting the adoption of EVs include but are not limited to:to perceptions about EV features, quality, safety, performance and cost; perceptions about the limited range over which EVs may be driven on a single battery charge; volatility in the cost of oil and gasoline; availability of services for EVs; consumers’ perception about the convenience and cost of charging EVs; and increases in fuel efficiency. In addition, macroeconomic factors, including government mandates and incentives, could impact demand for EVs, particularly since they can be more expensive than traditional gasoline-powered vehicles whenand the automotive industry globally has been experiencing a recent decline in sales. If the market for EVs does not develop as expected or if there is any slow-down or delay in overall EV adoption rates, this would negatively impact ChargePoint’s ability to increase its revenue or grow its business.

financial condition and results of operations.

39


Competition

ChargePoint is currently a market leader in North America in the commercial Level 2 Alternating Current (“AC”) chargers.charging. ChargePoint also offers AC chargers for use at home or multifamily settings and for fleet applications, and high-power Level 3 Direct Current (“DC”) Fast chargers for fast urban fast charging, corridor or long-trip charging and fleet applications. ChargePoint intends to expand its market share over time in its product categories, leveraging the network effect of its products and Cloud Services software. Existing competitors may expand their product offerings and sales strategies, and new competitors may enter the market. Furthermore, ChargePoint’s competition includes other types of alternative fuel vehicles and high fuel-economy gasoline powered vehicles. If ChargePoint’s market share decreases due to increased competition, its revenuefinancial condition and ability to generate profitsresults of operations in the future may be negatively impacted.

Furthermore, ChargePoint’s success could be negatively impacted if consumers and businesses choose other types of alternative fuel vehicles or high-fuel-economy gasoline powered vehicles over EVs.

Europe Expansion

ChargePoint operates in North America and selected countries in Europe. Europe is expected to be a significant contributor to ChargePoint’s revenue in future years. ChargePoint plans to useis using a portion of the proceeds from the Merger to increase its sales and marketing activities in Europe. ChargePoint is also positioned to grow its European business through existing partnerships with car leasing companies.companies and its recently closed acquisition of ViriCiti and HTB. In Europe, ChargePoint primarily competes with smallerother providers of EV charging station networks. Many of these competitors have limited funding, which could cause poor customer experiences and have a negative impact on overall EV adoption in Europe. ChargePoint’s growth in Europe requires differentiating itself as compared to these existing competitors. If ChargePoint is unable to continue penetrating the market in Europe, its future revenue growthfinancial condition and profits mayresults of operations would be negatively impacted.

Fleet Expansion

ChargePoint’s future growth is highly dependent upon fleet applications. Because fleet operators often make large purchases of EVs, volatility may be more pronounced and any significant decline from these customers reduceswould reduce ChargePoint’s potential for future growth.

Impact of New Product Releases and Investments in Growth

As ChargePoint introduces new products, such as the release of its Level 3 DC fast charger in fiscal year 2020, its gross margins may be temporarilyinitially negatively impacted by launch costs and lower volumes until its supply chainit achieves targeted cost reductions. Cost reductions such asmay not occur on the market introductiontimeline ChargePoint expects due to unanticipated supply chain difficulties. For example, ongoing supply chain challenges and heightened logistic costs related to COVID-19 decreased gross margins in the three and nine months ended October 31, 2021, and ChargePoint expects that gross margins will continue to be adversely affected by increased material costs and freight and logistic expenses through the remainder of its Level 3 DC Fast charger inthe fiscal year 2020.and likely into its fiscal 2023. In addition, ChargePoint may accelerate its operating expenditures where it sees growth opportunities, which may impact gross margin until upfront costs and inefficiencies are absorbed and normalized operations are achieved. ChargePoint also continuously evaluates and may adjust its operating expenditures based on its launch plans for its new products, as well as other factors including the pace and prioritization of current projects under development and the addition of new projects. As ChargePoint attains higher revenue, it expects operating expenses as a percentage of total revenue to decrease as it scales and focuses on increasing operational efficiency and process automation.

Government Mandates, Incentives and Programs

The U.S. federal government, certain foreign governments and some state and local governments provide incentives to end users and purchasers of EVs and EV charging stationsinfrastructure in the form of rebates, tax credits and other financial incentives. These governmental rebates, tax credits and other financial incentives significantly lower the effective price of EVs and EV charging stationsinfrastructure to customers. For example, the Infrastructure Investment and Jobs Act signed into law on November 15, 2021 would provide additional funding for EVs and EV charging infrastructure through the creation of new programs and grants and the expansion of existing programs, including $7.5 billion for EV charging along highway corridors. However, thesesuch incentives take time to be disbursed and to affect actual expenditure decisions. These incentives may also expire on specified dates, end when the allocated funding is no longer available, or be reduced or terminated as a matter of regulatory or legislative policy. In particular, the credits under Section 30C of the Internal Revenue Code of 1986, as amended (the “Code”) which benefit investments in EV charging stationsinfrastructure may be reduced or become unavailable if not extended in future years. Any reduction in rebates, tax credits or other financial incentives could reduce the demand for EVs and for charging infrastructure, including infrastructure ChargePoint offers.

40


ChargePoint also derives Otherother revenue from fees received for transferring regulatory credits earned for participating in low carbon fuel programs in approved U.S. states. ChargePoint claims these regulatory credits only if they are not claimed by purchasers of its EV charging stations; only a small percentage of its customers currently elect to claim such credits. If a material percentage of its customers were to claim these regulatory credits, ChargePoint’s revenue from this source could decline significantly, which could have an adverse effect on its revenue and overall gross margin. Recently,Prior to fiscal year 2021, ChargePoint has derived a slight majority of its Other revenue from these regulatory credits, and ChargePoint expectscredits. However, revenue from this source as a percentage of Other and total revenue willhas declined in recent quarters and may continue to decline over time. Further, the availability of such credits depends on continued governmental support for these programs. If these programs are modified, reduced or eliminated, ChargePoint’s ability to generate this revenue in the future would be adversely impacted.

Impact of COVID-19

In December 2019, COVID-19 was first reported toMarch 2020, the World Health Organization (“WHO”), and in January 2020, the WHO declared the outbreak to be a public health emergency. In March 2020, the WHO characterized COVID-19 as a pandemic. The impact of COVID-19, including changes in consumer and business behavior, pandemic fears and market downturns, and restrictions on business and individual activities, has created significant volatility in the global economy and led to reduced economic activity. The spread of COVID-19 has also created a disruption in the disrupted ChargePoint’s supply chain and heightened its freight and logistic costs, and has similarly disrupted manufacturing, delivery and overall supply chain of vehicle manufacturers and suppliers, andwhich has led to a decreasefluctuations in EV sales in markets around the world.

These ongoing supply chain challenges and heightened logistic costs decreased gross margins in the three and nine months ended October 31, 2021, and ChargePoint expects that gross margins will continue to be adversely affected by increased material costs and freight and logistic expenses through the remainder of the fiscal year.

As a result of the COVID-19 pandemic, ChargePoint initially modified its business practices (including reducing employee travel, recommending that all non-essential personnel work from home and cancellationcanceling or reduction ofreducing physical participation in sales activities, meetings, events and conferences), implemented additional safety protocols for essential workers, and implemented temporary cost cutting measures in order to reduce its operating costs, some of which it recently reversed, and itcosts. The Company may take further actions as may be required by government authorities or that it determines are in the best interests of its employees, customers, suppliers, vendors and business partners.

While the ultimate duration and extent of the COVID-19 pandemic depends on current and future developments that cannot be accurately predicted, such as the extent and effectiveness of containment actions and vaccinations,vaccination rates, it has already had an adverse effect on the global economy, and the ultimate full societal and economic impact of the COVID-19 pandemic remains unknown. In particular,The effect of the COVID-19 pandemic can also vary over time and across the geographies in which ChargePoint operates. For example, variations in work-from-home policies can cause fluctuations in ChargePoint’s revenues, and the Company believes that since people are not yet fully back to work it has not yet seen the full return of commercial customer demand for its products. The conditions caused by thisthe COVID-19 pandemic, such as more permanent work-from-home policies, are likely to affectcontinue affecting the rate of global infrastructure spending, suchand thus to continue to adversely impact ChargePoint’s commercial business and its overall gross margin as work-from-home policiesthe Company’s commercial customers are adopting,business contributes higher margins than its residential and fleet businesses. Further, the COVID-19 pandemic could continue to heighten supply chain pricing and logistics expenses and further adversely impact ChargePoint’s gross margins adversely affect demand for ChargePoint’s platforms, lengthen its product development and sales cycles, reduce the value, renewal rate or duration of subscriptions, negatively impact collections of accounts receivable, reduce expected spending from new customers, cause some of its paying customers to go out of business and limit the ability of its direct sales force to travel to customers and potential customers, all of which could adversely affect itsthe Company’s business, results of operations and financial condition during the fiscal year ending January 31, 2022 and potentially future periods.

Components of condition.


Results of Operations

& its Components

Revenue

Networked Charging Systems

Networked charging systemsCharging Systems revenue includes revenue related to the deliveries of EV charging system infrastructure, which include lower priced Level 1 home chargers typically sold to drivers,a range of Level 2 AC chargersproducts for use in residential, commercial useand fleet applications, and Level 3 DC, Fast charging systemsor fast-charge products for urban/corridor charginguse in commercial and for fleet operators.applications. A majoritysignificant portion of ChargePoint’s networked charging systemsNetworked Charging Systems revenue is presently derived from the sale of Level 2 AC chargers.products. ChargePoint generally recognizes revenue from sales of networked charging systemsNetworked Charging Systems upon shipment to the customer, at which is when thepoint ChargePoint’s performance obligation has beenis satisfied.

41


Subscriptions


Subscriptions revenue consists of services related tothe Company’s Cloud as well asServices, extended maintenance service plans under Assure. Subscriptions revenue also consists ofAssure warranties and CPaaS, revenue which combines the customer’sbundles use of ChargePoint’s ownedChargePoint-owned and operated systems with Cloud Services, Assure and Assure programsother benefits into a singleone subscription.
CPaaS subscriptions are considered for accounting purposes to contain a lease for the customer’s use of ChargePoint’s owned and operated systems unless the location allows itthe customer to receive incremental economic benefit from regulatory credits earned on that EV charging system. Lessor revenue relates to operating leases and historically has not been material. Subscriptions revenue is generally recognized over time on a straight-line basis as ChargePoint has a stand-readyan ongoing obligation to deliver such services to the customer.

Other

Other revenue consists of fees received for transferring regulatory credits earned for participating in low carbon fuel programs in approved states, charging related fees received from drivers using charging sites owned and operated by ChargePoint, net transaction fees earned for processing payments collected on driver charging sessions at charging sites owned by its customers, and other professional services. Revenue from regulatory credits is recognized at the point in timewhen the regulatory credits are transferred. Revenue from fees for owned and operated sites is recognized over time on a straight-line basis over the performance period of the service contract as ChargePoint has a stand-readyongoing obligation to deliver such services. Revenue from driver charging sessions and charging transaction fees is recognized at the point in timewhen the charging session or transaction is completed. Revenue from professional services is recognized as the services are rendered.

For the remainder of fiscal year 2022, ChargePoint expects revenue to grow in both networked charging systemsNetworked Charging Systems and subscriptionsSubscriptions due to increased demand in EVEVs and itsthe related charging infrastructure market.

October 31,
Networked Charging Systems20212020Change
(dollar amounts in thousands)
Three months ended$47,511 $22,566 $24,945 110.5 %
Percentage of total revenue73.1 %62.1 %
Nine months ended$115,185 $63,591 $51,594 81.1 %
Percentage of total revenue71.2 %61.1 %
Networked Charging Systems revenue increased during the three and nine months ended October 31, 2021 compared to the three and nine months ended October 31, 2020 primarily due to higher demand from customers resulting in higher volumes of systems delivered across ChargePoint’s major product families.

October 31,
Subscriptions20212020Change
(dollar amounts in thousands)
Three months ended$13,397 $10,782 $2,615 24.3 %
Percentage of total revenue20.6 %29.6 %
Nine months ended$36,303 $29,597 $6,706 22.7 %
Percentage of total revenue22.5 %28.4 %
Subscriptions revenue increased during the three and nine months ended October 31, 2021 compared to the three and nine months ended October 31, 2020 primarily due to growth in the number of Networked Charging Systems connected to ChargePoint’s network.

42


October 31,
Other revenue20212020Change
(dollar amounts in thousands)
Three months ended$4,126 $3,017 $1,109 36.8 %
Percentage of total revenue6.3 %8.3 %
Nine months ended$10,177 $10,910 $(733)(6.7)%
Percentage of total revenue6.3 %10.5 %
Other revenue increased during the three months ended October 31, 2021 compared to the three months ended October 31, 2020 mainly due to increased charging related fees received from drivers using charging sites owned and operated by ChargePoint and net transaction fees earned for processing payments collected on driver charging sessions at charging sites owned by ChargePoint’s customers, as well as increased regulator credits transferred.
Other revenue decreased during the nine months ended October 31, 2021 compared to the nine months ended October 31, 2020 mainly due to fewer regulatory credits transferred, partially offset by increased charging related fees received from drivers using charging sites owned and operated by ChargePoint, and net transaction fees earned for processing payments collected on driver charging sessions at charging sites owned by its customers.

Cost of Revenue

Networked Charging Systems

ChargePoint uses contract manufacturers to manufacture the substantial majority of its networked charging systems. ChargePoint conducts the remainder of itsNetworked Charging Systems. ChargePoint’s in-house manufacturing in-house.is typically limited to initial development units and to early customer samples. ChargePoint’s cost of revenue for the sale of networked charging systemsNetworked Charging Systems includes the contract manufacturer costs of finished goods. For ChargePoint’s limited in-house production, cost of revenue for the sale of networked charging systemsNetworked Charging Systems also includes parts, labor, manufacturing costs, and allocated facilities and information technology expenses. Cost of revenue for the sale of networked charging systemsNetworked Charging Systems also consists of salaries and related personnel expenses, including stock-based compensation, warranty provisions, depreciation of manufacturing related equipment and facilities, amortization of capitalized internal-use software, and allocated facilities and information technology expenses. As revenue is recognized, ChargePoint accounts for estimated warranty cost as a charge to cost of revenue. The estimated warranty cost is based on historical and predicted product failure rates and repair expenses. Costs incurred for shipping and handling are recorded in cost of revenue.

Subscriptions

Cost of subscriptionsSubscriptions revenue includes network and wireless connectivity costs for subscription services, field maintenance costs for Assure to support ChargePoint’s network of systems, depreciation of owned and operated systems used in CPaaS arrangements, amortization of capitalized internal-use software development costs, allocated facilities and information technology expenses, salaries and related personnel expenses, including stock-based compensation and third-party support costs to manage the systems and helpdesk services for drivers and site hosts.

hosts, network and wireless connectivity costs for subscription services, field costs for Assure, depreciation of owned and operated systems used in CPaaS arrangements, amortization of capitalized internal-use software development costs, allocated facilities and information technology expenses.

Other

Cost of other revenue includes depreciation and other costs for ChargePoint’s owned and operated charging sites, salaries and related personnel expenses, including stock-based compensation, as well as costs of environmentalprofessional services.
October 31,
Cost of Networked Charging Systems revenue20212020Change
(dollar amounts in thousands)
Three months ended$38,720 $22,382 $16,338 73.0 %
Percentage of networked charging systems revenue81.5 %99.2 %
Nine months ended$97,846 $61,406 $36,440 59.3 %
Percentage of networked charging systems revenue84.9 %96.6 %

43


Cost of Networked Charging Systems revenue increased during the three and professional services.

nine months ended October 31, 2021 compared to the three and nine months ended October 31, 2020 primarily due to an increase in the number of Networked Charging Systems delivered.


October 31,
Cost of Subscriptions revenue20212020Change
(dollar amounts in thousands)
Three months ended$7,637 $5,322 $2,315 43.5 %
Percentage of subscriptions revenue57.0 %49.4 %
Nine months ended$21,107 $14,547 $6,560 45.1 %
Percentage of subscriptions revenue58.1 %49.2 %
Cost of subscriptions revenue increased during the three and nine months ended October 31, 2021 compared to the three and nine months ended October 31, 2020 primarily resulting from an increase in stock-based compensation for the Company’s customer support personnel and ChargePoint expanding its network of charging systems.

October 31,
Cost of Other revenue20212020Change
(dollar amounts in thousands)
Three months ended$2,621 $1,408 $1,213 86.2 %
Percentage of other revenue63.5 %46.7 %
Nine months ended$6,662 $4,100 $2,562 62.5 %
Percentage of other revenue65.5 %37.6 %
Other cost of revenue increased during the three and nine months ended October 31, 2021 compared to the three and nine months ended October 31, 2020 primarily related to higher depreciation of owned and operated charging sites and increased other costs.
Gross Profit and Gross Margin

Gross profit is revenue less cost of revenue and gross margin is gross profit as a percentage of revenue. ChargePoint offers a range of networked charging systemsNetworked Charging Systems products which vary widely in selling price and associated margin. Accordingly, ChargePoint’s gross profit and gross margin have varied and are expected to continue to vary from period to period due to revenue levels; geographic, vertical and product mix; new product introductions, and its efforts to optimize its operations and supply chain.

In the long term, improvements in ChargePoint’s gross profit and gross margin will depend on its ability to increase its revenue and continue to optimize its operations and supply chain. However, at least in the short term, as ChargePoint launches new networked charging systemsNetworked Charging Systems products, grows its presence in Europe where it has not yet achieved economies of scale, and expands its solutions for its fleet customers, it expects gross margin to experience variability from period to period.

In addition, ChargePoint expects gross margins will continue to be adversely affected by increased material costs and freight and logistic expenses through at least the remainder of the fiscal year as a result of ongoing supply chain disruptions caused by COVID-19 and related measures.

44


October 31,
Gross Profit and Gross Margin20212020Change
(dollar amounts in thousands)
Three months ended$16,056 $7,253 $8,803 121.4 %
Gross margin24.7 %19.9 %
Nine months ended$36,050 $24,045 $12,005 49.9 %
Gross margin22.3 %23.1 %
Gross profit increased during the three and nine months ended October 31, 2021 compared to the three and nine months ended October 31, 2020 primarily due to an increase in Networked Charging Systems sales resulting from a larger number of charging systems delivered, and in the case of the three months ended October 31, 2021 due to the improvements in gross margin year-over year described below.
Gross margin increased during the three months ended October 31, 2021 compared to the three months ended October 31, 2020 primarily due to improved manufacturing efficiencies.
Gross margin decreased during the nine months ended October 31, 2021 compared to the nine months ended October 31, 2020 primarily due to an increase in stock-based compensation expense and a decrease in Other revenue in the form of regulatory credits transferred, partially offset by improved manufacturing efficiencies.
Research and Development Expenses

Research and development expenses consist primarily of salaries and related personnel expenses, including stock-based compensation, for personnel related to the development of improvements and expanded features for ChargePoint’s services, as well as quality assurance, testing, product management, amortization of capitalized internal-use software, and allocated facilities and information technology expenses. Research and development costs are expensed as incurred.

ChargePoint expects its research and development expenses to increase on an absolute basis and they may increase as a percentage of total revenue for the foreseeable future as itChargePoint continues to invest in research and development activities to achieve its technology and product roadmap.


October 31,
Research and development expenses20212020Change
(dollar amounts in thousands)
Three months ended$36,751 $18,919 $17,832 94.3 %
Percentage of total revenue56.5 %52.0 %
Nine months ended$102,535 $54,071 $48,464 89.6 %
Percentage of total revenue63.4 %51.9 %
Research and development expenses increased during the three months ended October 31, 2021 compared to the three months ended October 31, 2020 primarily attributable to a $12.3 million increase in personnel costs related to a a $6.9 million increase in salary and bonus expenses due to headcount growth and $5.4 million increase in stock-based compensation expense mainly from restricted stock unit (“RSU”) grants, a $2.6 million increase in engineering materials and services cost, as well as a $1.0 million increase in consulting services.
Research and development expenses increased during the nine months ended October 31, 2021 compared to the nine months ended October 31, 2020 primarily attributable to a $35.3 million increase in personnel costs related to a $19.0 million increase in stock-based compensation expense from RSU grants, a $16.3 million increase in salary and bonus expenses due to headcount growth, a $5.6 million increase in engineering materials and services costs, a $2.0 million increase in consulting services, as well as a $1.7 million increase in shipping costs.

45


Sales and Marketing Expenses

Sales and marketing expenses consist primarily of salaries and related personnel expenses, including stock-based compensation, sales commissions, professional services fees, travel, marketing and promotional expenses amortization of capitalized internal-use software and allocated facilities and information technology expenses.

ChargePoint expects its sales and marketing expenses to increase on an absolute basis and they may increase as a percentage of total revenue for the foreseeable future while it continues to add sales and marketing personnel, expand its sales channels and expand in Europe.


October 31,
Sales and marketing expenses20212020Change
(dollar amounts in thousands)
Three months ended$24,361 $12,134 $12,227 100.8 %
Percentage of total revenue37.5 %33.4 %
Nine months ended$62,258 $37,301 $24,957 66.9 %
Percentage of total revenue38.5 %35.8 %
Sales and marketing expenses increased during the three months ended October 31, 2021 compared to the three months ended October 31, 2020 primarily attributable to a $7.5 million increase in personnel costs related to a $1.9 million increase in salary, bonus and commissions due to headcount growth, as well as revenue growth and a $5.6 million increase in stock-based compensation expense resulting mainly from RSU grants, a $4.7 million increase in marketing activities and other operating expenses.
Sales and marketing expenses increased during the nine months ended October 31, 2021 compared to the nine months ended October 31, 2020 primarily attributable to a $17.6 million increase in personnel costs related to a $11.6 million increase in salary, bonus and commissions due to headcount growth, as well as revenue growth and a $6.0 million increase in stock-based compensation expense resulting mainly from RSU grants, and a $7.3 million increase in marketing activities and other operating expenses.
General and Administrative Expenses

General and administrative expenses consist primarily of salaries and related personnel expenses, including stock-based compensation, related to finance, legal and human resource functions, contractor and professional services fees, audit and compliance expenses, insurance costs, bad debt expenses, amortization of capitalized internal-use software and general corporate expenses, including allocated facilities and information technology expenses.


ChargePoint expects its general and administrative expenses to increase in absolute dollars as it continues to grow its business. ChargePoint also expectsbusiness and to incur additional expenses as a result of operatingoperate as a public company, including expenses necessary to comply with the rules and regulations applicable to companies listed on a national securities exchange and related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, as well as higher expenses for director and officer insurance, investor relations and legal, accounting and other professional services.


October 31,
General and administrative expenses20212020Change
(dollar amounts in thousands)
Three months ended$20,268 $8,790 $11,478 130.6 %
Percentage of total revenue31.2 %24.2 %
Nine months ended$57,467 $18,345 $39,122 213.3 %
Percentage of total revenue35.5 %17.6 %

General and administrative expenses increased during the three months ended October 31, 2021 compared to the three months ended October 31, 2020 primarily attributable to a $9.3 million increase in personnel costs related to a $6.6 million
46


increase in stock-based compensation expense resulting from RSU grants and stock option grants and a $2.6 million increase in salary expense due to headcount growth; and a $2.2 million increase in professional services fees related to acquisitions.
General and administrative expenses increased during the nine months ended October 31, 2021 compared to the nine months ended October 31, 2020 primarily attributable to a $25.0 million increase in personnel costs related to a $20.6 million increase in stock-based compensation expense resulting from RSU grants and stock option grants, $8.3 million increase in professional services fees related to acquisitions and expenses associated with an underwritten secondary offering of shares held by certain selling stockholders in July 2021, as well as $4.4 million increase in salary expense due to headcount growth and a $5.2 million increase in consulting expenses.

Interest Income

Interest income consists primarily of interest earned on ChargePoint’s cash, cash equivalents and short-term investments.


October 31,
Interest Income20212020Change
(dollar amounts in thousands)
Three months ended$25 $18 $7 38.9 %
Percentage of total revenue— %— %
Nine months ended$72 $298 $(226)(75.8)%
Percentage of total revenue— %0.3 %
Interest income increased during the three months ended October 31, 2021 as compared to the three months ended October 31, 2020 due to higher cash and cash equivalent balances.
Interest income decreased during the nine months ended October 31, 2021 as compared to the nine months ended October 31, 2020 due to lower returns on investments.

Interest Expense

Interest expense consists primarily of the interest on ChargePoint’s term loan, which was paid off in March 2021.


October 31,
Interest Expense20212020Change
(dollar amounts in thousands)
Three months ended$(3)$(815)$812 (99.6)%
Percentage of total revenue— %(2.2)%
Nine months ended(1,502)(2,443)$941 (38.5)%
Percentage of total revenue(0.9)%(2.3)%
Interest expense decreased during the three and nine months ended October 31, 2021 compared to the three and nine months ended October 31, 2020 primarily due to repayment of the term loan in March 2021. As of October 31, 2021, ChargePoint had no outstanding loans.

47


Change in Fair Value of Redeemable Convertible Preferred Stock Warrant Liability

Redeemable convertible preferred stock warrant liability is subject to remeasurement to fair value at each balance sheet date. Changes in fair value of redeemable convertible preferred stock warrant liability are recognized in the condensed consolidated statements of operations. ChargePoint adjusts the liability for changes in fair value until the earlier of the exercise or expiration of the warrants and conversion of redeemable convertible preferred stock into Common Stock.


October 31,
Change in fair value of redeemable convertible preferred stock warrant liability20212020Change
(dollar amounts in thousands)
Three months ended$— $(7,320)$7,320 (100.0)%
Percentage of total revenue— %(20.1)%
Nine months ended$9,237 $(18,301)$27,538 (150.5)%
Percentage of total revenue5.7 %(17.6)%
The change in fair value of redeemable convertible preferred stock warrant liability during the three and nine months ended October 31, 2021 compared to the three and nine months ended October 31, 2020 was primarily due to changes in the fair value of Legacy ChargePoint’s redeemable convertible preferred stock through the date of the Merger. As of October 31, 2021, ChargePoint had no outstanding redeemable convertible preferred stock warrant liabilities.
Change in Fair Value of Common Stock Warrant Liabilities

Common stock warrant liabilities consist of publicly-traded warrants (“Public Warrants”) and private placement warrants issued to NGP Switchback, LLC. (“Private Placement Warrants”) which ChargePoint assumed in connection with the Merger and which are subject to remeasurement to fair value at each balance sheet date. ChargePoint expects to incur an incremental income (expense) in theits condensed consolidated statements of operations for the fair value adjustments for the outstanding common stockCommon Stock warrant liabilities at the end of each reporting period or through the exercise of such warrants.


October 31,
Change in fair value of Common Stock warrant liability20212020Change
(dollar amounts in thousands)
Three months ended$(2,429)$— $(2,429)— %
Percentage of total revenue(3.7)%— %
Nine months ended$30,911 $— $30,911 — %
Percentage of total revenue19.1 %— %
ChargePoint recognized a $2.4 million loss during the three months ended October 31, 2021 due to the change in the fair value of Common Stock warrants.
ChargePoint recognized a $30.9 million gain during the nine months ended October 31, 2021 due to the change in the fair value of Common Stock warrants.

Change in Fair Value of Contingent Earnout Liability


Contingent Earnoutearnout liability was accounted for as a liability as of the date of the Merger and remeasured to fair value until the Earnout Triggering Event wasEvents were met for the first two tranches in March 2021 and the Earnout Shares were issued. In March 2021, the remaining Earnoutearnout liability for the third tranche converted to be accounted for as equity.

The Earnout Triggering Event was met for the third and final tranche in June 2021, and in July 2021, the Earnout Shares were issued.

48


October 31,
Change in fair value of contingent earnout liability20212020Change
(dollar amounts in thousands)
Three months ended$— $— $— — %
Percentage of total revenue— %— %
Nine months ended$84,420 $— $84,420 — %
Percentage of total revenue52.2 %— %
ChargePoint recognized an increase in fair value of contingent earnout liability of $84.4 million for the nine months ended October 31, 2021 due to the decrease in the fair value of ChargePoint’s Common Stock after consummation of the Merger.
Transaction Costs Expensed

Transaction costs consist of legal, accounting, underwritingbanking fees and other costs that were directly related to the consummation of the Merger. Transaction costs related to the issuance of shares were recognized in shareholders’stockholders’ equity (deficit) while costs associated with the warrant liabilities and non-capitalized amounts were expensed in the condensed consolidated statements of operations upon the completion of the Merger on February 26, 2021.


October 31,
Transaction costs expensed20212020Change
(dollar amounts in thousands)
Three months ended$— $— $— — %
Percentage of total revenue— %— %
Nine months ended$(7,031)$— $(7,031)— %
Percentage of total revenue(4.3)%— %
During the nine months ended October 31, 2021 ChargePoint expensed $7.0 million out of $36.5 million total transaction costs, that related to the warrant liabilities assumed as part of the Merger.
Other Income (Expense), Net

Other income (expense), net consists primarily of foreign currency transaction gains and losses.


October 31,
Other income (expense), net20212020Change
(dollar amounts in thousands)
Three months ended$(2,025)$(85)$(1,940)2282.4 %
Percentage of total revenue(3.1)%(0.2)%
Nine months ended$(2,200)$46 $(2,246)(4882.6)%
Percentage of total revenue(1.4)%— %
Other income (expense) increased during the three and nine months ended October 31, 2021 as compared to the three and nine months ended October 31, 2020, due to unfavorable changes in foreign exchange rates.
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Provision for Income Taxes

income taxes

ChargePoint’s provision for income taxes consists of an estimate of federal, state and foreign income taxes based on enacted federal, state and foreign tax rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities and changes in tax law. Due to the level of historical losses, ChargePoint maintains a valuation allowance against U.S. federal and state deferred tax assets as it has concluded it is more likely than not that these deferred tax assets will not be realized.

Results of Operations

Comparison of the Three Months Ended April 30, 2021 to the Three Months Ended April 30, 2020

The following table summarizes ChargePoint’s results of operations for the periods indicated:

   Three Months Ended April 30,  

Period-over-Period Change
Three Months Ended

 
   2021  2020  April 30, 2021 to 2020 
   (in thousands, except
percentages)		  Change ($)   Change (%) 

Revenue

      

Networked charging systems

  $26,800 $19,657 $7,143   36% 

Subscriptions

   10,824  9,004  1,820   20% 

Other

   2,886  4,115  (1,229)    (30)% 
  

 

 

  

 

 

  

 

 

   

Total revenue

   40,510  32,776  7,734   24% 

Cost of revenue

      

Networked charging systems

   23,742  18,616  5,126   28% 

Subscriptions

   5,640  4,773  867   18% 

Other

   1,911  1,623  288   18% 
  

 

 

  

 

 

  

 

 

   

Total cost of revenue

   31,293  25,012  6,281   25% 
  

 

 

  

 

 

  

 

 

   

Gross profit

   9,217  7,764  1,453   19% 
  

 

 

  

 

 

  

 

 

   

Gross margin

   23%   24%    

Operating expenses

      

Research and development

   25,374  18,026  7,348   41% 

Sales and marketing

   15,974  14,201  1,773   12% 

General and administrative

   14,467  5,089  9,378   184% 
  

 

 

  

 

 

  

 

 

   

Total operating expenses

   55,815  37,316  18,499   50% 
  

 

 

  

 

 

  

 

 

   

Loss from operations

   (46,598)   (29,552)   (17,046)    58% 

Interest income

   22  243  (221)    * 

Interest expense

   (1,499)   (835)   (664)    80% 

Change in fair value of redeemable convertible preferred stock warrant liability

   9,237  535  8,702    * 

Change in fair value of common stock warrant liabilities

   43,761  —     43,761    * 

Change in fair value of contingent earnout liability

   84,420  —     84,420    * 

Transaction costs expensed

   (7,031)   —     (7,031)    * 

Other income (expense), net

   15  (432)   447    * 
  

 

 

  

 

 

  

 

 

   

Net income (loss) before income taxes

   82,327  (30,041)   112,368    * 

Provision for income taxes

   38  57  (19)    * 
  

 

 

  

 

 

  

 

 

   

Net income (loss)

  $82,289 $(30,098)  $112,387   373% 
  

 

 

  

 

 

  

 

 

   

*

Not Meaningful

Revenue

Revenue increased by $7.7 million, or 24%, from $32.8 million during the three months ended April 30, 2020 to $40.5 million during the three months ended April 30, 2021, primarily attributable to an increase of $7.1 million in networked charging systems revenue. This increase was primarily attributable to higher volumes of systems delivered across both ChargePoint’s Level 1 home chargers and Level 3 DC Fast chargers as well as an increase in the average selling prices in some categories. Subscriptions revenue also increased by $1.8 million primarily due to growth in the number of charging systems connected to its network. These increases were partially offset by a decrease in other revenue of $1.2 million due to fewer regulatory credits transferred.

October 31,
Provision for income taxes20212020Change
(dollar amounts in thousands)
Three months ended$(314)$98 $(412)(420.4)%
Percentage of profit/(loss) before provision for income taxes0.5 %(0.2)%
Nine months ended$(211)$203 $(414)(203.9)%
Percentage of profit/(loss) before provision for income taxes0.3 %(0.2)%

Cost of Revenue

Cost of revenue increased by $6.3 million, or 25%, from $25.0 million during the three months ended April 30, 2020 to $31.3 million during the three months ended April 30, 2021, primarily due to an increase of $5.1 million in networked charging systems cost of revenue primarily due to an increase in the number of charging system delivered. Subscriptions cost of revenue increased by $0.9 million as ChargePoint expanded its network and support capabilities, and other cost of revenue increased by $0.3 million primarily related to higher depreciation on owned and operated charging sites.

Gross Profit and Gross Margin

Gross profit increased by $1.5 million, or 19%, from $7.8 million during the three months ended April 30, 2020 to $9.2 million during the three months ended April 30, 2021. Gross margin decreased from 24% during the three months ended April 30, 2020 to 23% during the three months ended April 30, 2021. The decrease was primarily due to a decrease in other revenue in the form of regulatory credits transferred, which has higher gross margins.

Research and Development Expenses

Research and development expenses increased by $7.3 million, or 41%, from $18.0 million during the three months ended April 30, 2020 to $25.4 million during the three months ended April 30, 2021. The increase was primarily due to a $3.8 million increase in engineering personnel costs due to headcount growth as well as a $3.0 million increase in research materials and related operating expenses.

Sales and Marketing Expenses

Sales and marketing expenses increased by $1.8 million, or 12%, from $14.2 million during the three months ended April 30, 2020 to $16.0 million during the three months ended April 30, 2021, primarily due to an increase in personnel costs including payroll, benefit and sales commissions, resulting from headcount and, with respect to sales commissions, revenue growth.

General and Administrative Expenses

General and administrative expenses increased by $9.4 million, or 184%, from $5.1 million during the three months ended April 30, 2020 to $14.5 million during the three months ended April 30, 2021. The increase was primarily due to a $5.8 million increase in stock-based compensation and a $2.4 million increase in audit, legal and advisory fees mainly related to the closing of the Merger.

Interest Income

Interest income did not significantly fluctuate during the three months ended April 30, 2021 as compared to the three months ended April 30, 2020.

Interest Expense

Interest expense increased by $0.7 million from $0.8 million for the three months ended April 30, 2020 to $1.5 million for the three months ended April 30, 2021. The increase was due to the prepayment charges associated with the settlement of the outstanding term loan. As of April 30, 2021, ChargePoint had no outstanding loans.

Change in Fair Value of Redeemable Convertible Preferred Stock Warrant Liability

Change in fair value of redeemable convertible preferred stock warrant liability increased by $8.7 million from $0.5 million during the three months ended April 30, 2020 to $9.2 million during the three months ended April 30, 2021, due to changes in the fair value of Legacy ChargePoint’s redeemable convertible preferred stock through the date of the Merger. As of April 30, 2021, ChargePoint had no outstanding redeemable convertible preferred stock warrant liabilities.

Change in Fair Value of Common Stock Warrant Liabilities

ChargePoint recognized a change in fair value of common stock warrant liabilities of $43.8 million during the three months ended April 30, 2021 due to the decrease in the fair value of Legacy ChargePoint’s common stock during the period the warrants were outstanding.

Change in Fair Value of Contingent Earnout Liability

ChargePoint recognized a change in fair value of contingent earnout liability of $84.4 million for the three months ended April 30, 2021 due to the decrease in the fair value of Legacy ChargePoint’s common stock after ChargePoint announced the Merger.

Transaction Costs Expensed

ChargePoint expensed transaction costs that related to the warrant liabilities assumed as part of the Merger of $7.0 million, out of $36.5 million total, for the three months ended April 30, 2021 as a result of the consummation of the Merger.

Other Income (Expense), Net

Other income (expense) did not significantly fluctuate during the three months ended April 30, 2021 as compared to the three months ended April 30, 2020.

Provision for income taxes

The provision for income taxes did not significantly fluctuate during the three and nine months ended April 30,October 31, 2021 as compared to the three and nine months ended April 30,October 31, 2020.


Liquidity and Capital Resources

Sources of Liquidity


ChargePoint has incurred net losses and negative cash flows from operations since its inception, which it anticipates will continue for the foreseeable future. To date, ChargePoint has funded its operationsbusiness primarily with proceeds from the issuance of redeemable convertible preferred stock, borrowings under its loan facilities, customer payments and proceeds from the Reverse Recapitalization.Merger, proceeds from warrant and option exercises for cash, and from customer payments. As of April 30,October 31, 2021, ChargePoint had cash, cash equivalents and restricted cash of $610.2$365.9 million. ChargePoint believes that its cash on hand together withand cash generated from sales to customers will satisfy its working capital and capital requirements for at least the next twelve months.

From inception to April 30,October 31, 2021, ChargePoint has raised aggregate net cash proceeds of $615.7 million from the sale of shares of redeemable convertible preferred stock and $477.5$479.2 million from the Merger and the PIPE.

concurrent purchase by certain investors of shares of Common Stock pursuant to separate subscription agreements (the “PIPE financing”). During the nine months ended October 31, 2021, ChargePoint received $118.8 million in proceeds from warrant exercises.

In March 2021, ChargePoint repaid the entire loan2018 Loan balance of $35.0 million plus accrued interest and prepayment fees of $1.2 million.

Long-Term Liquidity Requirements

Until ChargePoint can generate sufficient revenue to cover its cost of sales, operating expenses, working capital and capital expenditures, it expects to primarily fund cash needs through a combination of equity and debt financing. If ChargePoint raises funds by issuing equity securities, dilution to existing stockholders may result. Any equity securities issued may also provide for rights, preferences or privileges senior to those of holders of Common Stock. If ChargePoint raises funds by issuing debt securities, these debt securities would have rights, preferences and privileges senior to those of holders of Common Stock. The terms of debt securities or borrowings could impose significant restrictions on ChargePoint’s operations. The capital markets have in the past, and may in the future, experience periods of upheaval that could impact the availability and cost of equity and debt financing.

ChargePoint’s principal use of cash in recent periods has been funding its operations, the acquisitions of ViriCiti and HTB, and investing in capital expenditures. ChargePoint’s future capital requirements will depend on many factors, including its revenue growth rate, the timing and the amount of cash received from customers, the expansion of sales and marketing activities, the timing and extent of spending to support development efforts, expenses associated with its international expansion, the introduction of network enhancements and the continuing market adoption of its network. InChargePoint has and may in the future ChargePoint may enter into arrangements to acquire or invest in complementary businesses, products and technologies. ChargePoint may be required to seek additional equity or debt financing. In the event thatIf ChargePoint requires additional financing, it may

50


not be able to raise such financing on acceptable terms or at all. If ChargePoint is unable to raise additional capital or generate cash flows necessary to expand its operations and invest in continued innovation, it may not be able to compete successfully, which would harm its business, results of operations and financial condition. If adequate funds are not available, ChargePoint may need to reconsider its expansion plans or limit its research and development activities, which could have a material adverse impact on its business prospects and results of operations.


Cash Flows

For the ThreeNine Months Ended April 30,October 31, 2021 and 2020

The following table sets forth a summary of ChargePoint’s cash flows for the periods indicated:

   Three Months Ended
April 30,		 
   2021   2020 
   (in thousands) 

Net cash (used in) provided by:

    

Operating activities

  $(37,539)   $(34,694) 

Investing activities

   (4,138)    39,631

Financing activities

   505,988   446

Effects of exchange rates on cash, cash equivalents, and restricted cash

   7   (56) 
  

 

 

   

 

 

 

Net increase in cash, cash equivalents, and restricted cash

  $464,318  $5,327
  

 

 

   

 

 

 

Nine Months Ended
October 31,
20212020
(in thousands)
Net cash (used in) provided by:
Operating activities$(109,083)$(70,921)
Investing activities(217,393)38,101 
Financing activities547,224 128,747 
Effects of exchange rates on cash, cash equivalents, and restricted cash(748)13 
Net increase in cash, cash equivalents, and restricted cash$220,000 $95,940 

Net Cash Used in Operating Activities

During the threenine months ended April 30,October 31, 2021, net cash used in operating activities was $37.5$109.1 million, consisting primarily of a net incomeloss of $82.3$72.1 million fullyand non-cash charges of $49.3 million, partially offset by an increasea decrease in net operating assets of $2.2 million and non-cash charges of $117.6$12.3 million. The increasedecrease in net operating assets was primarily due to a $6.2$16.1 million increase in accrued and other liabilities, a $10.6 million increase in accounts payable, a $3.5 million decrease in inventories and a $29.7 million increase in deferred revenue, partially offset by a $18.9 million increase in prepaid expenses and other assets, a $5.0$26.6 million decrease in accrued and other liabilities, a $3.5 million decreaseincrease in accounts payablereceivable and a $0.4$2.2 million decrease in operating lease liabilities, largely offset by a $7.8 million increase in deferred revenue and a $4.9 million decrease in inventories.liabilities. The non-cash charges primarily consisted of $84.4 million change in fair value of contingent earnout liability, $43.8$30.9 million change in fair value of common stockCommon Stock warrant liabilitiesliability, $0.4 million change in deferred tax benefits and $9.2 million change in fair value of redeemable convertible preferred stock warrant liability, partially offset by $7.6$51.9 million of stock-based compensation expense, $7.0 million of transaction costs expensed, $2.7$11.4 million of depreciation, and amortization expense and $1.0amortization of deferred contract acquisition costs, $3.1 million of non-cash operating lease cost.

cost and $2.2 million of inventory reserves and other costs.

During the threenine months ended April 30,October 31, 2020, net cash used in operating activities was $34.7$70.9 million, consisting primarily of a net loss of $30.1$106.3 million, and an increaseoffset by a decrease in net operating assets of $8.4$1.5 million partially offset by and non-cash charges of $3.8$33.8 million. The increasedecrease in net operating assets was primarily attributable to a $10.3$10.1 million decrease in accounts payable,receivable, net due to increased collections, a $4.1$1.6 million increase in inventories, a $1.9 million decrease in operating lease liabilities, a $1.9 million decrease in accrued and other liabilities and $9.1 million increase in deferred revenue, largely offset by a $1.2$6.0 million increase in inventories, an $8.4 million increase in prepaid expenses and other assets, largely offset by a $9.2$2.4 million decrease in operating lease liabilities and a $2.4 million decrease in accounts receivable, net and $1.8 million increase in deferred revenue.payable. The non-cash charges primarily consisted of $2.3 million of depreciation and amortization expense, $0.9 million of stock-based compensation expense and $0.8 million of non-cash operating lease cost, partially offset by $0.5an $18.3 million change in the fair value of redeemable convertible preferred stock warrant liability.

liability, $7.5 million of depreciation and amortization expenses, $3.3 million of stock-based compensation expense and $2.9 million of non-cash operating lease cost.

Net Cash Provided By (Used In) Provided by Investing Activities

During the threenine months ended April 30,October 31, 2021, net cash used in investing activities was $4.1$217.4 million consisting of cash paid for acquisitions (net of cash acquired) of $205.3 million and purchases of property and equipment.

equipment of $12.1 million.

During the threenine months ended April 30,October 31, 2020, net cash provided by investing activities was $39.6$38.1 million, consisting of maturities of investments of $42.4$47.0 million, partially offset by purchases of property and equipment of $2.8$8.9 million.

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Net Cash Provided by Financing Activities

During the threenine months ended April 30,October 31, 2021, net cash provided by financing activities was $506.0$547.2 million, consisting of net proceeds from the Merger and PIPE financing of $481.5$511.6 million, and proceeds from the exercise of warrants of $73.3$118.8 million and proceeds from exercises of vested and unvested stock options of $4.2 million and change in driver funds and amounts due to customers of $1.9 million, partially offset by repayment of borrowings of $36.1 million, and taxes paidpayment of transaction costs related to net sharethe Merger of $32.5 million and payment of tax withholding obligations on settlement of earnout shares of $12.8$20.9 million.

During the threenine months ended April 30,October 31, 2020, net cash provided by financing activities was $0.4$128.7 million consisting of net proceeds from issuance of redeemable convertible preferred stock of $95.5 million, proceeds from the issuance of Common Stock warrants of $31.5 million and proceeds from exercises of vested and unvested stock options.

options of $2.2 million, partially offset by $0.5 million of payment of deferred transaction costs.

Off-Balance Sheet Arrangements

ChargePoint is not a party to any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

The Company’s discussion and analysis of its financial condition and results of operations are based upon its condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these condensed consolidated financial statements requires ChargePoint to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales and expenses. The Company evaluates its estimates and assumptions on an ongoing basis, and base its estimates on historical experience and on various other assumptions that ChargePoint believes to be reasonable under the circumstances, the results of which form the basis for the judgments ChargePoint makes about the carrying value of assets and liabilities that are not readily apparent from other sources. Because these estimates can vary depending on the situation, actual results may differ from these estimates. Making estimates and judgments about future events is inherently unpredictable and is subject to significant uncertainties, some of which are beyond ChargePoint’s control. Should any of these estimates and assumptions change or prove to have been incorrect, it could have a material impact on ChargePoint’s results of operations, financial position and statement of cash flows.

Other than the policies noted in Part I, Item 1, Note 2, “Summary of Significant Accounting Policies,” in the Company’s notes to condensed consolidated financial statements in this Quarterly Report on Form 10-Q, there have been no material changes to its critical accounting policies and estimates as compared to those disclosed in its audited consolidated financial statements as of January 31, 2021 and 2020 and for the years ended January 31, 2021, 2020 and 2019.

Recent Accounting Pronouncements

For a description of recent accounting pronouncements, including the expected dates of adoption and estimated effects, if any, on ChargePoint’s condensed consolidated financial statements, see Part I, Item 1, Note 2, “Summary of Significant Accounting Policies,” in its notes to condensed consolidated financial statements in this Quarterly Report on Form 10-Q.


ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

ChargePoint had cash, cash equivalents and restricted cash totaling $610.2$365.9 million as of April 30,October 31, 2021. Cash equivalents were invested primarily in money market funds. ChargePoint’s investment policy is focused on the preservation of capital and supporting its liquidity needs. Under the policy, ChargePoint invests in highly rated securities, issued by the U.S. government or liquid money market funds. ChargePoint does not invest in financial instruments for trading or speculative purposes, nor does it use leveraged financial instruments. ChargePoint utilizes external investment managers who adhere to the guidelines of its investment policy.

A hypothetical 10% change in interest rates would not have a material impact on the value of ChargePoint’s cash, cash equivalents, net loss or cash flows.

52


Foreign Currency Risk

ChargePoint has foreign currency risks related to its revenue and operating expenses denominated in currencies other than the U.S. dollar, primarily the euro, causing both its revenue and its operating results to be impacted by fluctuations in the exchange rates.

Gains or losses from the revaluation of certain cash balances, accounts receivable balances and intercompany balances that are denominated in these currencies impact ChargePoint’s net loss. A hypothetical decrease in all foreign currencies against the U.S. dollar of 10% would not result in a material foreign currency loss on foreign-denominated balances, as of April 30,October 31, 2021. As ChargePoint’s foreign operations expand, its results may be more materially impacted by fluctuations in the exchange rates of the currencies in which it does business.

At this time, ChargePoint does not enter into financial instruments to hedge its foreign currency exchange risk, but it may in the future.


ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in ourChargePoint’s reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including ourChargePoint’s Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

As required by Rules 13a-15 and 15d-15 under the Exchange Act, ourChargePoint’s Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of ourits disclosure controls and procedures as of April 30,October 31, 2021. Based upon this evaluation, ourthe Chief Executive Officer and Chief Financial Officer concluded that, due to the material weaknesses in internal control over financial reporting described below, ourChargePoint’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective at the reasonable assurance level as of such date. Notwithstanding these material weaknesses, management has concluded that the condensed consolidated financial statements included in this quarterly report on Form 10-Q are fairly stated in all material respects in accordance with U.S. GAAP.

Material Weaknesses in Internal Control over Financial Reporting

In connection with the preparation and audit of ChargePoint’s consolidated financial statements, material weaknesses were identified in its internal control over financial reporting as of January 31, 2021. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of ChargePoint’s annual or interim financial statements will not be prevented or detected on a timely basis.

ChargePoint did not design and maintain an effective control environment commensurate with its financial reporting requirements. Specifically, ChargePoint did not maintain a sufficient complement of personnel with an appropriate degree of accounting knowledge, experience and training to appropriately analyze, record and disclose accounting matters commensurate with its accounting and reporting requirements. This material weakness contributed to the following additional material weaknesses:

•ChargePoint did not design and maintain formal accounting policies, procedures and controls over significant accounts and disclosures to achieve complete, accurate and timely financial accounting, reporting and disclosures, including accounting for complex features associated with warrants, segregation of duties and adequate controls related to the preparation and review of journal entries; and

•ChargePoint did not design and maintain effective controls over certain information technology (“IT”) general controls for information systems that are relevant to the preparation of its consolidated financial statements. Specifically, ChargePoint did not design and maintain (a) program change management controls to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately and (b) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to its financial applications and data to appropriate company personnel.

53


The material weaknesses related to the control environment and lack of formal accounting policies, procedures and controls resulted in material adjustments to warrant liabilities, shareholders’stockholders’ equity and related accounts and disclosures and immaterial adjustments to several other account balances and disclosures in the historical consolidated financial statements.

The IT deficiencies did not result in a misstatement to the consolidated financial statements however, the deficiencies, when aggregated, could impact maintaining effective segregation of duties, as well as the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all financial statement accounts and disclosures that would not be prevented or detected. Additionally, each of these material weaknesses could result in a misstatement of account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

Remediation Plan

ChargePoint has beguncontinued implementation of a plan to remediate these material weaknesses. These remediation measures are ongoing and include the following:

•Hiring additional finance and accounting personnel to bolster the accounting capabilities and capacity, and to establish and maintain internal control over financial reporting;

•Designing and implementing controls to formalize roles and review responsibilities to align with the staff’s skills and experience and designing and implementing controls over segregation of duties;

•Providing ongoing training for personnel on accounting, financial reporting and internal control over financial reporting;

•Engaging an external advisor to assist with evaluating and documenting the design and operating effectiveness of internal control over financial reporting and assist with the remediation of deficiencies, as necessary;

•Designing and implementing controls over the preparation and review of journal entries and account reconciliations, including controls over the segregation of duties; and

•Designing and implementing IT general controls, including controls over the provisioning and monitoring of user access rights and privileges and change management processes and procedures.

ChargePoint is remediating the material weaknesses as efficiently and effectively as possible and remediation efforts could continue beyond the fiscal year ending January 31, 2023. At this time, weChargePoint cannot provide an estimate of costs expected to be incurred in connection with implementing this remediation plan; however, these remediation measures will be time consuming, will result in usit incurring significant costs, and will place significant demands on ourits financial and operational resources.

In order to maintain and improve the effectiveness of its internal control over financial reporting, ChargePoint has expended, and anticipates towill continue to expend, significant resources, including accounting-related costs and significant management oversight.

Changes in Internal Control Over Financial Reporting

There were no changes in ourChargePoint’s internal control over financial reporting covered by this Quarterly Report on Form 10-Q, other than the changes discussed above, that hashave materially affected, or isare reasonably likely to materially affect, ourits internal control over financial reporting.

54


PART II: OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

From time to time, ChargePoint may be involved in legal proceedings or subject to claims incident to the ordinary course of business. Regardless of the outcome, such proceedings or claims can have an adverse impact on ChargePoint because of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be obtained.



ITEM 1A. RISK FACTORS


An investment in ourChargePoint’s securities involves a high degree of risk. You should carefully consider the risks described below before making an investment decision. OurChargePoint’s business, prospects, financial condition, or operating results could be harmed by any of these risks, as well as other risks not known to usChargePoint or that we considerit considers immaterial as of the date of this Quarterly Report. The trading price of ourChargePoint’s securities could decline due to any of these risks, and, as a result, you may lose all or part of your investment.

Summary of Principal Risks Associated with ChargePoint’s Business

•ChargePoint is an early-stage company with a history of losses and expects to incur significant expenses and continuing losses for the near term.

•ChargePoint has experienced rapid growth and expects to invest in growth for the foreseeable future. If it fails to manage growth effectively, its business, operating results and financial condition could be adversely affected.

•ChargePoint currently faces competition from a number of companies, particularly in Europe, and expects to face significant competition in the future as the market for EV charging develops.

•ChargePoint faces risks related to health pandemics, including the recent coronavirusCOVID-19 pandemic, which could have a material and adverse effect on its business and results of operations.

•ChargePoint relies on a limited number of suppliers and manufacturers for its charging stations. A loss of any of these partners could negatively affect its business.

•ChargePoint’s business is subject to risks associated with construction, cost overruns and delays, and other contingencies that may arise in the course of completing installations, and such risks may increase in the future as ChargePoint expands the scope of such services with other parties.

While ChargePoint•Acquisitions or strategic investments could be difficult to date has not made material acquisitions, should it pursue acquisitions inidentify and integrate, divert the future, it would be subject to risks associated with acquisitions.

attention of key management personnel, disrupt ChargePoint’s business, dilute stockholder value and adversely affect its results of operations and financial condition.

•If ChargePoint is unable to attract and retain key employees and hire qualified management, technical engineering and sale personnel, its ability to compete and successfully grow its business would be harmed.

•ChargePoint is expanding operations internationally, which will expose it to additional tax, compliance, market and other risks.

•Some members of ChargePoint’s management have limited experience in operating a public company.

•ChargePoint may need to raise additional funds and these funds may not be available when needed.

needed or may not be available on terms that are favorable to ChargePoint.

•ChargePoint’s future revenue growth will depend in significant part on its ability to increase sales of its products and services to fleet operators.

55


•Computer malware, viruses, ransomware, hacking, phishing attacks and similar disruptions could result in security and privacy breaches and interruption in service, which could harm ChargePoint’s business.

•ChargePoint’s headquarters and other facilities are located in an active earthquake zone; an earthquake or other types of natural disasters or resource shortages, including public safety power shut-offs that have occurred and will continue to occur in California, could disrupt and harm its operations and those of ChargePoint’s customers.

ChargePoint’s stock price will be volatile, and you may not be able to sell shares at or above the price at the Closing.

•ChargePoint has never paid cash dividends on its capital stock and does not anticipate paying dividends in the foreseeable future.

•The price of ChargePoint’s Common Stock may be subject to wide fluctuations.

•Concentration of ownership among ChargePoint’s existing executive officers, directors and their affiliate may prevent new investors from influencing significant corporate decisions.

•ChargePoint’s future growth and success is highly correlated with and thus dependent upon the continuing rapid adoption of EVs for passenger and fleet applications.

•The EV market currently benefits from the availability of rebates, tax credits and other financial incentives from governments, utilities and others to offset the purchase or operating cost of EVs and EV charging stations.

•ChargePoint’s business may be adversely affected if it is unable to protect its technology and intellectual property from unauthorized use by third parties.

•ChargePoint has identified material weaknesses in its internal control over financial reporting. If ChargePoint is unable to remediate these material weaknesses, or if ChargePoint identifies additional material weaknesses in the future or otherwise fails to maintain an effective system of internal control over financial reporting, this may result in material misstatements of ChargePoint’s consolidated financial statements or cause ChargePoint to fail to meet its periodic reporting obligations.

ChargePoint’s Public Warrants and the Private Placement Warrants are being accounted for as a warrant liability and are being recorded at fair value upon issuance with changes in fair value each period reported in earnings, which may have an adverse effect on the market price of its Common Stock.

Risks Related to ChargePoint’s Business

ChargePoint is an early-stage company with a history of losses, and expects to incur significant expenses and continuing losses for the near term.

ChargePoint incurred a net loss of $197.0 million for the fiscal year ended January 31, 2021 and had net incomeloss of $82.3$72.1 million for the threenine months ended April 30,October 31, 2021. As of April 30,October 31, 2021, ChargePoint had an accumulated deficit of approximately $597.1$751.5 million. ChargePoint believes it will continue to incur

significant operating expenses and net losses each quarterin future quarters for the near term. Even if it achieves profitability, thereThere can be no assurance that it will be able to maintain profitability in the future. ChargePoint’s potential profitability is particularly dependent upon the continued adoption of EVs by consumers and fleet operators, the widespread adoption of electric trucks, and other vehicles and other electric transportation modalities, which may not occur.

ChargePoint has experienced rapid growth and expects to invest in growth for the foreseeable future. If it fails to manage growth effectively, its business, operating results and financial condition could be adversely affected.

ChargePoint has experienced rapid growth in recent periods. For example, the number of employees has grown from 743 as of January 31, 2020 to 834 as of January 31, 2021 and to 9171,319 as of April 30,October 31, 2021, including 77 employees in Europe as of January 31, 2020 to 101 as of January 31, 2021 and to 133343 as of April 30,October 31, 2021. The growth and expansion of its business has placed and continues to place a significant strain on management, operations, financial infrastructure and corporate culture. In the event of further growth, ChargePoint’s information technology systems and ChargePoint’s internal control over financial reporting and procedures may not be adequate to support its operations and may introduce opportunities for data security incidents that may interrupt business operations and permit bad actors to obtain unauthorized access to business information or misappropriate funds. ChargePoint may also face risks to the extent such bad actors infiltrate the information technology infrastructure of its contractors.

To manage growth in operations and personnel, ChargePoint will need to continue to improve its operational, financial and management controls and reporting systems and procedures. Failure to manage growth effectively could result in difficulty or delays in attracting new customers, declines in quality or customer satisfaction, increases in costs, difficulties in introducing new products and services or enhancing existing products and services, loss of customers, inability to retain or hire new employees effectively, information security vulnerabilities or other operational difficulties, any of which could adversely affect its business performance and operating results.

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ChargePoint currently faces competition from a number of companies, particularly in Europe, and expects to face significant competition in the future as the market for EV charging develops.

The EV charging market is relatively new and competition is still developing. ChargePoint primarily competes with smaller providers of EV charging station networks for installations, particularly in Europe. Large early-stage markets, such as Europe, require early engagement across verticals and customers to gain market share, and ongoing effort to scale channels, installers, teams and processes. Some European customers require solutions not yet available and ChargePoint’s recent entrance into Europe requires establishing itself against existing competitors. In addition, there are multiple competitors in Europe with limited funding, which could cause poor experiences, hampering overall EV adoption or trust in any particular provider.

In addition, there are other means for charging EVs, which could affect the level of demand for onsite charging capabilities at businesses. For example, Tesla Inc. continues to build out its supercharger network across the United States for its vehicles, which could reduce overall demand for EV charging at other sites. Also, third-party contractors can provide basic electric charging capabilities to potential customers seeking to have on premise EV charging capability as well as for home charging. In addition, many EV charging manufacturers, including ChargePoint, are offering home charging equipment, which could reduce demand for on premise charging capabilities of potential customers and reduce the demand for onsite charging capabilities if EV owners find charging at home to be sufficient.

Further, ChargePoint’s current or potential competitors may be acquired by third partiesthird-parties with greater available resources. In addition, certain of ChargePoint’s competitors are engaging in or have recently completed transactions to become a publicly traded company and may have ready access to the capital markets for additional funding. As a result, competitors may be able to respond more quickly and effectively than ChargePoint to new or changing opportunities, technologies, standards or customer requirements and may have the ability to initiate or withstand substantial price competition. In addition, competitors may in the future establish cooperative relationships with vendors of complementary products, technologies or services to increase the availability of their solutions in the marketplace. This competition may also materialize in the form of costly intellectual property disputes or litigation.

New competitors or alliances may emerge in the future that have greater market share, more widely adopted proprietary technologies, greater marketing expertise and greater financial resources, which could put ChargePoint at a competitive disadvantage. Future competitors could also be better positioned to serve certain segments of ChargePoint’s current or future target markets, which could create price pressure. In light of these factors, even if ChargePoint’s offerings are more effective and higher quality than those of its competitors, current or potential customers may accept competitive solutions. If ChargePoint fails to adapt to changing market conditions or continue to compete successfully with current charging providers or new competitors, its growth will be limited which would adversely affect its business and results of operations.

Failure to effectively expand ChargePoint’s sales and marketing capabilities could harm its ability to increase its customer base and achieve broader market acceptance of its solutions.

ChargePoint’s ability to grow its customer base, achieve broader market acceptance, grow revenue, and achieve and sustain profitability will depend, to a significant extent, on its ability to effectively expand its sales and marketing operations and activities. Sales and marketing expenses represent a significant percentage of its total revenue, and its operating results will suffer if sales and marketing expenditures do not contribute significantly to increasing revenue.

ChargePoint is substantially dependent on its direct sales force to obtain new customers. ChargePoint plans to continue to expand its direct sales force both domestically and internationally but it may not be able to recruit and hire a sufficient number of sales personnel, which may adversely affect its ability to expand its sales capabilities. New hires require significant training and time before they achieve full productivity, particularly in new sales territories. Recent hires and planned hires may not become as productive as quickly as anticipated and ChargePoint may be unable to hire or retain sufficient numbers of qualified individuals. Furthermore, hiring sales personnel in new countries can be costly, complex and time-consuming, and requires additional set up and upfront costs that may be disproportionate to the initial revenue expected from those countries. There is significant competition for direct sales personnel with strong sales skills and technical knowledge. ChargePoint’s ability to achieve significant revenue growth in the future will depend, in large part, on its success in recruiting, training, incentivizing and retaining a sufficient number of qualified direct sales personnel and on such personnel attaining desired productivity levels within a reasonable amount of time. ChargePoint’s business will be harmed if continuing investment in its sales and marketing capabilities does not generate a significant increase in revenue.

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ChargePoint faces risks related to health pandemics, including the recent coronavirus (“COVID-19”)COVID-19 pandemic, which could have a material and adverse effect on its business and results of operations.

The impactCOVID-19 pandemic, including the actual or contemplated return of COVID-19, including changes in consumer and business behavior, pandemic fears and market downturns, andstringent restrictions on business and individual activities,social gatherings or commerce, has created significant volatility in the global economyeconomy. Global trade conditions and has ledconsumer trends that have originated during the pandemic continue to reduced economic activity. The spread of COVID-19 has also createdpersist and may have a disruption in the manufacturing, deliverylong-lasting adverse impact on ChargePoint and overall supply chain of vehicle manufacturers and suppliers, and has led to a decrease in EV sales in markets around the world. Any sustained downturn in demand for EVs would harm ChargePoint’s business.

its industry.

The pandemic has resulted in government authorities implementing numerous measures to try to contain the COVID-19 virus, such as travel bans and restrictions, quarantines, stay-at-home or shelter-in-place orders and business shutdowns. These measures may adversely impact ChargePoint’s employees and operations and the operations of its customers, suppliers, vendors and business partners, and may negatively impact demand for EV charging stations, particularly at workplaces. These measures by government authorities may remain in place for a significant period of time and may adversely affect manufacturing and building plans, sales and marketing activities, business and results of operations.

Disruptions in the manufacturing, delivery and overall supply chain of vehicle manufacturers and suppliers, such as exacerbated port congestion and intermittent supplier shutdowns and delays, have resulted in additional costs and, to a lesser extent, component shortages, and have led to fluctuations in EV sales in markets around the world. Increased demand for personal electronics has also created a shortfall of semiconductor chips, which has caused additional supply challenges both within and outside of ChargePoint’s industry. Ongoing supply chain challenges and heightened logistics costs have affected ChargePoint’s gross margins in recent quarters and ChargePoint had initiallyexpects that gross margins will continue to be adversely affected by increased material costs and freight and logistic expenses through the remainder of the fiscal year. Costs incurred to expedite delivery of components used in charging stations or in providing installation or maintenance services or to proactively increase inventory could cause ChargePoint to raise its prices, impose surcharges or other fees or refuse to negotiate discounts. Further, any sustained downturn in demand for EVs would also harm ChargePoint’s business.
During 2020 and 2021, ChargePoint modified its business practices by recommending that all non-essential personnel work from home and cancelling or reducing physical participation in sales activities, meetings, events and conferences. ChargePoint has also implemented additional safety protocols for essential workers has implementedand cost cutting measures in order to reduce its operating costs, some of which it recently reversed, andcosts. ChargePoint may take further actions as may be required by government authorities or that it determines are in the best interests of its employees, customers, suppliers, vendors and business partners.partners, including acting to lift or re-impose initiatives. There is no certainty that such actions will be sufficient to mitigate the risks posed by the virusCOVID-19 pandemic or otherwise be satisfactory to government authorities. If significant portions of ChargePoint’s workforce are unable to work effectively, including due to illness, quarantines, social distancing, government actions or other restrictions in connection with the COVID-19 pandemic, its operations will be negatively impacted. Furthermore, if significant portions of its customers’ or potential customers’ workforces are subject to stay-at-home orders or otherwise have substantial numbers of their employees working remotely for sustained periods of time, user demand for charging stations and services will decline.

In addition, measures imposed by governments, may adversely impact ChargePoint’s employees and operations and the operations of its customers, suppliers, vendors and business partners, and may negatively impact demand for EV charging stations, particularly at workplaces.

The extent to whicheffect of the COVID-19 pandemic impactson ChargePoint’s business, prospects and results of operations will depend on future developments, which are highly uncertainthe direction and cannot be predicted, including, but not limited to, the duration of current global trends and spreadtheir sustained impact. Difficult macroeconomic conditions, such as decreases in per capita income and level of disposable income, increased and prolonged unemployment or a decline in consumer confidence as a result of the COVID-19 pandemic, as well as reduced spending by businesses, could have a material adverse effect on the demand for ChargePoint’s products and services. The effect of the COVID-19 pandemic can also vary over time and across the geographies in which ChargePoint operates. For example, variations in work-from-home policies can cause fluctuations in revenues, and ChargePoint believes that as people are not yet fully back to work ChargePoint has not yet seen the full return of commercial customer demand for ChargePoint products. The conditions caused by the COVID-19 pandemic, such as more permanent work-from-home policies, are likely to continue affecting the rate of global infrastructure spending, and thus to continue to adversely impact ChargePoint’s gross margins as the Company’s commercial business contributes higher margins than its severity, the actions to contain the virus or treat its impact,residential and when and to what extent normal economic and operating activities can resume. The COVID-19 pandemic could limit the ability of customers, suppliers, vendors and business partners to perform, including third-party suppliers’ ability to provide components and materials used in charging stations or in providing installation or maintenance services.fleet businesses. Even after the COVID-19 pandemic has subsided, ChargePoint may continue to experience an adverse impact to its business as a result of its global economic impact, including any recession that has occurred or may occur in the future.

Specifically, difficult macroeconomic conditions, such as decreases in per capita income and level of disposable income, increased and prolonged unemployment or a decline in consumer confidence as a result of the COVID-19 pandemic, as well as reduced spending by businesses, could each have a material adverse effect on the demand for ChargePoint’s products and services.

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ChargePoint relies on a limited number of suppliers and manufacturers for its charging stations. A loss of any of these partners could negatively affect its business.

ChargePoint relies on a limited number of suppliers to manufacture its charging stations, including in some cases only a single supplier for some products and components. This reliance on a limited number of manufacturers increases ChargePoint’s risks, since it does not currently have proven reliable alternatives or replacement manufacturers beyond these key parties. In the event of interruption, itincluding or resulting in a sudden failure by a supplier to meet its obligation, ChargePoint may not be able to increase capacity from other sources or develop alternate or secondary sources without incurring material additional costs and substantial delays. Thus, ChargePoint’s business could be adversely affected if one or more of its suppliers is impacted by any interruption at a particular location.

If ChargePoint experiences a significant increase in demand for its charging stations in future periods, or if it needs to replace an existing supplier, it may not be possible to supplement or replace them on acceptable terms, which may undermine its ability to deliver products to customers in a timely manner. For example, it may take a significant amount of time to identify a manufacturer that has the capability and resources to build charging stations in sufficient volume. Identifying suitable suppliers and manufacturers could be an extensive process that requires ChargePoint to become satisfied with their quality control, technical capabilities, responsiveness and service, financial stability, regulatory compliance, and labor and other ethical practices. Accordingly, a loss of any significant suppliers or manufacturers could have an adverse effect on ChargePoint’s business, financial condition and operating results. In addition, ourChargePoint’s suppliers may face supply chain risks and constraints of their own, which may impact the availability and pricing of ourits products. For example, supply chain challenges related to the COVID-19 pandemic and the global chip shortages that have impacted companies worldwide both within and outside of ourChargePoint’s industry may have adverse effects on ourits suppliers and, as a result, us.

ChargePoint.

In addition, as a result of the Merger, ChargePoint became subject to requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) to diligence, disclose and report whether or not its products contain minerals originating from the Democratic Republic of the Congo and adjoining countries, or conflict minerals. ChargePoint will incur additional costs to comply with these disclosure requirements, including costs related to determining the source of any of the relevant minerals and metals used in ourChargePoint’s products. These requirements could adversely affect the sourcing, availability and pricing of minerals used in the components used in itsChargePoint’s products. It is also possible that ChargePoint’s reputation may be adversely affected if it determines that certain of its products contain minerals not determined to be conflict-free or if it is unable to alter its products, processes or sources of supply to avoid use of such materials. ChargePoint may also encounter end-customers who require that all of the components of the products be certified as conflict free. If ChargePoint is not able to meet this requirement, such end-customers may choose to purchase products from a different company.

ChargePoint’s business is subject to risks associated with construction, cost overruns and delays, and other contingencies that may arise in the course of completing installations, and such risks may increase in the future as ChargePoint expands the scope of such services with other parties.

ChargePoint does not typically install charging stations at customer sites. These installations are typically performed by ChargePoint partners or electrical contractors with an existing relationship with the customer and/or knowledge of the site. The installation of charging stations at a particular site is generally subject to oversight and regulation in accordance with state and

local laws and ordinances relating to building codes, safety, environmental protection and related matters, and typically requires various local and other governmental approvals and permits that may vary by jurisdiction. In addition, building codes, accessibility requirements or regulations may hinder EV charger installation because they end up costing the developer or installer more in order to meet the code requirements. Meaningful delays or cost overruns may impact ChargePoint’s recognition of revenue in certain cases and/or impact customer relationships, either of which could impact ChargePoint’s business and profitability.

Furthermore, ChargePoint may in the future elect to install charging stations at customer sites or manage contractors, likely as part of offering customers a turnkey solution. Working with contractors may require ChargePoint to obtain licenses or require it or its customers to comply with additional rules, working conditions and other union requirements, which can add costs and complexity to an installation project. In addition, if these contractors are unable to provide timely, thorough and quality installation-related services, customers could fall behind their construction schedules leading to liability to ChargePoint or cause customers to become dissatisfied with the solutions ChargePoint offers.

While ChargePoint to date has not made material acquisitions, should it pursue acquisitions in the future, itoffers and ChargePoint’s overall reputation would be subjectharmed.

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Acquisitions or strategic investments could be difficult to risks associated with acquisitions.

identify and integrate, divert the attention of key management personnel, disrupt ChargePoint’s business, dilute stockholder value and adversely affect its results of operations and financial condition.

As part of ChargePoint’s business strategy, ChargePoint may acquire additional assets, products,has made and continues to consider making acquisitions of, or investments in, businesses, services or technologies or businesses that are complementary to its existing business. For example, on August 11, 2021, ChargePoint acquired ViriCiti Group B.V., a provider of electrification solutions for eBus and commercial fleets, and on October 6, 2021, ChargePoint acquired has•to•be gmbh, an e-mobility and charging software platform The process of identifying and consummating acquisitions, investments and the subsequent integration of new assets and businesses into ChargePoint’s own business, would requirerequires attention from management and could result in a diversion of resources from its existing business, which in turn could have an adverse effect on its operations. Acquired assets or businesses may not generate the expected financial results. Acquisitions or investments could also result in the use of cash, potentially dilutive issuances of equity securities, the occurrence of goodwill impairment charges, amortization expenses for other intangible assets and exposure to potential unknown liabilities of the acquired business.

Ifbusiness or investment. ChargePoint completes futuremay also incur costs and management time on transactions that are ultimately not completed. In addition, ChargePoint’s due diligence may fail to identify all of the problems, liabilities or other shortcomings or challenges of an acquired business, product, technology or investment, including issues related to intellectual property, product quality or product architecture, regulatory compliance practices, revenue recognition or other accounting practices or issues with employees or customers.

ChargePoint’s acquisitions itor investments may not ultimately strengthen its competitive position or achieve its goals and business strategy; ChargePoint may be subject to claims or liabilities assumed from an acquired company, product or technology; acquisitions or investments ChargePoint completes could be viewed negatively by its customers, investors and securities analysts; and ChargePoint may incur costs and expenses necessary to address an acquired company’s failure to comply with laws and governmental rules and regulations. Additionally, ChargePoint may be subject to litigation or other claims in connection with the acquired company, including claims from terminated employees, former stockholders or other third parties, which may differ from or be more significant than the risks ChargePoint’s business faces. An acquired company may also need to implement or improve its controls, procedures and policies, and ChargePoint may face risks associated if any of those controls, procedures or policies are insufficiently effective. ChargePoint may also face retention or cultural challenges associated with integrating employees from the acquired company into its organization. If ChargePoint is unsuccessful at integrating future acquisitions or investments, in a timely manner, or the technologies and operations associated with such acquisitions, the revenue and operating results of the combined company could be adversely affected. Any integration process may require significant time and resources, which may disrupt ChargePoint’s ongoing business and divert management’s attention, and ChargePoint may not be able to manage the integration process successfully or in a timely manner. ChargePoint may not successfully evaluate or utilize the acquired technology or personnel, realize anticipated synergies from the acquisition or investment, or accurately forecast the financial impact of an acquisition or investment transaction andor the related integration of such acquisition or investment, including accounting charges and any potential impairment of goodwill and intangible assets recognized in connection with such acquisitions.transaction. ChargePoint may have to pay cash, incur debt, or issue equity or equity-linked securities to pay for any future acquisitions or investments, each of which could adversely affect its financial condition or the market price of its Common Stock. Furthermore, the sale of equity or issuance of equity-linked debt to finance any future acquisitionssuch transaction could result in dilution to ChargePoint’s stockholders. The occurrence of any of these risks could harm ChargePoint’s business, operating results and financial condition.

If ChargePoint is unable to attract and retain key employees and hire qualified management, technical, engineering and sales personnel, its ability to compete and successfully grow its business would be harmed.

ChargePoint’s success depends, in part, on its continuing ability to identify, hire, attract, train and develop and retain highly qualified personnel. The inability to do so effectively would adversely affect its business. ChargePoint’s future performance also depends on the continued services and continuing contributions of its senior management to execute on its business plan and to identify and pursue new opportunities and product innovations. The loss of services of senior management, or the ineffective management of any leadership transitions, especially within ChargePoint’s sales organization, could significantly delay or prevent the achievement of its development and strategic objectives, which could adversely affect its business, financial condition and operating results.

Competition for employees can be intense, particularly in Silicon Valley where ChargePoint is headquartered, and the ability to attract, hire and retain them depends on ChargePoint’s ability to provide competitive compensation. ChargePoint may not be able to attract, assimilate, develop or retain qualified personnel in the future, and failure to do so could adversely affect its business, including the execution of its global business strategy.

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ChargePoint is expanding operations internationally, which will expose it to additional tax, compliance, market and other risks.

ChargePoint’s primary operations are in the United States and it maintains contractual relationships with parts and manufacturing suppliers in Asia, Mexico and other locations. Also, ChargePoint is continuing to invest to increase its presence in Europe, including its acquisitions of ViriCiti Group B.V. and has•to•be gmbh, and to expand a primarily softwareresearch and development teamteams in India.India and Reading, England. Managing this expansionthese expansions requires additional resources and controls, and could subject ChargePoint to risks associated with international operations, including:

•conformity with applicable business customs, including translation into foreign languages and associated expenses;

•lack of availability of government incentives and subsidies;

•challenges in arranging, and availability of, financing for customers;

•potential changes to its established business model;

•cost of alternative power sources, which could vary meaningfully outside the United States;

•difficulties in staffing and managing foreign operations in an environment of diverse culture, laws, and customers, and the increased travel, infrastructure, and legal and compliance costs associated with international operations;

•installation challenges;

•differing driving habits and transportation modalities in other markets;

•different levels of demand among commercial, fleet and residential customers;

•compliance with multiple, potentially conflicting and changing governmental laws, regulations, certifications, and permitting processes including environmental, banking, employment, tax, information security, privacy, and data protection laws and regulations such as the California Consumer Privacy Act (“CCPA”) and newer state privacy laws in the U.S. including in Virginia and Colorado, the European Union (the “EU”) General Data Protection Regulation (“GDPR”), national legislation implementing the same and changing requirements for legally transferring data out of the European Economic Area;

•compliance with U.S. and foreign anti-bribery laws including the Foreign Corrupt Practices Act (“FCPA”) and the United Kingdom Anti-Bribery Act;

Act of 2020 (the “Anti-Bribery Act”);

•conforming products to various international regulatory and safety requirements as well as charging and other electric infrastructures;

•difficulty in establishing, staffing and managing foreign operations;

•difficulties in collecting payments in foreign currencies and associated foreign currency exposure;

•restrictions on repatriation of earnings;

•compliance with potentially conflicting and changing laws of taxing jurisdictions and compliance with applicable U.S. tax laws as they relate to international operations, the complexity and adverse consequences of such tax laws, and potentially adverse tax consequences due to changes in such tax laws; and

•regional economic and political conditions.

As a result of these risks, ChargePoint’s current expansion efforts and any potential future international expansion efforts may not be successful.

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Some members of ChargePoint’s management have limited experience in operating a public company.

Some of ChargePoint’s executive officers have limited experience in the management of a publicly-traded company. The management team may not successfully or effectively continue to manage the transition to a public company that will be subject to significant regulatory oversight and reporting obligations under federal securities laws.
Their limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage in that it is likely that an

increasing amount of their time may be devoted to these activities, which will result in less time being devoted to the management and growth of our company.ChargePoint. ChargePoint may not have adequate personnel with the appropriate level of knowledge, experience and training in the accounting policies, practices or internal control over financial reporting required of public companies. The development and implementation of the standards and controls and the hiring of experienced personnel necessary to achieve the level of accounting standards required of a public company may require costs greater than expected.

ChargePoint may need to raise additional funds and these funds may not be available when needed.

ChargePoint may need to raise additional capital in the future to further scale its business and expand to additional markets. ChargePoint may raise additional funds through the issuance of equity, equity-related or debt securities, or through obtaining credit from government or financial institutions. ChargePoint cannot be certain that additional funds will be available on favorable terms when required, or at all. If ChargePoint cannot raise additional funds when needed, its financial condition, results of operations, business and prospects could be materially and adversely affected. If ChargePoint raises funds through the issuance of debt securities or through loan arrangements, the terms of which could require significant interest payments, contain covenants that restrict ChargePoint’s business, or other unfavorable terms. In addition, to the extent ChargePoint raises funds through the sale of additional equity securities, ChargePoint stockholders would experience additional dilution.

ChargePoint’s future revenue growth will depend in significant part on its ability to increase sales of its products and services to fleet operators.

ChargePoint’s future revenue growth will depend in significant part on its ability to increase sales of its products and services to fleet operators. The electrification of fleets is an emerging market, and fleet operators may not adopt EVs on a widespread basis and on the timelines ChargePoint anticipates. In addition to the factors affecting the growth of the EV market generally, transitioning to an EV fleet can be costly and capital intensive, which could result in slower than anticipated adoption. The sales cycle could also be longer for sales to fleet operators, as they are often larger organizations, with more formal procurement processes than smaller commercial site hosts. Fleet operators may also require significant additional services and support, and if ChargePoint is unable to provide such services and support, it may adversely affect its ability to attract additional fleet operators as customers. Any failure to attract and retain fleet operators as customers in the future would adversely affect ChargePoint’s business and results of operations.

Computer malware, viruses, ransomware, hacking, phishing attacks and similar disruptions could result in security and privacy breaches and interruption in service, which could harm ChargePoint’s business.

Computer malware, viruses, physical or electronic break-ins and similar disruptions could lead to interruption and delays in ChargePoint’s services and operations and loss, misuse or theft of data. Computer malware, viruses, ransomware, hacking and phishing attacks against online networks have become more prevalent and may occur on ChargePoint’s systems in the future. Any attempts by cyber attackers to disrupt ChargePoint’s services or systems, if successful, could harm its business, introduce liability to data subjects, result in the misappropriation of funds, be expensive to remedy, subject ChargePoint to substantial fines, penalties, damages and other liabilities under applicable laws and regulations, lead to a loss of protection of its intellectual property or trade secrets and damage its reputation or brand. Insurance may not be sufficient to cover significant expenses and losses related to cyber-attacks. Efforts to prevent cyber attackers from entering computer systems are expensive to implement, and ChargePoint may not be able to cause the implementation or enforcement of such preventions with respect to its third-party vendors. Though it is difficult to determine what, if any, harm may directly result from any specific interruption or attack, any failure to maintain performance, reliability, security and availability of systems and technical infrastructure may, in addition to other losses, harm ChargePoint’s reputation, brand and ability to attract customers.

ChargePoint has previously experienced, and may in the future experience, service disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, third-party service providers, human or software errors and capacity constraints. If ChargePoint’s services are unavailable when users attempt to access them, they may seek other services, which could reduce demand for its solutions from target customers.

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ChargePoint has processes and procedures in place designed to enable it to quickly recover from a disaster or catastrophe and continue business operations and has tested this capability under controlled circumstances. However, there are several factors ranging from human error to data corruption that could materially impact the efficacy of such processes and procedures,

including by lengthening the time services are partially or fully unavailable to customers and users. It may be difficult or impossible to perform some or all recovery steps and continue normal business operations due to the nature of a particular disaster or catastrophe, especially during peak periods, which could cause additional reputational damages, or loss of revenue, any of which could adversely affect its business and financial results.

ChargePoint’s headquarters and other facilities are located in an active earthquake zone; an earthquake or other types of natural disasters or resource shortages, including public safety power shut-offs that have occurred and willmay continue to occur in California, could disrupt and harm its operations and those of ChargePoint’s customers.

ChargePoint conducts a majority of its operations in the San Francisco Bay area in an active earthquake zone. The occurrence of a natural disaster such as an earthquake, drought, flood, fire (such as the recent extensive wildfires in California), localized extended outages of critical utilities (such as California’s public safety power shut-offs) or transportation systems, or any critical resource shortages could cause a significant interruption in its business, damage or destroy its facilities or inventory,inventories, and cause it to incur significant costs, any of which could harm its business, financial condition and results of operations. The insurance ChargePoint maintains against fires, earthquakes and other natural disasters may not be adequate to cover losses in any particular case.

In addition, rolling public safety power shut offs in California or other states can affect user acceptance of EVs, as charging may be unavailable at the desired times, or at all during these events. These shut offs could also affect the ability of fleet operators to charge their EVs, which, for example, could adversely affect transportation schedules or any service level agreements to which either ChargePoint or the fleet operator may be a party. If these events persist, the demand for EVs could decline, which would result in reduced demand for charging solutions.

Seasonality may cause fluctuations in ChargePoint’s revenue.
ChargePoint believes there are seasonal factors that may cause ChargePoint to record higher revenue in some quarters compared with others. A significant share of ChargePoint’s annual revenues are typically generated in the fourth fiscal quarter, which coincides with customers with a December 31 year-end choosing to spend remaining unused portions of their budgets. ChargePoint’s revenues are typically lower in its fiscal first quarter than its preceding fourth quarter, due to unfavorable weather conditions which result in a decrease in construction activity during the winter months, periods of wet weather and times when other weather and climate conditions would impair construction activity. While ChargePoint believes it has visibility into the seasonality of its business, various factors, including difficult weather conditions (such as flooding, hurricanes, prolonged rain or periods of unseasonably cold or snowstorms) in any quarter, may materially and adversely affect its business, financial condition and results of operations.
Risks Related to the EV Market

Changes to fuel economy standards or the success of alternative fuels may negatively impact the EV market and thus the demand for ChargePoint’s products and services.

As regulatory initiatives have required an increase in the mileage capabilities of cars, consumption of renewable transportation fuels, such as ethanol and biodiesel, and consumer acceptance of EVs and other alternative vehicles has been increasing. If fuel efficiency of non-electric vehicles continues to rise, whether as the result of regulations or otherwise, and affordability of vehicles using renewable transportation fuels improves, the demand for electric and high energy vehicles could diminish. In addition, the EV fueling model is different than gas or other fuel models, requiring behavior change and education of influencers, consumers and others such as regulatory bodies. Developments in alternative technologies, such as advanced diesel, ethanol, fuel cells or compressed natural gas, or improvements in the fuel economy of the internal combustion engine, may materially and adversely affect demand for EVs and EV charging stations. For example, fuel which is abundant and relatively inexpensive in the United States, such as compressed natural gas, may emerge as a preferred alternative to petroleum-based propulsion. Regulatory bodies may also adopt rules that substantially favor certain alternatives to petroleum-based propulsion over others, which may not necessarily be EVs. ThisEVs, or may adopt rules to eliminate, modify or reduce penalties or incentives to maintain minimum fuel economy standards. Any of these changes may impose additional obstacles to the purchase of EVs or the development of a more ubiquitous EV market. Finally, the current litigation between the state of California and the National Highway Traffic Safety Administration (“NHTSA”) could impact California’s ability to set fuel economy standards that encourage the adoption of EVs, and could be followed by many other states. If any of the above cause or contribute to consumers or businesses to no longer purchase EVs or purchase them at a lower rate, it would materially and adversely affect ChargePoint’s business, operating results, financial condition and prospects.

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ChargePoint’s future growth and success is highly correlated with and thus dependent upon the continuing rapid adoption of EVs for passenger and fleet applications.

ChargePoint’s future growth is highly dependent upon the adoption of EVs by businesses and consumers. The market for EVs is still rapidly evolving, characterized by rapidly changing technologies, competitive pricing and competitive factors, evolving government regulation and industry standards and changing consumer demands and behaviors, changing levels of concern related to environmental issues and governmental initiatives related to climate change and the environment generally. Although demand for EVs has grown in recent years, there is no guarantee of continuing future demand. If the market for EVs develops more slowly than expected, or if demand for EVs decreases, ChargePoint’s business, prospects, financial condition and operating results would be harmed. The market for EVs could be affected by numerous factors, such as:

•perceptions about EV features, quality, safety, performance and cost;

•perceptions about the limited range over which EVs may be driven on a single battery charge;

•competition, including from other types of alternative fuel vehicles, plug-in hybrid electric vehicles and high fuel-economy internal combustion engine vehicles;

•volatility in the cost of oil and gasoline;

•concerns regarding the stability of the electrical grid;

•the decline of an EV battery’s ability to hold a charge over time;

•availability of service for EVs;

•consumers’ perception about the convenience and cost of charging EVs;

•increases in fuel efficiency;

•government regulations and economic incentives, including adverse changes in, or expiration of, favorable tax incentives related to EVs, EV charging stations or decarbonization generally;

•relaxation of government mandates or quotas regarding the sale of EVs; and

•concerns about the future viability of EV manufacturers.

In addition, sales of vehicles in the automotive industry can be cyclical, which may affect growth in acceptance of EVs. It is uncertain how macroeconomic factors will impact demand for EVs, particularly since they can be more expensive than traditional gasoline-powered vehicles, when the automotive industry globally has been experiencing a recent decline in sales. Furthermore, because fleet operators often make large purchases of EVs, this cyclicality and volatility in the automotive industry may be more pronounced with commercial purchasers, and any significant decline in demand from these customers could reduce demand for EV charging and ChargePoint’s products and services in particular.

Demand for EVs may also be affected by factors directly impacting automobile prices or the cost of purchasing and operating automobiles, such as sales and financing incentives, prices of raw materials and parts and components, cost of fuel and governmental regulations, including tariffs, import regulation and other taxes. Volatility in demand may lead to lower vehicle unit sales, which may result in reduced demand for EV charging solutions and therefore adversely affect ChargePoint’s business, financial condition and operating results.

The EV market currently benefits from the availability of rebates, tax credits and other financial incentives from governments, utilities and others to offset the purchase or operating cost of EVs and EV charging stations. In particular, ChargePoint’s marketing efforts have heavily relied upon federal tax credits available to purchasers of its EV charging stations that effectively provide purchasers with a significantly discounted purchase price. The reduction, modification, or elimination of such benefits could cause reduced demand for EVs and EV charging stations, which would adversely affect ChargePoint’s financial results.

The U.S. federal government, foreign governments and some state and local governments provide incentives to end users and purchasers of EVs and EV charging stations in the form of rebates, tax credits and other financial incentives, such as payments for regulatory credits. The EV market relies on these governmental rebates, tax credits and other financial incentives to significantly lower the effective price of EVs and EV charging stations to customers. For example, the Infrastructure
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Investment and Jobs Act signed into law on November 15, 2021 would provide additional funding for EVs and EV charging infrastructure through the creation of new programs and grants and the expansion of existing programs, including $7.5 billion for EV charging along highway corridors. However, these incentives may expire on a particular date, end when the allocated funding is exhausted, or be reduced or terminated as a matter of regulatory or legislative policy. In particular, ChargePoint has heavily relied uponbenefited from the availability of federal tax credits to purchasers under Section 30C of the Code to market its EV charging stations, which can effectively provide such purchasers with up to a 30% discount off the purchase price of ChargePoint’s EV charging stations. The credits under Section 30C of the Code are set to expire on December 31, 2021 and thus would not be available to ChargePoint’s customers unless extended. There can be no assurance that the credits under Section 30C of the Code will be extended, or if extended, will not be otherwise reduced.extended. Any reduction in rebates, tax credits or other financial incentives, including the credit under Section 30C of the Code, could materially reduce the demand for EVs and ChargePoint’s solutions and, as a result, may adversely impact ChargePoint’s business and expansion potential.

ChargePoint also derives other revenue from regulatory credits. If government support of these credits declines, ChargePoint’s ability to generate this other revenue in the future would be adversely affected. Recently,In years prior to fiscal year 2021, ChargePoint has derived a slight majority of its other revenue from regulatory credits, and ChargePoint expectscredits. However, revenue from this source will decline as a percentage of other and total revenue has declined in recent quarters and it may continue to decline over time. Further, the availability of such credits may decline even with general governmental support of the transition to EV infrastructure. For example, in September 2020, California Governor Gavin Newsom issued Executive Order N-79-20 (the “EO”), announcing a target for all in-state sales of new passenger cars and trucks to be zero-emission by 2035. While the EO calls for the support of EV infrastructure, the form of this support is unclear. If California or other jurisdictions choose to adopt regulatory mandates instead of establishing or continuing green energy credit regimes for EV infrastructure, ChargePoint’s revenue from these credits would be adversely impacted.

The EV charging market is characterized by rapid technological change,changes often due to technical improvements, regulatory requirements and customer requirements, which requires ChargePoint to continue to develop new products and product innovations. Any delays in such development could adversely affect market adoption of its products and ChargePoint’s financial results.

Continuing technological changes in battery and other EV technologies could adversely affect adoption of current EV charging technology and/or ChargePoint’s products. ChargePoint’s future success will depend upon its ability to develop and introduce a variety of new capabilities and innovations to its existing product offerings, as well as introduce a variety of new product offerings, to address the changing needs of the EV charging market. As new products are introduced, gross margins tend to decline in the near term and improves as the product become more mature and with a more efficient manufacturing process.

As EV technologies change or governmental regulations impose new requirements on EV charging technology, ChargePoint may need to upgrade or adapt its charging station technology and introduce new products and services in order to serve vehicles that have the latest technology, in particular battery cell technology, or comply with new governmental regulations, which could involve substantial costs. Even if ChargePoint is able to keep pace with changes in technology and develop new products and services, its research and development expenses could increase, its gross margins could be adversely affected in some periods and its prior products could become obsolete or non-compliant with governmental regulations more quickly than expected.

ChargePoint cannot guarantee that any new products will be released in a timely manner, or at all, or achieve market acceptance. Delays in delivering new products that meet customer requirements could damage ChargePoint’s relationships with customers and lead them to seek alternative providers. Delays in introducing products and innovations or the failure to offer innovative products or services at competitive prices may cause existing and potential customers to purchase ChargePoint’s competitors’ products or services.

Finally, new or changing state or federal regulations may result in delays related to the development of new products or modifications to existing products in order to come into compliance and any such delays may result in customer’s selecting alternative providers or result in delays related to ChargePoint’s ability to install, sell or distribute its charging station technology.

If ChargePoint is unable to devote adequate resources to develop products or cannot otherwise successfully develop products or services that meet customer and regulatory requirements on a timely basis or that remain competitive with technological alternatives, its products and services could lose market share, its revenue willmay decline, it may experience higher operating losses and its business and prospects willmay be adversely affected.

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Certain statements we makeChargePoint makes about estimates of market opportunity and forecasts of market growth may prove to be inaccurate.

From time to time, we makeChargePoint makes statements with estimates of the addressable market for ChargePoint’s solutions and the EV market in general. Market opportunity estimates and growth forecasts, whether obtained from third-party sources or developed internally, are subject to significant uncertainty and are based on assumptions and estimates that may prove to be inaccurate. This is especially so at the present time due to the uncertain and rapidly changing projections of the severity, magnitude and duration of the current COVID-19 pandemic. The estimates and forecasts relating to the size and expected growth of the target EV market, market demand and adoption, capacity to address this demand and pricing may also prove to be inaccurate. In particular, estimates regarding the current and projected EV market opportunity are difficult to predict. The estimated addressable EV market may not materialize for many years, if ever, and even if the markets meet the size estimates and growth forecasts, ChargePoint’s business could fail to grow at similar rates.

Risks Related to ChargePoint’s Technology, Intellectual Property and Infrastructure

ChargePoint expects to incur research and development costs and devote significant resources to developing new products, which could significantly reduce its profitability and may never result in revenue to ChargePoint.

ChargePoint’s future growth depends on penetrating new markets, adapting existing products to new applications and customer requirements, and introducing new products that achieve market acceptance. ChargePoint plans to incur significant research and development costs in the future as part of its efforts to design, develop, manufacture and introduce new products and enhance existing products. ChargePoint’s research and development expenses were $25.4$102.5 million, $75.0 million, $69.5 million and $50.5 million during the threenine months ended April 30 201,October 31, 2021, and during the fiscal years ended January 31, 2021, 2020 and 2019, respectively, and are likely to grow in the future. Further, ChargePoint’s research and development program may not produce successful results, and its new products may not achieve market acceptance, create additional revenue or become profitable.

ChargePoint may need to defend against intellectual property infringement or misappropriation claims, which may be time-consuming and expensive.

From time to time, the holders of intellectual property rights may assert their rights and urge ChargePoint to take licenses, and/or may bring suits alleging infringement, misappropriation or misappropriationother violation of such rights. There can be no assurance that ChargePoint will be able to mitigate the risk of potential suits or other legal demands by competitors or other third parties.third-parties. Accordingly, ChargePoint may consider entering into licensing agreements with respect to such rights, although no assurance can be given that such licenses can be obtained on acceptable terms or that litigation will not occur, and such licenses and associated litigation could significantly increase ChargePoint’s operating expenses. In addition, if ChargePoint is determined to have or believes there is a high likelihood that it has infringed upon, misappropriated or misappropriatedotherwise violated a third party’sthird-party’s intellectual property rights, it may be required to cease making, selling or incorporating certain key components or intellectual property into the products and services it offers, to pay substantial damages and/or royalties, to redesign its products and services, and/or to establish and maintain alternative branding. In addition, to the extent that ChargePoint’s customers and business partners become the subject of any allegation or claim regarding the infringement, misappropriation or misappropriationother violation of intellectual property rights related to ChargePoint’s products and services, ChargePoint may be required to indemnify such customers and business partners. If ChargePoint were required to take one or more such actions, its business, prospects, operating results and financial condition could be materially and adversely affected. In addition, any litigation or claims, whether or not valid, could result in substantial costs, negative publicity and diversion of resources and management attention.

ChargePoint’s business may be adversely affected if it is unable to protect its technology and intellectual property from unauthorized use by third parties.

ChargePoint’s success depends, at least in part, on ChargePoint’s ability to obtain, maintain, enforce and protect its core technology and intellectual property. To accomplish this, ChargePoint relies on, and plans to continue relying on, a combination of patents, trade secrets (including know-how), employee and third-party nondisclosure agreements, copyright, trademarks, intellectual property licenses and other contractual rights to retain ownership of, and protect, its technology. Despite ChargePoint’s efforts to obtain, maintain, enforce and protect intellectual property rights, there can be no assurance that these steps will be available in all cases or will be adequate to prevent ChargePoint’s competitors or other third-parties from copying, reverse engineering, or otherwise obtaining and using its technology or products or seeking court declarations that they do not infringe, misappropriate or otherwise violate its intellectual property. Failure to adequately protect its technology and intellectual property could result in competitors offering similar products, potentially resulting in the loss of some of ChargePoint’s competitive advantage and a decrease in revenue which would adversely affect its business, prospects, financial condition and operating results.

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The measures ChargePoint takes to protect its technology intellectual property from unauthorized use by others may not be effective for various reasons, including the following:

•any patent applications ChargePoint submits may not result in the issuance of patents;

•the scope of issued patents may not be broad enough to protect its inventions and proprietary rights;

•any issued patents may be challenged by competitors and/or invalidated by courts or governmental authorities;

•ChargePoint may not be the first inventor of the subject matter to which it has filed a particular patent application, and it may not be the first party to file such a patent application;

•Patents have a finite term, and competitors and other third-parties may offer identical or similar products after the expiration of ChargePoint’s patents that cover such products;
•the costs associated with enforcing patents, confidentiality and invention agreements or other intellectual property rights may make aggressive enforcement impracticable;

•current and future competitors may circumvent patents or independently develop similar trade secrets or works of authorship, such as software;

•know-how and other proprietary information ChargePoint purports to hold as a trade secret may not qualify as a trade secret under applicable laws;

•ChargePoint’s employees, contractors or business partners may breach their confidentiality, non-disclosure, and

non-use obligations; and

•proprietary designs and technology embodied in ChargePoint’s products may be discoverable by third- partiesthird-parties through means that do not constitute violations of applicable laws.

Patent, trademark, and trade secret laws vary significantly throughout the world. Some foreign countries do not protect intellectual property rights to the same extent as do the laws of the United States. Further, policing the unauthorized use of its intellectual property in foreign jurisdictions may be difficult or impossible. Therefore, ChargePoint’s intellectual property rights may not be as strong or as easily enforced outside of the United States.

Certain patents in the EV space may come to be considered “standards essential.” If this is the case with respect to any of ChargePoint’s patents, it may be required to license certain technology on “fair, reasonable and non-discriminatory” terms, decreasing revenue. Further, competitors, vendors, or customers may, in certain instances, be free to create variations or derivative works of ChargePoint technology and intellectual property, and those derivative works may become directly competitive with ChargePoint’s offerings. Finally, ChargePoint may not be able to leverage, or obtain ownership of, all technology and intellectual property developed by ChargePoint’s vendors in connection with design and manufacture of ChargePoint’s products, thereby jeopardizing ChargePoint’s ability to obtain a competitive advantage over its competitors.

It is ChargePoint’s policy to enter into confidentiality and invention assignment agreements with its employees and contractors that have developed material intellectual property for ChargePoint, but these agreements may not be self-executing and may not otherwise adequately protect ChargePoint’s intellectual property, particularly with respect to conflicts of ownership relating to work product generated by employees and contractors. Furthermore, ChargePoint cannot be certain that these agreements will not be breached, and that third-parties will not gain access to its trade secrets, know-how and other proprietary technology. Third-parties may also independently develop the same or substantially similar proprietary technology. Monitoring unauthorized use of ChargePoint’s intellectual property is difficult and costly, as are the steps ChargePoint has taken or will take to prevent misappropriation.
To prevent unauthorized use of ChargePoint’s intellectual property, it may be necessary to prosecute actions for infringement, misappropriation or other violation of ChargePoint’s intellectual property against third-parties. Any such action could result in significant costs and diversion of ChargePoint’s resources and management’s attention, and there can be no assurance that ChargePoint will be successful in any such action. Furthermore, many of ChargePoint’s current and potential competitors have the ability to dedicate substantially greater resources to enforce their intellectual property rights than ChargePoint does. Accordingly, despite its efforts, ChargePoint may not be able to prevent third-parties from infringing, misappropriating or otherwise violating its intellectual property. Any of the foregoing may adversely affect ChargePoint’s revenues or results of operations.
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The current lack of international standards may lead to uncertainty, additional competition and further unexpected costs.

Lack of industry standards for EV station management, coupled with utilities and other large organizations mandating their own adoption of specifications that have not become widely adopted in the industry, may hinder innovation or slow new product or new feature introduction.

In addition, automobile manufacturers may choose to utilize their own proprietary systems, which could lock out competition for EV charging stations, or to use their size and market position to influence the market, which could limit ChargePoint’s market and reach to customers, negatively impacting its business.

Further, should regulatory bodies later impose a standard that is not compatible with ChargePoint’s infrastructure, it may incur significant costs to adapt its business model to the new regulatory standard, which may require significant time and, as a result, may have a material and adverse effect on its revenue or results of operations.

ChargePoint’s technology could have undetected defects, errors or bugs in hardware or software which could reduce market adoption, damage its reputation with current or prospective customers, and/or expose it to product liability and other claims that could materially and adversely affect its business.

ChargePoint may be subject to claims that charging stations have malfunctioned and persons were injured or purported to be injured. Any insurance that ChargePoint carries may not be sufficient or it may not apply to all situations. Similarly, to the extent that such malfunctions are related to components obtained from third-party vendors, such vendors may not assume responsibility for such malfunctions. In addition, ChargePoint’s customers could be subjected to claims as a result of such incidents and may bring legal claims against ChargePoint to attempt to hold it liable. Any of these events could adversely affect ChargePoint’s brand, relationships with customers, operating results or financial condition.

Across ChargePoint’s product line, ChargePoint develops equipment solutions based on preferred second source or common off-the-shelf vendors. However, due to its designs, ChargePoint does rely on some single source vendors, the unavailability or failure of which can pose risks to supply chain or product shipping situations.

Furthermore, ChargePoint’s software platform is complex, developed for over a decade by many developers, and includes a number of licensed third-party commercial and open-source software libraries. ChargePoint’s software has contained defects and errors and may in the future contain undetected defects or errors. ChargePoint is continuing to evolve the features and functionality of its platform through updates and enhancements, and as it does, it may introduce additional defects or errors that may not be detected until after deployment to customers. In addition, if ChargePoint’s products and services, including any updates or patches, are not implemented or used correctly or as intended, inadequate performance and disruptions in service may result.

Any defects or errors in product or services offerings, or the perception of such defects or errors, or other performance problems could result in any of the following, each of which could adversely affect ChargePoint’s business and results of its operations:

•expenditure of significant financial and product development resources, including recalls, in efforts to analyze, correct, eliminate or work around errors or defects;

•loss of existing or potential customers or partners;

•interruptions or delays in sales;

•delayed or lost revenue;

•delay or failure to attain market acceptance;

•delay in the development or release of new functionality or improvements;

•negative publicity and reputational harm;

•sales credits or refunds;

•exposure of confidential or proprietary information;

•diversion of development and customer service resources;

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•breach of warranty claims;

•legal claims under applicable laws, rules and regulations; and

•an increase in collection cycles for accounts receivable or the expense and risk of litigation.

Although ChargePoint has contractual protections, such as warranty disclaimers and limitation of liability provisions, in many of its agreements with customers, resellers and other business partners, such protections may not be uniformly implemented in all contracts and, where implemented, may not fully or effectively protect from claims by customers, reseller,resellers, business partners or other third parties.third-parties. Any insurance coverage or indemnification obligations of suppliers may not adequately cover all such claims or cover only a portion of such claims. A successful product liability, warranty, or other similar claim could have an adverse effect on ChargePoint’s business, operating results and financial condition. In addition, even claims that ultimately are unsuccessful could result in expenditure of funds in litigation, divert management’s time and other resources and cause reputational harm.

Some of ChargePoint’s products contain open-source software, which may pose particular risks to its proprietary software, products and services in a manner that could harm its business.
ChargePoint uses open-source software in its products and anticipates using open-source software in the future. Some open-source software licenses require those who distribute open-source software as part of their own software product to publicly disclose all or part of the source code to such software product or to make available any derivative works of the open-source code on unfavorable terms or at no cost, and ChargePoint may be subject to such terms. The terms of many open-source licenses have not been interpreted by U.S. or foreign courts, and there is a risk that open source software licenses could be construed in a manner that imposes unanticipated conditions or restrictions on ChargePoint’s ability to provide or distribute ChargePoint’s products or services.
In addition, ChargePoint relies on some open-source software and libraries issued under the General Public License (or similar “copyleft” licenses) for development of its products and may continue to rely on similar copyleft licenses. Third-parties may assert a copyright claim against ChargePoint regarding its use of such software or libraries, which could lead to the adverse results listed above.a limitation of ChargePoint’s use of such software or libraries. Use of such software or libraries may also force ChargePoint to provide third parties,third-parties, at no cost, the source code to its proprietary software, which may decrease revenue and lessen any competitive advantage ChargePoint has due to the secrecy of its source code.

ChargePoint could face claims from third-parties claiming ownership of, or demanding release of, the open-source software or derivative works that ChargePoint developed using such software, which could include ChargePoint’s proprietary source code, or otherwise seeking to enforce the terms of the applicable open-source license. These claims could result in litigation and could require ChargePoint to make its software source code freely available, purchase a costly license or cease offering the implicated products or services unless and until ChargePoint can re-engineer them to avoid infringement, which may be a costly and time-consuming process, and ChargePoint may not be able to complete the re-engineering process successfully.
Additionally, the use of certain open-source software can lead to greater risks than use of third-party commercial software, as open-source licensors generally do not provide warranties or controls on the origin of software. There is typically no support available for open-source software, and ChargePoint cannot ensure that the authors of such open-source software will implement or push updates to address security risks or will not abandon further development and maintenance. Many of the risks associated with the use of open-source software, such as the lack of warranties or assurances of title or performance, cannot be eliminated, and could, if not properly addressed, have an adverse effect on ChargePoint’s business and results.
Interruptions, delays in service or inability to increase capacity, including internationally, at third-party data center facilities could impair the use or functionality of ChargePoint’s subscription services, harm its business and subject it to liability.

ChargePoint currently serves customers from third-party data center facilities operated by Amazon Web Services (“AWS”) located in the United States, Europe and Canada. In addition to AWS, some ChargePoint services are housed in third-party data centers operated by Rackspace Technology in the United States. Any outage or failure of such data centers could negatively affect ChargePoint’s product connectivity and performance. ChargePoint’s primary environments are behind the Content Delivery Network operated by Cloudflare, Inc. (“Cloudflare”), and any interruptions of Cloudflare’s services could negatively affect ChargePoint’s product connectivity and performance. Furthermore, ChargePoint depends on connectivity from its charging stations to its data centers through cellular service providers, such as Verizon Wireless.Verizon. Any incident affecting a data center facility’s or a cellular service provider’s infrastructure or operations, whether caused by fire, flood, severe storm, earthquake, power loss, telecommunications failures, breach of security protocols, computer viruses and disabling devices, failure of access
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control mechanisms, natural disasters, war, criminal act, military actions, terrorist attacks and other similar events could negatively affect the use, functionality or availability of ChargePoint’s services.

Any damage to, or failure of, ChargePoint’s systems, or those of its third-party providers, could interrupt or hinder the use or functionality of its services. Impairment of or interruptions in ChargePoint’s services may reduce revenue, subject it to claims and litigation, cause customers to terminate their subscriptions, and adversely affect renewal rates and its ability to attract new customers. ChargePoint’s business will also be harmed if customers and potential customers believe its products and services are unreliable.

Customer-Related Risks

ChargePoint may be unable to leverage customer data in all geographic locations, and this limitation may impact research and development operations.

ChargePoint relies on data collected through charging stations or its mobile application, including usage data and geolocation data. ChargePoint uses this data in connection with the research, development and analysis of its technologies. ChargePoint’s inability to obtain necessary rights to use this data or freely transfer this data out of, for example, the European Economic Area, could result in delays or otherwise negatively impact ChargePoint’s research and development efforts.

If ChargePoint fails to offer high-quality support to station owners and drivers, its business and reputation will suffer.

Once a customer has installed ChargePoint charging stations and subscribed to ChargePoint’s services, station owners and drivers will rely on ChargePoint to provide support services to resolve any issues that might arise in the future. Rapid and high-quality customer support is important so station owners can provide charging services and drivers can receive reliable charging for their EVs. The importance of high-quality customer support will increase as ChargePoint seeks to expand its business and pursue new customers and geographies. If ChargePoint does not quickly resolve issues and provide effective support, its ability to retain customers or sell additional products and services to existing customers could suffer and its brand and reputation could be harmed.

ChargePoint’s business will depend on customers renewing their services subscriptions. If customers do not continue to use its subscription offerings or if they fail to add more stations, its business and operating results will be adversely affected.

In addition to selling charging station hardware, ChargePoint also depends on customers continuing to subscribe to its EV charging services and extended warranty coverages. Therefore, it is important that customers renew their subscriptions when the contract term expires and add additional charging stations and services to their subscriptions. Customers may decide not to renew their subscriptions with a similar contract period, at the same prices or terms or with the same or a greater number of users, stations or level of functionality. Customer retention may decline or fluctuate as a result of a number of factors, including satisfaction with software and features, functionality of the charging stations, prices, features and pricing of competing products, reductions in spending levels, mergers and acquisitions involving customers and deteriorating general economic conditions.

If customers do not renew their subscriptions, if they renew on less favorable terms or if they fail to add products or services, ChargePoint’s business and operating results will be adversely affected.

Changes in subscriptions or pricing models may not be reflected in near-term operating results.

ChargePoint generally recognizes subscription revenue from customers ratably over the terms of their contracts. As a result, most of the subscription revenue reported in each quarter is derived from the recognition of deferred revenue relating to subscriptions entered into during previous quarters. Consequently, a decline in new or renewed subscriptions in any single quarter will likely have only a small impact on revenue for that quarter. However, such a decline will negatively affect revenue in future quarters. In addition, the severity and duration of events may not be predictable, and their effects could extend beyond a single quarter. Accordingly, the effect of significant downturns in sales and market acceptance of subscription services, and potential changes in pricing policies or rate of renewals, may not be fully apparent until future periods.

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Financial, Tax and Accounting-Related Risks

ChargePoint’s financial condition and results of operations are likely to fluctuate on a quarterly basis in future periods, which could cause its results for a particular period to fall below expectations, resulting in a decline in the price of its Common Stock.

ChargePoint’s financial condition and results of operations have fluctuated in the past and may continue to fluctuate in the future due to a variety of factors, many of which are beyond its control.

In addition to the other risks described herein, the following factors could also cause ChargePoint’s financial condition and results of operations to fluctuate on a quarterly basis:

•the timing and volume of new sales;

•fluctuations in service costs, particularly due to unexpected costs of servicing and maintaining charging stations;

•the timing of new product introductions, which can initially have lower gross margins;

•the introduction of new products by competitors, changes in pricing or other factors impacting competition;

•weaker than anticipated demand for charging stations, whether due to changes in government incentives and policies or due to other conditions;

•fluctuations in sales and marketing or research and development expenses;

•supply chain interruptions and manufacturing or delivery delays;

•the timing and availability of newproducts relative to customers’ and investors’ expectations;

•the length of the sales and installation cycle for a particular customer;

•the impact of the COVID-19 pandemic on ChargePoint’s workforce, or those of its customers, suppliers, vendors or business partners;

•disruptions in sales, production, service or other business activities or ChargePoint’s inability to attract and retain qualified personnel; and

•unanticipated changes in federal, state, local or foreign government incentive programs, which can affect demand for EVs.

Fluctuations in operating results and cash flow could, among other things, give rise to short-term liquidity issues. In addition, revenue, and other operating results in future quarters may fall short of the expectations of investors and financial analysts, which could have an adverse effect on the price of the Common Stock.

Changes to applicable U.S. tax laws and regulations or exposure to additional income tax liabilities could affect ChargePoint’s business and future profitability.

ChargePoint is a U.S. corporation and thus subject to U.S. corporate income tax on its worldwide operations. Moreover, the majority of ChargePoint’s operations and customers are located in the United States, and as a result, ChargePoint is subject to various U.S. federal, state and local taxes. New U.S. laws and policy relating to taxes may have an adverse effect on ChargePoint’s business and future profitability. Further, existing U.S. tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to ChargePoint.

For example, on December 22, 2017, the Tax Cuts and Jobs Act of 2017 (“Tax Act”), was signed into law making significant changes to the Internal Revenue Code of 1986, as amended, or the Code, and certain provisions of the Tax Act may adversely affect ChargePoint. In particular, sweeping changes were made to the U.S. taxation of foreign operations. Changes include, but are not limited to, a permanent reduction to the corporate income tax rate, limiting interest deductions, a reduction to the maximum deduction allowed for net operating losses generated in tax years after December 31, 2017, the elimination of carrybacks of net operating losses, adopting elements of a territorial tax system, assessing a repatriation tax or “toll-charge” on undistributed earnings and profits of U.S.-owned foreign corporations, and introducing certain anti-base erosion provisions, including a new minimum tax on global intangible low-taxed income and base erosion and anti-abuse tax. The Tax Act could be subject to potential amendments and
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technical corrections, and is subject to interpretations and implementing regulations by the U.S. Treasury and IRS,Internal Revenue Service (“IRS”), any of which could mitigate or increase certain adverse effects of the legislation.

In addition, the Tax Act may impact taxation in other jurisdictions, including with respect to state income taxes as state legislatures respond to the Tax Act. Additionally, other foreign governing bodies have and may enact changes to their tax laws in reaction to the Tax Act that could result in changes to ChargePoint’s global tax position and materially adversely affect its business and future profitability.

As a result of ChargePoint’s plans to expand operations, including to jurisdictions in which the tax laws may not be favorable, ChargePoint’s tax rate may fluctuate, ChargePoint’s tax obligations may become significantly more complex and subject to greater risk of examination by taxing authorities or ChargePoint may be subject to future changes in tax law, the impacts of which could adversely affect ChargePoint’s after-tax profitability and financial results.

Because ChargePoint does not have a long history of operating at its present scale and it has significant expansion plans, ChargePoint’s effective tax rate may fluctuate in the future. Future effective tax rates could be affected by operating losses in jurisdictions where no tax benefit can be recorded under U.S. GAAP, changes in the composition of earnings in countries with differing tax rates, changes in deferred tax assets and liabilities, or changes in tax laws. Factors that could materially affect ChargePoint’s future effective tax rates include, but are not limited to: (a) changes in tax laws or the regulatory environment, (b) changes in accounting and tax standards or practices, (c) changes in the composition of operating income by tax jurisdiction and (d) ChargePoint’s operating results before taxes.

Additionally, after the Merger, ChargePoint’s operations will beare subject to significant income, withholding and other tax obligations in the United States and may become subject to taxes in numerous additional state, local and non-U.S. jurisdictions with respect to its income, operations and subsidiaries related to those jurisdictions. ChargePoint’s after-tax profitability and financial results could be subject to volatility or be affected by numerous factors, including (a) the availability of tax deductions, credits, exemptions, refunds (including refunds of value added taxes) and other benefits to reduce ChargePoint’s tax liabilities, (b) changes in the valuation of ChargePoint’s deferred tax assets and liabilities, (c) expected timing and amount of the release of any tax valuation allowances, (d) tax treatment of stock-based compensation, (e) changes in the relative amount of ChargePoint’s earnings subject to tax in the various jurisdictions in which ChargePoint operates or has subsidiaries, (f) the potential expansion of ChargePoint’s business into or otherwise becoming subject to tax in additional jurisdictions, (g) changes to ChargePoint’s existing intercompany structure (and any costs related thereto) and business operations, (h) the extent of ChargePoint’s intercompany transactions and the extent to which taxing authorities in the relevant jurisdictions respect those intercompany transactions and (i) ChargePoint’s ability to structure ChargePoint’s operations in an efficient and competitive manner. Due to the complexity of multinational tax obligations and filings, ChargePoint may have a heightened risk related to audits or examinations by U.S. federal, state, local and non-U.S. taxing authorities. Outcomes from these audits or examinations could have an adverse effect on ChargePoint’s after-tax profitability and financial condition. Additionally, the IRS and several foreign tax authorities have increasingly focused attention on intercompany transfer pricing with respect to sales of products and services and the use of intangibles. Tax authorities could disagree with ChargePoint’s intercompany charges, cross-jurisdictional transfer pricing or other matters and assess additional taxes. If ChargePoint does not prevail in any such disagreements, its profitability may be affected.

ChargePoint’s after-tax profitability and financial results may also be adversely impacted by changes in the relevant tax laws and tax rates, treaties, regulations, administrative practices and principles, judicial decisions and interpretations thereof, in each case, possibly with retroactive effect. For example, the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPSBase Erosion and Profit Shifting recently entered into force among the jurisdictions that have ratified it, although the United States has not yet entered into this convention. These recent changes could negatively impact ChargePoint’s taxation, especially as ChargePoint expands its relationships and operations internationally.

The ability of ChargePoint to utilize net operating loss and tax credit carryforwards following the Merger is conditioned upon ChargePoint attaining profitability and generating taxable income. ChargePoint has incurred significant net losses since inception and it is anticipated that ChargePoint will continue to incur significant losses. Additionally, ChargePoint’s ability to utilize net operating loss and tax credit carryforwards to offset future taxable income may be limited.

As of January 31, 2021, ChargePoint had $434.7 million of U.S. federal and $229.7 million of California net operating loss carryforwards available to reduce future taxable income, of which $281.9 million of the U.S. federal net operating loss

carryforwards can be carried forward indefinitely. The U.S. federal and California state net operating loss carryforwards begin to expire in 2028. In addition, ChargePoint had net operating loss carryforwards for other states of $134.7 million, which begin to expire in 2022. The Tax Act included a reduction to the maximum deduction allowed for net operating losses generated in tax years after December 31, 2017 and the elimination of carrybacks of net operating losses. Under the Coronavirus Aid, Relief,

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and Economic Security Act, or the CARES Act, which modified the Tax Act, U.S. federal net operating loss carryforwards generated in taxable periods beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such net operating loss carryforwards in taxable years beginning after December 31, 2020, is limited to 80% of taxable income. It is possible that ChargePoint will not generate taxable income in time to utilize the net operating loss carryforwards.
In addition, net operating loss carryforwards and certain tax credits may be subject to significant limitations under Section 382 and Section 383 of the Code, respectively, and similar provisions of state law. Under those sections of the Code, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change attributes, such as research tax credits, to offset its post-change income or tax may be limited. In general, an “ownership change” will occur if there is a cumulative change in ownership by “5% shareholders”stockholders” that exceeds 50 percentage points over a rolling three-year period. If ChargePoint has experienced an ownership change at any time since its incorporation, ChargePoint may already be subject to limitations on its ability to utilize its existing net operating loss carryforwards and other tax attributes to offset taxable income or tax liability. In addition, the Merger, and future changes in ChargePoint’s stock ownership, which may be outside of ChargePoint’s control, may trigger an ownership change. Similar provisions of state tax law may also apply to limit ChargePoint’s use of accumulated state tax attributes. As a result, even if ChargePoint earns net taxable income in the future, its ability to use its pre-change net operating loss carryforwards and other tax attributes to offset such taxable income or tax liability may be subject to limitations, which could potentially result in increased future income tax liability to ChargePoint.

ChargePoint performed an analysis to assess whether an “ownership change,” as defined by Section 382 of the Code, has occurred from its inception through January 31, 2021 and expects to complete this Section 382 analysis during the fiscal year ending January 31, 2022. Based on this analysis, ChargePoint has experienced “ownership changes,” limiting the utilization of the net operating loss carryforwards or research and development tax credit carryforwards under Section 382 of the Code by first multiplying the value of the ChargePoint’s stock at the time of the ownership change by the applicable long-term tax-exempt rate, and then applying additional adjustments, as required. Any limitation may result in expiration of a portion of the net operating loss carryforwards or research and development tax credit carryforwards before utilization. In addition, the Merger if consummated, may constitute an ownership change under Sections 382 and 383 of the Code. ChargePoint’s net operating losses or credits may also be impaired under state law. Accordingly, ChargePoint may not be able to utilize a material portion of the net operating losses or credits. The ability of ChargePoint to utilize ChargePoint’s net operating losses or credits following the Merger is conditioned upon ChargePoint attaining profitability and generating U.S. federal and state taxable income. ChargePoint has incurred significant net losses since inception and will continue to incur significant losses; and therefore, ChargePoint does not know whether or when the combined carryforwards may be or may become subject to limitation by Sections 382 and 383 of the Code.

ChargePoint’s reported financial results may be negatively impacted by changes in U.S. GAAP.

U.S. GAAP is subject to interpretation by the Financial Accounting Standards Board’s Accounting Standards Codification, the SEC and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on reported financial results, and may even affect the reporting of transactions completed before the announcement or effectiveness of a change.

ChargePoint is an “emerging growth company” and it cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make its Common Stock less attractive to investors and may make it more difficult to compare performance with other public companies.

ChargePoint is currently an emerging growth company as defined in the U.S. legislation Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), but as of January 31, 2022, it expects to be a large accelerated filer and, itas a result, will no longer be an emerging growth company as of that date. Until then, ChargePoint intends to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”(“Sarbanes-Oxley”), reduced

disclosure obligations regarding executive compensation in periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Investors may find the Common Stock less attractive because ChargePoint will continue to rely on these exemptions. If some investors find the Common Stock less attractive as a result, there may be a less active trading market for their Common Stock, and the stock price may be more volatile.

An emerging growth company may elect to delay the adoption of new or revised accounting standards. With Switchback making this election, Section 102(b)(2) of the JOBS Act allows ChargePoint to delay adoption of new or revised accounting standards until those standards apply to non-public business entities. As a result, the financial statements contained in this Quarterly Report and those that ChargePoint will file in the future may not be comparable to companies that comply with public business entities revised accounting standards effective dates.

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ChargePoint will incurincurs significant increased expenses and administrative burdens as a public company, which could have an adverse effect on its business, financial condition and results of operations.

ChargePoint will facefaces increased legal, accounting, administrative and other costs and expenses as a public company that it did not incur as a private company. The Sarbanes-Oxley, Act, including the requirements of Section 404, as well as rules and regulations subsequently implemented by the SEC, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations promulgated and to be promulgated thereunder, the Public Company Accounting Oversight Board and the securities exchanges, impose additional reporting and other obligations on public companies. Compliance with public company requirements will increaseincreases costs and make certain activities more time-consuming. A number of those requirements require it to carry out activities ChargePoint has not done previously. In addition, expenses associated with SEC reporting requirements will be incurred. Furthermore, if any issues in complying with those requirements are identified, such as the restatement of ourChargePoint’s previously issued consolidated financial statements, and related material weakness as described in the Form 10-K/Athis Quarterly Report, ChargePoint may be subject to additional costs and expenses to come into compliance (see also “Risk Factors — We“Risks Related to Legal Matters and Regulations—ChargePoint may face litigation and other risks as a result of the material weakness in ourits internal control over financial reporting and the restatement of ourits financial statements,” and “Risk Factors — ChargePoint“Financial, Tax and Accounting-Related Risks —ChargePoint has identified material weaknesses in its internal control over financial reporting. If ChargePoint is unable to remediate these material weaknesses, or if ChargePoint identifies additional material weaknesses in the future or otherwise fails to maintain an effective system of internal control over financial reporting, this may result in material misstatements of ChargePoint’s consolidated financial statements or cause ChargePoint to fail to meet its periodic reporting obligations,” for more detail),. ChargePoint has incurred and could incur additional costs to rectify those or new issues, and the existence of these issues could adversely affect its reputation or investor perceptions. In addition, as a public company, ChargePoint maintains director and officer liability insurance, for which it must pay substantial premiums. The additional reporting and other obligations imposed by these rules and regulations increase legal and financial compliance costs and the costs of related legal, accounting and administrative activities. Advocacy efforts by stockholders and third partiesthird-parties may also prompt additional changes in governance and reporting requirements, which could further increase costs.

ChargePoint has identified material weaknesses in its internal control over financial reporting. If ChargePoint is unable to remediate these material weaknesses, or if ChargePoint identifies additional material weaknesses in the future or otherwise fails to maintain an effective internal control over financial reporting, this may result in material misstatements of ChargePoint’s consolidated financial statements or cause ChargePoint to fail to meet its periodic reporting obligations.

As a public company, ChargePoint is required to provide management’s attestation on internal control over financial reporting.controls pursuant to Section 404 of Sarbanes-Oxley. The standards required for a public company under Section 404(a) of Sarbanes-Oxley are significantly more stringent than those previously required of ChargePoint as a privately-held company. When ChargePoint ceases to be an emerging growth company, it will also be subject to auditor attestation requirements of Section 404(b) of Sarbanes-Oxley and the relevant increased disclosure obligations. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that became applicable after the Merger.of Section 404(a) and/or Section 404(b) of Sarbanes-Oxley. If ChargePoint is not able to implement thethese additional requirements of Section 404(a) of the Sarbanes-Oxley Act in a timely manner or with adequate compliance, it may not be able to assess whether its internal control over financial reporting is effective, which may subject it to adverse regulatory consequences and could harm investor confidence.

In connection with the preparation and audit of ChargePoint’s consolidated financial statements, material weaknesses were identified in its internal control over financial reporting as of January 31, 2021. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of ChargePoint’s annual or interim financial statements will not be prevented or detected on a timely basis.

ChargePoint did not design and maintain an effective control environment commensurate with its financial reporting requirements. Specifically, ChargePoint did not maintain a sufficient complement of personnel with an appropriate degree of accounting knowledge, experience and training to appropriately analyze, record and disclose accounting matters commensurate with its accounting and reporting requirements. This material weakness contributed to the following additional material weaknesses:

•ChargePoint did not design and maintain formal accounting policies, procedures and controls over significant accounts and disclosures to achieve complete, accurate and timely financial accounting, reporting and disclosures, including accounting for complex features associated with warrants, segregation of duties and adequate controls related to the preparation and review of journal entries; and

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•ChargePoint did not design and maintain effective controls over certain information technology (“IT”) general controls for information systems that are relevant to the preparation of its consolidated financial statements. Specifically, ChargePoint did not design and maintain (a) program change management controls to ensure that information technology program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately and (b) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to its financial applications and data to appropriate company personnel.

The material weaknesses related to the control environment and lack of formal accounting policies, procedures and controls resulted in material adjustments to warrant liabilities, shareholders’stockholders’ equity and related accounts and disclosures and immaterial adjustments to severala number of other account balances and disclosures in the historical consolidated financial statements.

The IT deficiencies did not result in a misstatement to the consolidated financial statements, however, the deficiencies, when aggregated, could impact maintaining effective segregation of duties, as well as the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all financial statement accounts and disclosures that would not be prevented or detected. Additionally, each of these material weaknesses could result in a misstatement of account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

ChargePoint has beguncontinued implementation of a plan to remediate these material weaknesses. These remediation measures are ongoing and include the following:

Hiring•hiring additional finance and accounting personnel to bolster the accounting capabilities and capacity and to establish and maintain internal control over financial reporting;

Designing•designing and implementing controls to formalize roles and review responsibilities to align with the staff’s skills and experience and designing and implementing controls over segregation of duties;

Providing•providing ongoing training for personnel on accounting, financial reporting and internal control over financial reporting;

Engaging•engaging an external advisor to assist with evaluating and documenting the design and operating effectiveness of internal control over financial reporting and assist with the remediation of deficiencies, as necessary;

Designing•designing and implementing controls over the preparation and review of journal entries and account reconciliations, including controls over the segregation of duties; and

Designing•designing and implementing IT general controls, including controls over the provisioning and monitoring of user access rights and privileges and change management processes and procedures.

ChargePoint is remediating the material weaknesses as efficiently and effectively as possible and

ChargePoint’s remediation efforts could continue beyond the fiscal year ending January 31, 2023. At this time, weChargePoint cannot provide an estimate of costs expected to be incurred in connection with implementing this remediation plan; however, these remediation measures will be time consuming, will result in usit incurring significant costs, and will place significant demands on ourits financial and operational resources.

In order to maintain and improve the effectiveness of its internal control over financial reporting, ChargePoint has expended, and anticipates that ChargePoint will continue to expend, significant resources, including accounting-related costs and significant management oversight. ChargePoint’s independent registered public accounting firm is not required to formally attest to the effectiveness of its internal control over financial reporting until after it is no longer an “emerging growth company” as defined in the JOBS Act. At such time, ChargePoint’s independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which its internal control over financial reporting is documented, designed or operating. Any failure to maintain effective disclosure controls and internal control over financial reporting could adversely affect the business and operating results and could cause a decline in the price of ourChargePoint’s Common Stock.

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Risks Related to Legal Matters and Regulations

Privacy concerns and laws, or other domestic or foreign regulations, may adversely affect ChargePoint’s business.

ChargePoint relies on data collected through charging stations or its mobile application, including usage data and geolocation data. ChargePoint uses this data in connection with the research, development and analysis of its technologies. Accordingly, ChargePoint may be subject to or affected by a number of federal, state, local and international laws and regulations, as well as contractual obligations and industry standards, that impose certain obligations and restrictions with respect to data privacy and security and govern its collection, storage, retention, protection, use, processing, transmission, sharing and disclosure of personal information including that of ChargePoint’s employees, customers and other third-parties with whom ChargePoint conducts business. National and local governments and agencies in the countries in which ChargePoint operates and in which its customers operate have adopted, are considering adopting, or may adopt laws and regulations regarding the collection, use, storage, processing and disclosure of information regarding consumers and other individuals, which could impact its ability to offer services in certain jurisdictions. Laws and regulations relating to the collection, use, storage, disclosure, security and other processing of individuals’ information can vary significantly from jurisdiction to jurisdiction and are particularly stringent in Europe. The costs of compliance with, and other burdens imposed by, laws, regulations, standards and other obligations relating to privacy, data protection and information security are significant. In addition, some companies, particularly larger enterprises, often will not contract with vendors that do not meet these rigorous standards. Accordingly, the failure, or perceived inability, to comply with these laws, regulations, standards and other obligations may limit the use and adoption of ChargePoint’s solutions, reduce overall demand, lead to regulatory investigations, litigation and significant fines, penalties or liabilities for actual or alleged noncompliance, or slow the pace at which we closeit closes sales transactions, any of which could harm its business. Moreover, if ChargePoint or any of its employees or contractors fail or are believed to fail to adhere to appropriate practices regarding customers’ data, it may damage its reputation and brand.

Additionally, existing laws, regulations, standards and other obligations may be interpreted in new and differing manners in the future, and may be inconsistent among jurisdictions. Future laws, regulations, standards and other obligations, and changes in the interpretation of existing laws, regulations, standards and other obligations could result in increased regulation, increased costs of compliance and penalties for non-compliance, and limitations on data collection, use, disclosure and transfer for ChargePoint and its customers. The EU and United States agreed in 2016 to a framework for data transferred from the EU to the United States, but this framework has been challenged and recently declared invalid by the Court of Justice of the EU, thereby creating additional legal risk for ChargePoint.
Additionally, the EU adopted the GDPR in 2016, and it became effective in May 2018. The GDPR establishes requirements applicable to the handling of personal data and imposes penalties for non-compliance of up to the greater of €20 million or 4% of worldwide revenue. The costs of compliance with, and other burdens imposed by, the GDPR may limit the use and adoption of ChargePoint’s products and services and could have an adverse impact on its business. Further, California adopted the California Consumer Privacy Protection Act (“CCPA”)CCPA and the California State Attorney General has begun enforcement actions. Although ChargePoint initiated a compliance program designed to ensure CCPA compliance after consulting with outside privacy counsel, ChargePoint may remain exposed to ongoing legal risks and compliance costs related to CCPA and the new California Privacy Rights Act (“CPRA”) that comes into force, which will become effective in most material respects starting on January 1, 2023.

The costs of compliance with, and other burdens imposed by, laws and regulations relating to privacy, data protection and information security that are applicable to the businesses of customers may adversely affect ability and willingness to process, handle, store, use and transmit certain types of information, such as demographic and other personal information. The EU and the United States agreed in 2016 to the EU-US Privacy Shield Framework, which provided one mechanism for lawful cross-border transfers of personal data between the EU and the United States. However, the Court of Justice of the EU issued a decision on July 16, 2020 invalidating the EU-US Privacy Shield Framework, thereby creating additional legal risk for ChargePoint. In addition, the other bases on which ChargePoint and its customers rely for the transfer of personal data across national borders, such as the Standard Contractual Clauses promulgated by the EU Commission Decision 2010/87/EU, commonly referred to as the Model Clauses, continue to be subjected to regulatory and judicial scrutiny. If ChargePoint or its customers are unable to transfer data between and among countries and regions in which it operates, it could decrease demand for its products and services or require it to modify or restrict some of its products or services.

In addition to government activity, privacy advocacy groups, the technology industry and other industries have established or may establish various new, additional or different self-regulatory standards that may place additional burdens on technology companies. Customers may expect that ChargePoint will meet voluntary certifications or adhere to other standards established by them or third parties.third-parties. If ChargePoint is unable to maintain these certifications or meet these standards, it could reduce demand for its solutions and adversely affect its business.

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Failure to comply with anticorruption and anti-money laundering laws, including the FCPA and similar laws associated with activities outside of the United States, could subject ChargePoint to penalties and other adverse consequences.

ChargePoint is subject to the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act, the USA PATRIOT Act, the UK BriberyAnti-Bribery Act and possibly other anti-bribery and anti-money laundering laws in countries in which it conducts activities. It faces significant risks if it fails to comply with the FCPA and other anti-corruption laws that prohibit companies and their employees and third-party intermediaries from promising, authorizing, offering or providing, directly or indirectly, improper payments or benefits to foreign government officials, political parties and private-sector recipients for the purpose of obtaining or retaining business, directing business to any person or securing any advantage. Any violation of the FCPA, other applicable anti-corruption laws, and anti-money laundering laws could result in whistleblower complaints, adverse media coverage, investigations, loss of export privileges, or severe criminal or civil sanctions, which could have a materially adverse effect on ChargePoint’s reputation, business, operating results and prospects. In addition, responding to any enforcement action may result in a significant diversion of management’s attention and resources, significant defense costs and other professional fees.

Failure to comply with laws relating to employment could subject ChargePoint to penalties and other adverse consequences.

ChargePoint is subject to various employment-related laws in the jurisdictions in which its employees are based. It faces risks if it fails to comply with applicable United StatesU.S. federal or state wage laws, or wage laws applicable to its employees outside of the United States. In addition, ChargePoint implemented a reduction in force and furloughed employees in 2020, and the attendant layoffs and/or furloughs could create an additional risk of claims being made on behalf of affected employees. Any violation of applicable wage laws or other labor- orlabor-or employment-related laws could result in complaints by current or former employees, adverse media coverage, investigations and damages or penalties which could have a materially adverse effect on ChargePoint’s reputation, business, operating results and prospects. In addition, responding to any such proceeding may result in a significant diversion of management’s attention and resources, significant defense costs and other professional fees.

Existing and future environmental health and safety laws and regulations could result in increased compliance costs or additional operating costs or construction costs and restrictions. Failure to comply with such laws and regulations may result in substantial fines or other limitations that may adversely impact ChargePoint’s financial results or results of operation.

ChargePoint and its operations, as well as those of ChargePoint’s contractors, suppliers and customers, are subject to certain environmental laws and regulations, including laws related to the use, handling, storage, transportation and disposal of hazardous substances and wastes as well as electronic wastes and hardware, whether hazardous or not. These laws may require ChargePoint or others in ChargePoint’s value chain to obtain permits and comply with procedures that impose various restrictions and obligations that may have material effects on ChargePoint’s operations. If key permits and approvals cannot be obtained on acceptable terms, or if other operational requirements cannot be met in a manner satisfactory for ChargePoint’s operations or on a timeline that meets ChargePoint’s commercial obligations, it may adversely impact ourChargePoint’s business.

Environmental and health and safety laws and regulations can be complex and may be subject to change, such as through new requirements enacted at the supranational, national, sub-national and/or local level or new or modified regulations that may be implemented under existing law. The nature and extent of any changes in these laws, rules, regulations and permits may be unpredictable and may have material effects on ChargePoint’s business. Future legislation and regulations or changes in existing legislation and regulations, or interpretations thereof, including those relating to hardware manufacturing, electronic waste or batteries, could cause additional expenditures, restrictions and delays in connection with ChargePoint’s operations as well as other future projects, the extent of which cannot be predicted.

Further, ChargePoint currently relies on third partiesthird-parties to ensure compliance with certain environmental laws, including those related to the disposal of hazardous and non-hazardous wastes. Any failure to properly handle or dispose of such wastes, regardless of whether such failure is ChargePoint’s or its contractors, may result in liability under environmental laws, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), under which liability may be imposed without regard to fault or degree of contribution for the investigation and clean-up of contaminated sites, as well as impacts to human health and damages to natural resources. Additionally, ChargePoint may not be able to secure contracts with third partiesthird-parties to continue their key supply chain and disposal services for ourChargePoint’s business, which may result in increased costs for compliance with environmental laws and regulations.

We

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ChargePoint may face litigation and other risks as a result of the material weakness in ourits internal control over financial reporting and the restatement of ourits financial statements.

Following the issuance of the SEC’s Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies on April 12, 2021, the audit committee of ourChargePoint’s Board of Directors (the “Board”), after considering the recommendations of management, determined that it was appropriate to restate ourChargePoint’s previously filed financial statements for the Non-Reliance Periods. See “Risk Factors—The Pubic Warrants and the Private Placement Warrants are being accounted for as a warrant liability and are being recorded at fair value upon issuance with changes in fair value each period reported in earnings, which may have an adverse effect on the market pricecertain periods of our Common Stock.”non-reliance. As part of this restatement, weChargePoint identified a material weakness in ourits internal control over financial reporting.

As a result of such material weakness, such restatement, the change in accounting for the Public Warrants and the Private Placement Warrants, and other matters raised or that may in the future be raised by the SEC, we faceChargePoint faces potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the restatement and material weaknesses in ourits internal control over financial reporting and the preparation of ourits financial statements. As of the date of this Quarterly Report, we haveChargePoint has no knowledge of any such litigation or dispute. However, weChargePoint can provide no assurance that such litigation or dispute will not arise in the future. Any such litigation or dispute, whether successful or not, could have a material adverse effect on ourits business, results of operations and financial condition.

Risks Related to Ownership of ourChargePoint’s Securities

Concentration of ownership among ChargePoint’s existing executive officers, directors and their affiliates may prevent new investors from influencing significant corporate decisions.

As of May 20,October 1, 2021, ChargePoint’s directors, executive officers and their affiliates as a groupin the aggregate beneficially own approximately 39.5%27.3% of the outstanding Common Stock. As a result, these stockholders are able to exercise a significant level of control over all matters requiring stockholder approval, including the election of directors, any amendment of the certificate of incorporation and approval of significant corporate transactions. This control could have the effect of delaying or preventing a change of control or changes in management and will make the approval of certain transactions difficult or impossible without the support of these stockholders.

ChargePoint has never paid cash dividends on its capital stock and does not anticipate paying dividends in the foreseeable future.

ChargePoint has never paid cash dividends on its capital stock and currently intends to retain any future earnings to fund the growth of its business. Any determination to pay dividends in the future will be at the discretion of the Board and will depend on financial condition, operating results, capital requirements, general business conditions and other factors that the Board may deem relevant. As a result, capital appreciation, if any, of Common Stock will be the sole source of gain for the foreseeable future.

Our stockThe price willof ChargePoint’s Common Stock may be volatile.

subject to wide fluctuations.

The trading price of theChargePoint’s Common Stock and the Public Warrants will be volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond ChargePoint’s control. These factors include:

•actual or anticipated fluctuations in operating results;

•failure to meet or exceed financial estimates and projections of the investment community or that we provideChargePoint provides to the public;

•issuance of new or updated research or reports by securities analysts or changed recommendations for the industry in general;

•announcements of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments;

•changes in competitive factors;

•operating and share price performance of other companies in the industry or related markets;

•sales of shares of ChargePoint’s Common Stock into the market pursuant to the exercise of registration rights described elsewhere in this Quarterly Report;

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•the timing and magnitude of investments in the growth of the business;

•actual or anticipated changes in laws and regulations;

•additions or departures of key management or other personnel;

•increased labor costs;

•disputes or other developments related to intellectual property or other proprietary rights, including litigation;

•the ability to market newand enhanced solutions on a timely basis;

•sales of substantial amounts of the Common Stock by the members of the Board, executive officers or significant stockholders or the perception that such sales could occur;

•changes in capital structure, including future issuances of securities or the incurrence of debt; and

•general economic, political and market conditions.

In addition, the stock market in general, and the stock prices of technology companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry factors may seriously affect the market price of ourChargePoint’s Common Stock, regardless of actual operating performance. In addition, in the past, following periods of volatility in the overall market and the market price of a particular company’s securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted, could result in substantial costs and a diversion of management’s attention and resources.

The coverage of ChargePoint’s business or its securities by securities or industry analysts or the absence thereof could adversely affect the trading price and volume of ChargePoint’s Common Stock and other securities.
The trading market for ChargePoint’s securities is influenced in part by the research and other reports that industry or securities analysts publish about ChargePoint or its business or industry from time to time. ChargePoint does not control these analysts or the content and opinions included in their reports. As a former shell company, ChargePoint may be slow to attract or retain equity research coverage, and the analysts who publish information about ChargePoint’s securities will have had relatively little experience with ChargePoint, which could affect their ability to accurately forecast ChargePoint’s results and make it more likely that ChargePoint fails to meet their estimates. If no or few analysts commence or continue equity research coverage of ChargePoint, the trading price and volume of ChargePoint’s securities would likely be negatively impacted. If analysts do cover ChargePoint and one or more of them downgrade its securities, or if they issue other unfavorable commentary about ChargePoint or its industry or inaccurate research, the trading price of ChargePoint’s Common Stock and other securities would likely decline. Furthermore, if one or more of these analysts cease coverage or fail to regularly publish reports on ChargePoint, it could lose visibility in the financial markets. Any of the foregoing would likely cause the trading price and volume of ChargePoint’s Common Stock and other securities to decline.
Anti-takeover provisions contained in ourChargePoint’s governing documents and applicable laws could impair a takeover attempt.

ChargePoint’s Second Amended and Restated Certificate of Incorporation (the “Second A&R CharterCharter”) and SecondAmended and Restated Bylaws (the “Second A&R BylawsBylaws”) afford certain rights and powers to the Board that could contribute to the delay or prevention of an acquisition that it deems undesirable. ChargePoint is also subject to Section 203 of the DGCL and other provisions of Delaware law that limit the ability of stockholders in certain situations to effect certain business combinations.mergers. Any of the foregoing provisions and terms that has the effect of delaying or deterring a change in control could limit the opportunity for stockholders to receive a premium for their shares of their Common Stock and could also affect the price that some investors are willing to pay for the Common Stock.

Our ChargePoint’s Second A&R Charter provides, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation matters, which could limit stockholders’ ability to obtain a more favorable judicial forum for disputes with usChargePoint or its directors, officers, employees or stockholders.

The Second A&R Charter requires, to the fullest extent permitted by law, that derivative actions brought in nameon behalf of ChargePoint, actions against current or former directors, officers, andstockholders or, subject to certain exceptions, employees for breach of fiduciary duty and certain other similar actions may be brought in the Court of Chancery in the State of Delaware or, if that
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court lacks subject matter jurisdiction, another federal or state court situated in the State of Delaware. Any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of ChargePoint shall be deemed to have notice of and consented to the forum provisions in the certificate of incorporation. In addition, the Second A&R Charter and Second A&R Bylaws will provide that, unless ChargePoint consents in writing to another forum, the federal district courts of the United States shall, to the fullest extent of the law, be the exclusive forum for the resolution of any complaint asserting a cause of action under the Securities Act andor the Exchange Act.

In March 2020, the Delaware Supreme Court issued a decision in Salzburg et al. v. Sciabacucchi, which found that an exclusive forum provision providing for claims under the Securities Act to be brought in federal court is facially valid under Delaware law. It is unclear whether this decision will be appealed, or what the final outcome of this case will be. ChargePoint intends to enforce this provision, but it does not know whether courts in other jurisdictions will agree with this decision or enforce it.

This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with ChargePoint or any of its directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provision contained in the certificate of incorporationSecond A&R Charter to be inapplicable or unenforceable in an action, ChargePoint may incur additional costs associated with resolving such action in other jurisdictions, which could harm its business, operating results and financial condition.

We may redeem unexpired Public Warrants prior

Sales, or the perception of future sales, of a substantial number of shares of Common Stock by ChargePoint’s existing stockholders could cause the price of the Common Stock to their exercisedecline.
Sales of a substantial number of shares of ChargePoint’s Common Stock in the public market could occur at a timeany time. These sales, or the perception in the market that is disadvantageous to the holders of Public Warrants.

We havea large number of shares intend to sell shares, could reduce the ability to redeem outstanding Public Warrants at any time after they become exercisable and prior to their expiration, at amarket price of $0.01 per Public Warrant; providedChargePoint’s Common Stock. For instance, in connection with the closing of the Merger, ChargePoint and the holders of registration rights in Switchback and Legacy ChargePoint entered into an amended and restated Registration Rights Agreement (the “A&R Registration Rights Agreement” and such holders the “Registration Rights Holders”). In certain circumstances, the Registration Rights Holders can demand certain underwritten offerings and will be entitled to customary piggyback registration rights. Also, in connection with the consummation of the acquisition of has•to•be gmbh, ChargePoint entered into a registration rights agreement with the former shareholders of HTB providing for the filing of a resale registration statement as more completely described below.

ChargePoint has in the past, and may in the future, file registration statements as a result of such registration rights. For example, on July 12, 2021, ChargePoint filed a resale registration statement on Form S-1 (No. 333-257855) that relates to the last reported sales priceoffer and sale from time to time by the selling security holders named in that prospectus of ourup to 12,000,000 shares of ChargePoint’s Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations(the “Secondary Offering”). ChargePoint’s directors, executive officers and certain stockholders entered into lock-up agreements with the like) for any 20 trading days withinrepresentatives of the several underwriters, in connection with the Secondary Offering, which expired on September 28, 2021. Further, on October 14, 2021, ChargePoint filed a 30 trading-day period endingresale registration statement on Form S-1 (No. 333-260247) that was declared effective by the third trading day priorSEC that relates to the date on which we give noticeoffer and sale from time to time by the selling security holders named in that prospectus of such redemptionup to 5,695,176 shares of ChargePoint’s Common Stock in connection with the consummation of ChargePoint’s acquisition of has•to•be gmbh.
As of July 9, 2021, 224,656,707 shares of ChargePoint’s Common Stock or 69.9% of all outstanding shares of its Common Stock were prohibited or otherwise restricted from being sold in the public market under securities laws or lock-up agreements entered into in connection with the Merger or the Secondary Offering. As of October 31, 2021, the lock-up restrictions applicable to the warrant holders. IfMerger and whenSecondary Offering had lapsed and no shares of ChargePoint’s Common Stock were prohibited or otherwise restricted from being sold in the Public Warrantspublic market under lock-up agreements. Shares issued upon the exercise of stock options outstanding under ChargePoint’s equity incentive plans or pursuant to future awards granted under those plans will become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securitiesavailable for sale under all applicable state securities laws. On June 4, 2021, we mailed a Notice of Redemption in respect of the redemption of all of its outstanding Public Warrants that remain outstanding following 5:00 p.m. New York City time on July 6, 2021 for a redemption price of $0.01 per warrant. The Private Placement Warrants that are still heldpublic market to the extent permitted by the initial holders thereof or their permitted transferees are not subject toprovisions of applicable vesting schedules, any applicable market standoff, a registration statement on Form S-8 and Rule 144 and Rule 701 under the redemption. Redemption of the outstanding Public Warrants could force the Public Warrant holders to: (i) exercise their Public Warrants and pay the exercise price therefor at a time when it may be disadvantageous for them to do so; (ii) sell their Public Warrants at the then-current market price when they might otherwise wish to hold their Public Warrants; or (iii) accept the nominal redemption price which, at the time the outstanding Public Warrants are called for redemption on July 6, 2021, is likely to be substantially less than the market value of their Public Warrants.

Securities Act.

Warrants are exercisable for ourChargePoint’s Common Stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to ourChargePoint’s stockholders.

As of April 30,October 31, 2021, the Public Warrants and the Private Placement Warrants were exercisable for 13,839,8442,172,226 shares of Common Stock at a weighted average exercise price of $10.00$11.50 per share and therethe Legacy Warrants were additional warrants outstanding exercisable for 30,055,24335,584,603 shares of Common Stock at a weighted averageweighted-average exercise price of $6.81$7.19 per share. Any shares of ourChargePoint’s Common Stock issued upon exercise of the Public Warrants and the Private Placement Warrants and other outstanding warrantsthe Legacy Warrants will result in dilution to the then existing holders of Common Stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of ourChargePoint’s Common Stock.

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The Public Warrants and the Private Placement Warrants are being accounted for as a warrant liability and are being recorded at fair value upon issuance with changes in fair value each period reported in earnings, which may have an adverse effect on the market price of ourChargePoint’s Common Stock.

Under U.S. GAAP, we areChargePoint is required to evaluate the Public Warrants and the Private Placement Warrants to determine whether they should be accounted for as a warrant liability or as equity. We haveChargePoint has concluded that the Public Warrants and the Private Placement Warrants contain provisions requiring liability classification.classification as of October 31, 2021. Therefore, as described in the financial statements of Switchback included herein, we areChargePoint is accounting for the Public Warrants and the Private Placement Warrants as a warrant liability and are recording that liability at fair value upon issuance. We will recordChargePoint records any subsequent changes in fair value as of the end of each period for which earnings are reported.reporting period. The impact of changes in fair value on earnings may have an adverse effect on the market price of our Common Stock and may cause fluctuations in ourits results of operations based on factors that are outside of ourits control.


ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Recent Sales of Unregistered Securities

Acquisition of has•to•be gmbh
On October 6, 2021, ChargePoint and its wholly owned subsidiary ChargePoint European Holdings B.V. (“ChargePoint Europe”) completed its acquisition of HTB (the “Closing”) and paid to the former stockholders of HTB an aggregate of 5,695,176 shares of Common Stock (the “Shares”) as a portion of the purchase price, of which 885,692 Shares are subject to escrow to secure potential future indemnification claims. The information requiredShares were issued pursuant to an exemption from registration under Section 4(a)(2) and or Regulation S of the Securities Act because such issuance did not involve a public offering and were issued to offshore investors.
Recent Sales of Unregistered Securities
During the three months ended October 31, 2021, ChargePoint issued an aggregate of 235,963 shares of Common Stock pursuant to the exercise of options by a former director under the Legacy ChargePoint’s 2017 Stock Plan with aggregate proceeds to ChargePoint of $198,209. ChargePoint deems this Item 2 is containedissuance to be exempt from registration under the Securities Act either in our Current Reportreliance on Form 8-K,Rule 701 of the Securities Act as originally filedsales and offers under compensatory benefit plans and contracts relating to compensation in compliance with the SECRule 701, or in reliance on March 1, 2021 andSection 4(a)(2), as subsequently amended on April 1, 2021.

a transaction by an issuer not involving a public offering.

Issuer Purchases of Equity Securities

None.


ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.


ITEM 4.

MINE SAFETY DISCLOSURES

ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.


ITEM 5.

OTHER INFORMATION

ITEM 5. OTHER INFORMATION
None.


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ITEM 6. EXHIBITS
(a)Exhibits:
ITEM 6.

EXHIBITS

(a)

Exhibits:

Exhibit No.

Description

31.1
3.1Second Amended and Restated Certificate of Incorporation of Switchback (incorporated by reference to Exhibit 3.1 to ChargePoint’s Current Report on Form 8-K (File No. 01- 39004), filed with the SEC on March 1, 2021).
3.2Second Amended and Restated Bylaws of ChargePoint, effective as of February 26, 2021 (incorporated by reference to Exhibit 3.2 to ChargePoint’s Current Report on Form 8-K (File No. 001-39004), filed with the SEC on March 1, 2021).
10.3+Form of Indemnification Agreement (incorporated by reference to Exhibit 10.9 to ChargePoint’s Current Report on Form 8-K (File No. 001-39004), filed with the SEC on March 1, 2021).
10.4+ChargePoint Holdings Incentive Bonus Plan (incorporated by reference to Exhibit 10.10 to ChargePoint’s Current Report on Form 8-K (File No. 001-39004), filed with the SEC on March 1, 2021).
10.5+ChargePoint Holdings, Inc. Compensation Program for Non-Employee Directors (incorporated by reference to Exhibit 10.11 to ChargePoint’s Current Report on Form 8-K (File No. 001-39004), filed with the SEC on March 1, 2021).
10.6Amended and Restated Registration Rights Agreement, dated February 26, 2021, by and among ChargePoint, and certain stockholders and equityholders of ChargePoint (incorporated by reference to Exhibit 10.13 to ChargePoint’s Current Report on Form 8-K (File No. 001-39004), filed with the SEC on March 1, 2021).
10.7+Form of Change in Control Vesting Acceleration Agreement for ChargePoint (Europe) (incorporated by reference to Exhibit 10.18 to ChargePoint’s Post-Effective Amendment No. 2 to the Registration Statement on Form S-1 (File no. 333-253759), filed with the SEC on May 28, 2021).
10.8+Form of Severance and Change in Control Agreement for ChargePoint (US) (incorporated by reference to Exhibit 10.19 to ChargePoint’s Post-Effective Amendment No. 2 to the Registration Statement on Form S-1 (File no. 333-253759), filed with the SEC on May 28, 2021).
10.9+Form of Severance and Change in Control Agreement for ChargePoint Europe Holdings B.V. (Europe) (incorporated by reference to Exhibit 10.20 to ChargePoint’s Post-Effective Amendment No. 2 to the Registration Statement on Form S-1 (File no. 333-253759), filed with the SEC on May 28, 2021).
31.1
31.2
31.2
32.1
32.1
32.2
32.2
101.INSXBRL Instance Document
101.SCHXBRL Taxonomy Extension Schema
101.CALXBRL Taxonomy Extension Calculation Linkbase
101.DEFXBRL Taxonomy Extension Definition Linkbase
101.LABXBRL Taxonomy Extension Label Linkbase
101.PREXBRL Taxonomy Extension Presentation Linkbase

*

Filed herewith

**

Furnished herewith

†

The schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request.

+

Denotes management compensatory plan, contract or arrangement.

____________


* Filed herewith
** Furnished herewith

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SIGNATURES


Pursuant to the requirements of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

June 11,December 15, 2021
CHARGEPOINT HOLDINGS, INC.
By:By:

/s/ Rex S. Jackson

Name:Rex S. Jackson
Title:Title:Chief Financial Officer and Principal Financial Officer

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83