Filed pursuant to Rule 424(b)(3)

Registration No. 333-253759

PROSPECTUS SUPPLEMENT NO. 4

(to Prospectus dated June 7, 2021)

ChargePoint Holdings, Inc.

Up to 246,020,583 Shares of Common Stock

6,521,568 Warrants to Purchase

Common Stock

This prospectus supplement supplements the prospectus dated June 7, 2021, as previously supplemented (the “Prospectus”), which forms a part of our registration statement on Form S-1 (No. 333-253759). This prospectus supplement is being filed to update and supplement the information in the Prospectus with the information contained in our Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on September 10, 2021 (the “Quarterly Report”). Accordingly, we have attached the Quarterly Report to this prospectus supplement.

The Prospectus and this prospectus supplement relate to the issuance by us of up to an aggregate of up to 10,470,562 shares of our common stock, $0.0001 par value per share (“Common Stock”), issuable upon the exercise of our publicly-traded warrants (the “Public Warrants”), up to 6,521,568 shares of our Common Stock issuable upon exercise of private placement warrants issued to NGP Switchback, LLC (the “Private Warrants”), and other warrants to purchase up to 8,266,681 shares of our Common Stock. The Prospectus and this prospectus supplement also relate to the resale from time to time, upon the expiration of lock-up agreements, by (i) the selling stockholders named in the Prospectus or their permitted transferees of up to 220,761,772 shares of our Common Stock and (ii) the selling holders of Private Warrants.

Our Common Stock is listed on the New York Stock Exchange under the symbol “CHPT.” On September 9, 2021, the closing price of our Common Stock was $ 21.87.

We are an “emerging growth company” under applicable federal securities laws and will be subject to reduced public company reporting requirements.

INVESTING IN OUR SECURITIES INVOLVES RISKS THAT ARE DESCRIBED IN THE “RISK FACTORS” SECTION BEGINNING ON PAGE 10 OF THE PROSPECTUS.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued under this prospectus supplement or the Prospectus or determined if this prospectus supplement or the Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus supplement is September 10, 2021.

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

(Mark One)

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

For the quarterly period ended July 31, 2021

OR

 

☐	TRANSITION 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)

 

 

 

Delaware		84-1747686
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)
240 East Hacienda Avenue Campbell, CA		95008
(Address of principal executive offices)		(Zip Code)

(408) 841-4500

(Registrant’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 $0.0001		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  ☒    No  ☐

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  ☒    No  ☐

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

 

Large accelerated filer		☐		Accelerated filer		☐
Non-accelerated filer		☒		Smaller reporting company		☒
				Emerging growth company		☒

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. ☐

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

The registrant had outstanding 322,602,267 shares of common stock as of August 31, 2021.

 

 

 

CHARGEPOINT HOLDINGS, INC.

Table of Contents

 

				Page
Part I - Financial Information					5
Item 1.		Condensed Consolidated Financial Statements (Unaudited)			5
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			37
Item 3.		Quantitative and Qualitative Disclosures About Market Risk			53
Item 4.		Controls and Procedures			53
Part II - Other Information
Item 1.		Legal Proceedings			56
Item 1A.		Risk Factors			56
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds			83
Item 3.		Defaults Upon Senior Securities			83
Item 4.		Mine Safety Disclosures			83
Item 5.		Other Information			83
Item 6.		Exhibits			84
Signatures					85

 

2

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 affect the results of operations, financial position and cash flows of ChargePoint;

 

•

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

 

•

unexpected delays in new product introductions;

 

•

ChargePoint’s ability to expand its business in Europe;

 

•

ChargePoint’s ability to integrate newly acquired assets and businesses into ChargePoint’s own business;

 

•

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

 

•

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

 

•

incentives from governments or utilities may be reduced, which could reduce demand for EVs, or the portion of regulatory credits that customers claim may increase, which would reduce ChargePoint’s revenue from this source;

 

•

the impact of competing technologies that could reduce the demand for EVs;

 

•

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 ChargePoint’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.

 

3

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

Part I - Financial Information

 

ITEM 1.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

ChargePoint Holdings, Inc. Unaudited Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets as of July  31, 2021 and January 31, 2021 (unaudited)			6
Condensed Consolidated Statements of Operations for the Three and Six Months Ended July 31, 2021 and 2020 (unaudited)			7
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended July 31, 2021 and 2020 (unaudited)			8
Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Three and Six Months Ended July 31, 2021 and 2020 (unaudited)			9
Condensed Consolidated Statements of Cash Flows for the Six Months Ended July 31, 2021 and 2020 (unaudited)			11
Notes to Condensed Consolidated Financial Statements (unaudited)			13

 

5

ChargePoint Holdings, Inc.

Condensed Consolidated Balance Sheets

(unaudited)

 

		July 31, 2021				January 31, 2021
		(in thousands, except share and per share data)
Assets
Current assets:
Cash and cash equivalents		$	618,089			$	145,491
Restricted cash			400				400
Accounts receivable, net of allowance of $2,000 as of July 31, 2021 and January 31, 2021			42,708				35,075
Inventories			27,916				33,592
Prepaid expenses and other current assets			22,138				12,074
Total current assets			711,251				226,632
Property and equipment, net			32,265				29,988
Operating lease right-of-use assets			20,834				21,817
Goodwill			1,215				1,215
Other assets			5,023				10,468
Total assets		$	770,588			$	290,120
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable		$	28,416			$	19,784
Accrued and other current liabilities			51,980				47,162
Deferred revenue			47,769				40,934
Debt, current			—				10,208
Total current liabilities			128,165				118,088
Deferred revenue, noncurrent			58,000				48,896
Debt, noncurrent			—				24,686
Operating lease liabilities			21,582				22,459
Common stock warrant liabilities			26,868				—
Redeemable convertible preferred stock warrant liability			—				75,843
Other long-term liabilities			961				972
Total liabilities			235,576				290,944
Commitments and contingencies (Note 7)
Redeemable convertible preferred stock: $0.0001 par value; 0 and 185,180,248 shares authorized as of July 31, 2021 and January 31, 2021, respectively; 0 and 182,934,257 shares issued and outstanding as of July 31, 2021 and January 31, 2021, respectively (liquidation value: $0 and $17,492,964 as of July 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 July 31, 2021 and January 31, 2021, respectively; 322,170,484 and 22,961,032 shares issued and outstanding as of July 31, 2021 and January 31, 2021, respectively			32				2
Preferred stock, $0.0001 par value; 10,000,000 and 0 shares authorized as of July 31, 2021 and January 31, 2021, respectively; 0 issued and outstanding as of July 31, 2021 and January 31, 2021			—				—
Additional paid-in capital			1,216,893				62,736
Accumulated other comprehensive income			150				155
Accumulated deficit			(682,063	)			(679,414	)
Total stockholders’ equity (deficit)			535,012				(616,521	)
Total liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit)		$	770,588			$	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 July 31,								Six Months Ended July 31,
		2021				2020				2021				2020
		(in thousands, except share and per share data)								(in thousands, except share and per share data)
Revenue
Networked charging systems		$	40,874			$	21,368			$	67,674			$	41,025
Subscriptions			12,082				9,811				22,906				18,815
Other			3,165				3,778				6,051				7,893
Total revenue			56,121				34,957				96,631				67,733
Cost of revenue
Networked charging systems			35,384				20,408				59,126				39,024
Subscriptions			7,830				4,452				13,470				9,225
Other			2,130				1,069				4,041				2,692
Total cost of revenue			45,344				25,929				76,637				50,941
Gross profit			10,777				9,028				19,994				16,792
Operating expenses
Research and development			40,410				17,126				65,784				35,152
Sales and marketing			21,923				10,966				37,897				25,167
General and administrative			22,732				4,466				37,199				9,555
Total operating expenses			85,065				32,558				140,880				69,874
Loss from operations			(74,288	)			(23,530	)			(120,886	)			(53,082	)
Interest income			25				37				47				280
Interest expense			—				(793	)			(1,499	)			(1,628	)
Change in fair value of redeemable convertible preferred stock warrant liability			—				(11,516	)			9,237				(10,981	)
Change in fair value of common stock warrant liabilities			(10,421	)			—				33,340				—
Change in fair value of contingent earnout liability			—				—				84,420				—
Transaction costs expensed			—				—				(7,031	)			—
Other (expense) income, net			(189	)			563				(174	)			131
Net loss before income taxes			(84,873	)			(35,239	)			(2,546	)			(65,280	)
Provision for income taxes			65				48				103				105
Net loss		$	(84,938	)		$	(35,287	)		$	(2,649	)		$	(65,385	)
Accretion of beneficial conversion feature of redeemable convertible preferred stock			—				(58,625	)			—				(58,625	)
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		$	(84,938	)		$	(93,912	)		$	(169,431	)		$	(124,010	)
Gain attributable to earnout shares issued			—				—				(84,420	)			—
Change in fair value of dilutive warrants			(7,427	)			—				(53,540	)			—
Net loss attributable to common stockholders - Diluted		$	(92,365	)		$	(93,912	)		$	(307,391	)		$	(124,010	)
Weighted average shares outstanding - Basic			312,227,526				13,468,677				266,197,482				12,822,481
Weighted average shares outstanding - Diluted			313,602,100				13,468,677				275,577,000				12,822,481
Net loss per share - Basic		$	(0.27	)		$	(6.97	)		$	(0.64	)		$	(9.67	)
Net loss per share - Diluted		$	(0.29	)		$	(6.97	)		$	(1.12	)		$	(9.67	)

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 July 31,								Six Months Ended July 31,
		2021				2020				2021				2020
		(in thousands)								(in thousands)
Net loss		$	(84,938	)		$	(35,287	)		$	(2,649	)		$	(65,385	)
Other comprehensive income (loss):
Foreign currency translation adjustment			(12	)			92				(5	)			36
Unrealized loss on short-term investments, net of tax			—				(23	)			—				(23	)
Other comprehensive (loss) income			(12	)			69				(5	)			13
Comprehensive loss		$	(84,950	)		$	(35,218	)		$	(2,654	)		$	(65,372	)

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
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

 

9

		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	)
Issuance of redeemable convertible preferred stock and common warrants, net of issuance costs			21,783,334				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, 2020			182,366,537			$	612,674				14,579,702			$	1			$	55,363			$	50			$	(547,775	)		$	(492,361	)

 

(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)

 

		Six Months Ended July 31,
		2021				2020
		(in thousands)
Cash flows from operating activities
Net loss		$	(2,649	)		$	(65,385	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			5,576				4,684
Non-cash operating lease cost			1,963				1,749
Stock-based compensation			35,870				2,100
Amortization of deferred contract acquisition costs			829				538
Change in fair value of redeemable convertible preferred stock warrant liability			(9,237	)			—
Change in fair value of common stock warrant liabilities			(33,340	)			10,981
Change in fair value of contingent earnout liability			(84,420	)			—
Transaction costs expensed			7,031				—
Other			1,236				683
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net			(7,657	)			16,188
Inventories			5,620				(7,427	)
Prepaid expenses and other assets			(9,325	)			(3,335	)
Operating lease liabilities			(953	)			(2,031	)
Accounts payable			9,293				(9,324	)
Accrued and other liabilities			3,027				(4,054	)
Deferred revenue			15,938				4,564
Net cash used in operating activities			(61,198	)			(50,069	)
Cash flows from investing activities
Purchases of property and equipment			(7,788	)			(5,962	)
Maturities of investments			—				47,014
Net cash (used in) provided by investing activities			(7,788	)			41,052
Cash flows from financing activities
Proceeds from issuance of redeemable convertible preferred stock			—				92,433
Proceeds from the exercise of public warrants			117,598				31,390
Merger and PIPE financing			511,646				—
Payments of transaction costs related to Merger			(32,468	)			—
Payment of tax withholding obligations on settlement of earnout shares			(20,894	)			—
Repayment of borrowings			(36,051	)			—
Proceeds from exercises of vested and unvested stock options			1,759				1,542
Net cash provided by financing activities			541,590				125,365
Effect of exchange rate changes on cash, cash equivalents, and restricted cash			(6	)			36
Net increase in cash, cash equivalents, and restricted cash			472,598				116,384
Cash, cash equivalents, and restricted cash at beginning of period			145,891				73,153
Cash, cash equivalents, and restricted cash at end of period		$	618,489			$	189,537

 

11

ChargePoint Holdings, Inc.

Condensed Consolidated Statements of Cash Flows - (continued)

Six Months Ended July 31, 2021 and 2020 (Unaudited)

 

		Six Months Ended July 31,
		2021				2020
		(in thousands)
Supplementary cash flow information
Cash paid for interest		$	344			$	1,402
Cash paid for taxes		$	115			$	105
Supplementary cash flow information on noncash investing and financing activities
Accretion of beneficial conversion feature of redeemable convertible preferred stock		$	—			$	58,625
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			$	—

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, authenticate and transact EV charging sessions (“Cloud” or “Cloud Services”). As part of ChargePoint’s 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. This network provides multiple web-based portals for charging system owners, fleet managers, drivers, and utilities.

In addition, the Company offers extended parts and labor warranty (“Assure”) that includes proactive monitoring, fast response times, 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.

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 Registration Statement on Form S-1 filed with the SEC on July 12, 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 July 31, 2021 and the results of operations for the three and six months ended July 31, 2021 and 2020, and cash flows for the six months ended July 31, 2021 and 2020. The results of operations for the three and six months ended July 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 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 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 July 31, 2021, the Company had an accumulated deficit of $682.1 million.

The Company has funded its operations primarily with proceeds from the issuance of redeemable convertible preferred stock, 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 $618.5 million as of July 31, 2021. As of September 10, 2021, the date on which these condensed consolidated financial statements were 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.

 

13

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 Systems 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. 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 that 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 transactions pursuant to which Lightning Merger Sub Inc., a wholly owned subsidiary of Switchback incorporated in the State of Delaware (“Lightning Merger Sub”), merged with ChargePoint, Inc., a Delaware corporation (“Legacy ChargePoint”); Legacy ChargePoint survived as a wholly-owned subsidiary of Switchback (such transactions, the “Merger,” and, collectively with the other transactions described in the Merger Agreement (as defined below), the “Reverse Recapitalization”). Further, as a result of the Merger, Switchback was renamed “ChargePoint Holdings, Inc.”

Please refer to Note 3 “Reverse Recapitalization” 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 Warrants Liabilities

The Company assumed 10,470,562 publicly-traded warrants (“Public Warrants”) and 6,521,568 private placement warrants issued to NGP Switchback, LLC (“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 which were issued in connection with the closing of the Merger) and entitle the holder to purchase one share of the Company’s Common stock, par value $0.0001 (“Common Stock”) at an exercise price of $11.50 per share. During the six months ended July 31, 2021, 10,226,081 Public Warrants and 4,347,712 Private Placement Warrants were exercised and the remaining 244,481 Public Warrants outstanding as of the July 6, 2021 redemption date were redeemed for cash. The Public Warrants, prior to their redemption, were publicly traded and were exercisable for cash unless certain conditions occurred, such as the 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 could be cashlessly exercised. The Private Placement Warrants are not redeemable for cash so long as they are held by the initial purchasers or their permitted 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 Public 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 were 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 were not indexed to the Common Stock and therefore were accounted for as a liability at the Reverse 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 were 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.

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

 

15

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 stock warrants, including Common Stock Warrants as a result of the Merger, contingent earnout liability, the value of common 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.

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 at times cash balances may be in excess of federal insurance limits.

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 July 31, 2021 and January 31, 2021, one customer individually accounted for 9% and 16% of accounts receivable, net, respectively. For the six months ended July 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 operating results.

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 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, which has led to fluctuations in EV sales around the world.

 

16

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

 

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 cancelling or reducing 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. 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, the ultimate societal and economic impact of the COVID-19 pandemic remains unknown. 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 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 residential and fleet businesses. Further, the COVID-19 pandemic could continue to heighten supply chain pricing and logistics expenses, and could, for example, adversely impact ChargePoint’s gross margins through heightened supply chain expenses, and could adversely affect demand for ChargePoint’s platforms, lengthen its 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 its business, results of operations and financial condition.

Segment Reporting

The Company operates as one operating segment because its Chief Executive Officer, as the Company’s chief operating decision maker 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.

 

17

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 and are paid up-front. Revenue expected to be recognized from remaining performance obligations was $118.2 million as of July 31, 2021, of which 42 % is expected to be recognized over the next twelve 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 Cloud Services and Assure services not yet provided 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 revenue that will be recognized during the succeeding twelve-month period is recorded as current deferred revenue with the remainder recorded as deferred revenue, non-current on the condensed consolidated balance sheets. Total current and non-current deferred revenue was $105.8 million and $89.8 million as of July 31, 2021 and January 31, 2021, respectively. The Company recognized $7.7 million and $4.6 million of revenue during the three months ended July 31, 2021 and July 31, 2020, and $22.9 million and $21.0 million of revenue during the six months ended July 31, 2021 and July 31, 2020, respectively, that was included in the deferred revenue balance at the beginning of the period.

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. The Company will become 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 period, 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 the guidance will have on its condensed consolidated financial statements.

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, 2020, 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 the guidance will have on its condensed consolidated financial statements.

 

18

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, 2020. As a result, the Company will adopt ASU 2020-06 for the January 31, 2022 annual period and is currently assessing the impact the guidance will have on its condensed consolidated financial statements.

 

19

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

 

3.	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 were converted into an equivalent number of shares of Legacy ChargePoint common stock on a one-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 were converted into an equivalent number of shares of Legacy ChargePoint common stock on a one-to-one basis;

 

•

all 45,376 shares of Legacy ChargePoint’s outstanding Series C redeemable convertible preferred stock were 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 were 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 were converted into an equivalent number of shares of Legacy ChargePoint common stock on a 1:48.2529 basis.

At the Merger, eligible ChargePoint equity holders received or had 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 Switchback Public Offering on May 16, 2019 ( “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 Common Stock achieved $12.00 for any ten trading days within any twenty consecutive trading day period during the five-year period following the Closing (“Founder Earn Back Triggering Event”), met the 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.

 

20

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 as follows:

 

		Shares
Common stock of Switchback, outstanding prior to Merger			39,264,704
Less redemption of Switchback shares			(33,009	)
Less surrender of Switchback Founder Shares			(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

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, 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 issuance of 60,746,989 shares of 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 $225.0 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, which was met on March 12, 2021

(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 down.

 

21

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 July 31, 2021
		Level 1				Level 2				Level 3				Total
		(in thousands)
Assets
Money market funds		$	454,713			$	—			$	—			$	454,713
Total financial assets		$	454,713			$	—			$	—			$	454,713
Liabilities
Common stock warrant liabilities (Private Placement)		$	—			$	—			$	26,868			$	26,868
Total financial liabilities		$	—			$	—			$	26,868			$	26,868

 

		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

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 July 31, 2021 and January 31, 2021. Realized gains and losses, net of tax, were not material for any of the periods presented.

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

 

22

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				49,264				84,420
Reclassification of warrants to stockholders’ equity (deficit) due to exercise			—				51,756				—
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 July 31, 2021		$	—			$	(26,868	)		$	—

The fair values of the private placement warrant liability, redeemable convertible preferred stock warrant liability and earnout liability are based on significant unobservable inputs, which represent Level 3 measurements within the fair value hierarchy. The significant unobservable inputs used in the fair value measurements of the private placement warrant liability, the redeemable convertible preferred stock warrant liability and the earnout liability include the expected volatility and dividend yield. In determining the fair value of the private placement warrant liability, the Company used the Binomial Lattice Model (“BLM”) that assumes optimal exercise of the Company’s redemption option at the earliest possible date (Note 9). In determining the fair value of the redeemable convertible preferred stock warrant liability, the Company used the Black-Scholes Option Pricing Model (“Black-Scholes”) to estimate the fair value using unobservable inputs including the expected term, expected volatility, risk-free interest rate and dividend yield (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).

 

5.	Composition of Certain Financial Statement Items

Inventories

Inventories consisted of the following:

 

		July 31, 2021				January 31, 2021
		(in thousands)
Raw materials		$	8,421			$	13,029
Work-in-progress			—				68
Finished goods			19,495				20,495
Total Inventories		$	27,916			$	33,592

 

23

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

 

Property and equipment, net

Property and equipment, net consisted of the following:

 

		July 31, 2021				January 31, 2021
		(in thousands)
Furniture and fixtures		$	899			$	1,594
Computers and software			5,843				5,384
Machinery and equipment			12,140				10,605
Tooling			9,666				7,705
Leasehold improvements			9,680				9,398
Owned and operated systems			20,582				17,703
Construction in progress			2,760				2,462
			61,570				54,851
Less: Accumulated depreciation			(29,305	)			(24,863	)
Total Property and Equipment, Net		$	32,265			$	29,988

Depreciation expense for the three months ended July 31, 2021 and 2020 was $2.9 million and $2.4 million, respectively.

Depreciation expense for the six months ended July 31, 2021 and 2020 was $5.6 million and $4.7 million, respectively.

Accrued and other current liabilities

Accrued and other current liabilities consisted of the following:

 

		July 31, 2021				January 31, 2021
		(in thousands)
Accrued expenses		$	19,113			$	18,404
Refundable customer deposits			7,488				6,482
Taxes payable			6,495				5,213
Payroll and related expenses			7,372				7,547
Warranty accruals			3,100				3,000
Operating lease liabilities, current			3,130				2,393
Other liabilities			5,282				4,123
Total Accrued and Other Current Liabilities		$	51,980			$	47,162

 

24

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

 

Revenue

Revenue consisted of the following:

 

		Three Months Ended July 31,								Six Months Ended July 31,
		2021				2020				2021				2020
		(in thousands)								(in thousands)
United States		$	51,109			$	32,347			$	86,219			$	62,638
Rest of World			5,012				2,610				10,412				5,095
Total revenue		$	56,121			$	34,957			$	96,631			$	67,733

 

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 previous 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.

There was no interest expense incurred during the three months ending July 31, 2021; the interest expense incurred during the three months ended July 31, 2020 was $0.8 million.

Total interest expense incurred during the six months ended July 31, 2021 and 2020 was $1.5 million and $1.6 million, respectively. There was no accrued interest as of July 31, 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.

 

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 July 31, 2021, the Company had open purchase commitments for goods and services of $133.7 million, all of which are expected to be received by June 30, 2024.

 

25

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

 

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.

 

26

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 July 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 its customers warranting certain levels of uptime reliability and performance and permitting those customers to receive credits if 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.

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

 

27

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

 

The following table presents future payments of lease liabilities under the Company’s non-cancelable operating leases as of July 31, 2021 (in thousands):

 

		(in thousands)
2022 (remaining six months)		$	2,759
2023			5,111
2024			4,329
2025			4,153
2026			3,837
Thereafter			13,871
Total undiscounted operating lease payments			34,060
Less: imputed interest			(9,348	)
Total operating lease liabilities			24,712
Less: current portion of operating lease liabilities			(3,130	)
Operating lease liabilities, noncurrent		$	21,582

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 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.

Common Stock Reserved for Future Issuance

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

 

		July 31, 2021
Stock options issued and outstanding			26,401,717
Restricted stock units outstanding			4,017,149
Common stock warrants outstanding			39,249,702
Shares available for grant under 2021 Equity Incentive Plan			40,878,653
Shares available for grant under 2021 ESPP			8,177,683
Total shares of common stock reserved			118,724,904

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.

 

28

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

 

9.	Stock Warrants and 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 redeemable convertible preferred stock warrant liability was remeasured and reclassified to additional paid-in capital.

The liability associated with these warrants was subject to remeasurement at each balance sheet date using the Level 3 fair value inputs. See Note 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

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 July 31, 2021, 587,880 Legacy Warrants were net exercised resulting in the issuance of 558,100 shares of Common Stock. During the six months ended July 31, 2021, 1,685,185 Legacy Warrants were net exercised resulting in the issuance of 1,480,080 shares of Common Stock. As of July 31, 2021, there were 37,075,846 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 July 31, 2021. The Company recorded a gain of $3.8 million and $49.2 million for the three and six months ended July 31, 2021, respectively, classified within change in fair value of warrant liabilities in the condensed consolidated statements of operations.

The Private Placement Warrants were valued using the following assumptions under the BLM that assumes optimal exercise of the Company’s redemption option at the earliest possible date:

 

29

ChargePoint Holdings, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

 

		July 31, 2021				February 26, 2021
Market price of public stock		$	23.65				$30.83
Exercise price		$	11.50				$11.50
Expected term (years)			4.6				5.0
Volatility			70.2	%			73.5	%
Risk-free interest rate			0.6	%			0.8	%
Dividend rate			0.0	%			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 by the Public Warrant holders. At the conclusion of the redemption notice period on July 6, 2021, the Company redeemed the remaining 244,481 Public Warrants outstanding for $0.01 per warrant. The Company recognized a loss of $14.3 million for the three months ended July 31, 2021 and a loss of $15.9 million for the six months ended July 31, 2021, classified within change in fair value of warrant liabilities in the condensed consolidated statements of operations.

During the six months ended July 31, 2021, proceeds received for the exercise of Public Warrants were $117.6 million. As of July 31, 2021, no Public Warrants remained outstanding.

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			(1,685,185	)			(4,347,712	)			(10,226,081	)			(16,258,978	)
Warrants Redeemed			—				—				(244,481	)			(244,481	)
Outstanding as of July 31, 2021			37,075,846				2,173,856				—				39,249,702

 

(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.

Contingent Earnout Liability

During the five year period starting at the closing of the Merger (“Earnout Period”), eligible former equity holders of Legacy ChargePoint could receive up to 27,000,000 additional shares of Common Stock (“Earnout Shares”) in the aggregate in three equal tranches if certain Earnout Triggering Events (as described in the Merger Agreement) are fully satisfied. An “Earnout Triggering Event” means the date 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 stock are then listed) is greater or equal to $15.00, $20.00 and $30.00 for any ten trading days within any 20 consecutive trading day period within the Earnout Period.

 

30