STOCK-BASED COMPENSATION (Tables)

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Components of Stock-based Compensation Expense

The following table summarizes the components of stock-based compensation expense included in the consolidated statements of operations:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Stock-Based Compensation Expense:
Cost of revenue	$	125	$	140	$	250	$	253
Sales and marketing expense	431		574		862		928
Research and development expense	709		656		1,410		1,067
General and administrative expense	752		599		1,563		1,095
	$	2,017	$	1,969	$	4,085	$	3,343

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Stock-based compensation expense by type:
Employee stock option plan	$	1,975	$	1,872	$	3,993	$	3,145
Non-employee stock option plan	12		12		23		23
Subsidiary stock option plan	30		85		69		175
	$	2,017	$	1,969	$	4,085	$	3,343

Summary of Share Option Activities

The following table summarizes the Company’s employee share option activities during the six months ended June 30, 2023:

	Number of Option Shares	Weighted Average Grant Date Fair Value		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Outstanding at December 31, 2022	9,211,641	$	3.58	$	8.24	6.36 years
Granted	24,000	6.54		11.85
Exercised	(140,775)	1.64		4.00
Forfeited/cancelled	(24,219)	11.88		24.45
Outstanding at June 30, 2023	9,070,647	$	3.64	$	8.11	5.59 years
Vested and exercisable at June 30, 2023	6,635,252

The following table summarizes the Company’s non-employee share option activities during the six months ended June 30, 2023:

	Number of Option Shares	Weighted Average Grant Date Fair Value		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Outstanding at December 31, 2022	1,483,658	$	0.38	$	1.15	3.68 years
Exercised	(155,429)	0.24		0.57
Forfeited/cancelled	(8,103)	0.22		0.50
Outstanding at June 30, 2023	1,320,126	$	0.40	$	1.22	3.04 years
Vested and exercisable at June 30, 2023	1,308,876

The following table summarizes the ACM Shanghai stock option activities during the six months ended June 30, 2023:

	Number of Option Shares in ACM Shanghai	Weighted Average Grant Date Fair Value		Weighted Average Exercise Price		Weighted Average  Remaining Contractual Term
Outstanding at December 31, 2022	5,377,500	$	0.23	$	1.93	1.76 years
Exercise	(2,150,309)	$	0.20	$	1.88
Forfeited/cancelled	(92,308)	$	0.23	$	1.88
Outstanding at June 30, 2023	3,134,883	$	0.23	$	1.90	1.35 years
Vested and exercisable at June 30, 2023	492,308

Assumptions Used to Determine Fair Value of Options Granted

The fair value of options granted to employees with a service period based condition is estimated on the grant date using the Black-Scholes valuation with following assumptions:

	Six Months Ended June 30, 2023	Years ended December 31, 2022
Fair value of share of common stock (1)	$11.85	$16.83-$25.45
Expected term in years(2)	6.25	5.50-6.25
Volatility(3)	52%	49.43%-50.87%
Risk-free interest rate(4)	4%	1.7%-3.04%
Expected dividend(5)	0%	0%

(1)Equal to closing value on the grant date.

(2)Expected term of share options is based on the average of the vesting period and the contractual term for each grant according to Staff Accounting Bulletin 110.

(3)Volatility is calculated based on the historical volatility of ACM’s comparable companies in the period equal to the expected term of each grant.

(4)Risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term of the share options in effect at the time of grant.

(5)Expected dividend is assumed to be 0% as ACM has no history or expectation of paying a dividend on its common stock.