Stock-based Compensation

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Note 12. Stock-based Compensation

Stock Options

The Company maintains the 2016 Stock Incentive Plan and the 2021 Incentive Award Plan (the “Stock Plans”) under which incentive stock options, non-qualified stock options and RSUs may be granted to employees. Under the Stock Plans, the Company has 26,705,443 shares available for issuance as of December 31, 2022.

Under the terms of the Stock Plans, incentive stock options must have an exercise price at or above the fair market value of the stock on the date of the grant, while non-qualified stock options are permitted to be granted below fair market value of the stock on the date of grant. The majority of stock options granted have service-based vesting conditions only. The service-based vesting conditions vary though typically, stock options vest over four years with 25% of stock options vesting on the first anniversary of the grant and the remaining 75% vesting monthly over the remaining 36 months. Option holders have a ten-year period to exercise the options before they expire.

The fair value of stock option awards was determined on the grant date using the Black-Scholes option-pricing model. No new options were granted during the year ended December 31, 2021. The assumptions for the Black-Scholes model for options granted during the period ended December 31, 2022 and 2020 were as follows:


	Year ended December 31,
	2022	2021
Expected term (years)(1)	6.02	5.79 - 6.02
Expected volatility(2)	48.7% - 49.0%	43.2% - 48.2%
Common Stock Value	2.92 - 3.28	6.86 - 14.13
Risk-free interest rate(3)	2.73% - 2.93%	1.79% - 2.55%
Dividend yield(4)	0%	0%

(1)

Expected term is the length of time the grant is expected to be outstanding before it is exercised or terminated. This number is calculated as the midpoint between the vesting term and the original contractual term (contractual period to exercise). If the option contains graded vesting, then the vesting term would be based on the vesting pattern.

(2)

Expected volatility was estimated based on comparable companies' reported volatilities.

(3)

The risk-free rate is an interpolation of yields on U.S. Treasury securities with maturities equivalent to the expected term.

(4)

The Company has assumed a dividend yield of zero as they have no plans to declare dividends in the foreseeable future.

The following table summarized the stock option activity and related information under all stock option plans:


	Number of Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2019		11,913,780		$	0.24		8.73	$	15,707
Granted		7,393,347			0.55		—		—
Exercised		(351,037	)		0.20		—		—
Forfeited		(1,006,417	)		0.40		—		—
Expired		(147,687	)		0.27		—		—
Outstanding as of December 31, 2020		17,801,986		$	0.36		8.27	$	140,560
Exercised		(3,701,243	)		0.25		—		—
Forfeited		(242,387	)		0.41		—		—
Outstanding as of December 31, 2021		13,858,356		$	0.39		7.47	$	99,406
Granted		1,335,000			3.08		—		—
Exercised		(1,464,760	)		0.24		—		—
Forfeited		(294,513	)		0.51		—		—
Outstanding as of December 31, 2022		13,434,083		$	0.67		6.77	$	11,593
Vested and exercisable as of December 31, 2022		10,555,579		$	0.46		6.48	$	10,074
Vested and expected to vest as of December 31, 2022		13,434,083		$	0.67		6.77	$	11,593

The intrinsic value of options exercised during years ended December 31, 2022, 2021 and 2020 was $7.2 million, $32.0 million, and $4.8 million, respectively.

As of December 31, 2022, the Company had $2.1 million of unrecognized stock-based compensation expense related to the stock options. This cost is expected to be recognized over a weighted-average period of 1.7 years.

As of December 31, 2021, the Company recognized $1.1 million of the additional compensation expense for certain stock option grants that had a performance vesting condition that was satisfied as of the Closing of the BCA.

Restricted Stock Units and Performance-based Restricted Stock Units

Beginning November 2020, the Company granted RSUs and PBRSUs to certain employees and consultants pursuant to the 2016 and 2020 Stock Plan. RSU’s typically vest 25 percent upon the one-year anniversary date from the initial vesting date, with 12.5% vesting on each six-month anniversary date over the following three years. The RSUs are subject to a time-based vesting condition and a performance condition tied to the completion of the merger with InterPrivate, both of which must be satisfied in order for the RSUs to be vested and settled for shares of Common Stock. The performance vesting condition for these RSU were met on March 12, 2021. As a result, the Company’s outstanding RSUs vested to the extent the applicable service condition was satisfied as of such date. The vesting of these outstanding RSUs resulted in approximately $2.7 million of incremental stock-based compensation expense for the year ended December 31, 2021.

The following table summarizes our RSU activity (includes performance-based restricted stock units) for the year ended December 31, 2022:


	Shares			Weighted Average Grant Date Fair Value per Share
Outstanding as of December 31, 2019		—		$	—
Granted		1,536,195			7.74
Released		—			—
Forfeited		—			—
Outstanding as of December 31, 2020		1,536,195		$	7.74
Granted		6,206,975			10.51
Released		(758,945	)		9.34
Forfeited		(353,146	)		9.83
Outstanding as of December 31, 2021		6,631,079		$	10.04
Granted		9,200,047			3.20
Released		(2,521,081	)		8.75
Forfeited		(1,364,670	)		8.45
Outstanding as of December 31, 2022		11,945,375		$	5.22

The total fair value of restricted stock and performance based restricted stock awards vested for the years ended December 31, 2022 and 2021, was $8.3 million and $6.6 million, respectively. There were no RSUs granted prior to 2020.

As of December 31, 2022, the Company had $52.7 million of unrecognized stock-based compensation expense related to the RSUs. This cost is expected to be recognized over a weighted average period of 2.8 years.

Restricted Stock

Restricted stock activity for the year ended December 31, 2020 is as follows:


	Shares			Weighted Average Grant Date Fair Value per Share
Outstanding as of December 31, 2019		17,439,354		$	0.03
Granted		—			—
Forfeited		—			—
Vested		(17,439,354	)		0.03
Outstanding as of December 31, 2020		—		$	—

There were no restricted stock granted during the years ended December 31, 2022, 2021 and 2020.

Employee Stock Purchase Plan

In November 2022, the Board and the Company’s stockholders adopted the 2022 Employee Stock Purchase Plan (“ESPP”) under which 1,831,812 shares were authorized for issuance. The ESPP permits eligible employees to purchase the Company’s common stock through payroll deduction with up to 15% of their pre-tax earnings subject to certain Internal Revenue Code limitations. The purchase price of shares is 85% of the lower of the fair market value of the Company’s common stock on the first day of a six-month offering period, or the relevant purchase date. In addition, participants are subject to $25,000 annual purchase restriction. No ESPP shares were purchased during 2022.

Compensation expense

Total stock-based compensation expense by function was as follows (in thousands):


	Year ended December 31,
	2022		2021		2020
Cost of revenue	$	1,161	$	1,483	$	470
Research and development expenses		17,197		12,754		1,895
Sales and marketing expenses		917		371		26
General and administrative expenses		4,972		7,629		1,415
Total	$	24,247	$	22,237	$	3,806

Stock-based compensation of $38 thousand was capitalized in deferred cost for the year ended December 31, 2022. Stock-based compensation capitalized will be recognized as cost when the related non recurring service revenue is recognized.