Stock-Based Compensation

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

9. Stock-Based Compensation

The following table summarizes stock-based compensation expense by financial statement line item in the Company’s condensed consolidated statement of operations and comprehensive loss for the periods presented (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Research and development	$	39,927	$	216,838	$	86,427	$	477,846
General and administrative		21,561		389,677		48,047		781,490
Total	$	61,488	$	606,515	$	134,474	$	1,259,336

The Company grants stock-based incentive awards pursuant to the 2021 Incentive Award Plan (the “2021 Plan”) and the 2022 Inducement Plan (the “2022 Inducement Plan”). As of June 30, 2023, there were approximately 187.9 million shares and 8.3 million shares available for future issuance under the 2021 Plan and 2022 Inducement Plan, respectively.

Stock Options

A summary of stock option activity for the six months ended June 30, 2023 is presented below:


	Number of Shares (1)			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value (2)
	(in thousands)					(in years)		(in thousands)
Outstanding as of December 31, 2022		10,501		$	0.34
Granted		979			1.90
Exercised		(1,572	)		0.01
Outstanding as of June 30, 2023		9,908			0.55		2.55	$	14,614
Exercisable as of June 30, 2023		8,707			0.30		1.56		14,614

(1) Excludes 1.9 million shares underlying options issued outside the accounting for compensation awards under ASC 718.

(2) The aggregate intrinsic value is calculated as the difference between the Company's closing stock price on the last trading day of the quarter and the exercise prices, multiplied by the number of in-the-money stock options.

The aggregate intrinsic value of stock options exercised during the six months ended June 30, 2023 and 2022 was $2.9 million and $9.1 million, respectively. During the six months ended June 30, 2023 and 2022, the Company granted options with an aggregate fair value of $1.4 million and $1.2 million, respectively. The weighted-average fair value of options granted during the six months ended June 30, 2023 and 2022 was $1.43 and $1.84 per share, respectively, and was calculated using the following key input assumptions in the Black-Scholes option-pricing model:


	Six Months Ended June 30,
	2023			2022
Risk-free interest rate		3.94	%		3.25	%
Expected volatility		93	%		75	%
Expected term (in years)		5.5			5.5
Dividend yield		0	%		0	%

As of June 30, 2023, there was $1.8 million of unrecognized compensation expense related to stock options to be recognized over a weighted-average period of 1.2 years.

Restricted Stock and Restricted Stock Units

During the six months ended June 30, 2022, the Company cash settled approximately 3.2 million restricted stock units (“RSUs”) granted to non-employee directors for a total cash payment of $9.8 million.

A summary of the RSU and restricted stock award (“RSA”) activity for the six months ended June 30, 2023 is presented below:


	Restricted Stock Units					Restricted Stock Awards
	Number of Shares (in thousands)			Weighted Average Grant Date Fair Value		Number of Shares (in thousands)			Weighted Average Grant Date Fair Value
Nonvested as of December 31, 2022		134,436		$	5.84		4		$	1.99
Granted		88,869			1.32		—			—
Vested		(27,217	)		6.83		(4	)		1.99
Forfeited		(11,852	)		4.24		—			—
Nonvested as of June 30, 2023		184,236			3.61		—			—

The weighted average grant date fair value of RSUs granted during the six months ended June 30, 2023 and 2022 was $1.32 and $3.79, respectively. No RSAs were granted during the six months ended June 30, 2023 and 2022.

The aggregate grant date fair value of the RSUs that vested during the six months ended June 30, 2023 and 2022 was $185.9 million and $199.3 million, respectively. The aggregate grant date fair value of the RSAs that vested during the six months ended June 30, 2023 and 2022 was de minimis.

As of June 30, 2023, there was $413.6 million of unrecognized compensation expense related to RSUs to be recognized over a weighted-average period of 3.2 years.

Earnouts

Earnout shares represent equity awards in the form of RSUs and RSAs that were granted to existing shareholders of the Company as of the closing date of the Company's merger with SRNG on September 16, 2021 (the “Closing Date”). The earnout shares are subject to the same terms and conditions as the underlying awards (including with respect to vesting and termination-related provisions). Additionally, the earnout shares are subject to a market condition that will be met when the trading price of the Company's common stock is greater than or equal to $12.50, $15.00, $17.50 and $20.00 for any 20 trading days within any period of 30 consecutive trading days, on or before the fifth anniversary of the Closing Date (collectively, the “Earnout Targets”). The first Earnout Target of $12.50 per share was met on November 15, 2021.

A summary of activity during the six months ended June 30, 2023 for the earnout shares is presented below:


	Number of Shares (in thousands)			Weighted Average Grant Date Fair Value
Nonvested as of December 31, 2022		23,520		$	12.79
Vested		(307	)		13.34
Forfeited		(241	)		12.25
Nonvested as of June 30, 2023		22,972			12.79

The aggregate grant date fair value of the earnout shares that vested during the six months ended June 30, 2023 and 2022 was $4.1 million and $5.8 million, respectively.

As of June 30, 2023, there was $9.9 million of unrecognized compensation expense related to earnout shares to be recognized over a weighted-average period of 1.7 years.