Share-Based Compensation

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

As of December 31, 2022, the Company had 33.2 million options, 3.7 million restricted shares and 10.0 million warrants outstanding.

The Company awards common stock and stock options to employees, consultants, and directors as compensation for their services, and accounts for its stock option awards to employees, consultants, and directors pursuant to the provisions of ASC 718. For the options with market conditions, the fair value of each award is estimated on the date of grant using a Monte-Carlo valuation model and the fair value of each option recognized as compensation expense over the derived service period. For the options with performance conditions, the fair value of each award is estimated on the date of grant using the Black-Scholes Merton valuation model and the fair value of each option recognized as compensation expense over the implicit service period. For restricted stock and option awards only with service conditions, the fair value of each option award is estimated on the date of grant using the Black-Scholes Merton valuation model. The Company recognizes the fair value of each option as compensation expense ratably using the straight-line attribution method over the service period, which is generally the vesting period.

Effective as of December 3, 2010 and amended on August 3, 2018, the Company’s Board approved the 2010 Plan pursuant to which options or other similar securities may be granted. On October 22, 2020, the Company's shareholders approved the amendment and restatement of the 2010 Plan. The maximum aggregate number of shares of common stock that may be issued under the 2010 Plan increased from 31.5 million shares to 56.8 million shares. As of December 31, 2022, options available for issuance are 60.3 million shares.

For the years ended December 31, 2022, 2021 and 2020, total share-based payments expense was $10.6 million, $22.0 million and $12.0 million, respectively.

(a)Stock Options

The following table summarizes stock option activity for the years ended December 31, 2022 and 2021:


	Options Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregated Intrinsic Value





Outstanding at December 31, 2020	25,087,416	$	1.29	7.92	$	18,554,241
Granted	9,562,000	2.49		—	—
Exercised	(5,589,084)	1.50		—	7,731,175
Expired	(2,966,509)	1.69		—	—
Forfeited	(4,250,042)	1.10		—	—
Outstanding at December 31, 2021	21,843,781	1.74		8.06	4,596,393
Granted	13,033,750	0.30		—	—
Exercised	(72,334)	0.53		—	—
Expired	(1,038,796)	2.08		—	—
Forfeited	(526,037)	1.75		—	—
Outstanding at December 31, 2022	33,240,364	1.17		7.8	—
Vested as of December 31, 2022	18,756,614	1.57		6.45	—
Expected to vest as of December 31, 2022	14,483,750	0.65		9.53	—

As of December 31, 2022, $5.4 million of total unrecognized compensation expense related to non-vested share options is expected to be recognized over a weighted average period of 1.17 years. The total intrinsic value of shares exercised in the years ended December 31, 2022, 2021 and 2020, was $0.0 million, $7.7 million and $2.4 million, respectively. The total fair value of shares vested in the years ended December 31, 2022, 2021 and 2020, was $8.4 million, $8.4 million and $11.8 million, respectively. Cash received from options exercised in the years ended December 31, 2022, 2021 and 2020, was $0.0 million, $8.4 million and $1.7 million, respectively.

For the options with performance and service conditions, the assumptions used to estimate the fair values of the stock options granted in the year ended December 31, 2022, 2021 and 2020 are as follows:


	Year ended
	December 31, 2022		December 31, 2021		December 31, 2020
Expected term (in years)	0.5 - 5.55		4.79 - 7.17		5.15 - 5.52
Expected volatility	96% - 127%		112% - 130%		101% - 122%
Expected dividend yield	—	%	—	%	—	%
Risk free interest rate	1.69% - 4.58%		0.51% - 1.29%		0.39% - 0.44%

For the options with market conditions, the assumptions used to estimate the fair values of the stock options granted in the year ended December 31, 2021 as follows:


	For the Year Ended December 31, 2021
Expected term (in years)	1.88
Expected volatility	106.92	%
Expected dividend yield	—	%
Risk free interest rate	1.31	%

(b)Warrants

In connection with certain of the Company’s service and fund raising agreements, the Company issued warrants to service providers and investors to purchase the common stock of the Company. As of December 31, 2022, the weighted average exercise price was $0.29, and the weighted average remaining life was 4.89 years.

A summary of the warrants is as follows:


	2022	2021
Warrants Outstanding	Number of Warrants Outstanding and Exercisable	Number of Warrants Outstanding and Exercisable	Exercise Price		Expiration Date
Service providers	—	200,000	$	5.00	July 1, 2022
Service providers	—	700,000	2.50		February 28, 2022-October 1, 2022
Service providers	—	100,000	7.50		January 1, 2023
Service providers	—	100,000	9.00		January 1, 2023
Acuitas Capital, LLC	5,000,000	—	0.29
Acuitas Capital, LLC	5,000,000	—	0.29
	10,000,000	1,100,000

(c)Restricted Shares

In December 2022, the Company granted 8.2 million restricted shares to certain employees and directors under the 2010 Plan which was approved by the Board. The restricted shares were vested either immediately or over 24 months. The aggregated grant date fair value of all those restricted shares was $1.6 million.

In July 2022, the Company granted 0.6 million restricted shares to certain employees under the 2010 Plan which was approved by the Board. The restricted shares were vested immediately on the grant date. The aggregated grant date fair value of all those restricted shares was $0.4 million.

In July 2021, the Company granted 5.0 million restricted shares to seven employees and directors under the 2010 Plan which was approved by the Board. The restricted shares were vested immediately on the grant date. The aggregated grant date fair value of all those restricted shares was $12.4 million.

In November 2020, the Company granted 0.1 million restricted shares to one employee under the 2010 Plan which was approved by the Board of Directors. The restricted shares were vested immediately on the commencement date. The aggregated grant date fair value of all those restricted shares was $0.1 million.

A sumary of the unvested restricted shares is as follows:


	Shares	Weighted-average fair value
Non-vested restricted shares outstanding at December 31, 2020	—	$	—
Granted	5,025,000	2.46
Forfeited	—	—
Vested	(5,025,000)	2.46
Non-vested restricted shares outstanding at December 31, 2021	—
Granted	8,800,000	0.22
Forfeited	—	—
Vested	(5,100,000)	0.25
Non-vested restricted shares outstanding at December 31, 2022	3,700,000	0.19

As of December 31, 2022, there was $0.7 million of unrecognized compensation cost related to unvested restricted shares.