| STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION | 10. STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION Authorized Shares At September 30, 2023, the Company’s authorized shares
consisted of 300,000,000 shares of Class A common stock, $0.0001 par value, 22,000,000 shares of Class B common stock, $0.0001
par value, and 1,000,000 shares of preferred stock, par value of $0.0001 per share. Preferred Stock Preferred stock shares authorized may be issued from time
to time in one or more series, with each series terms, voting, dividend, conversion, redemption, liquidation and other rights to be determined
by the Board of Directors at the time of issuance. As of September Warrants The Company’s outstanding warrants include Public
Warrants, which were issued as one-half of a redeemable Public Warrant per unit issued in D8’s initial public offering on July 17,
2020, and Private Placement Warrants sold in a private placement to D8’s sponsor (the “Sponsor”) in connection with
the closing of the initial public offering and in connection with the conversion of D8 working capital loans. Each warrant is exercisable
to purchase one share of Class A common stock at $11.50 per share. As of September The Public Warrants became exercisable at $11.50 per share
30 days after the Closing. If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even
if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. The Company filed
a registration statement with the SEC that was declared effective as of October 22, 2021 covering the shares of Class A common stock issuable
upon exercise of the warrants and is maintaining a current prospectus relating to those shares of Class A common stock until the warrants
expire, are exercised or redeemed, as specified in the warrant agreement. The warrants will expire five years after the closing of
the Business Combination or earlier upon redemption or liquidation. Redemption of warrants when the price per share of Class
A common stock equals or exceeds $18.00.
● in
whole and not in part;
● at
a price of $0.01 per warrant;
● upon
a minimum of 30 days’ prior written notice of redemption; and
● if,
and only if, the last reported sale price of Class A common stock equals or exceeds $18.00 per share (as adjusted) for any 20 trading
days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption
to the warrant holders. Redemption of warrants when the price per share of Class
A common stock equals or exceeds $10.00
● in
whole and not in part;
● at
a price of $0.10 per warrant;
● upon
a minimum of 30 days’ prior written notice of redemption; provided
● if,
and only if, the last reported sale price of Class A common stock shares equals or exceeds $10.00 per share (as adjusted) for any 20
trading days within a 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant
holders. The Private Placement Warrants are identical to the Public
Warrants underlying the units sold in D8’s initial public offering, except that the Private Placement Warrants and the shares of
Class A common stock issuable upon exercise of the Private Placement Warrants, so long as they are held by the Sponsor or its permitted
transferees, (i) are not redeemable by the Company, (ii) could not (including the shares of Class A common stock issuable upon exercise
of these warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30 days after the completion
of the initial Business Combination, (iii) may be exercised by the holders on a cashless basis and (iv) are entitled to registration rights.
If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants
will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants. Common Stock Classes of Common Stock Class A common stock receives one vote per share. Subject
to preferences that may be applicable to any outstanding preferred stock, the holders of shares of Class A common stock are entitled to
receive ratably such dividends, if any, as may be declared from time to time by the board of directors out of funds legally available
for such purposes. In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, the holders of
Class A common stock are entitled to share ratably in all assets remaining after payment of our debts and other liabilities, subject to
prior distribution rights of preferred stock or any class or series of stock having a preference over the Class A common stock, then outstanding,
if any. Class B common stock receives 20 votes per share and converts
into Class A at a one-to-one conversion rate per share. Holders of Class B common stock will share ratably together with each holder of
Class A common stock, if and when any dividend is declared by the board of directors. Holders of Class B common stock have the right to
convert shares of their Class B common stock into fully paid and non-assessable shares of Class A common stock, on a one-to-one basis,
at the option of the holder at any time. Upon the occurrence of certain events, holders of Class B common stock automatically convert
into Class A common stock, on a one-to-one basis. In the event of any voluntary or involuntary liquidation, dissolution or winding up
of our affairs, the holders of Class B common stock are entitled to share ratably in all assets remaining after payment of our debts and
other liabilities, subject to prior distribution rights of preferred stock or any class or series of stock having a preference over the
Class B common stock, then outstanding, if any. Stock Based Compensation 2021 Plan The 2021 Plan provides for the granting of incentive and
nonqualified stock options, restricted stock, and other stock-based awards to employees, officers, directors, consultants, and advisors
of the Company. Under the 2021 Plan, incentive and nonqualified stock options may be granted at not less than 100% of the fair market
value of the Company’s common stock on the date of grant. If an incentive stock option is granted to an individual who owns more
than 10% of the combined voting power of all classes of the Company’s capital stock, the exercise price may not be less than 110%
of the fair market value of the Company’s common stock on the date of grant and the term of the option may not be longer than five
years . The 2021 Plan authorizes the Company to issue up to 31,944,891
shares of common stock (either Class A or Class B) pursuant to awards granted under the 2021 Plan. The Board of Directors administers
the 2021 Plan and determines the specific terms of the awards. The contractual term of options granted under the 2021 Plan is not more
than 10 years. The 2021 Plan will expire on April 13, 2031 or an earlier date approved by a vote of the Company’s stockholders or
Board of Directors . The Company issues RSUs of Class A common stock to certain
employees and members of the board of directors. The RSUs vest over a four-year period. Performance-based RSUs are issued in the form
of performance share units (“PSUs”). PSUs include threshold, target, and maximum achievement levels based on the achievement
of specific performance measures. PSUs are subject to forfeiture if applicable performance measures are not attained. The expense is recognized
over the vesting period, based on the best available estimate of the number of share units expected to vest. Estimates are subsequently
revised if there is any indication that the number of share units expected to vest differs from previous estimates. Any cumulative adjustment
prior to vesting is recognized in the current period. In July 2023, 2,510,422 PSUs were granted and an additional 2,510,422 PSUs could
be earned if certain performance measures are overachieved. The activity for common stock subject to vesting is as follows:
Shares Weighted
Balance of unvested shares - January 1, 2023 3,085,123 $ 5.01
Granted 5,044,878 $ 2.10
Vested (1,037,432 ) $ 4.36
Forfeited (146,297 ) $ 3.80
Balance of unvested shares - September 30, 2023 6,946,272 $ 3.02 Total stock-based
compensation related to RSUs and PSUs during the three and nine-month periods ended September 30, 2023 was $1,722 and $4,598, respectively.
As of September 30, 2023, the total unrecognized stock-based compensation expense related to unvested RSUs and PSUs aggregated $15,558
and is expected to be recognized over a weighted average period of 2.58 years. The aggregate intrinsic value of RSUs granted and vested
during the nine months ended September 30, 2023 was $2,980 and $1,877, respectively. The aggregate intrinsic value of RSUs outstanding
at September 30, 2023 was $4,103. The Company grants stock options to employees at exercise
prices deemed by the Board of Directors to be equal to the fair value of the common stock at the time of grant. For options with a service
condition, the fair value of the Company’s stock options and warrants on the date of grant is determined by a Black-Scholes pricing
model utilizing key assumptions such as common stock price, risk-free interest rate, dividend yield, expected volatility and expected
life. The Company’s estimates of these assumptions are primarily based on the fair value of the Company’s stock, historical
data, peer company data and judgement regarding future trends. The Company uses its publicly traded stock price as the fair value of its
common stock. During the nine months ended September September
Nine
Months Ended September 30,
2023 2022
Risk-free interest rate 3.42% - 4.39 % 1.95% - 3.01 %
Expected term (in years) 6.02 - 6.08 5.52 - 6.07
Dividend yield — % — %
Expected volatility 74.42% - 79.44 % 68.87% - 70.26 % The risk-free interest rate assumption is based upon observed
interest rates appropriate for the term of the related stock options. The expected life of employee and non-employee stock options was
calculated using the average of the contractual term of the option and the weighted-average vesting period of the option, as the Company
does not have sufficient history to use an alternative method to calculate an expected life for employees. The Company does not pay a
dividend and is not expected to pay a dividend in the foreseeable future. Expected volatility for the Company’s common stock was
determined based on a combination of an average of the historical volatility of a peer group of similar public companies and the Company’s
own stock. As of September September Total stock-based compensation expense related to all of
the Company’s stock-based awards granted is reported in the statements of operations as follows:
Three Months Ended Nine Months Ended
2023 2022 2023 2022
Research and development $ 850 $ 743 $ 2,516 $ 1,742
Sales and marketing 331 383 926 945
General and administrative 2,432 2,523 6,750 6,019
Total $ 3,613 $ 3,649 $ 10,192 $ 8,706 The Company plans to generally issue previously unissued
shares of common stock for the exercise of stock options. There were 3,959,540 shares available for future equity
grants under the 2021 Plan at September The option activity of the 2021 Plan for the nine months
ended September
Options Weighted Weighted
Outstanding at January 1, 2023 14,192,417 $ 3.90 8.26
Granted 4,217,330 1.96
Exercised (885,829 ) 0.30
Forfeited, expired, or cancelled (2,639,359 ) 4.78
Options vested and expected to vest at September 30, 2023 14,884,559 $ 3.40 7.02 The weighted average grant date fair value of options granted
during the nine months ended September September September September September Common Stock Reserved for Future Issuance As of September
As of
September 30, December 31,
2023 2022
Common stock options outstanding 14,885 14,192
Restricted stock units outstanding 6,946 3,085
Shares available for issuance under the 2021 Plan 3,959 3,465
Public warrants 17,249 17,249
Private warrants 10,400 10,400
Total shares of authorized Common Stock reserved for future issuance 53,439 48,391 |
