| STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION | 10. STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION Reverse Stock Split At Vicarious Surgical’s annual shareholder meeting
held on June 10, 2024, the Company’s shareholders granted the Company’s board of directors (the “Board of Directors”)
the discretion to effect a reverse stock split of the Company’s issued and outstanding Class A and Class B common stock through
an amendment (the “Certificate of Amendment”) to the Company’s Certificate of Incorporation at a ratio of not less than
1-for-5 and not greater than 1-for-30. The Board of Directors approved effecting a 1-for-30 reverse stock split and authorized the filing
of the Certificate of Amendment for the Reverse Split with the Secretary of State of the State of Delaware. The Reverse Split became effective
in accordance with the terms of the Certificate of Amendment on June 12, 2024. The Certificate of Amendment did not change the number
of authorized shares of common stock or the par value. All references in these unaudited condensed financial statements to shares, share
prices, exercise prices, and other per share information in all periods have been adjusted, on a retroactive basis, to reflect the Reverse
Split. Authorized Shares At June 30, 2024, the Company’s authorized shares
consisted of 300,000,000 shares of Class A common stock, $0.0001 par value; and 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 June 30, 2024, there were no 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. As of June 30, 2024, the Company had 17,248,601 Public
Warrants exercisable for 574,953 shares of Class A common stock and 10,400,000 Private Placement Warrants exercisable for 346,666 shares
of Class A common stock outstanding. Thirty (30) whole warrants are exercisable to purchase one
share of Class A common stock at $345.00 per share. 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 on September 17, 2026 or earlier
upon redemption or liquidation. Redemption of warrants when the price per share of Class
A common stock equals or exceeds $540.00.
● in
whole and not in part;
● at
a price of $0.30 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 $540.00 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 $300.00
● in
whole and not in part;
● at
a price of $3.00 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 $300.00 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 . PSOs include threshold, target, and maximum achievement levels based on the achievement of
specific performance measures. PSOs The 2021 Plan authorizes the Company to issue up to 1,231,496
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. PSUs are issued in the form of performance share
units. 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, 83,680 PSUs were granted and an additional 83,680 PSUs could have been 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, 2024 188,032 $ 90.16
Granted 1,534 $ 9.05
Vested (15,488 ) $ 101.25
Forfeited (27,497 ) $ 59.70
Balance of unvested shares - March 31, 2024 146,581 $ 93.85
Granted 19,995 $ 9.90
Vested (13,955 ) $ 111.47
Forfeited (773 ) $ 59.70
Balance of unvested shares - June 30, 2021 151,848 $ 81.35 The total stock-based
compensation related to RSUs and PSUs during the three and six-month periods ended June 30, 2024 was $1,584 and $3,147, respectively.
As of June 30, 2024, the total unrecognized stock-based compensation expense related to unvested RSUs and PSUs aggregated $9,389 and is
expected to be recognized over a weighted average period of 1.96 years. The aggregate intrinsic value of RSUs granted and vested during
the six months ended June 30, 2024 was $126 and $315, respectively. The aggregate intrinsic value of RSUs outstanding at June 30, 2024
was $891. 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 Class A 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 six months ended June 30, 2024 and June 30, 2023,
the Company granted options to purchase 348,810 and 21,897 shares, respectively, of Class A common stock, to employees and consultants
with a fair value of $2,085 and $1,124 respectively, calculated using the Black-Scholes option-pricing model with the following assumptions:
Six Months Ended
2024 2023
Risk-free interest rate 4.24% - 4.46 % 3.42% - 4.17 %
Expected term (in years) 5.81 - 6.31 6.07 - 6.08
Dividend yield — % — %
Expected volatility 92.78% - 99.51 % 76.18%
- 76.72 % 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 June 30, 2024, there was $10,926 of total gross unrecognized
stock-based compensation expense related to unvested stock options. The costs remaining as of June 30, 2024 are expected to be recognized
over a weighted-average period of 2.17 years. 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 Six Months Ended
2024 2023 2024 2023
Research and development $ 577 $ 805 $ 1,214 $ 1,666
Sales and marketing 343 302 686 595
General and administrative 2,146 2,217 4,257 4,317
Total $ 3,066 $ 3,324 $ 6,157 $ 6,578 The Company plans to generally issue previously unissued
shares of common stock for the exercise of stock options. There were 101,609 shares available for future equity
grants under the 2021 Plan at June 30, 2024. The option activity of the 2021 Plan for the six months
ended June 30, 2024, is as follows: Options Weighted Weighted Outstanding at January 1, 2024 408,999 $ 101.20 7.57 Granted 348,810 7.47 Exercised (857 ) 2.02 Forfeited, expired, or cancelled (36,367 ) 100.33 Options vested and expected to vest at June 30, 2024 720,585 $ 55.99 8.46 The weighted average grant date fair value of options granted
during the six months ended June 30, 2024 and June 30, 2023 was $5.98 and $1.71, respectively. The aggregate intrinsic value of options
exercised during the six months ended June 30, 2024 and June 30, 2023 was $9 and $1,699, respectively. The aggregate intrinsic value of
options outstanding at June 30, 2024 was $20. Common Stock Reserved for Future Issuance As of June 30, 2024 and December 31, 2023, the Company has
reserved the following shares of Class A common stock for future issuance (in thousands):
As of
June 30, December 31,
2024 2023
Common stock options outstanding 721 409
Restricted stock units outstanding 152 188
Shares available for issuance under the 2021 Plan 102 241
Public warrants 575 575
Private warrants 347 347
Total shares of authorized Common Stock reserved for future issuance 1,897 1,760 |
