Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Share equity incentive plans

v3.24.0.1
Share equity incentive plans
 12 Months Ended
Dec. 31, 2023
Share-Based Payment Arrangement [Abstract]  
Share equity incentive plans Share equity incentive plans
In 2010, the Company's Board of Directors approved a Share Option Plan (The “2010 Plan“), pursuant to which incentive and nonqualified stock options were able to be granted to employees, officers, directors, consultants and other service providers of the Company. In 2012, the Company's Board of Directors approved an Equity Incentive Plan (The “2012 Plan“), pursuant to which, as amended, incentive and nonqualified share options and RSUs may be granted to employees, officers, directors, consultants and other service providers of the Company or its subsidiaries. The Company reserved an aggregate amount of 17,339,974 shares for issuance under the 2010 Plan and the 2012 Plan, as amended.
In April 2021, the Company’s board of directors approved the 2021 Share Incentive Plan (the “2021 Plan”) which became effective, following shareholders approval, in connection with the Company’s IPO. The Company reserved an aggregate amount of 1,300,000 shares for issuance under the 2021 Plan. The 2021 Plan provides for an annual increase on the first day of each year beginning in 2022 and on January 1st of each calendar year thereafter during the term of the 2021 Plan equal to the lesser of: (i) 5% of the total number of ordinary shares outstanding as of the end of the last day of the immediately preceding calendar year, and (ii) such smaller amount of shares as is determined by the board of directors, if so determined prior to the January 1st of the calendar year in which the increase will occur.
In addition, any Ordinary Shares (i) underlying an award granted under the 2021 Plan or the 2012 Plan that has expired, or was canceled, terminated, forfeited, or settled in cash in lieu of issuance of ordinary shares, without having been exercised; (ii) which were part of the pool reserved for awards under the 2012 Plan but not granted as of the effective date of the 2021 Plan, or (iii) if permitted by the board of directors, tendered to pay the exercise price or withholding obligation with respect to an award under the 2021 Plan or 2012 Plan, shall automatically be available for grant of awards under the 2021 Plan.
The 2010 Plan, 2012 Plan and 2021 Plan are administered by the Company’s board of directors (the “Plan Administrator”). The Plan Administrator determines the exercise price and vesting schedules for share options and RSUs (including PRSUs) granted under the plans on the date of grant. Share options and RSU grants generally vest over a four-year period and generally have contractual terms of ten years.
The following table summarizes share option activity for the years ended December 31, 2022 and 2023:
2022 2023
Number
of
Options		 Weighted Average Exercise Price Weighted
Average remaining Contractual Term
(in years)		 Number
of
Options		 Weighted Average Exercise Price Weighted
Average remaining Contractual Term
(in years)
Outstanding at the beginning of the year 9,981,394  $ 2.37  6.65 8,362,930  $2.28 5.25
Granted —  —  —  —  — — 
Exercised (911,307) 2.23  —  (863,806) 2.67  — 
Forfeited (707,157) 3.56  —  (147,725) 3.45  — 
Outstanding at the end of the year 8,362,930  $ 2.28  5.25 7,351,399  $2.21 4.04
Exercisable at the end of the year 7,001,928  $ 2.18  4.75 6,844,376  $2.15 3.83
The weighted-average grant-date fair value of share options granted was $10.34 per share for the year ended December 31, 2021. No share options were granted during the years ended December 31, 2022 and 2023.
The fair value of the share options granted in the year ended December 31, 2021 was estimated on the grant date based on the following assumptions:
Volatility 60%
Expected term in years 6.25
Risk-free interest rate
0.55% - 0.92%
Estimated fair value of underlying ordinary shares
12.92 - 24.08
Dividend yield 0%
Expected volatility – The Company performed an analysis of its peer companies with similar expected lives to develop an expected volatility assumption.
Expected term – The expected term represents the period that options are expected to be outstanding. For option grants that are considered to be “plain vanilla,” the Company determined the expected term using the simplified method. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options.
Risk-free interest rate – Based upon market quoted market yields for the United States Treasury debt securities.
Expected dividend yield – Since the Company has never paid and has no intention to pay cash dividends on ordinary shares in the near term, the expected dividend yield is zero.
Fair value of ordinary shares – Prior to the Company’s IPO, as the Company’s Ordinary Shares were not publicly traded, the fair value was determined by the Company’s board of directors, with input from management and valuation reports prepared by third-party valuation specialists.
The share-based compensation expenses are classified in the consolidated statements of comprehensive income (loss) according to the activities that the employees owning the awards perform. The Company does not recognize any expense for awards that do not ultimately vest, except for awards where vesting is conditioned upon a market condition.
Intrinsic value represents the potential amount receivable by the option holders had all option holders exercised their options as of such date.
The intrinsic value of the exercised options was $23,122, $8,212 and $3,037 for the years ended December 31, 2021, 2022 and 2023, respectively. The grant-date fair value of vested options was $9,593 and $5,296 for the years ended December 31, 2022 and 2023, respectively.
The total unrecognized compensation cost as of December 31, 2023 was $3,559, which will be recognized over a weighted-average period of 0.94 years.
The following table summarizes RSU (including PRSU) activity for the years ended December 31, 2022 and 2023:
2022 2023
Number of RSUs Weighted Average Fair Value at grant date Number of RSUs Weighted Average Fair Value at grant date
Outstanding and unvested at the beginning of the year 967,797  $ 18.97  2,866,980  $ 12.06 
Granted 2,678,036  10.66  2,820,708  6.54 
Vested (319,516) 17.91  (1,060,404) 11.83 
Forfeited (459,337) 15.06  (623,948) 10.90 
Outstanding and unvested at the end of the year 2,866,980  12.06  4,003,336  8.16 
As of December 31, 2023, the Company had $27,524 of unrecognized compensation expense related to non-vested RSUs, expected to be recognized over a weighted average period of 2.76 years.
Employee Share Purchase Plan
In April 2021, the Company’s Board of Directors approved the 2021 Employee Share Purchase Plan (the “ESPP”) which became effective, following shareholder approval, in connection with the Company’s IPO. The Company reserved an aggregate amount of 2,000,000 shares under the ESPP Plan. The number of ordinary shares that are available for sale under the ESPP also includes an annual increase on the first day of each fiscal year beginning with the 2022 fiscal year, equal to the lesser of: (a) 1% of the ordinary shares outstanding on the last day of the immediately preceding calendar year, as determined on a fully diluted basis, (b) such smaller number of ordinary shares as may be determined by the board of directors and (c) 3,000,000 ordinary shares. The ESPP is administered by the Company’s board of directors.
Generally, all of the Company’s employees are eligible to participate if they are customarily employed by the Company, or any participating subsidiary or affiliate, for at least 20 hours per week and more than five months in any calendar year. However, an employee may not be granted rights to purchase ordinary shares under the Company’s ESPP if such employee:
•Immediately after the grant would own capital shares and/or hold outstanding options to purchase such shares possessing 5% or more of the total combined voting power or value of all classes of capital shares of the Company or of any parent or subsidiary of the Company; or
•Holds rights to purchase ordinary shares under all employee share purchase plans of the Company or any parent or subsidiary of the Company that accrue at a rate that exceeds $25,000 worth of the Company’s ordinary shares each calendar year in which such rights are outstanding at any time.
The Company issued 357,508 and 293,208 ordinary shares under the ESPP during the year ended December 31, 2022 and 2023 . The Company did not issue any ordinary shares under the ESPP during the year ended December 31, 2021. As of December 31, 2023, 2,862,076 ordinary shares remain available for grant under the ESPP.
The Company recognized $108, $1,243 and $572 of stock-based compensation expense related to the ESPP during the years ended December 31, 2021, 2022 and 2023, respectively. Total unrecognized compensation cost related to the ESPP was approximately $216 as of December 31, 2023, and will be recognized as compensation expense over a weighted average period of 0.4 years.
The following table summarizes the share-based compensation recorded in each line item in the accompanying consolidated statements of comprehensive income (loss):
Year Ended December 31,
2021 2022 2023
Cost of revenue $ 211  $ 599  $ 635 
Research and development 4,058  5,287  5,782 
Sales and marketing 3,450  5,995  5,196 
General and administrative 3,452  5,106  6,514 
Total $ 11,171  $ 16,987  $ 18,127