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

Share equity incentive plans

v3.22.1
Share equity incentive plans
 12 Months Ended
Dec. 31, 2021
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 stock options and restricted share units (“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 shareholder 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 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, 2020 and 2021 :
December 31,
2020 2021
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 9,887,125  $ 1.77  6.40 9,874,165  $ 1.99  6.83
Granted 2,581,893  2.56  —  1,708,500  3.71  — 
Exercised (1,656,994) 0.87  —  (1,301,233) 0.94  — 
Forfeited (937,859) 3.22  —  (300,038) 3.71  — 
Outstanding at the end of the year 9,874,165  $ 1.99  6.83 9,981,394  $ 2.37  6.65
Exercisable at the end of the year 5,624,558  $ 1.58  5.30 6,150,329  $ 1.99  5.54
The weighted-average grant-date fair value of options granted was $4.39 and $10.34 per share for the years ended December 31, 2020 and 2021, respectively.
The fair value of these options was estimated on the grant date based on the following assumptions:
December 31,
2019 2020 2021
Volatility 50% 50% 60%
Expected term in years 6.25 6.25 6.25
Risk-free interest rate
1.55%-2.54%
0.12% - 1.47%
0.55% -0.92%
Estimated fair value of underlying ordinary shares
2.17-3.44
3.34 - 7.6
12.92- 24.08
Dividend yield 0% 0% 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 determines 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, the expected dividend yield is zero.
Fair value of common 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.
The following table summarizes information about share options outstanding under the 2012 Plan and 2021 Plan as of December 31, 2020 and 2021:
Options Outstanding Options Exercisable
Number Outstanding at December 31, 2020 Weighted Average Remaining Contractual Life (Years) Number Exercisable at December 31, 2020 Weighted Average Remaining Contractual Life (Years)
$0.0003 589,000  2.58 589,000  2.58
$0.01 355,700  9.85 —  0
$0.40 1,264,241  3.18 1,264,241  3.18
$0.60 69,286  4.46 69,286  4.46
$0.652 229,521  0.16 229,521  0.16
$1.43 401,500  9.71 —  0
$1.90 738,530  4.74 738,530  4.74
$2.17 1,604,121  7.12 1,134,964  7.01
$2.25 126,224  5.70 126,224  5.70
$2.388 566,900  9.81 —  0
$2.71 2,761,792  7.99 1,353,667  7.94
$3.44 302,250  8.72 92,125  8.68
$3.57 775,500  9.60 27,000  9.34
$5.97 89,600  9.91 —  0
Total 9,874,165  6.83 5,624,558  5.30
Aggregate intrinsic value $ 55,419  $ 33,818 
Options Outstanding Options Exercisable
Number Outstanding at December 31, 2021 Weighted Average Remaining Contractual Life (Years) Number Exercisable at December 31, 2021 Weighted Average Remaining Contractual Life (Years)
$0.0003 89,000  1.58 89,000  1.58
$0.01 355,700  8.85 155,618  8.85
$0.40 1,149,241  2.05 1,149,241  2.05
$0.60 65,286  3.45 65,286  3.45
$1.43 401,500  8.71 125,468  8.71
$1.90 594,320  3.73 594,320  3.73
$2.17 1,396,871  6.15 1,235,090  6.12
$2.25 117,224  3.24 117,224  3.24
$2.388 489,700  8.69 129,400  8.19
$2.71 2,655,489  6.85 1,936,746  6.76
$3.04 1,401,700  9.08 131,250  9.08
$3.44 248,501  7.36 140,191  6.98
$3.57 748,562  8.60 261,308  8.54
$5.97 79,500  8.91 20,187  8.91
$7.60 184,800  9.08 —  0
$24.08 4,000  9.61 —  0
Total 9,981,394  6.65 6,150,329  5.54
Aggregate intrinsic value $ 155,136  $ 97,907 
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 $6,440 and $23,122 for years ended December 31, 2020 and 2021 , respectively. The grant-date fair value of vested options was $1,762 and $6,266 for the years ended December 31, 2020 and 2021, respectively.
The total unrecognized compensation cost as of December 31, 2021 was $19,578 which will be recognized over a weighted-average period of 2.37 years.
The following table summarizes RSU activity for the years ended December 31, 2020 and 2021:
December 31,
2020		 The weighted average fair value at grant date December 31,
2021		 The weighted average fair value at grant date
(Number of units) (Number of units)
Outstanding at the beginning of the year
—  $ —  132,500  $ 7.60 
Granted 132,500  7.60  880,022  20.41 
Vested —  —  (10,354) 11.15 
Forfeited —  —  (34,371) 14.46 
Outstanding at the end of the year
132,500  7.60  967,797  18.97 
Unvested RSUs 132,500  7.60  967,797  18.97 
As of December 31, 2020 and 2021, the Company had $996 and $16,542 of unrecognized compensation expense related to non-vested RSUs, expected to be recognized over a weighted average period of 3.96 and 3.40 years, respectively.
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 will be 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 will be 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 our ordinary shares under our 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 ours or of any parent or subsidiary of ours; or
•holds rights to purchase ordinary shares under all employee share purchase plans of ours or any parent or subsidiary of ours that accrue at a rate that exceeds $25,000 worth of our ordinary shares for each calendar year in which such rights are outstanding at any time.
As of December 31, 2021, the Company has affected an ESPP for eligible employees effective as of December 1, 2021, for a duration of 6 months. As of December 31, 2021, no shares were purchased under the ESPP.
The following table summarizes the share-based compensation, including the share-based compensation of the secondary transactions described in Note 12, recorded in each line item in the accompanying consolidated states of comprehensive income (loss):
Year Ended December 31,
2019 2020 2021
Cost of revenue $ 38  $ 40  $ 211 
Research and development 452  1,107  4,058 
Sales and marketing 427  821  3,450 
General and administrative 1,087  2,832  3,452 
Total $ 2,004  $ 4,800  $ 11,171