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Share-Based Compensation | 12 Months Ended
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Dec. 31, 2024
Share-Based Payment Arrangement [Abstract] |
Share-Based Compensation | Share-Based Compensation 2016 Share Option and Incentive Plan In January 2016, in connection with its U.S. IPO, the board of directors and shareholders of the Company approved the 2016 Share Option and Incentive Plan (the “2016 Plan”), which became effective in February 2016. The Company initially reserved 65,029,595 ordinary shares for the issuance of awards under the 2016 Plan, plus any shares available under the 2011 Option Plan (the “2011 Plan”), and not subject to any outstanding options as of the effective date of the 2016 Plan, along with underlying share awards under the 2011 Plan that are cancelled or forfeited without issuance of ordinary shares. As of December 31, 2024, ordinary shares cancelled or forfeited under the 2011 Plan that were carried over to the 2016 Plan totaled 5,166,900. The 2016 Plan provided for an annual increase in the shares available for issuance, to be added on the first day of each fiscal year, beginning on January 1, 2017, equal to the lesser of (i) five percent (5%)% of the outstanding shares of the Company’s ordinary shares on the last day of the immediately preceding fiscal year or (ii) such number of shares determined by the Company’s board of directors or the compensation committee. On January 1, 2018, 29,603,616 ordinary shares were added to the 2016 Plan under this provision. However, in August 2018, in connection with the Hong Kong IPO, the board of directors of the Company approved an amended and restated 2016 Plan to remove this “evergreen” provision and implement other changes required by the Hong Kong Stock Exchange (“HKEx”) rules. In December 2018, the shareholders of the Company approved a second amended and restated 2016 Plan to increase the number of shares authorized for issuance by 38,553,159 ordinary shares, as well as amend the cap on annual compensation to independent directors and make other changes. In June 2020, the shareholders approved an Amendment No. 1 to the 2016 Plan to increase the number of shares authorized for issuance by 57,200,000 ordinary shares and to extend the term of the plan through April 13, 2030. The number of shares available for issuance under the 2016 Plan is subject to adjustment in the event of a share split, share dividend or other change in the Company’s capitalization. As of December 31, 2024, share-based awards to acquire 83,064,175 ordinary shares were available for future grant under the 2016 Plan. In order to continue to provide incentive opportunities under the 2016 Plan, the Board of Directors and shareholders of the Company approved an amendment to the 2016 Plan (the “Amendment No. 2”), which became effective as of June 22, 2022, to increase the number of authorized shares available for issuance under the 2016 Plan by 66,300,000 ordinary shares, or 5%, of the Company’s outstanding shares as of March 31, 2022. In June 2024, the shareholders approved a third amended and restated 2016 Plan to increase the number of shares authorized for issuance by 92,820,000. 2018 Inducement Equity Plan In June 2018, the board of directors of the Company approved the 2018 Inducement Equity Plan (the “2018 Plan”) and reserved 12,000,000 ordinary shares to be used exclusively for grants of awards to individuals who were not previously employees of the Company or its subsidiaries, as a material inducement to the individual’s entry into employment with the Company or its subsidiaries, within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. The 2018 Plan was approved by the board of directors upon recommendation of the compensation committee, without shareholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules. The terms and conditions of the 2018 Plan, and the forms of award agreements to be used thereunder, are substantially similar to the 2016 Plan and the forms of award agreements thereunder. In August 2018, in connection with the listing of the Company’s ordinary shares on the HKEx, the board of directors of the Company approved an amended and restated 2018 Plan to implement changes required by the HKEx rules. Upon the effectiveness of Amendment No. 2 to the 2016 Plan, on June 22, 2022, the 2018 Plan was terminated to the effect that no new equity awards shall be granted under the plan but the outstanding equity awards under the plan shall continue to vest and/or be exercisable in accordance with their terms. 2018 Employee Share Purchase Plan In June 2018, the shareholders of the Company approved the 2018 Employee Share Purchase Plan (the “ESPP”). Initially, 3,500,000 ordinary shares of the Company were reserved for issuance under the ESPP. In August 2018, in connection with the Hong Kong IPO, the board of directors of the Company approved an amended and restated ESPP to remove an “evergreen” share replenishment provision originally included in the plan and implement other changes required by the HKEx rules. In December 2018, the shareholders of the Company approved a second amended and restated ESPP to increase the number of shares authorized for issuance by 3,855,315 ordinary shares to 7,355,315 ordinary shares. In June 2024, the shareholders of the Company approved a fourth amended and restated ESPP to increase the number of shares authorized for issuance by 5,070,000 ordinary shares to 12,425,315 ordinary shares. The ESPP allows eligible employees to purchase the Company’s ordinary shares (including in the form of ADSs) at the end of each offering period, which will generally be six months, at a 15% discount to the market price of the Company’s ADSs at the beginning or the end of each offering period, whichever is lower, using funds deducted from their payroll during the offering period. Eligible employees are able to authorize payroll deductions of up to 10% of their eligible earnings, subject to applicable limitations. The following tables summarizes the shares issued under the ESPP:
|  |  |  | Market Price 1 |  | Purchase Price 2 |  |
Issuance Date |  | Number of Ordinary Shares Issued |  | ADS |  | Ordinary |  | ADS |  | Ordinary |  | Proceeds
August 31, 2024 |  | 1,035,996 |  |  | $ | 165.20 |  |  | $ | 12.69 |  |  | $ | 140.27 |  |  | $ | 10.78 |  |  | $ | 11,178 |
February 29, 2024 |  | 1,021,397 |  |  | $ | 165.65 |  |  | $ | 12.74 |  |  | $ | 140.80 |  |  | $ | 10.83 |  |  | $ | 11,063 |
August 31, 2023 |  | 794,144 |  |  | $ | 207.55 |  |  | $ | 15.97 |  |  | $ | 176.42 |  |  | $ | 13.57 |  |  | $ | 10,777 |
February 28, 2023 |  | 930,582 |  |  | $ | 171.10 |  |  | $ | 13.16 |  |  | $ | 145.44 |  |  | $ | 11.19 |  |  | $ | 10,414 |
August 31, 2022 |  | 861,315 |  |  | $ | 171.66 |  |  | $ | 13.20 |  |  | $ | 145.91 |  |  | $ | 11.22 |  |  | $ | 9,667 |
February 28, 2022 |  | 667,160 |  |  | $ | 210.52 |  |  | $ | 16.19 |  |  | $ | 178.94 |  |  | $ | 13.76 |  |  | $ | 9,183 |
1 The market price is the lower of the closing price on Nasdaq on the issuance date or the offering date, in accordance with the terms of the ESPP. 2 The purchase price is the price which was discounted from the applicable market price, in accordance with the terms of the ESPP. As of December 31, 2024, 4,953,682 ordinary shares were available for future issuance under the ESPP. Share options Generally, share options have a contractual term of 10 years and vest over a three- to five-year period, with the first tranche vesting one calendar year after the grant date or the service relationship start date and the remainder of the awards vesting on a monthly basis thereafter. Restricted shares and restricted share units generally vest over a four-year period, with the first tranche vesting one calendar year after the grant date or the service relationship start date and the remainder of the awards vesting on a yearly basis thereafter, or sometimes vest upon the achievement of pre-specified performance conditions. The following table summarizes the Company’s share option activities under the 2011, 2016 and 2018 Plans:
| Number of Options |  | Weighted Average Exercise Price |  | Weighted Average Grant Date Fair Value |  | Weighted Average Remaining Contractual Term |  | Aggregate Intrinsic Value
|  |  | $ |  | $ |  | Years |  | $
Outstanding at December 31, 2021 | 72,204,888 |  |  | 7.08 |  |  |  |  |  |  |
Granted | 12,516,816 |  |  | 12.34 |  |  | 6.40 |  |  |  |  |
Exercised | (5,898,217) |  |  | 4.63 |  |  |  |  |  |  | 52,258 |
Forfeited | (2,296,634) |  |  | 16.46 |  |  |  |  |  |  |
Outstanding at December 31, 2022 | 76,526,853 |  |  | 7.85 |  |  |  |  |  |  |
Granted | 9,817,925 |  |  | 16.37 |  |  | 8.14 |  |  |  |  |
Exercised | (6,974,331) |  |  | 4.54 |  |  |  |  |  |  | 92,051 |
Forfeited | (1,225,334) |  |  | 17.60 |  |  |  |  |  |  |
Outstanding at December 31, 2023 | 78,145,113 |  |  | 9.06 |  |  |  |  |  |  |
Granted | 9,180,301 |  |  | 12.53 |  |  | 6.62 |  |  |  |  |
Exercised | (6,812,624) |  |  | 3.87 |  |  |  |  |  |  | 69,946 |
Forfeited | (2,530,134) |  |  | 15.87 |  |  |  |  |  |  |
Outstanding at December 31, 2024 | 77,982,656 |  |  | 9.70 |  |  |  |  | 4.83 |  | 429,581 |
Exercisable as of December 31, 2024 | 60,173,280 |  |  | 8.42 |  |  |  |  | 3.7 |  | 406,868 |
Vested and expected to vest at December 31, 2024 | 75,311,250 |  |  | 9.55 |  |  |  |  | 4.7 |  | 426,174 |
As of December 31, 2024, the unrecognized compensation cost related to 15,137,970 unvested share options expected to vest was $82,424. This unrecognized compensation will be recognized over an estimated weighted-average amortization period of 2.4 years. The total fair value of employee share option awards vested during the years ended December 31, 2024, 2023 and 2022 was $68,420, $61,121 and $62,548, respectively. Fair value of options The Company uses the binomial option-pricing model in determining the estimated fair value of the options granted. The model requires the input of highly subjective assumptions including the estimated expected stock price volatility and, the exercise multiple for which employees are likely to exercise share options. For expected volatilities, the trading history and observation period of the Company’s own share price is used in conjunction with historical price volatilities of ordinary shares of several comparable companies in the same industry as the Company. For the exercise multiple, the Company was not able to develop an exercise pattern as reference, thus the exercise multiple is based on management’s estimation, which the Company believes is representative of the future exercise pattern of the options. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury Bills yield curve in effect at the time of grant. The following table presents the range of fair values and the assumptions used to estimate those fair values of the share options granted in the years presented:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Fair value of ordinary share | $5.72 ~ $9.19 |  | $7.26 ~ $10.72 |  | $5.51 ~ $9.04
Risk-free interest rate | 3.8% ~ 4.6% |  | 3.4% ~ 4.6% |  | 1.8% ~ 3.9%
Expected exercise multiple | 2.8 |  | 2.8 |  | 2.8
Expected volatility | 57% ~ 58% |  | 58% ~ 60% |  | 51% ~ 60%
Expected dividend yield | 0% |  | 0% |  | 0%
Contractual life | 10 years |  | 10 years |  | 10 years
Restricted share units The following table summarizes the Company’s restricted share unit activities under the 2016 and 2018 Plans:
| Numbers of Shares |  | Weighted-Average Grant Date Fair Value
|  |  | $
Outstanding at December 31, 2021 | 36,082,982 |  |  | 18.33 |
Granted | 38,707,669 |  |  | 12.46 |
Vested | (12,533,586) |  |  | 16.37 |
Forfeited | (6,859,892) |  |  | 16.72 |
Outstanding at December 31, 2022 | 55,397,173 |  |  | 14.87 |
Granted | 34,573,994 |  |  | 15.57 |
Vested | (17,862,598) |  |  | 14.71 |
Forfeited | (5,707,546) |  |  | 15.47 |
Outstanding at December 31, 2023 | 66,401,023 |  |  | 15.22 |
Granted | 49,693,592 |  |  | 12.53 |
Vested | (21,251,477) |  |  | 15.53 |
Forfeited | (9,012,471) |  |  | 14.46 |
Outstanding at December 31, 2024 | 85,830,667 |  |  | 13.67 |
Expected to vest at December 31, 2024 | 72,956,067 |  |  | 13.67 |
As of December 31, 2024, the unrecognized compensation cost related to unvested restricted share units expected to vest was $801,403. This unrecognized compensation will be recognized over an estimated weighted-average amortization period of 2.7 years. Share-based compensation expense The following table summarizes total share-based compensation cost recognized for the years ended December 31, 2024, 2023 and 2022:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
| $ |  | $ |  | $
Research and development | 186,113 |  |  | 163,550 |  |  | 139,348 |
Selling, general and administrative | 255,680 |  |  | 204,038 |  |  | 163,814 |
Total | 441,793 |  |  | 367,588 |  |  | 303,162 |

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