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Stock-based Compensation | 6 Months Ended
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Jun. 30, 2024
Share-Based Payment Arrangement [Abstract] |
Stock-based Compensation | Stock-based Compensation As of June 30, 2024, the Company has five equity incentive plans: its Amended and Restated 2015 Stock Plan (the “2015 Plan”), the Sense Photonics, Inc. 2017 Equity Incentive Plan (the “Sense Plan”), the Velodyne Lidar, Inc. 2020 Equity Incentive Plan (the “Velodyne Plan”), its 2021 Incentive Award Plan (the “2021 Plan”) and its Amended and Restated 2022 Employee Stock Purchase Plan (the “2022 ESPP” and, collectively with the 2015 Plan, the Sense Plan, the Velodyne Plan and the 2021 Plan, the “Plans”). The Plans, other than the 2022 ESPP, provide for the grant of stock options, stock appreciation rights, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance stock unit awards and other forms of equity compensation (collectively, “equity awards”). In addition, the 2021 Plan provides for the grant of performance bonus awards. New equity awards may only be granted under the Velodyne Plan and the 2021 Plan. Awards under the 2021 Plan and Velodyne Plan can be granted to employees, including officers, directors and consultants of the Company and its subsidiaries, in each case, within the limits provided in the 2021 Plan and Velodyne Plan, respectively. The Company’s 2022 ESPP has been offered to all eligible employees since August 2022 and generally permits certain employees to purchase shares of our common stock through payroll deductions of up to 15% of their compensation of each offering period, subject to certain limitations. The 2022 ESPP provides offering periods that have a duration of 24 months in length and are comprised of purchase periods of six months in length. The offering periods are scheduled to start on the first trading day on or after May 16 and November 16 of each year. Under the 2022 ESPP, the purchase price of a share under the ESPP equals 85% of the lesser of the fair market value of a share of common stock on either the first or last day of the applicable offering period or the last day of the applicable purchase period. In May 2023, the Company increased the share purchase limit under the 2022 ESPP to 3,000 shares of Company common stock per offering period and added Velodyne Lidar, Inc. as a participating employer in the 2022 ESPP. During the three and six months ended June 30, 2024, 184,079 shares of common stock were issued under the 2022 ESPP, at a price of $4.24 per share, which represented 85% of the market price of the common stock on November 16, 2023, the first day of the offering period, which was lower than the closing trading price of the common stock on the exercise date. As of June 30, 2024, 0.7 million shares of the Company’s common stock were pending issuance under the 2022 ESPP. The stock-based compensation expense is calculated as of the beginning of the offering period as the fair value of the 2022 ESPP shares utilizing the Black-Scholes option valuation model and is recognized over the offering period. Stock option activity for the six months ended June 30, 2024 is as follows:
| Number of Shares Underlying Outstanding Options |  | Weighted- Average Exercise Price per Share |  | Weighted- Average Remaining Contractual Term (in years) |  | Aggregate Intrinsic Value
Outstanding—December 31, 2023 | 1,871,649 |  |  | $ | 7.36 |  |  | 6.72 |  | $ | 6,191 |
Options exercised | (76,860) |  |  | 1.19 |  |  |  |  |
Options cancelled | (6,705) |  |  | 16.49 |  |  |  |  |
Outstanding—June 30, 2024 | 1,788,084 |  |  | $ | 7.56 |  |  | 6.19 |  | $ | 7,930 |
Vested and expected to vest—June 30, 2024 | 1,788,084 |  |  | $ | 7.56 |  |  | 6.19 |  | $ | 7,930 |
Exercisable—June 30, 2024 | 1,659,069 |  |  | $ | 7.51 |  |  | 6.19 |  | $ | 7,421 |
The following table summarizes information about stock options outstanding and exercisable at June 30, 2024.
|  | Options Outstanding |  | Options Exercisable
Exercise Price |  | Options Outstanding |  | Weighted Average Remaining Contractual Life (Years) |
$ | 1.85 |  |  | 212,684 |  |  | 6.02 |  | 210,786 |
2.13 |  |  | 809,709 |  |  | 6.26 |  | 745,644 |
14.22 |  |  | 752,408 |  |  | 6.25 |  | 689,706 |
52.40 |  |  | 13,238 |  |  | 3.67 |  | 12,933 |
|  | 1,788,039 |  |  |  |  | 1,659,069 |
As of June 30, 2024, there was approximately $1.4 million of unamortized stock-based compensation expense related to unvested stock options that is expected to be recognized over a weighted average period of 0.3 years. Restricted Stock Units A summary of RSU activity is as follows:
| Number of Shares |  | Weighted Average Grant Date Fair Value (per share)
Unvested—December 31, 2023 | 3,074,939 |  |  | $ | 13.19 |
Granted | 2,334,378 |  |  | 9.77 |
Canceled | (127,957) |  |  | 17.19 |
Vested | (1,070,815) |  |  | 12.85 |
Unvested—June 30, 2024 | 4,210,545 |  |  | $ | 11.26 |
Stock compensation expense is recognized on a straight-line basis over the vesting period of each award of RSUs. As of June 30, 2024, total compensation expense related to unvested RSUs granted to employees, but not yet recognized, was $43.4 million, with a weighted-average remaining vesting period of 1.6 years. RSUs settle into shares of common stock upon vesting. Restricted Stock Awards A summary of RSA activity is as follows:
| Number of Shares |  | Weighted Average Grant Date Fair Value (per share)
Unvested—December 31, 2023 | 380,383 |  |  | $ | 15.30 |
Granted | 533,601 |  |  | 7.94 |
Canceled | — |  |  | — |
Vested | (187,610) |  |  | 12.66 |
Unvested—June 30, 2024 | 726,374 |  |  | $ | 10.58 |
Stock compensation expense is recognized on a straight-line basis over the vesting period of each award of RSAs. As of June 30, 2024, total compensation expense related to unvested RSAs granted to employees, but not yet recognized, was $5.5 million, with a weighted-average remaining vesting period of 1.2 years. The common stock comprising RSAs is issued at grant but, generally, is subject to a risk of forfeiture if the holder terminates service with the Company and its subsidiaries prior to vesting. Stock-Based Compensation Expense The Company recognized stock-based compensation expense for all share-based awards in the condensed consolidated statements of operations and comprehensive loss as follows (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Cost of revenue | $ | 1,210 |  |  | $ | 654 |  |  | $ | 2,123 |  |  | $ | 1,428 |
Research and development | 4,650 |  |  | 8,204 |  |  | 8,838 |  |  | 15,709 |
Sales and marketing | 1,492 |  |  | 3,500 |  |  | 2,892 |  |  | 6,381 |
General and administrative | 3,343 |  |  | 4,108 |  |  | 6,246 |  |  | 14,728 |
Total stock-based compensation | $ | 10,695 |  |  | $ | 16,466 |  |  | $ | 20,099 |  |  | $ | 38,246 |
The following table summarizes stock-based compensation expense by award type (in thousands):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
RSUs | $ | 7,495 |  |  | $ | 13,457 |  |  | $ | 14,304 |  |  | $ | 29,787 |
Stock Options | 1,512 |  |  | 2,007 |  |  | 3,042 |  |  | 4,012 |
Employee stock purchase plan | 514 |  |  | 224 |  |  | 1,019 |  |  | 408 |
RSAs | 1,174 |  |  | 778 |  |  | 1,734 |  |  | 4,039 |
Total stock-based compensation | $ | 10,695 |  |  | $ | 16,466 |  |  | $ | 20,099 |  |  | $ | 38,246 |
Share based compensation recognized upon completion of the Velodyne Merger The Company recognized $6.1 million of stock-based compensation expense in the six months ended June 30, 2023 related to accelerated vesting of certain RSUs upon completion of the Velodyne Merger and termination of employment of some of its executives and members of the board, who had accelerated vesting provisions in the event of a change in control. Additionally, in the six months ended June 30, 2023, the Company recognized $2.4 million of stock-based compensation expense related to accelerated vesting of certain Velodyne restricted stock units, restricted stock awards and performance-based awards upon completion of the Velodyne Merger and termination of employment of some of Velodyne executives and members of the board.

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