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STOCK-BASED COMPENSATION | 9 Months Ended
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Sep. 30, 2022
Share-based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION 2016 Stock Plan On October 10, 2016, the Company amended and restated the 2013 Equity Incentive Plan (the 2013 Plan) and changed the name of the plan to Arteris, Inc. 2016 Incentive Plan (the 2016 Plan). Adoption of the 2016 Plan provides for participation by foreign nationals or those employed outside of the United States. The 2016 Plan provides for the granting of the following types of stock awards: incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards (RSUs) and other stock awards. The number of shares authorized for award was 20,803,838. The Company has granted awards of common stock in the form of 14,142,208 shares as of December 31, 2021. Following the Company’s IPO in October 2021, all future grants will be made under the 2021 Plan (as defined below), w ith none remaining available for future grant under the 2016 Plan. 2021 Stock Plan The Company adopted the 2021 Incentive Award Plan (the 2021 Plan) effective October 26, 2021. The 2021 Plan provides for a variety of stock-based compensation awards, including stock options, stock appreciation rights, or SARs, restricted stock awards, restricted stock unit awards, performance bonus awards, performance stock unit awards, dividend equivalents, or other stock or cash based awards. Following the effectiveness of the 2021 Plan, the Company will not make any further grants under the 2016 Plan. However, the 2016 Plan will continue to govern the terms and conditions of the outstanding awards granted under this plan. Shares of common stock subject to awards granted under the 2016 Plan that are forfeited, lapse unexercised and withheld to cover taxes which following the effective date of the 2021 Plan are not issued under the 2016 Plan will be available for issuance under the 2021 Plan. 2021 Employee stock purchase plan The Company adopted the 2021 Employee Stock Purchase Plan (the 2021 ESPP) effective on October 26, 2021. The 2021 ESPP would enable eligible employees of the Company to purchase shares of common stock at a discount to fair market value. As of September 30, 2022, there had been no offering period under the ESPP. Shares Available for Future Grant Shares available for future grant consisted of the following:
| As of
| September 30, 2022 |  |
Shares available for future grant under the 2021 Plan | 3,469,764 |  |  |
Shares available for future grant under the 2021 ESPP | 922,306 |  |  |
The Company issues new shares upon a share option exercise or release of restricted stock units. Stock Options The following table summarizes the stock option activities under the Company’s 2016 Plan:
| Options Outstanding
| Number of Options |  | Weighted-Average Exercise Price |  | Weighted-Average Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value ($'000s)
BALANCE—December 31, 2021 | 5,407,170 |  |  | $ | 0.96 |  |  | 7.16 |  | $ | 108,964 |
Exercised | (1,022,050) |  |  | $ | 0.60 |  |  |  |  |
Canceled | (347,399) |  |  | $ | 1.19 |  |  |  |  |
BALANCE—September 30, 2022 | 4,037,721 |  |  | $ | 1.03 |  |  | 6.49 |  | $ | 22,738 |
Options vested and exercisable—September 30, 2022 | 3,011,042 |  |  | $ | 0.90 |  |  | 6.09 |  | $ | 17,354 |
The aggregate intrinsic value of the options exercised during the nine months ended September 30, 2022 and 2021 was $9.8 million and $1.2 million, respectively. The total grant-date fair value of options vested was $0.3 million during both the nine months ended September 30, 2022 and 2021. As of September 30, 2022, there was $0.5 million of unamortized stock-based compensation cost related to unvested stock options, which is expected to be recognized over a weighted-average period of 2.0 years. The Company had no stock option grants during the nine months ended September 30, 2022 and 2021. Restricted Stock Units The following table summarizes the restricted stock units activities under the Company’s 2016 and 2021 Plans:
| Restricted Stock Units
| Number of Shares |  | Weighted-Average Grant Date Fair Value
Unvested—December 31, 2021 | 3,925,097 |  |  | $ | 5.60 |
Granted | 2,440,603 |  |  | $ | 11.76 |
Vested | (1,008,620) |  |  | $ | 6.22 |
Forfeited | (252,733) |  |  | $ | 12.07 |
Unvested—September 30, 2022 | 5,104,347 |  |  | $ | 8.11 |
The total grant-date fair value of restricted stock units vested was $6.3 million and less than $0.1 million during the nine months ended September 30, 2022 and 2021, respectively. As of September 30, 2022, there was $34.0 million of unamortized stock-based compensation cost related to unvested restricted stock units, which is expected to be recognized over a weighted-average period of 3.2 years. Stock-based Compensation Stock-based compensation expense is recorded on a departmental basis, based on the classification of the award holder. The following table presents the amount of stock-based compensation related to stock-based awards to employees on the Company’s condensed consolidated statements of loss (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30, |  |
| 2022 |  | 2021 |  | 2022 |  | 2021 |  |  |  |
Cost of revenue | $ | 118 |  |  | $ | 15 |  |  | $ | 474 |  |  | $ | 42 |  |  |  |  |
Research and development | 1,798 |  |  | 225 |  |  | 4,435 |  |  | 645 |  |  |  |  |
Sales and marketing | 679 |  |  | 23 |  |  | 1,678 |  |  | 72 |  |  |  |  |
General and administrative | 794 |  |  | 170 |  |  | 2,495 |  |  | 385 |  |  |  |  |
Total stock-based compensation | $ | 3,389 |  |  | $ | 433 |  |  | $ | 9,082 |  |  | $ | 1,144 |  |  |  |  |

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- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
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