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Stock-based Compensation | 12 Months Ended
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Dec. 31, 2021
Share-based Payment Arrangement [Abstract] |
Stock-based Compensation | NOTE 11 - STOCK-BASED COMPENSATION: In September 2021, the Company adopted the “Valens Semiconductor Ltd. 2021 Share Incentive Plan”. The Company’s stock options and Restricted Stock Units (RSUs) have a term of up to 10 years from grant date unless extended by the Board of Directors. Options and RSUs generally vest as follows: 25% on the first anniversary from the “Vesting Start Date” as defined in the grant agreement and remainder vest ratably over the following 12 quarters. During 2021, the Company added 8,370,000 Ordinary Shares to the Ordinary Shares pool reserved for issuance (2,318,860 in 2020). As of December 31, 2021, and 2020, the number of ordinary shares included in the Company’s stock incentive plans totaled to 28,383,788 and 20,013,788, respectively. Stock Options On September 30, 2021 the vesting of 814,272 options of one of the Company’s executives were accelerated. The Company expensed $3,396 thousand in the general and administrative expenses due to such vesting acceleration. The following is a summary of the status of the Company’s share option plan as of December 31, 2021, as well as changes during the years:
|  | December 31, 2021 |
|  | Number of Options |  |  | Weighted- Average Exercise price |
Options outstanding at the beginning of the year |  |  | 15,955,892 |  |  | $ | 0.71 |
Granted during the year |  |  | 1,662,897 |  |  | $ | 0.90 |
Exercised during the year |  |  | (1,722,880 | ) |  | $ | 0.72 |
Forfeited during the year |  |  | (446,396 | ) |  | $ | 0.84 |
Outstanding at the end of the year |  |  | 15,449,513 |  |  | $ | 0.73 |
Options exercisable at year-end |  |  | 11,449,733 |  |  | $ | 0.68 |
The following table summarizes information about share options outstanding as of December 31, 2021:
Outstanding as of December 31, 2021 |  |  | Exercisable as of December 31, 2021 |
Range of exercise prices |  | Number outstanding |  |  | Weighted average remaining contractual term |  |  | Weighted average exercise price |  |  | Aggregate intrinsic value (U.S. dollars in thousands) |  |  | Number Exercisable |  |  | Weighted average remaining contractual term |  |  | Weighted Average exercise price |  |  | Aggregate intrinsic value (U.S. dollars in thousands) |
$0.15-$0.86 |  |  | 15,403,350 |  |  |  | 6.12 |  |  | $ | 0.72 |  |  |  | 107,517 |  |  |  | 11,416,017 |  |  |  | 5.29 |  |  | $ | 0.67 |  |  |  | 80,243 |
$1.87 |  |  | 5,963 |  |  |  | 9.03 |  |  | $ | 1.87 |  |  |  | 35 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
$2.10 |  |  | 33,126 |  |  |  | 2.69 |  |  | $ | 2.10 |  |  |  | 186 |  |  |  | 33,126 |  |  |  | 2.69 |  |  | $ | 2.10 |  |  |  | 186 |
$9.07 |  |  | 7,074 |  |  |  | 9.95 |  |  | $ | 9.07 |  |  |  | — |  |  |  | 590 |  |  |  | 9.95 |  |  | $ | 9.07 |  |  |  | — |
The following assumptions were used for options granted during the year in order to estimate the fair value of stock-based compensation awards:
|  | 2021 |  |  | 2020 |
Expected term |  |  | 6-10 |  |  |  | 6-10 |
Expected volatility |  |  | 46.71%-50.7% |  |  |  | 48.15 | %
Expected dividend rate |  |  | 0 | % |  |  | 0 | %
Risk-free rate |  |  | 0.61%-1.74 | % |  |  | 0.42%-1.69 | %
During 2021, 2020 and 2019, 321,777, 3,347,705 and 1,003,185 options respectively, were granted to several related parties (please refer to Note 16 regarding Related Parties). As of December 31, 2021, the unrecognized compensation costs related to unvested stock options totaled to $13,853 thousand, which are expected to be expensed over a weighted-average period of 2.7 years. 2,300,980 out of the outstanding options that have not yet vested as of December 31, 2021, have acceleration mechanisms according to certain terms set forth in the grant agreements primarily in the case of a M&A Transaction which constitutes a Liquidation Event (as defined in Note 9). The unrecognized compensation costs related to those unvested stock options are $7,281 thousand, which are expected to be recognized over a weighted-average period of 2.3 years. The following table presents the classification of the stock options expenses for the periods indicated:
|  | Year Ended December 31 |
|  | 2021 |  |  | 2020 |  |  | 2019 |
|  | U.S. dollars in thousands |
Cost of revenue |  |  | 158 |  |  |  | 178 |  |  |  | 180 |
Research and development |  |  | 1,684 |  |  |  | 1,267 |  |  |  | 1,266 |
Selling, general and administrative |  |  | 7,981 |  |  |  | 3,884 |  |  |  | 1,418 |
Total stock-based compensation -Stock Options |  |  | 9,823 |  |  |  | 5,329 |  |  |  | 2,864 |
Restricted Stock Units The following is a summary of the status of the Company’s RSU’s as of December 31, 2021, as well as changes during the year:
|  | December 31, 2021
|  | Number of RSUs |  |  | Weighted- Average Grant Date Fair Value
RSUs outstanding at the beginning of the year |  |  | — |  |  | —
Granted during the year |  |  | 133,384 |  |  | $7.89
Exercised during the year |  |  | — |  |  | —
Forfeited during the year |  |  | — |  |  | —
Outstanding at the end of the year |  |  | 133,384 |  |  | $7.89
RSUs exercisable at year-end |  |  | 616 |  |  | $7.89
Outstanding as of December 31, 2021 |  |  | Exercisable as of December 31, 2021 |
Range of exercise prices |  |  | Number outstanding |  |  | Weighted average remaining contractual term |  |  | Weighted average exercise price |  |  | Aggregate intrinsic value (U.S. dollars in thousands) |  |  | Number Exercisable |  |  | Weighted average remaining contractual term |  |  | Weighted Average exercise price |  |  | Aggregate intrinsic value (U.S. dollars in thousands) |
$ | 7.89 |  |  |  | 133,384 |  |  |  | 9.96 |  |  | $ | 7.89 |  |  | $ | 76 |  |  |  | 616 |  |  |  | 9.96 |  |  | $ | 7.89 |  |  |  | ( | *)
(*) Less than $1 thousand As of December 31, 2021, the unrecognized compensation cost related to unvested RSUs totaled to approximately $914 thousand and is expected to be expensed over a weighted-average recognition period of approximately 3.8 years. During 2021, 2020 and 2019, 7,398, 0 and 0 RSU’s respectively, were granted to several related parties (please refer to Note 17 regarding Related Parties). The following table presents the classification of RSU’s expenses for the periods indicated:
|  | Year Ended December 31 |
|  | 2021 |  |  | 2020 |  |  | 2019 |
|  | U.S. dollars in thousands |
Cost of revenue |  |  | 6 |  |  |  | — |  |  |  | — |
Research and development |  |  | 22 |  |  |  | — |  |  |  | — |
Selling, general and administrative |  |  | 18 |  |  |  | — |  |  |  | — |
Total stock-based compensation-RSUs |  |  | 46 |  |  |  | — |  |  |  | — |

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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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