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STOCK-BASED COMPENSATION | 6 Months Ended
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Jun. 30, 2022
Share-Based Payment Arrangement [Abstract] |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Share-Based Compensation Plans The Company has granted stock options and restricted stock units (“RSUs”) to certain of our employees and directors pursuant to our stock incentive plans. Stock options have an exercise price equal to the fair market value of the shares on the date of grant and generally expire 10 years from the date of grant. An RSU is a contractual right to receive one share of our common stock in the future, and the fair value of the RSU is based on our share price on the grant date. The Company’s time-based RSUs generally vest one-quarter on each of the second and third anniversaries of the Business Combination date and the remaining one-half on the fourth anniversary of the Business Combination date; however, certain special retention awards may have different vesting terms. In addition, grants of RSUs to our non-employee directors and certain executive officers contain provisions as part of the respective employment agreements that accelerate the vesting of RSU grants in the event of a termination by the Company or a departure by a director or executive officers. The Company also grants performance-based RSUs that vest subject to the achievement of specified performance goals within a specified time-frame. The performance-based RSUs contain provisions that increase or decrease the number of RSUs that ultimately vest, depending upon the level of performance achieved. The Company has also granted RSUs that vest based upon the price of our common stock, which is a market condition. The fair value of awards that contain a market-based condition is estimated using a lattice model to analyze the fair value of the subject shares. The lattice model utilizes multiple stock paths, which are analyzed to determine the fair value of the subject shares. Stock Options Pre-Combination Kore 2014 Equity Incentive Plan During 2020, pre-combination KORE granted awards to certain employees and pre-combination KORE board members. Under pre-combination KORE’s 2014 Equity Incentive Plan (the “2014 Plan”), the board of pre-combination KORE was authorized to grant stock options to eligible employees and directors of pre-combination KORE. The fair value of the options was expensed on a straight-line basis over the requisite service period, which was generally the vesting period. The Plan was terminated on September 30, 2021 in conjunction with the Business Combination. As of December 31, 2020, and June 30, 2021 there were 432,500 stock options outstanding with a weighted average grant date fair value of $15.45, a weighted average exercise price of $141.53 and a weighted average remaining contractual term of 7.2 years. The following is a summary of the Company’s share-based compensation expense related to stock options during the reporting periods shown below:
|  | For the three months ended |  | For the six months ended |
|  | June 30, |
(in ‘000 USD) |  | 2021 |  | 2021 |
Total Stock Compensation Expense |  | $ | 315 |  |  | $ | 630 |  |
As of June 30, 2021, the total unrecognized compensation costs related to outstanding stock options was $2.8 million, which was expected to be recognized over a weighted-average period of 2.2 years. Restricted Stock Units 2021 Long-Term Stock Incentive Plan On September 29, 2021, the board of directors (the “Board”) approved the KORE Group Holdings, Inc. 2021 Long-Term Stock Incentive Plan (the “2021 Plan”) to promote the interests of the Company and its stockholders by (i) attracting and retaining employees and directors of, and consultants to, the Company and its subsidiaries; (ii) motivating such individuals by means of performance-related incentives to achieve longer-range performance goals; and (iii) enabling such individuals to participate in the long-term growth and financial success of the Company. The 2021 Plan allows for the grant of share-based payment awards to employees, directors of the Board, and consultants to the Company. The 2021 Plan is administered by the Compensation Committee of the Board. On December 8, 2021, the Compensation Committee of the Board approved the future grants of certain Restricted Stock Unit Awards, the effectiveness of which were contingent upon the filing and effectiveness of the Form S-8 Registration Statement of the common stock, which occurred on January 4, 2022. The following table summarizes RSU activity during the reporting periods shown below:
|  | Number of Awards outstanding (in Thousands) |  | Weighted- Average grant date fair value (per share) |  | Aggregate Intrinsic Value (in Thousands)
Unvested RSUs at December 31, 2021 |  | — |  |  | $ | — |  |  | — |
Granted |  | 5,690 |  |  | 6.28 |  |  | 35,731 |
Vested |  | — |  |  | — |  |  | — |
Forfeited and canceled |  | (158) |  |  | 6.97 |  |  | (1,104) |
Unvested RSUs at June 30, 2022 |  | 5,532 |  |  |  |  | 34,627 |
During the three and six months ended June 30, 2022, respectively the Company granted 0.3 million and 3.9 million RSUs that vest based on the passage of time. The actual number of performance-based RSUs that could vest will range from 0% to 150% of the 1.6 million unvested RSUs granted, depending upon our level of achievement with respect to the performance goals. During the three and six months ended June 30, 2022, respectively, the Company granted zero and 1.6 million, respectively, of performance based RSUs. In addition, the Company granted approximately 0.2 million RSUs, which vest based on the Company’s stock price attaining a closing price equal to or greater than $13, $15, or $18 per share over any 20 trading days within any 30 consecutive trading day period. The fair value of these RSUs is estimated using a lattice model. Significant inputs used in our valuation of these RSUs included the following:
|  | For the three months ended |  | For the six months ended
|  | June 30,
|  | 2022 |  | 2022
Expected volatility |  | 57.1%-75.2% |  | 57.1%-75.2%
Risk-free interest rate |  | 1.37%-2.09% |  | 1.37%-2.09%
The following is a summary of the Company’s share-based compensation expense related to RSUs during the reporting periods shown below:
|  | For the three months ended |  | For the six months ended
|  | June 30,
(in ‘000 USD) |  | 2022 |  | 2022
Total Stock Compensation Expense |  | $ | 2,501 |  |  | 4,551 |
As of June 30, 2022, the total unrecognized compensation costs related to outstanding RSUs were $30.1 million, which is expected to be recognized over a weighted-average period of 2.8 years.

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