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Stockholders’ Equity and Stock-Based Compensation | 12 Months Ended
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Dec. 31, 2023
Stockholders’ Equity and Stock-Based Compensation [Abstract] |
STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION | 11. STOCKHOLDERS’ EQUITY AND STOCK-BASED COMPENSATION Authorized Shares At December 31, 2023, the Company’s authorized shares consisted of 300,000,000 shares of Class A common stock, $0.0001 par value; 22,000,000 shares of Class B common stock, $0.0001 par value; and 1,000,000 shares of preferred stock, par value of $0.0001 per share. Preferred Stock Preferred stock shares authorized may be issued from time to time in one or more series, with each series terms, voting, dividend, conversion, redemption, liquidation and other rights to be determined by the Board of Directors at the time of issuance. As of December 31, 2023, there were no shares of preferred stock issued and outstanding. Warrants The Company’s outstanding warrants include Public Warrants, which were issued as one-half of a redeemable Public Warrant per unit issued in D8’s initial public offering on July 17, 2020, and Private Placement Warrants sold in a private placement to D8’s sponsor (the “Sponsor”) in connection with the closing of the initial public offering and in connection with the conversion of D8 working capital loans. Each warrant is exercisable to purchase one share of Class A common stock at $11.50 per share. As of December 31, 2023, the Company had 17,248,601 Public Warrants and 10,400,000 Private Placement Warrants outstanding. The Public Warrants became exercisable at $11.50 per share 30 days after the Closing. If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. The Company filed a registration statement with the SEC that was declared effective as of October 22, 2021 covering the shares of Class A common stock issuable upon exercise of the warrants and is maintaining a current prospectus relating to those shares of Class A common stock until the warrants expire, are exercised or redeemed, as specified in the warrant agreement. The warrants will expire five years after the closing of the Business Combination or earlier upon redemption or liquidation. Redemption of warrants when the price per share of Class A common stock equals or exceeds $18.00. The Company may call the Public Warrants for redemption:
| ● | in whole and not in part;
| ● | at a price of $0.01 per warrant;
| ● | upon a minimum of 30 days’ prior written notice of redemption; and
| ● | if, and only if, the last reported sale price of Class A common stock equals or exceeds $18.00 per share (as adjusted) for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders.
Redemption of warrants when the price per share of Class A common stock equals or exceeds $10.00. The Company may call the Public Warrants for redemption:
| ● | in whole and not in part;
| ● | at a price of $0.10 per warrant;
| ● | upon a minimum of 30 days’ prior written notice of redemption; provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares based on the redemption date and the “fair market value” of the Company’s Class A common stock; and
| ● | if, and only if, the last reported sale price of Class A common stock shares equals or exceeds $10.00 per share (as adjusted) for any 20 trading days within a 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders.
The Private Placement Warrants are identical to the Public Warrants underlying the units sold in D8’s initial public offering, except that the Private Placement Warrants and the shares of Class A common stock issuable upon exercise of the Private Placement Warrants, so long as they are held by the Sponsor or its permitted transferees, (i) are not redeemable by the Company, (ii) could not (including the shares of Class A common stock issuable upon exercise of these warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30 days after the completion of the initial Business Combination, (iii) may be exercised by the holders on a cashless basis and (iv) are entitled to registration rights. If the Private Placement Warrants are held by holders other than the Sponsor or its permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants. Common Stock Classes of Common Stock Class A common stock receives one vote per share. Subject to preferences that may be applicable to any outstanding preferred stock, the holders of shares of Class A common stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by the board of directors out of funds legally available for such purposes. In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, the holders of Class A common stock are entitled to share ratably in all assets remaining after payment of our debts and other liabilities, subject to prior distribution rights of preferred stock or any class or series of stock having a preference over the Class A common stock, then outstanding, if any. Class B common stock receives 20 votes per share and converts into Class A at a one-to-one conversion rate per share. Holders of Class B common stock will share ratably together with each holder of Class A common stock, if and when any dividend is declared by the board of directors. Holders of Class B common stock have the right to convert shares of their Class B common stock into fully paid and non-assessable shares of Class A common stock, on a one-to-one basis, at the option of the holder at any time. Upon the occurrence of certain events, holders of Class B common stock automatically convert into Class A common stock, on a one-to-one basis. In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, the holders of Class B common stock are entitled to share ratably in all assets remaining after payment of our debts and other liabilities, subject to prior distribution rights of preferred stock or any class or series of stock having a preference over the Class B common stock, then outstanding, if any. Stock Based Compensation 2021 Plan — In connection with the Closing, the Company’s stockholders approved the Vicarious Surgical Inc. 2021 Equity Incentive Plan (the “2021 Plan”), pursuant to which 6,590,000 shares of Class A common stock were reserved for future equity grants under the 2021 Plan and 11,794,074 shares of Class A common stock were reserved for issuance under the 2021 Plan upon exercise of outstanding option awards assumed by the Company in connection with the Business Combination. On June 1, 2022, the Company’s stockholders approved an amendment to the 2021 Plan, which provides for the granting of up to 6,590,000 additional shares of Class A common stock under the 2021 Plan as determined by the Board of Directors. On June 1, 2023, the Company’s stockholders approved an amendment to the 2021 Plan, which provides for the granting of up to 6,970,817 additional shares of Class A common stock under the 2021 Plan as determined by the Board of Directors. The 2021 Plan provides for the granting of incentive and nonqualified stock options, restricted stock, and other stock-based awards to employees, officers, directors, consultants, and advisors of the Company. Under the 2021 Plan, incentive and nonqualified stock options may be granted at not less than 100% of the fair market value of the Company’s common stock on the date of grant. If an incentive stock option is granted to an individual who owns more than 10% of the combined voting power of all classes of the Company’s capital stock, the exercise price may not be less than 110% of the fair market value of the Company’s common stock on the date of grant and the term of the option may not be longer than five years. The 2021 Plan authorizes the Company to issue up to 31,944,891 shares of common stock (either Class A or Class B) pursuant to awards granted under the 2021 Plan. The Board of Directors administers the 2021 Plan and determines the specific terms of the awards. The contractual term of options granted under the 2021 Plan is not more than 10 years. The 2021 Plan will expire on April 13, 2031 or an earlier date approved by a vote of the Company’s stockholders or Board of Directors. The Company issues RSUs of Class A common stock to certain employees and members of the board of directors. The RSUs vest over a four-year period. Performance-based RSUs are issued in the form of performance share units (“PSUs”). PSUs include threshold, target, and maximum achievement levels based on the achievement of specific performance measures. PSUs are subject to forfeiture if applicable performance measures are not attained. The expense is recognized over the vesting period, based on the best available estimate of the number of share units expected to vest. Estimates are subsequently revised if there is any indication that the number of share units expected to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognized in the current period. In July 2023, 2,510,422 PSUs were granted and an additional 2,510,422 PSUs could be earned if certain performance measures are overachieved. The activity for common stock subject to vesting is as follows:
|  | Shares Subject to Vesting |  |  | Weighted Average Grant Date Fair Value |
Balance of unvested shares - January 1, 2023 |  |  | 3,085,123 |  |  | $ | 5.01 |
Granted |  |  | 5,081,863 |  |  | $ | 2.08 |
Vested |  |  | (1,493,445 | ) |  | $ | 4.08 |
Forfeited |  |  | (1,034,008 | ) |  | $ | 2.92 |
Balance of unvested shares - December 31, 2023 |  |  | 5,639,533 |  |  | $ | 3.01 |
Total stock-based compensation related to RSUs and PSU’s during the years ended December 31, 2023 and 2022, was $6,120 and $5,286, respectively. As of December 31, 2023, the total unrecognized stock-based compensation expense related to unvested RSUs and PSUs aggregated $12,326 and is expected to be recognized over a weighted average period of 2.3 years. The aggregate intrinsic value of the RSUs granted and vested during the year ended December 31, 2023 was $1,864 and $2,034, respectively. The aggregate intrinsic value of RSUs outstanding at December 31, 2023 was $2,068. The Company grants stock options to employees at exercise prices deemed by the Board of Directors to be equal to the fair value of the common stock at the time of grant. For options with a service condition, the fair value of the Company’s stock options and warrants on the date of grant is determined by a Black-Scholes pricing model utilizing key assumptions such as common stock price, risk-free interest rate, dividend yield, expected volatility and expected life. The Company’s estimates of these assumptions are primarily based on the fair value of the Company’s stock, historical data, peer company data and judgement regarding future trends. The Company uses its publicly traded stock price as the fair value of its common stock. During the years ended December 31, 2023 and 2022, the Company granted options to purchase 4,217,330 and 5,576,191 shares, respectively of Class A common stock, to employees and consultants with a fair value of $5,651 and $15,461, respectively, calculated using the Black-Scholes option-pricing model with the following assumptions:
|  |  | Year Ended December 31, |
|  |  | 2023 |  |  |  | 2022 |
Risk-free interest rate |  |  | 3.42% - 4.39 | % |  |  | 1.94% - 3.92 | %
Expected term (in years) |  |  | 6.02 - 6.08 |  |  |  | 5.52 - 6.08 |
Dividend yield |  |  | — | % |  |  | — | %
Expected volatility |  |  | 74.42% - 79.44 | % |  |  | 68.87% - 70.26 | %
The risk-free interest rate assumption is based upon observed interest rates appropriate for the term of the related stock options. The expected life of employee and non-employee stock options was calculated using the average of the contractual term of the option and the weighted-average vesting period of the option, as the Company does not have sufficient history to use an alternative method to calculate an expected life for employees. The Company does not pay a dividend and is not expected to pay a dividend in the foreseeable future. Expected volatility for the Company’s common stock was determined based on a combination of an average of the historical volatility of a peer group of similar public companies and the Company’s own stock. As of December 31, 2023, there was $13,069 of total gross unrecognized stock-based compensation expense related to unvested stock options. The costs remaining as of December 31, 2023 are expected to be recognized over a weighted-average period of 2.38 years. Total stock-based compensation expense related to all of the Company’s stock-based awards granted is reported in the statements of operations as follows:
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |
Research and development |  | $ | 3,164 |  |  | $ | 2,696 |
Sales and marketing |  |  | 1,256 |  |  |  | 1,296 |
General and administrative |  |  | 8,847 |  |  |  | 8,263 |
Total |  | $ | 13,267 |  |  | $ | 12,255 |
The Company plans to generally issue previously unissued shares of common stock for the exercise of stock options. There were 7,228,226 shares available for future equity grants under the 2021 Plan at December 31, 2023. The option activity of the 2021 Plan for the year ended December 31, 2023, is as follows:
|  |  |  |  | Weighted Average Exercise |  |  | Weighted Average Remaining Contractual Life |
|  | Options |  |  | Price |  |  | (in years) |
Options outstanding at January 1, 2023 |  |  | 14,192,417 |  |  | $ | 3.90 |  |  |  | 8.26 |
Granted |  |  | 4,217,330 |  |  |  | 1.96 |  |  |  |  |
Exercised |  |  | (1,087,090 | ) |  |  | 0.27 |  |  |  |  |
Forfeited, expired, or cancelled |  |  | (5,057,319 | ) |  |  | 4.32 |  |  |  |  |
Options vested and expected to vest at December 31, 2023 |  |  | 12,265,338 |  |  | $ | 3.37 |  |  |  | 7.57 |
The weighted average grant date fair value of options granted during the years ended December 31, 2023 and 2022 was $1.34 and $2.77, respectively. The aggregate intrinsic value of options exercised during the years ended December 31, 2023 and 2022, was $1,774 and $10,066, respectively. The aggregate intrinsic value of options outstanding at December 31, 2023 was $79. Common Stock Reserved for Future Issuance As of December 31, 2023 and 2022, the Company has reserved the following shares of Class A Common Stock for future issuance (in thousands):
|  | As of December 31, |
|  | 2023 |  |  | 2022 |
Common stock options outstanding |  |  | 12,265 |  |  |  | 14,192 |
Restricted stock units outstanding |  |  | 5,640 |  |  |  | 3,085 |
Shares available for issuance under the 2021 Plan |  |  | 7,228 |  |  |  | 3,465 |
Public warrants |  |  | 17,249 |  |  |  | 17,249 |
Private warrants |  |  | 10,400 |  |  |  | 10,400 |
Total shares of authorized Common Stock reserved for future issuance |  |  | 52,782 |  |  |  | 48,391 |

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