Clever Leaves Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation Plans

The Company's 2018 Equity Incentive Plan, 2020 Equity Incentive Plan and Earnout Plan are described in the Company's 2021 Form 10-K.

Share-Based Compensation Expense

The following table summarizes the Company's share-based compensation expense for each of its awards, included in the Consolidated Statements of Operations for the three and nine months ended September 30, 2022.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

Share-based compensation award type:
Stock Options	$	66	$	283	$	336	$	1,005
RSUs	892		2,981		2,270		7,132
Total Shared Based Compensation Expense	$	958	$	3,264	2,606		8,137

The Company recognized share-based compensation expense in general and administrative expense.

Stock Options

The following table is a summary of options activity for the Company’s equity incentive plans for the nine months ended September 30, 2022:


	Stock Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Balance as at December 31, 2021	784,193	$	5.91	3.68	$	—
Granted	23,114	2.16		7.25	—
Exercised	(158,882)	0.24		—	$	130
Forfeited	(54,427)	7.54		—	—
Expired	(158,104)	5.91		—	—
Balance as of September 30, 2022	435,894	$	7.21	2.71	$	—
Vested and expected to vest as of September 30, 2022	425,361	$	7.13	2.74	$	—
Vested and exercisable as of September 30, 2022	318,079	$	6.81	2.15	$	—

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common shares for all stock options that had exercise prices lower than the fair value of the Company’s common shares.

The weighted-average grant-date fair value per share of stock-options granted during the nine months ended September 30, 2022 and 2021 was $1.95 and $9.97, respectively.

The share-based compensation expense related to unvested stock options awards not yet recognized as of September 30, 2022 and December 31, 2021, was $561 and $1,414, respectively, which is expected to be recognized over a weighted average period of 1.2 and 1.4 years, respectively.

Restricted Share Units

Time-based Restricted Share Units

The fair value for time-based RSUs is based on the closing price of the Company’s common shares on the grant date.

The following table summarizes the changes in the Company’s time-based restricted share unit activity during the nine months ended September 30, 2022:


	Restricted Share Units	Weighted-Average Grant Date Fair Value
Non-vested as of December 31, 2021	502,701	$	10.93
Granted	2,004,324	2.53
Vested	(276,921)	9.19
Canceled/forfeited	(648,385)	3.44
Non-vested as of September 30, 2022	1,581,719	$	3.66

Market-based Restricted Share Units

The Company has previously granted RSUs with both a market condition and a service condition (market-based RSUs) to the Company’s employees. No such market-based RSUs were granted during the nine months ended September 30, 2022. The market-based condition for these awards requires that (i) the Company’s common shares maintain a closing price equal to or greater than $12.50 for any 20 trading days within any consecutive 30 trading day period on or before December 18, 2022 (which condition was met on March 16, 2021) or (ii) the Company's common shares maintain a closing price equal to or greater than $15.00 for any 20 trading days within any consecutive 30 trading day period on or before December 18, 2024. Provided that the market-based condition is satisfied, and the respective employee remains employed by the Company, the market-based restricted share units will vest in four equal annual installments on the applicable vesting date.

The following table presents the weighted-average assumptions used in the Monte Carlo simulation model to determine the fair value of the market-based restricted share units granted in the nine months ended September 30, 2022:


	Weighted Average Assumptions
Grant date share price	$	2.53
Risk-free interest rate	1.6		%
Expected dividend yield	0.0		%
Expected volatility	75		%
Expected life (in years)	2.54 - 2.36

The following table summarizes the changes in the Company’s market-based restricted share unit activity during the nine months ended September 30, 2022:


	Restricted Share Units	Weighted-Average Grant Date Fair Value
Non-vested as of December 31, 2021	1,073,331	$	12.94
Granted	—	—
Vested	(35,268)	13.91
Canceled/forfeited	(305,955)	12.84
Non-vested as of September 30, 2022	732,108	$	12.93