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

6 Months Ended

Jun. 30, 2021

Share-based Payment Arrangement [Abstract]

SHARE-BASED COMPENSATION

Stock Options

The following table summarizes the Company’s stock option activity since December 31, 2020:


	Stock Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Balance as at December 31, 2020	896,888	$	5.22	3.96	$	2,889
Granted	60,079	$	13.92	9.70	—
Exercised	(40,942)	$	0.24	—	$	434
Forfeited	(27,857)	$	12.11	—	—
Expired	(85,399)	$	8.40	—	—
Balance as at June 30, 2021	802,769	$	5.96	3.97	$	3,361
Vested and expected to vest as at June 30, 2021	791,488	$	5.90	4.09	$	3,364
Vested and exercisable as at June 30, 2021	413,241	$	6.23	3.77	$	1,702

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 share-based awards granted during the six months ended June 30, 2021 was $10.11.

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 three months ended June 30, 2021:


	Restricted Share Units	Weighted-Average Grant Date Fair Value
Unvested as of December 31, 2020	78,634	$	3.25
Granted	365,300	14.04
Vested	(12,824)	8.66
Canceled/forfeited	(6,219)	13.89
Unvested as of June 30, 2021	424,891	$	12.28

Market-based Restricted Share Units

During the six months ended June 30, 2021, the Company granted RSUs with both a market condition and a service condition (market-based RSUs) to the Company’s employees. The market-based condition for these awards requires that the Company’s

common shares maintain a closing price equal to or greater than $12.50 or $15.00 per share for any 20 trading days within any consecutive 30 trading day period on or before December 18, 2022 or December 18, 2024, respectively. 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 six months ended June 30, 2021:


	Six Months Ended
	June 30, 2021
Grant date share price	$	14.40
Risk-free interest rate	0.5		%
Expected dividend yield	0.0		%
Expected volatility	90		%
Expected life (in years)	1.8 - 3.8

The following table summarizes the changes in the Company’s market-based restricted share unit activity during the six months ended June 30, 2021:


	Restricted Share Units	Weighted-Average Grant Date Fair Value
Unvested as of December 31, 2020	—	$	—
Granted	1,038,718	13.89

Canceled/forfeited	(20,666)	4.02
Unvested as of June 30, 2021	1,018,052	$	13.89

No market-based RSUs vested during the six months ended June 30, 2021.

Please refer to Note 16 for RSUs granted subsequent to June 30, 2021.

Share-Based Compensation Expense

The following table summarizes the Company's recognized share-based compensation expense for each of its awards for the periods presented:


	Six Months Ended		Three Months Ended
Share-based compensation award type	June 30, 2021	June 30, 2020	June 30, 2021	June 30, 2020

Stock Options	721	713	365	297
RSUs	4,152	—	2,958	—
Total Shared Based Compensation Expense	4,873	713	3,323	297

The Company recognized share-based compensation expense in general and administrative expense in its Condensed Consolidated Statements of Operations.