Rodgers Silicon Valley Acquisition Corp. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Stock-based Compensation

Stock-based Compensation

9 Months Ended

Oct. 02, 2022

Share-Based Payment Arrangement [Abstract]

The Company issues equity awards to employees and non-employees in the form of stock options and restricted stock units (“RSUs”). Additionally, the Company also offers an employee stock purchase plan (“ESPP”) to its eligible employees. In the second quarter of 2022, the Company began to grant performance based RSU (“PRSU”) subject to performance and service vesting conditions. The Company uses Black-Scholes option pricing model to value its stock options granted and the estimated shares to be purchased under the ESPP. For both RSUs and PRSUs, the Company uses its common stock price, which is the last reported sales price on the grant date to value those securities.

In general, the Company recognizes its stock-based compensation expense on a straight-line basis over the requisite service period and records forfeitures as they occur. For PRSUs, the Company uses the graded vesting method to calculate

the stock-based compensation expense. At each reporting period, the Company would recognize and adjust the stock-based compensation expense based on its probability assessment in meeting its PRSUs' performance conditions.

The following table summarizes the total stock-based compensation expense, by operating expense category, recognized in the Condensed Consolidated Statements of Operations for the periods presented below (in thousands).


	Quarters Ended				Fiscal Years-to-Date Ended
	October 2, 2022		October 3, 2021		October 2, 2022		October 3, 2021
Cost of revenue	$	1,067	$	—	$	1,317	$	274
Research and development	3,372		1,290		9,705		4,197
Selling, general and administrative	4,260		1,752		11,095		2,246
Total stock-based compensation expense	$	8,699	$	3,042	$	22,117	$	6,717

For the fiscal year-to-date ended October 2, 2022, the Company capitalized $1.2 million of stock-based compensation as property and equipment, net in the Condensed Consolidated Balance Sheet. For the fiscal year-to-date ended October 3, 2021, the Company capitalized an immaterial amount of stock-based compensation as deferred contract costs, inventory and property and equipment, net in the Condensed Consolidated Balance Sheet. There was no recognized tax benefit related to stock-based compensation for the periods presented. In addition, the Company accrued $1.4 million of bonus to be settled in equity awards as accrued compensation on the Condensed Consolidated Balance Sheet as of October 2, 2022.

As of October 2, 2022, there was approximately $93.6 million of total unrecognized stock-based compensation expense related to unvested equity awards, which are expected to be recognized over a weighted-average period of 3.6 years. As of October 2, 2022, there was approximately $1.4 million of total unrecognized stock-based compensation related to the ESPP, which is expected to be recognized over a period of 1.1 years.

Stock Option Activity

The following table summarized stock option activities for the fiscal year-to-date ended October 2, 2022 (in thousands, except share and per share amount).


	Number of Options Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value (1) (2)
Balances as of January 3, 2021	5,753,005	$	8.88
Granted	46,190	13.82
Exercised	(343,124)	5.98			$	4,077
Forfeited	(372,428)	9.43
Balances as of October 2, 2022	5,083,643	$	9.08	8.5	$	47,348


(1)			The intrinsic value of options exercised is based upon the value of the Company’s stock at exercise.
(2)			The aggregate intrinsic value of the stock options outstanding as of October 2, 2022 represents the value of the Company’s closing stock price at $18.34 on October 2, 2022 in excess of the exercise price multiplied by the number of options outstanding.

Unvested early exercised stock options which are subject to repurchase by the Company are not considered participating securities as those shares do not have non-forfeitable rights to dividends or dividend equivalents. Unvested early exercised stock options are not considered outstanding for purposes of the weighted average outstanding share calculation until they vest.

As of October 2, 2022, 3,342,128 shares remained subject to the Company’s right of repurchase as a result of early exercised stock options. The remaining liability related to early exercised shares as of October 2, 2022 was $0.2 million and was recorded in other current and non-current liabilities in the Condensed Consolidated Balance Sheets.

Restricted Stock Unit and Performance Restricted Stock Unit Activities

The Company generally grants RSUs with service vesting condition and PRSUs with both performance and service vesting conditions. Each RSU or PRSU is not considered issued and outstanding and does not have voting rights until it is converted into one share of the Company’s common stock upon vesting. The following table summarized RSUs and PRSUs activities for the fiscal year-to-date ended October 2, 2022 (in thousands, except share and per share amount).


	RSUs			PRSUs
	Number of Shares Outstanding	Weighted Average Grant Date Fair Value		Number of Shares Outstanding	Weighted Average Grant Date Fair Value
Issued and unvested shares balances as of January 2, 2022	535,449	$	23.38	—	$	—
Granted	4,513,171	13.63		1,500,845	13.41
Vested	(358,747)	15.61		—	—
Forfeited	(256,804)	16.26		—	—
Issued and unvested shares outstanding as of October 2, 2022	4,433,069	$	14.50	1,500,845	$	13.41