On November 18, 2015, the Company’s Board of Directors adopted and approved the 2015 Equity Incentive Plan (the 2015 Plan), which authorized the Company to grant up to 223,424 ordinary shares in the form of incentive share options, nonstatutory share options, share appreciation rights, restricted share awards, restricted share units and other share awards. The types of share-based awards, including the rights amount, terms, and exercisability provisions of grants are determined by the Company’s Board of Directors. The purpose of the 2015 Plan was to provide the Company with the flexibility to issue share-based awards as part of an overall compensation package to attract and retain qualified personnel. On May 18, 2017, the Company amended the 2015 Plan to increase the number of ordinary shares available for issuance under the 2015 Plan by 219,605 shares to 443,029 shares.

On March 14, 2018, the Company’s Board of Directors adopted and approved the 2018 Equity Incentive Plan (the 2018 Plan), which became effective upon the execution and delivery of the underwriting agreement related to the Company’s IPO. Since adopting the 2018 Plan, no further grants can be made under the 2015 Plan. The ordinary shares underlying any options that are forfeited, cancelled, repurchased or are otherwise terminated by the Company under the 2015 Plan will not be added back to the ordinary shares available for issuance.

The 2018 Plan originally authorized the Company to grant up to 1,018,459 ordinary shares in the form of incentive share options, nonstatutory share options, share appreciation rights, restricted share awards, restricted share units, performance share awards, performance cash awards and other share awards. The types of share-based awards, including the amount, terms, and exercisability provisions of grants are determined by the Company’s Board of Directors. The ordinary shares underlying any options that are forfeited, cancelled, repurchased or are otherwise terminated by the Company under the 2018 Plan are added back to the ordinary shares available for issuance under the 2018 Plan.

On December 5, 2018, pursuant to powers delegated to it by the Board of Directors of the Company, the Compensation Committee approved an increase in the number of ordinary shares available to be granted pursuant to the 2018 Plan by 4% of the total number of shares of the Company’s issued share capital on December 31, 2018, being 574,081 ordinary shares.

On February 14, 2020, pursuant to powers delegated to it by the Board of Directors of the Company, the Compensation Committee approved, by written resolution, an increase of 594,758 ordinary shares to the number of ordinary shares available to be granted pursuant to the 2018 Plan, being just under 4% of the total number of the Company’s ordinary shares outstanding shares on December 31, 2019, in accordance with the terms of the 2018 Plan.

On June 10, 2020, at the Company’s annual general meeting of shareholders, the shareholders approved and adopted an amended and restated 2018 Plan which, among other things, included an increase of 2,250,000 ordinary shares to the number of ordinary shares reserved for issuance under the 2018 Plan. 

On June 23, 2021, at the Company’s annual general meeting of shareholders, the shareholders approved an amendment to the amended and restated 2018 Plan to increase the number of ordinary shares reserved for issuance under the amended and restated 2018 Plan by 15,000,000 ordinary shares to 19,437,298 ordinary shares.

On November 24, 2021, the Company’s Board of Directors adopted and approved the 2021 Inducement Equity Incentive Plan (the 2021 Inducement Plan) reserving 5,000,000 of its ordinary shares to be used exclusively for grants of awards to individuals that were not previously employees or directors of the Company (or following such individuals’ bona fide period of non-employment with the company), as a material inducement to such individuals’ entry into employment with the company within the meaning of Rule 5635(c)(4) of the Nasdaq Listing Rules. The terms and conditions of the 2021 Inducement Plan are substantially similar to the 2018 Plan.

Restricted Ordinary Shares

In connection with the Company’s formation, 413,110 restricted ordinary shares were issued on October 14, 2015 to the Company’s founders at par value. These ordinary shares are subject to various restrictions pursuant to ordinary share purchase agreements between the Company and each founder, including restrictions on transfer and a Company right of repurchase. The restricted ordinary shares were 25% vested as of October 14, 2016 and 1/36^th of the remaining restricted ordinary shares vested on a monthly basis thereafter (subject to acceleration of vesting in connection with certain change of control transactions). A change in status occurred on November 18, 2015 when the founders became employees of the Company. The grant date of these shares is now considered to be November 18, 2015 when the fair value was $3.14 per share.

The Company recorded share-based compensation expense for the restricted ordinary shares based on the grant date fair value. The Company recorded an expense of $260 for the year ended December 31, 2019. Restricted ordinary shares were fully vested as of December 31, 2019 and there was no restricted ordinary share activity for the years ended December 31, 2021 and 2020.

Share Options

Unless specified otherwise in an individual option agreement, share options granted under the 2015 Plan, the 2018 Plan and the 2021 Inducement Plan generally have a ten year term and a four year vesting period. The vesting requirement is conditioned upon a grantee’s continued service with the Company during the vesting period. Once vested, all awards are exercisable from the date of grant until they expire. The option grants are non-transferable. Vested options generally remain exercisable for 90 days subsequent to the termination of the option holder’s service with the Company. In the event of an option holder’s disability or death while employed by or providing service to the Company, the exercisable period extends to twelve months or eighteen months, respectively.

The fair value of options granted during the years ended December 31, 2021, 2020 and 2019 was estimated using the Black-Scholes option-pricing model. The inputs for the Black-Scholes model require management’s significant assumptions. The risk-free interest rate was based on a normalized estimate of the 7-year U.S. treasury yield. The Company has estimated the expected term utilizing the “simplified” method for awards that qualify as “plain vanilla”. The Company does not have sufficient company-specific historical and implied volatility information and it therefore estimates its expected share volatility based on historical volatility information of reasonably comparable guideline public companies and itself. The Company expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded share price. Expected dividend yield is based on the fact that the Company has never paid cash dividends, its ability to pay cash dividends is prohibited by the terms of its credit facility with SVB (until March 1, 2022) and the Company’s future ability to pay cash dividends on its shares may be limited by the terms of any future debt or preferred securities. The Company has elected to account for forfeitures as they occur.

The Company granted 15,421,412, 64,840 and 512,778 share options to employees and directors during the years ended December 31, 2021, 2020 and 2019, respectively. There were 15,507,360, 266,666 and 837,386 unvested employee and director options outstanding as of December 31, 2021, December 31, 2020 and December 31, 2019, respectively. Total expense recognized related to the employee and director share options was $3,779, $1,136 and $1,388 for the years ended December 31, 2021, 2020 and 2019, respectively. Total unamortized compensation expense related to employee and director share options was $21,521, $970 and $3,342 as of December 31, 2021, December 31, 2020 and December 31, 2019, respectively, expected to be recognized over a remaining weighted average vesting period of 3.49 years, 1.47 years and 2.61 years as of December 31, 2021, December 31, 2020 and December 31, 2019, respectively.

The range of assumptions that the Company used to determine the grant date fair value of employee and director options granted were as follows:

The following table summarizes total stock option activity for all Company plans:

The following table summarizes the total number of options outstanding and the weighted-average exercise price:

The aggregate intrinsic value of share options is calculated as the difference between the exercise price of the share options and the fair value of the Company’s ordinary shares for those share options that had exercise prices lower than the fair value of the Company’s ordinary shares as of December 31, 2021, December 31, 2020 and December 31, 2019.

The weighted average grant-date fair value per share of share options granted during the years ended December 31, 2021, 2020 and 2019 was $1.58, $1.28 and $3.80, respectively.

Restricted Share Units (RSUs)

The Company granted 1,845,328 RSUs to employees and directors during the year ended December 31, 2021 and 31,367 RSUs to directors during the year ended December 31, 2019. No RSUs were granted to employees or directors during the year ended December 31, 2020.  

The following table summarizes the number of RSUs granted covering an equal number of the Company’s ordinary shares for all of our plans:

The table below shows the total number of RSUs granted and the weighted-average grant date fair value of the total RSUs granted:

The fair value of the RSUs is determined on the date of grant based on the market price of the Company’s ordinary shares on that date. The fair value of RSUs is expensed ratably over the vesting period, which is generally one year for directors and two years for employees under our 2018 Plan and four years for employees under our 2021 Inducement Plan. Total expense recognized related to the RSUs was $960, $63 and $313 for the years ended December 31, 2021, 2020 and 2019, respectively. Total unamortized compensation expense related to the RSUs was $1,416 as of December 31, 2021, expected to be recognized over a remaining average vesting period of 1.89 years as of December 31, 2021. There was no unamortized compensation expense related to the RSUs as of December 31, 2020.

No RSUs, which are subject to certain performance-based vesting conditions (Performance RSUs), were awarded during the year ended December 31, 2021. The Company awarded 1,079,000 and 50,000 RSUs to certain employees during the years ended December 31, 2020 and 2019, respectively, which are subject to certain vesting conditions (Performance RSUs).

The table below shows the number of Performance RSUs granted covering an equal number of the Company’s ordinary shares and the weighted-average grant date fair value of the Performance RSUs granted:

The weighted average grant date fair value of Performance RSUs with a market condition was determined using the Monte Carlo simulation model. The fair value of Performance RSUs is expensed ratably over the vesting period. Due to the expiration of Performance RSUs during the year, a credit of $420 was recognized for the year ended December 31, 2021. Total expense recognized

related to Performance RSUs was $1,560 for the year ended December 31, 2020. All Performance RSUs were fully expensed as of December 31, 2021. Total unamortized compensation expenses related to Performance RSUs was $152 for the year ended December 31, 2020, expected to be recognized over a remaining average vesting period of 0.20 years as of December 31, 2020.

The Company’s share-based compensation expense was classified in the consolidated statements of operations and comprehensive loss as follows:

There was a total of $22,937, $1,122 and $3,639 unamortized share-based compensation expense for share options, restricted share units and performance restricted share units as of December 31, 2021, December 31, 2020 and December 31, 2019, respectively, expected to be recognized over a remaining average vesting period of 3.32 years, 0.80 years and 2.44 years as of December 31, 2021, December 31, 2020 and December 31, 2019, respectively.