Prior to the Business Combination, the Company’s Amended and Restated 2011 Stock Option Plan (the “2011 Plan”) allowed the Company to grant shares of common stock to employees, non-employee directors and non-employee third parties. The Company also had shares authorized under a stock plan assumed in a 2020 business combination. As of June 30, 2021, a total of 84,492,530 awards remain subject to future issuance under these arrangements. Upon the Closing, the remaining unallocated share reserve under the 2011 Plan was cancelled and no new awards will be granted under such plan. Awards outstanding under the 2011 Plan were assumed by SoFi Technologies upon the Closing and continue to be governed by the terms of the 2011 Plan.

In connection with the Closing of the Business Combination, the Company adopted the 2021 Stock Option and Incentive Plan (the “2021 Plan”), which authorized for issuance 63,575,425 shares of common stock in connection with the Business Combination. The number of authorized shares will increase on the first day of each fiscal year beginning with SoFi Technologies’ 2022 fiscal year, as prescribed in the 2021 Plan. The 2021 Plan allows for the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalents and other stock or cash based awards. As of June 30, 2021, 6,428,578 performance stock unit (“PSU”) awards and 178,021 restricted stock unit (“RSU”) awards have been granted under the 2021 Plan, which are further described below.

During the six months ended June 30, 2021 and 2020, we incurred cash outflows of $28,603 and $12,628, respectively, related to the payment of withholding taxes for vested RSUs. These cash outflows are presented within financing activities in the Unaudited Condensed Consolidated Statements of Cash Flows.

Stock-based compensation expense related to stock options, RSUs and PSUs is presented within the following line items in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the periods indicated:


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Technology and product development	$	16,618	$	5,882	$	28,234	$	11,943
Sales and marketing	3,695		1,990		6,140		3,111
Cost of operations	2,709		1,463		4,190		3,134
General and administrative	29,132		14,210		51,044		25,042
Total	$	52,154	$	23,545	$	89,608	$	43,230

Prior to us contemplating a public market transaction, we established the fair value of our common stock by using the option pricing model (Black-Scholes Model based) via the backsolve method and through placing weight on previously redeemable preferred stock transactions. The valuations also applied discounts for lack of marketability to reflect the fact that there was no market mechanism to sell our common stock and, as such, the common stock option and RSU holders would need to wait for a liquidity event to facilitate the sale of their equity awards. In addition, there were contractual transfer restrictions placed on common stock in the event that we remained a private company.

During the third quarter of 2020, once we made intentional progress toward pursuing a public market transaction, we began applying the probability-weighted expected return method to determine the fair value of our common stock. The probability weightings assigned to certain potential exit scenarios were based on management’s expected near-term and long-term funding requirements and assessment of the most attractive liquidation possibilities at the time of the valuation.

During the fourth quarter of 2020, we valued our common stock on a monthly basis. A common stock transaction that closed in December 2020 at a price of $10.57 per common share, which was of substantial size and in close proximity to the Business Combination, served as the key input for the fair value of our common stock for grants made during the fourth quarter of 2020. We decreased the assumed discount for lack of marketability throughout the fourth quarter of 2020, corresponding with our decreased time to liquidity assumption throughout the quarter, as we became more certain about the possibility of entering into the Business Combination over time. We continued to use a share price of $10.57 to value our common stock for transactions in January until the date on which we executed the Agreement.

Subsequent to executing the Agreement on January 7, 2021 and through the Business Combination, we determined the value of our common stock based on the observable daily closing price of SCH’s stock (ticker symbol “IPOE”) multiplied by the exchange ratio in effect for such transaction date. Subsequent to the Business Combination, we determined the value of our common stock based on the observable daily closing price of SoFi’s stock (ticker symbol “SOFI”).

The terms of the stock option grants, including the exercise price per share and vesting periods, are determined by our board of directors. At the discretion and determination of our board of directors, both the 2011 Plan and the 2021 Plan allow for the granting of stock options that may be exercised before the stock options have vested.

The following is a summary of stock option activity for the period indicated:


	Number of Stock Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)





Outstanding as of January 1, 2021	17,183,828	$	9.92	6.6
Retroactive conversion of stock options due to Business Combination	12,764,147	(4.23)
Outstanding as of January 1, 2021, as converted	29,947,975	5.69		6.6
Granted(1)	—	n/a

Exercised(2)	(2,797,592)	1.49

Forfeited	(7,540)	6.31
Expired	(102,116)	6.24
Outstanding as of June 30, 2021	27,040,727	$	6.13	6.1
Exercisable as of June 30, 2021	26,036,585	$	6.26	6.1

(2)Includes 593,798 stock options that were exercised during the second quarter of 2021 for which we did not legally issue the associated common stock as of June 30, 2021 as a result of implementing an administrative freeze on legal issuances of common stock in advance of the Closing of the Business Combination. As such, this presentation differs from the corresponding disclosure of exercises of stock options presented in the Consolidated Statements of Changes in Temporary Equity and Permanent Equity (Deficit), as the latter reflects only exercises for which shares of common stock were legally issued.

RSUs are equity awards granted to employees that entitle the holder to shares of our common stock when the awards vest. RSUs are measured based on the fair value of our common stock on the date of grant. The weighted average fair value of our common stock was $19.07 during the six months ended June 30, 2021.

The following table summarizes RSU activity for the period indicated:


	Number of RSUs	Weighted Average Grant Date Fair Value
Outstanding as of January 1, 2021	25,591,913	$	13.06
Retroactive conversion of RSUs due to Business Combination	19,009,673	(5.57)
Outstanding as of January 1, 2021, as converted	44,601,586	7.49
Granted	19,455,724	16.86

Vested(1)(2)	(7,853,603)	7.58
Forfeited	(3,075,586)	8.46
Outstanding as of June 30, 2021(3)	53,128,121	$	10.86

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(2)Includes 3,907,905 RSUs that vested during the second quarter of 2021 for which we did not legally issue the associated common stock as of June 30, 2021 as a result of implementing an administrative freeze on legal issuances of common stock in advance of the Closing of the Business Combination. As such, this presentation differs from the corresponding disclosure of RSUs vested presented in the Consolidated Statements of Changes in Temporary Equity and Permanent Equity (Deficit), as the latter reflects only RSU vestings for which shares of common stock were legally issued.

(3)Includes 178,021 RSUs that were granted in 2020 with an original vest date in June 2021 to earn the first tranche of compensation for the 2020 plan period. However, upon determining that the original performance-based vesting condition would not be satisfied, the Company modified the awards to extend the vesting date by 12 months. We concluded that the facts and circumstances aligned with an improbable-to-probable modification (Type III) and the vesting condition of the modified awards is a service-based condition. As a result, we reversed previously recognized share-based compensation expense of $1,237 in June 2021. For the modified awards, we will record total share-based compensation expense of $3,884 determined based on the number of awards expected to vest and the modification-date fair value over the 12-month service period, of which $180 was recorded in June 2021.

PSUs are equity awards granted to employees that entitle the holder to shares of our common stock when the awards vest. Under the 2021 Plan, we granted PSUs that will vest, if at all, on a graded basis during the four-year period commencing on May 28, 2022, subject to the achievement of specified performance goals, such as the volume-weighted average closing price of our stock over a 90-trading day period (“Target Hurdles”) and, if we become a bank holding company, maintaining certain minimum standards applicable to bank holding companies. All PSUs are subject to continued employment on the date of vesting. In the event of a Sale Event (as defined in the 2021 Plan), the awards may automatically vest subject to the satisfaction of the Target Hurdles by reference to the sale price, without regard to any other vesting conditions. In the second quarter of 2021, we granted 6,428,578 PSUs with a weighted-average grant date fair value of $14.66, all of which were unvested as of June 30, 2021.

Compensation cost associated with PSUs is recognized using the accelerated attribution method for each of the three vesting tranches over the respective derived service period. We determine the grant-date fair value of PSUs utilizing a Monte Carlo simulation model. The following table summarizes the inputs used for estimating the fair value of PSUs granted during the period indicated: