| STOCKHOLDERS’ EQUITY AND EQUITY-BASED COMPENSATION | STOCKHOLDERS’ EQUITY AND EQUITY-BASED COMPENSATION Stockholders’ Equity Authorized Shares Pursuant to the Amended and Restated Certificate of Incorporation, we are authorized to issue 1,525,000,000 shares, consisting of (i) 1,500,000,000 shares of Common Stock and (ii) 25,000,000 shares of preferred stock. Holders of Common Stock are entitled to one vote per share; provided, that by agreement (i) certain Incremental Term Lenders (collectively, the “Non-Citizen Investors”) that are not “citizens of the United States” (as defined in 49 USC § 40102(a)(15)(C)), may be afforded collective voting rights equal to 1% of all shares of Common Stock entitled to vote at a meeting of the Company’s stockholders; (ii) for so long as such Non-Citizen Investors collectively hold such shares of Common Stock, the shares of Common Stock held by CK Wheels in excess of 23.9% of all shares of Common stock entitled to vote at a meeting of the Company’s stockholders, will not have voting rights (subject to ratable adjustment if the Non-Citizen Investors cease to own (beneficially or of record) a certain number of shares of Common Stock); and (iii) any shares owned by Delta above 29.9% will be neutral shares with respect to voting rights, will be voted in proportion to all other votes cast (“for”, “against” or “abstain”) at a meeting of stockholders by stockholders other than Delta. Reverse Stock Split Following approval by the Company’s stockholders at the Company’s 2023 Annual Meeting of Stockholders held on May 31, 2023 (the “2023 Annual Meeting”), the Board of Directors of the Company (the “Board”) approved the Reverse Stock Split of Wheels Up’s outstanding shares of Common Stock, at a reverse stock split ratio of 1-for-10 and contemporaneously with the Reverse Stock Split, the Authorized Share Reduction, which provided for a proportionate reduction in the number of authorized shares of Common Stock from 2.5 billion shares of Common Stock to 250 million shares, each of which became effective immediately after the close of trading on the NYSE on June 7, 2023. The Company’s total stockholders’ equity, in the aggregate, did not change as a result of the Reverse Stock Split and Authorized Share Reduction. In addition, the par value for the Company’s Common Stock remained unchanged. Holders of Common Stock who would otherwise have held fractional shares because the number of shares of Common Stock they held before the Reverse Stock Split was not evenly divisible by the reverse stock split ratio received cash (without interest, and subject to any required tax withholding applicable to a holder) in lieu of issuance of such fractional shares. As a result of the Reverse Stock Split, equitable adjustments corresponding to the reverse stock split ratio were made to the number of shares of Common Stock underlying Wheels Up’s outstanding equity awards and the number of shares issuable under Wheels Up’s equity incentive plans, as well as any exercise prices, hurdle amounts or market-based vesting conditions of such equity awards, as applicable. In addition, equitable adjustments corresponding to the reverse stock split ratio of 1-for-10 were made to the Warrants (as defined below), resulting in each Warrant becoming exercisable for 1/10th of one share of Common Stock at an exercise price of $115.00 per whole share of Common Stock and the stated redemption prices per Warrant being proportionately reduced (see Note 12). 2023 Common Stock Issuances In connection with the transactions contemplated by the Credit Agreement, the Company entered into the Investor Rights Agreement on September 20, 2023. Pursuant to the Investor Rights Agreement, the Company issued the Lenders 141,313,671 Initial Shares in a private placement that closed after the end of the trading day on the Credit Agreement Closing Date, which represented approximately 80% of the Company’s issued and outstanding shares of Common Stock on a fully diluted basis. The Initial Shares were issued such that each Lender received a pro rata portion of the Initial Shares equal to the proportion of its participation in the Term Loan as of the Credit Agreement Closing Date. The amount recorded for the Initial Issuance was determined using the relative fair value basis, which resulted in allocated gross proceeds of $64.2 million for the Initial Issuance. Issuance costs of $4.9 million were recorded as a reduction to Additional paid-in capital. On November 9, 2023, the Company’s stockholders approved, at the 2023 Special Meeting, the Amended and Restated Certificate of Incorporation, which, among other things, increased the number of shares of Common Stock available for issuance thereunder. In connection with the transactions contemplated by the Credit Agreement Amendment, the Company entered into the Investor Rights Agreement Amendment, and substantially concurrently therewith on the Final Closing Date, entered into Investor Rights Agreement Joinders with each Incremental Term Lender (or its applicable affiliate). Thereafter, Company issued 529,926,270 Deferred Shares to the Lenders on the Final Closing Date in a private placement. The Investor Shares were issued in private placements such that after the Investor Issuances, each Lender was issued a number of shares equal to its pro rata portion of the Investor Shares based on its participation in the Term Loan. The Company recorded the Deferred Issuance as a forward contract for Common Stock within Additional paid-in capital on the consolidated balance sheet during the third quarter of 2023. The amount recorded for the Deferred Issuance was determined using the relative fair value basis, which resulted in allocated gross proceeds of $240.9 million for the Deferred Issuance. Issuance costs of $18.3 million were recorded as a reduction to Additional paid-in capital during the year ended December 31, 2023. On the November 15, 2023, the Company and Initial Lenders entered into the Investor Rights Agreement Joinders with each Incremental Term Lender (or its applicable affiliate), pursuant to which each Incremental Term Lender (or its applicable affiliate) joined the Investor Rights Agreement and assumed the rights and obligations of an Additional Investor (as defined in the Investor Rights Agreement) thereunder, including the right to receive a pro rata portion of the Investor Shares. As a result, 68,845,122 of the Deferred Shares (the Reallocated Shares) were issued to the Incremental Term Lenders. The Company recorded the Reallocated Shares within Additional paid-in capital on the consolidated balance sheet during the fourth quarter of 2023. The amount recorded for the Reallocated shares was determined using the relative fair value basis, which resulted in allocated gross proceeds of $30.6 million. Issuance costs of $2.2 million were recorded as a reduction to Additional paid-in capital during the year ended December 31, 2023. Equity-Based Compensation As of December 31, 2023, we had nine equity-based compensation plans that were approved by the board of directors of WUP (collectively, the “WUP Management Incentive Plan”) prior to the Business Combination, as well as the Wheels Up Partners Holdings LLC Option Plan (the “WUP Option Plan”). Following the consummation of the Business Combination, no new grants can be made under the WUP Management Incentive Plan or the WUP Option Plan. In connection with the Business Combination, the Board and stockholders of Wheels Up adopted the Wheels Up Experience Inc. Long-Term Incentive Plan (the “Original 2021 LTIP”), for employees, consultants and other qualified persons. Following approval by the Board, at the 2023 Annual Meeting, the Company’s stockholders approved the Amended and Restated 2021 LTIP to increase the aggregate number of shares of Common Stock available for awards made thereunder by 24,150,000 shares (2,415,000 shares after giving effect to the Reverse Stock Split) and amend certain other plan provisions. The Amended and Restated 2021 LTIP provides for the grant of incentive options, nonstatutory options, restricted stock, RSUs, rights, other stock-based awards, performance awards, cash awards or any combination of the foregoing. As of the Business Combination Closing Date, in connection with the Business Combination, the Board granted accelerated vesting of approximately 18 months on all outstanding equity-based compensation awards granted under the WUP Management Incentive Plan or WUP Option Plan. This modification to our awards resulted in the acceleration of all remaining compensation cost due to a shorter requisite service period as compared to the original award. There was no change to the fair value or incremental compensation cost incurred. On June 30, 2022, the Board adopted the Wheels Up Experience Inc. 2022 Inducement Grant Plan (the “2022 Inducement Grant Plan”) to be used for a one-time employment inducement grant, pursuant to NYSE Rule 303A.08, for Todd Smith, in connection with his appointment as Chief Financial Officer. The maximum number of awards that could be granted under the 2022 Inducement Grant Plan were 2,051,282 shares of Common Stock (205,128 shares of Common Stock after giving effect to the Reverse Stock Split), which were all granted in the form of RSUs to Mr. Smith on July 1, 2022. RSU awards granted under the 2022 Inducement Grant Plan contain generally the same terms as other awards granted under the Original 2021 LTIP during the fiscal year ended December 31, 2022. WUP Management Incentive Plan In March 2014, the WUP Management Incentive Plan was established, which provided for the issuance of WUP profits interests, restricted or unrestricted, to employees, consultants and other qualified persons. WUP Profits Interests As of December 31, 2023, an aggregate of 3.1 million profits interests have been authorized and issued under the WUP Management Incentive Plan. Vested WUP profits interests are eligible to be exchanged into shares of Common Stock. Amounts of WUP profits interests reported in the tables below represent the maximum number of WUP profits interests outstanding or that could be realized upon vesting and immediately exchanged for the maximum number of shares of Common Stock. The actual number of shares of Common Stock received upon exchange of such WUP profits interests will depend on the trading price per share of Common Stock at the time of such exchange. The following table summarizes the WUP profits interests activity under the WUP Management Incentive Plan as of December 31, 2023: Number of WUP Weighted-Average Grant (In thousands) Outstanding WUP profits interests as of January 1, 2023 2,881 $ 4.16 Granted — — Exchanged — — Expired/forfeited — — Outstanding WUP profits interests as of December 31, 2023 2,881 $ 4.16 The weighted-average remaining contractual term as of December 31, 2023 for WUP profits interests outstanding was approximately 7.5 years. The following table summarizes the status of non-vested WUP profits interests as of December 31, 2023: Number of WUP Weighted-Average Grant (In thousands) Non-vested WUP profits interests as of January 1, 2023 170 $ 4.19 Granted — — Vested (170) 4.19 Forfeited — — Non-vested WUP profits interests as of December 31, 2023 — $ — The total fair value of vested WUP profits interests amounted to $0.7 million for the year ended December 31, 2023. WUP Restricted Interests WUP restricted interests were time and performance-based awards that vested with a change in control or initial public offering. As a result, we started recording compensation cost for WUP restricted interests on the Business Combination Closing Date. The WUP restricted interests granted vested when both of the following conditions were met: (i) ratably over a four-year service period and (ii) upon the first to occur of (A) a change of control and (B) the later to occur of (1) six months after an initial public offering and (2) 30 days after the expiration of any applicable lock-up period in connection with an initial public offering. The WUP restricted interests lock-up period expired on February 8, 2022 and all remaining WUP restricted interests vested during the year ended December 31, 2022. WUP Option Plan In December 2016, the WUP Option Plan was established, which provided for the issuance of stock options to purchase WUP common interests at an exercise price based on the fair market value of the interests on the date of grant. Generally, WUP stock options granted vest over a four-year service period and expire on the tenth anniversary of the grant date. As of December 31, 2023, the number of WUP stock options authorized and issued in aggregate under the WUP stock option plan was 1.8 million. The following table summarizes the activity under the WUP Option Plan as of December 31, 2023: Number of Weighted- Weighted-Average Grant (In thousands) Outstanding WUP stock options as of January 1, 2023 1,280 $ 75.10 $ 12.02 Granted — — — Exercised — — — Forfeited (141) 72.48 7.55 Expired (10) 72.71 6.74 Outstanding WUP stock options as of December 31, 2023 1,129 $ 75.45 $ 12.64 Exercisable WUP stock options as of December 31, 2023 1,129 $ 75.45 $ 12.64 The aggregate intrinsic value as of December 31, 2023 for WUP stock options that were outstanding and exercisable was nil . The weighted-average remaining contractual term as of December 31, 2023 for WUP stock options that were outstanding and exercisable was approximately 5.6 years and 5.6 years, respectively. The following table summarizes the status of non-vested WUP stock options as of December 31, 2023: Number of WUP Stock Weighted-Average Grant (In thousands) Non-vested WUP stock options as of January 1, 2023 104 $ 19.95 Granted — — Vested (102) 20.03 Expired — — Forfeited (2) 16.01 Non-vested WUP stock options as of December 31, 2023 — $ — The total fair value of WUP stock options that vested was $2.1 million, $3.9 million and $9.0 million during the years ended December 31, 2023, 2022 and 2021, respectively. The total intrinsic value of WUP stock options exercised during the years ended December 31, 2023 2022 and 2021 was nil, nil and $0.2 million, respectively. The WUP profits interests, WUP restricted interests, WUP stock options and Wheels Up stock options valuations were determined using Level 3 inputs. The expected seven-year term was estimated using the midpoint of the four-year service period and the ten-year contractual term of the awards. Expected volatility was estimated based on the historical volatilities of publicly traded companies within the airline industry and certain comparable travel technology companies. We used the published yields for zero-coupon Treasury notes to determine the risk-free interest rate. The expected dividend yield is zero as we have never paid and do not currently anticipate paying any cash dividends in the foreseeable future. Amended and Restated 2021 LTIP As of December 31, 2023, an aggregate of 5.2 million shares were authorized for issuance under the Amended and Restated 2021 LTIP. RSUs Wheels Up RSUs granted under the Amended and Restated 2021 LTIP generally vest at intervals over up to a three-year service period. The following tables summarize the activity under the Amended and Restated 2021 LTIP related to RSUs as of December 31, 2023: Number of RSUs (1) Weighted-Average Grant (In thousands) Non-vested and outstanding RSUs as of January 1, 2023 1,617 $ 34.64 Granted (1) 2,324 2.68 Vested (708) 33.44 Forfeited (1,385) 15.35 Non-vested and outstanding RSUs as of December 31, 2023 1,848 $ 9.35 (1) RSU awards granted under the 2022 Inducement Grant Plan contain generally the same terms as other RSU awards granted under the Original 2021 LTIP during the fiscal year ended December 31, 2022. The number of RSUs and weighted-average grant date fair value include 205,128 RSUs granted under the 2022 Inducement Grant Plan in July 2022, of which 136,752 RSUs had vested as of December 31, 2023 and the remaining 68,376 RSUs are scheduled to vest on December 30, 2024, subject to continued service through the final vesting date. The weighted-average grant-date fair value of RSUs granted was $6.2 million, $54.9 million, $62.2 million during the years ended December 31, 2023, 2022 and 2021, respectively. The total fair value of RSUs that vested during the years ended December 31, 2023, 2022 and 2021 was $23.7 million, $35.3 million and $0.6 million, respectively. The total unrecognized compensation cost related to non-vested RSUs was $12.3 million as of December 31, 2023 and is expected to be recognized over a weighted-average period of 1.4 years. PSUs Under the terms of the PSUs granted to certain employees, upon the achievement of certain pre-determined performance objectives, each PSU may settle into shares of our Common Stock. The PSUs will vest, if at all, upon the actual achievement of the related performance objectives, subject to specified change of control exceptions. The following table summarizes the activity under the Amended and Restated 2021 LTIP related to PSUs as of December 31, 2023: Number of PSUs Weighted-Average Grant (in thousands) Non-vested PSUs as of January 1, 2023 96 $ 21.68 Granted 145 2.93 Vested (32) 12.19 Forfeited (191) 11.59 Non-vested PSUs as of December 31, 2023 18 $ 2.89 The weighted-average grant-date fair value of PSUs granted during the years ended December 31, 2023, 2022 and 2021 were $0.4 million, $2.5 million and nil, respectively. The total fair value of PSUs that vested during the years ended December 31, 2023, 2022 and 2021 were $0.3 million, nil and nil, respectively. Compensation expense associated with PSUs is recognized over the vesting period of the awards that are ultimately expected to vest when the achievement of the related performance objectives becomes probable. The total grant date fair value of unvested PSUs as of December 31, 2023 was $0.1 million. RSUs Subject to Market-Based Vesting Conditions (“Market-Based RSUs”) The Company previously granted Market-Based RSUs to certain employees, which were settleable into shares of Common Stock. The Market-Based RSUs were subject to vesting, if at all, based on the closing trading price per share of our Common Stock over any 30 consecutive trading day-period that occurred prior to the end date specified in the underlying award agreement, subject to continued service through each such vesting date. Based on the Common Stock trading price, the market conditions for the outstanding Market-Based RSUs were not met, and no shares vested as of June 30, 2023. All outstanding unvested Market-Based RSUs were forfeited and cancelled during the three months ended June 30, 2023. Wheels Up Stock Options Wheels Up stock options granted under the Amended and Restated 2021 LTIP vest quarterly over a three-year service period and expire on the ten Number of Weighted- Weighted-Average Grant (In thousands) Outstanding Wheels Up stock options as of January 1, 2023 77 $ 100.00 $ 47.52 Granted — — — Exercised — — — Forfeited — — — Expired — — — Outstanding Wheels Up stock options as of December 31, 2023 77 $ 100.00 $ 47.52 Exercisable Wheels Up stock options as of December 31, 2023 77 $ 100.00 $ 47.52 The weighted-average grant-date fair value of Wheels Up stock options granted during the years ended December 31, 2023, 2022 and 2021 were nil, nil and $4.4 million, respectively. The total fair value of Wheels Up stock options that vested during the years ended December 31, 2023, 2022 and 2021 were nil, $2.9 million and $0.7 million, respectively. No options were exercised during the years ended December 31, 2022 and 2021. The aggregate intrinsic value as of December 31, 2023 for Wheels Up stock options that were outstanding and exercisable was $0. The weighted-average remaining contractual term as of December 31, 2023 for Wheels Up stock options that were outstanding and exercisable was approximately 3.9 years and 3.9 years, respectively. Executive Performance Award On November 30, 2023, the Compensation Committee of the Board approved the Wheels Up Experience Inc. Performance Award Agreement, dated as of November 30, 2023 (the “CEO Performance Award”), granted to George Mattson, the Company’s Chief Executive Officer. Except as set forth in Section III.A of the Amended and Restated 2021 LTIP, the CEO Performance Award incorporates the terms of the existing Amended and Restated 2021 LTIP, as it may be amended from time-to-time. The CEO Performance Award is intended to constitute a standalone employee benefit plan and any shares of Common Stock issued under the CEO Performance Award will not be issued under, or count against the number of shares of Common Stock reserved pursuant to, the Amended and Restated 2021 LTIP. The issuance of any shares under the CEO Performance Award upon vesting is contingent upon receipt of the approval of the award by the Company’s stockholders. If the CEO Performance Award is not approved by the Company’s stockholders at a future annual or special meeting of the Company’s stockholders or by written consent of the Company’s stockholders, or if on any Determination Date (as defined below) there is not a sufficient amount of shares authorized by the Company's stockholders to deliver the number of shares due under the CEO Performance Award, then upon vesting, if at all, any amounts payable under the CEO Performance Award will not be paid in the form of the issuance of new shares of Common Stock and instead will be payable in cash. The CEO Performance Award is a one-time performance award granted to our Chief Executive Officer in lieu of future annual equity compensation grants and is intended to provide him with the opportunity to share in the long-term growth of the value of the Company. The award consists of a contingent right to receive a number of newly issued shares of Common Stock upon: (i) repayment of the Company’s borrowings under the $390.0 million Term Loan, if at all; and (ii) satisfaction of service-based vesting conditions, which provide that 25% of the CEO Performance Award will be eligible to vest on each of September 20, 2024, 2025, 2026 and 2027, so long as our Chief Executive Officer remains employed with the Company as of such dates. A “Repayment Event” includes certain refinancings of the Term Loan on or before September 20, 2028, the scheduled maturity date of the Term Loan. Subject to the satisfaction of the applicable vesting conditions described above, the number of shares of Common Stock that may vest and be issued to our Chief Executive Officer will first be determined on December 31st of the year in which a Repayment Event occurs, and then on December 31st of each subsequent year (each such date, a “Determination Date”) until December 31, 2028 (the “Final Determination Date”). At any Determination Date following a Repayment Event, the number of shares of Common Stock issuable to our Chief Executive Officer in connection with such Determination Date, if any, will be determined using the then applicable percentage associated with the service-based vesting condition (the “Service Vested Percentage”). The number of shares of Common Stock subject to vesting and issuance, if any, to our Chief Executive Officer on each Determination Date following a Repayment Event is based on a formula that aligns the number of shares of Common Stock issuable to our Chief Executive Officer with the repayment or refinancing of the Term Loan and Revolving Credit Facility, the then applicable dollar value of the shares of Common Stock issued to the Lenders under the Investor Rights Agreement and the volume weighted average price per share of Common Stock during the 60 trading day period prior to the applicable Determination Date (the “VWAP”). The number of shares of Common Stock, if any, issuable under the CEO Performance Award will vary depending on, among other things: (i) the occurrence and timing of a Repayment Event; (ii) the Lenders’ Total Investor Return (as defined in the CEO Performance Award) as a multiple of the aggregate principal amount of the Term Loan and any borrowings under the Revolving Credit Facility (as of the applicable Determination Date, the “Investor Multiple on Invested Capital”), if any; and (iii) the Service Vested Percentage as of the applicable Determination Date. There can be no assurance that the vesting conditions will be satisfied or that the foregoing variables will result in the vesting and issuance of any shares of Common Stock or payments of cash pursuant to the CEO Performance Award. The performance-based vesting conditions for the CEO Performance Award were not met and no shares vested as of December 31, 2023. As of December 31, 2023, the achievement of the related performance objective was deemed probable of being achieved on September 20, 2028, the scheduled maturity date of the Term Loan. The grant-date fair value of the CEO Performance Award, using a Monte Carlo simulation model, was $148.4 million. The derived service period for the award began on November 30, 2023, and is 5.2 years. For the CEO Performance Award, if realized, to be fully settled in connection with the Final Determination Date at a level consistent with the estimated grant date fair value, the Investor Multiple on Invested Capital will need to be greater than four times. We recognized compensation expense of $2.5 million associated with the CEO Performance Award during the year ended December 31, 2023, and the remaining outstanding expense is expected to be recognized over 5.1 years. As of December 31, 2023, since we have not obtained authorization from the Company’s stockholders for shares of Common Stock to satisfy settlement of the award in the form of the issuance of new shares, the carrying amount of award has been classified as mezzanine equity in the consolidated balance sheet under Contingent performance awards. Subsequent to December 31, 2023, we granted a contingent performance award to our Chief Financial Officer with similar performance- and service-based vesting conditions with a grant-date fair value, using a Monte Carlo simulation model, of $50.9 million (see Note 21 ). Fair Value Estimates We estimated fair value to measure compensation cost of the WUP profits interests, WUP restricted interests, WUP stock options, Wheels Up stock options and the CEO Performance Award on the date of grant using techniques that are considered to be consistent with the objective of measuring fair value. In selecting the appropriate technique, management considered, among other factors, the nature of the instrument, the market risks that it embodies, and the expected means of settlement. Estimating fair values of the WUP profits interests, WUP restricted interests, WUP stock options, Wheels Up stock options and CEO Performance Award requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external factors. In addition, option-pricing models are highly volatile and sensitive to changes. The following table summarizes the significant assumptions used to estimate the fair value on the date of grant: 2023 (1) 2022 2021 (2) Expected term (in years) 5.2 n/a 7 Volatility 60 % n/a 46 % Risk-free rate 4.3 % n/a 1.2 % Expected dividend rate 0 % n/a 0 % (1) Assumptions used in the Monte Carlo simulation related to the CEO Performance Award. (2) Assumptions used in the Black Scholes model related to the Wheels Up Stock Options. Equity-Based Compensation Expense Compensation expense for WUP profits interests recognized in the consolidated statements of operations was $0.1 million, $1.3 million and $1.7 million for the years ended December 31, 2023, 2022 and 2021, respectively. Compensation expense for WUP restricted interests recognized in the consolidated statements of operations was nil, $4.3 million and $14.2 million for the years ended December 31, 2023, 2022 and 2021, respectively. Compensation expense for WUP stock options under the WUP Option Plan and Wheels Up stock options under the Amended and Restated 2021 LTIP recognized in the consolidated statements of operations was $1.1 million, $7.7 million and $8.5 million for the years ended December 31, 2023, 2022 and 2021, respectively. Compensation expense for RSUs and PSUs under the Amended and Restated 2021 LTIP recognized in the consolidated statements of operations was $16.7 million, $41.1 million and $7.3 million for the years ended December 31, 2023, 2022 and 2021, respectively. Compensation expense for the CEO Performance Award recognized in the consolidated statements of operations was $2.5 million, nil and nil for the years ended December 31, 2023, 2022 and 2021, respectively. The following table summarizes equity-based compensation expense recognized by consolidated statement of operations line item (in thousands): Year Ended December 31, 2023 2022 2021 Cost of revenue $ 3,927 $ 14,456 $ 4,541 Technology and development 2,096 3,180 1,340 Sales and marketing 1,764 11,009 5,185 General and administrative 17,846 60,334 38,607 Total equity-based compensation expense $ 25,633 $ 88,979 $ 49,673 Earnout Shares The 0.9 million Earnout Shares vest with the achievement of separate market conditions. One-third of the Earnout Shares will meet the market condition when the closing Common Stock price is greater than or equal to $125.00 for any 20 trading days within a period of 30 consecutive trading days within five years of the Business Combination Closing Date. An additional one-third will vest when the Common Stock is greater than or equal to $150.00 over the same measurement period. The final one-third will vest when the Common Stock is greater than or equal to $175.00 over the same measurement period. Earnout Shares are attributable to vested WUP profits interests and restricted interests as of the date each of the Earnout Share market conditions are met. No Earnout Shares have been issued as of December 31, 2023. The grant-date fair value of the Earnout Shares attributable to the holders of WUP profits interests and restricted interests, using a Monte Carlo simulation model, was $57.9 million. The derived service period began on the Closing Date and had a weighted-average period of 1.7 years. Based on the Common Stock trading price the market conditions were not met and no Earnout Shares vested as of December 31, 2023. Compensation expense for Earnout Shares recognized in the consolidated statements of operations was $1.4 million, $38.5 million and $18.0 million for the years ended December 31, 2023, 2022 and 2021, respectively. Treasury Stock As of December 31, 2023, we had 275,707 shares of treasury stock. The increase in treasury stock during the year ended December 31, 2023 reflects shares of Common Stock withheld to settle employee taxes due upon the vesting of RSUs, as well as shares of Common Stock acquired from stockholders who would otherwise have held fractional shares because the number of shares of Common Stock they held before the Reverse Stock Split was not evenly divisible by the reverse stock split ratio, which the Company acquired for cash (without interest, and subject to any required tax withholding applicable to a holder) in lieu of issuance of such fractional shares of Common Stock. During the year ended December 31, 2023, we did not cancel or reissue any shares of Common Stock held as treasury stock. |
