Stockholders' Equity |
3 Months Ended |
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Mar. 31, 2023 | |
| Equity [Abstract] | |
| Stockholders' Equity | Stockholders’ Equity 2021 Equity Incentive Plan
In connection with the IPO and effective October 6, 2021, we adopted the 2021 Incentive Award Plan (the “2021 Equity Plan”), under which we may grant cash and equity-based incentive awards to our employees, consultants and directors. The maximum number of shares of our common stock available for issuance under the 2021 Equity Plan is equal to the sum of (i) approximately 14.5 million shares of our common stock, (ii) an annual increase on the first day of each year beginning in 2022 and ending in and including 2031, equal to the lesser of (A) 4% of the outstanding shares of our common stock on the last day of the immediately preceding fiscal year and (B) such lesser amount as determined by our board of directors, and (iii) the approximately 1.0 million shares of our common stock that were available for issuance under the LTF Holdings, Inc. 2015 Equity Incentive Plan (the “2015 Equity Plan”) as of October 6, 2021, provided, however, no more than 14.5 million shares may be issued upon the exercise of incentive stock options. Effective January 1, 2022, the number of shares of our common stock available for issuance under the 2021 Equity Plan increased by approximately 7.7 million shares pursuant to the evergreen feature described in part (ii) of the immediately preceding sentence. Our board of directors determined that no additional shares would become available under such evergreen feature effective as of January 1, 2023. Additionally, the number of shares of our common stock available for issuance under the 2021 Equity Plan may increase with respect to awards under the 2015 Equity Plan which are forfeited or lapse unexercised and which following the effective date of the 2021 Equity Plan are not issued under such prior plan. The share reserve formula under the 2021 Equity Plan is intended to provide us with the continuing ability to grant equity awards to eligible employees, directors and consultants for the 10-year term of the 2021 Equity Plan.
As of March 31, 2023, approximately 18.4 million shares were available for future awards to employees and other eligible participants under the 2021 Equity Plan.
2021 Employee Stock Purchase Plan
In connection with the IPO and effective October 6, 2021, we adopted the 2021 Employee Stock Purchase Plan (the “ESPP”). The ESPP is designed to allow our eligible employees to purchase shares of our common stock, at periodic intervals, with their accumulated payroll deductions. The ESPP consists of two components: an Internal Revenue Service (“IRS”) Code section 423 (“Section 423”) component, which is intended to qualify under Section 423 of the IRS Code and a non-Section 423 component, which need not qualify under Section 423 of the IRS Code. The aggregate number of shares of our common stock that has initially been reserved for issuance under the ESPP is equal to (i) approximately 2.9 million shares of our common stock, and (ii) an annual increase on the first day of each year beginning in 2022 and ending in and
including 2031, equal to the lesser of (A) 1% of the aggregate number of shares of our common stock outstanding on the final day of the immediately preceding calendar year and (B) such smaller number of our shares of common stock as determined by our board of directors; provided that in no event will more than 29.0 million shares of our common stock be available for issuance under the Section 423 component of the ESPP. Our board of directors determined that no additional shares would become available under the ESPP as of January 1, 2022 or January 1, 2023 pursuant to the evergreen feature described in part (ii) of the immediately preceding sentence. Our board of directors or the compensation committee will have authority to interpret the terms of the ESPP and determine eligibility of participants.
We launched the first offering period under the ESPP on December 1, 2022. The ESPP permits participants to purchase common stock through payroll deductions of up to 15% of their eligible compensation, which includes a participant’s gross base compensation for services to us. On the first trading day of each offering period, each participant is automatically granted an option to purchase shares of our common stock. The purchase option expires at the end of the applicable offering period and will be exercised on each purchase date during such offering period to the extent of the payroll deductions accumulated during the offering period. We have consecutive offering periods of approximately six months in length commencing on each June 1 and December 1 during the term of the ESPP. The purchase price for a share of our common stock is 90% of the fair market value of a share on the enrollment date for such offering period or on the purchase date, whichever is lower, and subject to adjustment by our board of directors or compensation committee. Participants may voluntarily end their participation in the ESPP prior to the end of the applicable offering period and are paid their accrued payroll deductions that have not yet been used to purchase shares of common stock. Upon exercise, the participant purchases the number of whole shares that his or her accumulated payroll deductions will buy at the purchase option price, subject to the certain participation limitations. Participation ends automatically upon a participant’s termination of employment. No shares were issued under the ESPP as of March 31, 2023. We recognized $0.2 million of share-based compensation expense for the discount received by participants for the three months ended March 31, 2023, all of which is included in General, administrative and marketing in our condensed consolidated statement of operations. As of March 31, 2023, unrecognized share-based compensation expense related to the first offering period under the ESPP was approximately $0.1 million, which is expected to be recognized over a weighted average remaining period of 0.2 years.
Stock Options
During the three months ended March 31, 2023, the Company granted approximately 0.7 million stock option awards under the 2021 Equity Plan. These options have a 10-year contractual term from the date of grant and vest in ratable annual installments on each of the first anniversaries of the grant date, subject to continuous employment or service from the grant date through the applicable vesting date. The exercise price associated with each of these awards is not less than the fair market value per share of our common stock at the time of grant. The fair value of the options granted during the three months ended March 31, 2023 was calculated using the Black-Scholes option pricing model. Approximately 0.3 million stock options were exercised during the three months ended March 31, 2023. As of March 31, 2023, options to purchase approximately 25.2 million shares of our common stock were outstanding, of which approximately 21.6 million were exercisable.
Share-based compensation expense associated with stock options for the three months ended March 31, 2023 was $2.2 million, of which $0.2 million and $2.0 million is included in Center operations and General, administrative and marketing, respectively, in our condensed consolidated statements of operations. Share-based compensation expense associated with stock options for the three months ended March 31, 2022 was $11.4 million, of which $1.0 million, $10.1 million and $0.3 million is included in Center operations, General, administrative and marketing and Other operating expense (income), respectively, in our condensed consolidated statements of operations. As of March 31, 2023, unrecognized share-based compensation expense related to stock options was approximately $20.4 million, which is expected to be recognized over a weighted average remaining period of 2.8 years.
Restricted Stock Units
During the three months ended March 31, 2023, the Company granted approximately 0.7 million restricted stock unit awards to our executives under the 2021 Equity Plan, of which approximately 0.3 million were performance-based and approximately 0.4 million were subject to time-based vesting over years with a performance qualifier, in each case subject to continuous employment or service from the grant date through the applicable vesting date. At March 31, 2023, approximately 2.5 million restricted stock units were outstanding.
In the event actual performance exceeds the target amount for the performance-based restricted stock units, the above-target amount is to be paid through the issuance of fully-vested shares of the Company’s common stock at such time of determination in 2024. Accordingly, we account for the projected above-target amount as liability-classified share-based
payment awards. For information regarding our liability-classified share-based payment awards, see “—Liability-Classified Share-Based Payment Awards” below.
Share-based compensation expense associated with restricted stock units for the three months ended March 31, 2023 was $3.0 million, of which $0.5 million, $2.3 million and $0.2 million is included in Center operations, General, administrative and marketing and Other operating expense (income), respectively, in our condensed consolidated statements of operations. Share-based compensation expense associated with restricted stock units for the three months ended March 31, 2022 was $5.2 million, of which $0.2 million and $5.0 million is included in Center operations and General, administrative and marketing, respectively, in our condensed consolidated statements of operations. As of March 31, 2023, unrecognized share-based compensation expense related to restricted stock units was approximately $36.3 million, which is expected to be recognized over a weighted average remaining period of 2.4 years.
Liability-Classified Share-Based Payment Awards
Because the projected above-target amount for the performance-based restricted stock units (which is described in “—Restricted Stock Units” above) represents a fixed dollar amount that, if payable, would be settled in a variable number of shares of the Company’s common stock, we account for such share-based payment awards as a liability-classified award. Based on our current assessment, we have deemed it probable that the target performance amount will be exceeded. Accordingly, we recognized $0.2 million of share-based compensation expense associated with these liability-classified share-based payment awards during the three months ended March 31, 2023, all of which is included in General, administrative and marketing in our condensed consolidated statements of operations. The offset to this share-based compensation expense was recognized as an increase in Accrued expenses and other current liabilities on our condensed consolidated balance sheet.
Restricted Stock
Share-based compensation expense associated with restricted common stock for the three months ended March 31, 2022 was $4.8 million, all of which is included in General, administrative and marketing in our condensed consolidated statements of operations. These restricted shares were fully vested as of April 4, 2022, and there is no unrecognized share-based compensation expense related to these shares.
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