Profit Interest Units of SIS Holdings LP

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

Profit Interest Units of SIS Holdings LP

SIS Holdings adopted the SIS Holdings LP Class B Unit Plan (the “SIS Holdings Plan”) in May 2017. All outstanding awards, including, but not limited to, awards to employees of Appgate (or a subsidiary thereof), under the SIS Holdings Plan were issued in 2017, 2018 and 2019. Equity-based compensation costs totaled $0.1 million and $1.0 million for three months ended March 31, 2022 and 2021, respectively. These amounts are included in the following captions in the condensed consolidated statements of operations (in thousands):


	Three Months Ended
	March 31,
	2022		2021
Cost of revenue	$	62	$	131
Sales and marketing	81		567
Research and development	—		111
General and administrative	—		201
Total	$	143	$	1,010

No related income tax benefit was recognized as of March 31, 2022 or December 31, 2021.

As of March 31, 2022, total equity-based compensation costs related to 389 unvested Class B units not yet recognized totaled $0.3 million, which is expected to be recognized over a weighted-average period of 0.93 years.

Effective July 29, 2021, the SIS Holdings Plan was amended to the extent required such that any distribution by SIS Holdings to its equity holders that is attributable to amounts received by SIS Holdings in respect of its equity interests in Cyxtera or Legacy Appgate, in each case upon the consummation of the transactions contemplated by Cyxtera’s merger with Starboard Value Acquisition Corp. in July 2021 (the “Cyxtera Transaction” and, together with the Merger, the “Transactions”) or the agreement and plan of reorganization, dated February 8, 2021 entered into by and among Newtown Lane, Merger Sub and Legacy Appgate, respectively, shall be deemed to have been made at an amount equal to the value of the Cyxtera common stock or Legacy Appgate common stock, as applicable, in each such Transaction.