On January 21, 2020, the Company granted 181,316 time-based restricted share unit awards to certain employees which vest in equal installments over three years.

On August 18, 2020, the Company granted 1,003,000 time-based restricted share unit awards to certain employees which vest in equal installments over three years.

On August 15, 2020, the Company granted the board of directors a total of 166,373 restricted share unit awards (“RSU’s”) as compensation for future service. The RSU’s fully vest at the completion of the one-year period commencing from the date of grant.

The following is a summary of restricted share unit activity for the nine months ended September 30, 2020:

Restricted Share Units Activity	Number of Awards			Weighted-Average Grant Date Fair Value
Non-Vested share units as of December 31, 2019		60,902		$	15.60
Granted		1,350,689			7.00
Vested		(41,670	)		15.60
Cancelled		(7,761	)		15.61
Non-Vested share units as of September 30, 2020		1,362,160		$	7.07

On January 21, 2020, the Company granted 181,316 performance share unit awards to certain employees which vest upon the achievement of certain pre-established performance target established for the 2020 calendar year and the satisfaction of an additional time-based vesting requirement that generally requires continued employment through January 21, 2023. Performance share units are converted into shares of common stock upon vesting on a one-for-one basis. The Company estimates the fair value of each performance share when the grant is authorized, and the related service period has commenced. The Company recognizes compensation cost over the vesting period based on the probability of the performance conditions being achieved. If the specified service and performance conditions are not met, compensation expense is not recognized, and any previously recognized compensation expense will be reversed.

On August 18, 2020, the Company granted 1,003,000 performance share unit awards (“PSU’s”) to certain executive officers, the PSU’s expire on the sixth anniversary of the Grant Date. The PSU’s will vest upon achievement of the five-day volume weighted average price of OneSpaWorld common shares reaching the following hurdle prices:

Hurdle Price		Percentage of PSU's Vested
$	7.24	25%
$	8.83	25%
$	10.41	25%
$	12.00	25%

Grant date fair value of the PSU’s was estimated by a third-party valuation specialist using a Monte Carlo simulation in a risk-neutral framework assuming Geometric Motion, 100,000 trials, and using the following assumptions:

Hurdle prices per share	$7.24, $8.83, $10.41, $12.00
End of simulation term	August 18, 2026
Term of simulation	6 years
Stock price as of measurement date	$	5.65
Volatility		54.13	%
Risk-free rate (continuous)		0.37	%

The following is a summary of performance share unit activity for the nine months ended September 30, 2020:

Performance Share Unit Activity	Number of Awards			Weighted-Average Grant Date Fair Value
Non-Vested share units as of December 31, 2019		-
Granted		1,184,316		$	6.34
Vested		-			-
Cancelled		(1,350	)		15.67
Non-Vested share units as of September 30, 2020		1,182,966		$	6.32

The share-based compensation expense for the three months ended September 30, 2020 (Successor) and 2019 (Successor) was $1.1 million and $0.1 million, respectively. The share-based compensation expense during the nine months ended September 30, 2020 (Successor) and for the period for March 20, 2019 to September 30, 2019 (Successor) was $1.9 million and $20.4 million, respectively, which is included as a component of salary and payroll taxes in the accompanying condensed consolidated and combined statements of operations. There was no share-based compensation expense for the period from January 1, 2019 to March 19, 2019 (Predecessor).