The Company’s management, through the Company’s affiliation with its shareholder and former parent, EQT, participated in a 2017 Class B Profits Interest Unit Incentive Plan (the “Class B Plan”), whereby EQT was authorized to issue a total of 6,366,891 Profit Interest Units (“Class B Units”), representing the right to share a portion of the value appreciation in EQT.

The majority of the employee grant agreements for the Class B Units were comprised of 50% time-based vesting units (“Time-based Units”) and 50% performance-based vesting units (“Performance-based Units”). The Time-based Units generally vested over a five-year period; The Performance-based Units would vest if EQT achieved specified levels of return on investment at the time of i) a change in control, ii) a reduction in holdings of the Company by EQT to 10% or less following an IPO or iii) certain distributions to EQT. There were also certain grant agreements for the Class B Units that were entirely comprised of Time-based Units. Upon vesting, the holder of Class B Units received a right to a fractional portion of the profits and distributions of the parent in excess of a “participation threshold” determined in accordance with the EQT limited partnership agreement.

In addition to the performance conditions above, the Chief Executive Officer’s (“CEO”) performance-based Class B Units also vested if the aggregate value attributable to an IPO equaled or exceeded an amount equivalent to the return on investment performance targets.

The Class B Units were in a secondary position to the Class A units in EQT, in that in any event in which the EQT equity was valued and paid out, holders of the Class B Units would only be paid if an amount at least equal to the applicable participation threshold was first allocated to all of the outstanding classes of units under EQT’s limited partnership agreement. In addition, EQT had the right, but not the obligation, to repurchase units at fair value upon certain events, such as a termination of employment. During the years ended December 31, 2020 and 2019, EQT repurchased 87,930 and 241,601 Class B Units at their intrinsic value of $1,079 and $703 respectively. These repurchases were funded through

dividends paid by the Company to EQT. These Class B Units do not have a maximum contractual life, and as such, these Class B Units do not expire.

The fair value of the Time-based Units that vested solely upon continued employment was measured at the grant date and was recognized as cost over the employee’s requisite service period, which was generally five years. The expense related to the vesting of the Time-based Units was recorded on the Company’s books because the Company directly benefited from the services provided by Class B Unit holders. The grant date fair values were determined based on the pricing models and valuation assumptions noted in the following table, shown at their weighted-average values:

(1)	Based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected exercise term of our incentive units

(2)	In projecting expected stock price volatility, we consider the historical volatility of the stock prices of comparable public companies.

(3)	The Company estimates the expected life of incentive units based upon the timing of a potential liquidity event.

A summary of the Class B Units activity for the period is presented below (dollar amounts are not in thousands):


		WEIGHTED AVERAGE
		Weighted-Average
		Grant-Date		Weighted-Average
		Fair Value		Exercise Price
	UNITS	Per Unit		Per Unit
Outstanding, as of December 31, 2019	5,436,299	$	3.53	11.43
Granted	1,357,408		7.39	26.96
Exercised	(87,930)		3.55	10.2
Forfeited	(377,626)		3.63	10.3
Exchanged	(6,328,151)		4.37	—
Outstanding, December 31, 2020	—	$	—	—

Outstanding units represent the total of vested Class B Units and those expected to vest, including Time-based Units for which the requisite service period has not yet been rendered. Of those Class B Units that were vested and exercisable at December 31, 2019, the weighted-average distribution threshold was $10.16. The weighted-average grant date fair value per unit was $3.53 as of December 31, 2019.

The aggregate intrinsic value of Class B Units outstanding, vested and exercisable at December 31, 2019 was $38,440. There were no Class B Units outstanding as of December 31, 2020.

The total fair value of Class B Units vested and exercisable during 2019 was $1,872. Equity-based compensation expense related to the Time-based Units was $2,776 and $1,691 for the years ended December 31, 2020 and 2019. The Performance-based Units were not probable of vesting prior to the exchange of Class B Units for common shares, as described below; as such, no expense was recorded for these Units prior to the IPO. As of December 31, 2020, there were no unrecognized compensation costs related to the Units as they had been exchanged for restricted stock as discussed below.

Exchange

Effective as of December 10, 2020 (the “Exchange Date”), all vested Class B Units were exchanged by EQT for shares of common stock of the Company held by EQT, and unvested Class B Units were exchanged for shares of restricted common

stock of the Company. On the Exchange Date, holders of unvested Time-based and Performance-based Units elected to either (1) exchange their unvested Class B Units with shares of restricted common stock of the Company that maintained the same vesting conditions (both time-based and performance-based) of such unvested Class B Units or (2) exchange their unvested Class B Units (both Time-based and Performance-based Units) with shares of restricted common stock of the Company that would be subject only to the same time-vesting conditions of such unvested Time-based Units, based on the original grant date. 53 holders of Class B Units elected the latter option. The CEO elected for the former option, based on the fact that his Performance-based Units vested upon the consummation of the offering. The number of shares of common stock exchanged by EQT for vested Class B Units and number of shares of restricted common stock exchanged by EQT for unvested Class B Units were based on their deemed value as of the date of the offering divided by the estimated per share offering price. The deemed value of Class B Units considered the overall implied value of the Company based on the offering price and considering their economic rights pursuant to the contractual waterfall and related distribution thresholds.

Based on the IPO price of $23.00 per share, the Company issued 5,941,693 shares of restricted common stock to holders of unvested Class B Units in exchange for such unvested Class B Units and holders of vested Class B Units received an aggregate of 4,211,598 shares of common stock in exchange for vested Class B Units.

Modification accounting was not required for the time-based vesting Class B Units for which the vesting conditions, classification and fair market value did not change as a result of the shares of restricted common stock that replaced them. The original grant date fair value will continue to be recognized on a straight-line basis.

Modification accounting was required for the performance-based vesting Class B Units that were exchanged for time-based vesting restricted common stock, given the vesting conditions were changed. Such performance-vesting Class B Units that were improbable of vesting were remeasured based on the modification date fair value of the shares of restricted common stock replacing such Class B Units. The total fair value of the restricted stock was $83,260. Because the service inception date preceded the grant date of the replacement awards, a catch up-adjustment of $56,487 was recorded at the modification date, based on the portion of the requisite service period that had elapsed since the original grant date for each tranche of the award. Considering the original awards contained performance conditions necessary to vest, the accelerated attribution approach was applied. The accelerated attribution approach results in cost being allocated to each of the tranches of the awards and recognized ratably over each tranche as if they were separate awards.

Separately, upon completion of the offering, $3,912 of compensation cost was recognized related to our Chief Executive Officer’s 853,001 performance-based Class B Units that automatically vested upon the IPO of the Company and were exchanged for 1,561,950 common shares of the Company.

Restricted Stock

As detailed above, unvested Class B Units were exchanged for restricted stock of the Company. Share based compensation for the restricted stock exchanged for the time-based Class B Units is recognized on a straight-line basis over the requisite service period of the award, which is generally five years. Share-based compensation for the restricted stock exchanged for the performance-based Class B Units is recognized using the accelerated attribution approach.

A summary of the restricted stock in 2021 is shown below:


			WEIGHTED-AVERAGE
			GRANT-DATE
	SHARES		FAIR VALUE
Non-vested restricted stock as of December 31, 2020	5,941,693	$	23.00
Granted	87,127		31.70
Vested	(1,957,054)		23.02
Forfeited	(161,044)		23.00
Non-vested restricted stock as of December 31, 2021	3,910,722	$	23.18

The Company granted 87,127 replacement shares of restricted stock in 2021 in connection with the Pinnacle business acquisition under which equity-based awards are outstanding. The fair value of the per share of restricted stock issued in 2021 was measured using grant date fair market value adjusted lack of marketability for these shares. Total grant date fair value was $2,762. The restricted stock issued in 2021 generally have a three year vesting period except for one holder whose shares vests equally on a monthly basis for 2 years. The Company exchanged 5,941,693 shares discussed in previous section in 2020 and was not authorized and did not issue any restricted stock in 2019.

Equity-based compensation expenses related to the restricted stock exchanged for performance-based Class B units were $12,349 and $57,421 for the years ended December 31, 2021 and 2020, respectively. At December 31, 2021, the total unrecognized equity-based compensation expenses related to outstanding restricted stock recognized using the accelerated attribution approach was $11,638. The unrecognized compensation expense for the category at December 31, 2021 is expected to be recognized over a weighted-average period of 24.6 months.

Equity-based compensation expenses related to the time-based restricted stock were $3,104 and $167 for the years ended December 31, 2021 and 2020, respectively. At December 31, 2021, the total unrecognized equity-based compensation expenses related to outstanding restricted stock recognized using the straight-line attribution approach were $6,394. The unrecognized compensation expense for the category at December 31, 2021 is expected to be recognized over a weighted-average period of 33.2 months.

Equity-based employee compensation expense related to the time-based restricted stock for the Pinnacle acquisition was $292 for the year ended December 31, 2021. At December 31, 2021, the total unrecognized equity-based compensation expenses related to outstanding restricted stock recognized using the straight-line attribution approach was $2,470. The unrecognized compensation expense for the category at December 31, 2021 is expected to be recognized over a weighted-average period of 26.7 months.

2020 Incentive Plan

In order to align our equity compensation program with public company practices, the Company’s Board of Directors adopted and stockholders approved the 2020 Incentive Plan. The 2020 Incentive Plan allows for grants of non-qualified stock options, incentive stock options, restricted stock, and restricted stock units (RSUs) to employees, directors and officers, and consultants or advisors of the Company. The 2020 Incentive Plan allows for 20,000,000 shares (the “plan share reserve”) of common stock to be issued. No more than the number of shares of common stock equal to the plan share reserve may be issued in the aggregate pursuant to the exercise of incentive stock options. The maximum number of shares of common stock granted during a single fiscal year to any non-employee director, taken together with any cash fees paid to such non-employee director during the fiscal year, may not exceed $1,000,000 in total value, except for certain awards made to a non-executive chair of our board of directors. At December 31, 2021, there was 19,898,104 shares reserved for future issuance.

The plan share reserve will be increased on the first day of each fiscal year beginning with the 2021 fiscal year and ending after the tenth anniversary of the effective date in an amount equal to the lesser of (i) the positive difference, if any, between (x) 4.0% of the outstanding common stock on the last day of the immediately preceding fiscal year and (y) the plan share reserve on the last day of the immediately preceding fiscal year and (ii) a lower number of shares of our common stock as determined by our board of directors.

Restricted Stock Units

Restricted stock units (“RSUs”) represent the right to receive shares of the Company’s common stock at a specified date in the future. During year ended December 2021, the Company granted 1,347,265 RSUs under the 2020 Incentive Plan that generally vest over an average three-year period. The fair value of the RSUs is based on the fair value of the underlying shares on the date of grant.

A summary of the Company’s RSU activity is as follows:


		WEIGHTED-
		AVERAGE
		GRANT DATE
	UNITS	FAIR VALUE
Non-vested RSUs as of December 31, 2020	30,052	$	23.00
Granted	1,347,265		29.19
Vested	(24,728)		23.00
Forfeited	(63,865)		26.80
Non-vested RSUs as of December 31, 2021	1,288,724	$	29.28

Equity-based compensation expense related to the RSUs was $8,257 and $81 for the years ended December 31, 2021 and 2020, respectively. At December 31, 2021, the total unrecognized equity-based compensation expense related to outstanding RSUs was $29,914, which is expected to be recognized over a weighted-average period of 28.5 months.

Performance Restricted Stock Units

Performance stock units (“PSUs”) are issued under the 2020 Incentive Plan and represent the right to receive shares of the Company’s common stock at a specified date in the future based on the satisfaction of various service conditions and the achievement of certain performance thresholds including year over year revenue growth and unlevered free cash flow growth.

Equity-based compensation for the PSUs is only recognized to the extent a threshold is probable of being achieved and is recognized using the accelerated attribution approach. The Company will continue to assess the probability of each

condition being achieved at each reporting period to determine whether and when to recognize compensation cost. The following table presents a summary of activity on the PSUs for the period ended December 31, 2021.


		WEIGHTED-
		AVERAGE
		GRANT DATE
	UNITS	FAIR VALUE
Non-vested PSUs as of December 31, 2020	—	$	—
Granted	418,480		27.36
Vested	—		—
Forfeited	(11,905)		27.45
Non-vested PSUs as of December 31, 2021	406,575	$	27.35

Equity-based compensation expense related to the PSUs was $5,481 for the year ended December 31, 2021. At December 31, 2021, the total unrecognized equity-based compensation expense related to outstanding PSUs was $5,141, which is expected to be recognized over a weighted-average period of 19.77 months.

The number of restricted stock awards and RSUs vested in 2021 includes 11,103 shares that were withheld on behalf of employees to satisfy the statutory tax withholding requirements.

2020 Employee Stock Purchase Plan

On December 10, 2020, stockholders approved the 2020 Employee Stock Purchase Plan (the “Employee Stock Purchase Plan”). Under the Employee Stock Purchase Plan, employees, and those of the Company’s subsidiaries, may purchase shares of common stock, during pre-specified offering periods. Named executive officers will be eligible to participate in the Employee Stock Purchase Plan on the same terms and conditions as all other participating employees. The maximum number of shares authorized for sale under the Employee Stock Purchase Plan is 1,700,000 shares.

Generally, all employees and those of the Company’s subsidiaries will be eligible to participate in the Employee Stock Purchase Plan, except for employees who own 5% or more of the combined voting power or value of all issued and outstanding stock. Employees may contribute through payroll deductions of 1% to 15% of such employees’ base compensation on each payroll date that falls within an offering period. Participants may not acquire rights to purchase more than $25 of common stock under the Employee Stock Purchase Plan for any calendar year. Common stock will be available for purchase for up to 27 months.

Shares will be purchased at a discounted per-share purchase price equal to 85% of the per-share closing price of the Company’s common stock on the last day of the applicable offering period.

As of December 31, 2021, no shares of common stock have been purchased under the Employee Stock Purchase Plan and no offering has been made to eligible employees under the Plan.

Equity-based compensation expense

The following table summarizes the components of total equity-based compensation expense included in the Consolidated Statements of Operations and Comprehensive Loss for each period presented:


	YEAR ENDED DECEMBER 31,
	2021		2020		2019
Cost of revenues	$	5,193	$	8,805	$	156
Sales and marketing		2,204		7,390		110
Research and development		2,872		7,133		121
General and administrative expenses		19,214		41,179		1,304
Total	$	29,483	$	64,507	$	1,691

The tax benefit related to compensation expense was $117 for the year ended December 31, 2021. There were no tax benefits related to compensation expense for the year ended December 31, 2020 and 2019.