A summary of our aggregate share-based compensation expense is set forth below. Stock-based compensation expense is included in corporate, general and administrative expenses on our consolidated statements of operations.

(a)

The amount for 2021 relates to stock-based compensation expense recognized as a result of the Cancellation Agreement.

2016 Equity Incentive Plan

The Company maintained the 2016 Equity Incentive Plan pursuant to which various stock-based awards were granted to employees, directors, consultants, and advisers. The total number of shares of the Company’s common stock that was authorized under the 2016 Equity Incentive Plan was 17,836,636, of which a total of 16,994,976 awards were granted. On July 27, 2020, the Company, Ignite Aggregator LP (the “LP”), and the equity holders of the Company entered into a Securities Purchase Agreement, and in conjunction therewith, the Company amended and restated the 2016 Credit Agreement. A portion of the proceeds from the 2016 Credit Agreement were used by the Company to repurchase 16,095,819 shares of its common stock from the certain members of management, the Board of Directors, and members of our equity partner. Additionally, as part of the 2016 Credit Agreement, the Company executed the Cancellation Agreement with each of the 2016 Equity Incentive Plan option holders, pursuant to which the Company’s 16,994,976 common stock options which were granted under the 2016 Equity Incentive Plan, were cancelled. The Cancellation Agreement resulted in the option holders receiving the same amount of cash that they would have received had they exercised their options, participated in the repurchase described above and sold their remaining shares. The 2016 Equity Incentive Plan was cancelled and replaced with the 2020 Equity Incentive Plan, as described below.

2020 Equity Incentive Plan

Profits Interests

The LP maintains the 2020 Equity Incentive Plan pursuant to which interests in the LP in the form of Class B Units (profits interests) may be granted to employees, directors, consultants, and advisers. A maximum number of 16,162,177 Class B Units are authorized for grant under the 2020 Equity Incentive Plan. As of June 30, 2022, a total of 13,009,137 profits interests units have been granted under the 2020 Equity Incentive Plan.

These profits interests represented profits interest ownership in the LP tied solely to the accretion, if any, in the value of the LP following the date of issuance of such profits interests. Profits interests participated in any increase of LP value related to their profits interests after the hurdle value had been achieved and the LP profits interests received the agreed-upon return on their invested capital. The hurdle value per unit is $5.49 for both the performance-based and time-based units.

Each profits interests unit contains the following material terms:

(i)

The profits interests receive distributions (other than tax distributions) only upon a liquidity event, as defined, that exceed a threshold equivalent to the fair value of the LP, as determined by the Company’s Board of Directors, at the grant date.

(ii)

A portion of the units vest over a period of continuous employment or service (service-vesting units) while the other portion of the units only vest based on the level of aggregate multiple of invested capital and internal

rate of return achieved by Ignite Aggregator LP, one of the limited partners of the LP, upon a change of control of the Company (performance-vesting units).

The performance-vesting units are subject to a market condition, which the Company incorporated as part of its determination of the grant date fair value of the units.

The Company used the Monte Carlo option model to determine the fair value of the granted profits interests units at the time of the grant. As these awards were granted prior to our IPO, the stock price was based on the price realized in the equity owner transaction. Expected stock price volatility was based on consideration of indications observed from several publicly traded peer companies. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of the unit. The dividend yield percentage is zero because the Company neither currently pays dividends nor intends to do so during the expected term. The expected term of the units represents the time the units are expected to be outstanding. The assumptions under the Monte Carlo model related to the profits interests units, presented on a weighted-average basis, are provided below:


	2021
Expected volatility		44	%
Expected life (years) - time vesting units		1.8
Interest rate		0.16	%
Dividend yield		—	%
Weighted-average fair value	$	1.28
Fair value of underlying stock	$	5.49

A summary of profits interests activity for the year ended June 30, 2022, was as follows:


	Number of	Weighted average
Time-based unit awards	units	grant date fair value

Outstanding balance, June 30, 2021	6,587,261	$	1.28
Granted	—
Forfeited	(2,807,201)	$	1.28
Vested	(1,621,988)	$	1.28
Outstanding balance, June 30, 2022	2,158,072	$	1.28


	Number of	Weighted average
Performance-based unit awards	units	grant date fair value

Outstanding balance, June 30, 2021	6,223,262	$	0.57
Granted	—
Forfeited	(4,005,397)	$	0.57
Vested	—
Outstanding balance, June 30, 2022	2,217,865	$	0.57

The total unrecognized compensation cost related to profits interests units outstanding as of June 30, 2022 was $4.8 million, comprised (i) $3.5 million related to time-based unit awards expected to be recognized over a weighted-average period of 1.8 years and (ii) $1.3 million related to performance-based unit awards, which will be recorded when it is probable that the performance-based criteria will be met.

2021 Omnibus Incentive Plan

In March 2021, the compensation committee of our Board of Directors approved the InnovAge Holding Corp. 2021 Omnibus Incentive Plan (“2021 Omnibus Incentive Plan”), pursuant to which various stock-based awards may be granted to employees, directors, consultants, and advisers. The total number of shares of the Company’s common stock authorized under the 2021 Omnibus Incentive Plan is 14,700,000. The Company has issued time-based restricted stock units under

this plan to its employees which generally vest (i) on March 4, 2023, the second anniversary of the grant date, (ii) over a three-year period with one-third vesting on each anniversary of the date of grant, or (iii) at other dates. Certain other vesting periods have also been used. The grant date fair value of restricted stock units is based on the closing market price of our common stock on the date of grant. Certain awards under this plan vest upon achieving specific share price performance criteria and are determined to have performance-based vesting conditions.

Restricted Stock Units

A summary of time-based vesting restricted stock units activity for the year ended June 30, 2022, was as follows:


			Weighted
			average
	Number of		grant-date fair
Restricted stock units - time based	awards		value per share

Outstanding balance, June 30, 2021	48,470	$	22.87
Forfeited	(17,990)	$	23.21
Vested	(18,517)	$	11.36
Granted	464,805	$	9.69
Outstanding balance, June 30, 2022	476,768	$	9.69

The total unrecognized compensation cost related to time-based restricted stock units outstanding as of June 30, 2022, was $3.0 million and is expected to be recognized over a weighted-average period of 1.9 years.

A summary of performance-based vesting restricted stock units activity for the year ended June 30, 2022, was as follows:


			Weighted
			average
	Number of		grant-date fair
Restricted stock units - performance based	awards		value per share

Outstanding balance, June 30, 2021	—	$	—
Forfeited	—	$	—
Vested	—	$	—
Granted	258,767	$	5.18
Outstanding balance, June 30, 2022	258,767	$	5.18

The fair value of the performance-based restricted stock units and performance-based stock options granted during the year ended June 30, 2022, was based upon a Monte Carlo option pricing model using the assumptions in the following table:


	2022
Expected volatility		34.5	%
Expected term (in years)		5.0
Interest rate		1.56	%
Dividend yield		0	%
Weighted-average fair values	$	5.18
Fair value of underlying stock	$	7.89

The total unrecognized compensation cost related to performance-based vesting restricted stock units outstanding as of June 30, 2022, was $1.1 million and is expected to be recognized over a weighted-average period of 3.3 years.

Nonqualified Stock Options

A summary of time-based vesting stock option activity for the year ended June 30, 2022, was as follows:


			Weighted
			average
	Number of		grant-date fair
Stock options - time based	awards		value per share

Outstanding balance, June 30, 2021	—	$	—
Granted	554,499	$	1.61
Forfeited	—	$	—
Outstanding balance, June 30, 2022	554,499	$	1.61

The total unrecognized compensation costs related to time-based vesting stock options outstanding as of June 30, 2022, was $0.6 million and is expected to be recognized over a weighted-average period of 2.5 years.

The fair value of the time-based stock options granted during the year ended June 30, 2022, was based upon the Black-Scholes option pricing model using the assumptions in the following table:


	2022
Expected volatility		34.5	%
Weighted-average expected life (years) - time vesting units		2.9
Interest rate		0.83	%
Dividend yield		0	%
Weighted-average fair values	$	1.61
Fair value of underlying stock	$	7.89

A summary of performance-based vesting stock option activity for the year ended June 30, 2022, was as follows:


			Weighted
			average
	Number of		grant-date fair
Stock options - performance based	awards		value per share

Outstanding balance, June 30, 2021	—	$	—
Granted	776,299	$	3.08
Forfeited	—	$	—
Outstanding balance, June 30, 2022	776,299	$	3.08

The fair value of the performance-based stock options granted during the year ended June 30, 2022, was based upon a Monte Carlo option pricing model using the assumptions in the table above under the ‘Restricted Stock Units’ heading.

The total unrecognized compensation cost related to performance-based vesting stock options outstanding as of June 30, 2022, was $2.0 million and is expected to be recognized over a weighted-average period of 3.4 years.