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Equity-Based Compensation
6 Months Ended
Jun. 30, 2021
Share-based Payment Arrangement [Abstract]  
Equity-Based Compensation Equity-Based Compensation
In November 2020, in connection with the IPO, the Company’s board of directors adopted the 2020 Omnibus Incentive Plan (the “2020 Plan”). All awards granted under the 2020 Plan are intended to be treated as (i) stock options, including incentive stock options (“ISOs”), (ii) stock appreciation rights (“SARs”), (iii) restricted share awards (“RSAs”), (iv) restricted stock units (“RSUs”), (v) dividend equivalents, or (vi) other stock or cash awards as may be determined by the plan’s administrator from time to time. The Company uses the Black-Scholes option pricing model to estimate the fair value of each option grant on the date of grant or any other measurement date.
Prior to the IPO, the Company’s parent, MLSH 1, granted unit-based awards to certain executives of the Company in the form of non-vested units. Our controlled subsidiary, MLSC, also granted unit-based awards to certain employees (collectively the “Incentive Units”). All awards of Incentive Units were measured based on the fair value of the award on the date of grant. Compensation expense for the Incentive Units is recognized over their requisite service period. The incentive units were subject to a combination of market, service or performance vesting conditions. For Incentive Units subject to performance conditions, the Company evaluated the probability of achieving each performance condition at each reporting date and recognized expense over the requisite service period when it was deemed probable that a performance condition will be met using the accelerated attribution method over the requisite service period. Upon completion of the IPO all of the Incentive Units subject to a performance and market condition became vested.
The following table summarizes the total equity-based compensation expense included in the Company’s consolidated statements of income for the periods presented (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2021202020212020
Cost of sales$509 $$1,019 $
Research and development106 78 193 158 
Selling, general and administrative1,768 495 3,449 919 
Total equity-based compensation$2,383 $576 $4,661 $1,084 
No stock options were exercised or exercisable during the three and six months ended June 30, 2021.
As of June 30, 2021, the total unrecognized equity-based compensation related to stock options, Incentive Units, and RSUs were $21.6 million, $2.4 million, and $1.5 million, respectively, which is expected to be recognized over a weighted-average period of approximately 3.5, 2.3, and 2.4 years, respectively.