UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

(Amendment No.    )

 

 

Filed by the Registrant  ☒

Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

☐	Preliminary Proxy Statement

 

☐	Confidential, for use of the Commission only (as permitted by Rule 14a-6(e)(2))

 

☒	Definitive Proxy Statement

 

☐	Definitive Additional Materials

 

☐	Soliciting Material under § 240.14a-12

F45 Training Holdings Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

 

☒	No fee required

 

☐	Fee paid previously with preliminary materials

 

☐	Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 

 

 

F45 Training Holdings Inc.

3601 South Congress Avenue, Building E

Austin, Texas 78704

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

Date: June 13, 2022

Time: 5:00 p.m. Central Time

Location: www.virtualshareholdermeeting.com/F452022

To Our Stockholders:

We are pleased to invite you to attend the 2022 Annual Meeting of Stockholders of F45 Training Holdings Inc. (“F45” or the “Company”) on June 13, 2022 at 5:00 p.m. Central Time, online via live audio webcast by visiting www.virtualshareholdermeeting.com/F452022 (the “Annual Meeting”) for the following purposes:

 

1.

To elect the four director nominees named in this proxy statement to serve as Class I directors of the Company, each to serve for a three-year term and until his or her successor has been duly elected and qualified, or until his or her earlier death, resignation, removal, retirement or disqualification;

 

2.

To ratify the appointment of Deloitte & Touche LLP (“Deloitte”) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2022; and

 

3.

Transact any other business that may be properly presented at the Annual Meeting or any adjournment or postponement thereof.

The Company’s board of directors has determined to hold the Annual Meeting virtually. We believe that this is the right choice for F45 as it provides expanded stockholder access regardless of the size of the Annual Meeting or resources available to stockholders, improves communications and, given the ongoing pandemic, ensures the health and safety of participants by allowing them to participate from any location at no additional cost. Stockholders of record as of the close of business on April 18, 2022 are entitled to notice of, and, to vote at, the Annual Meeting, or any adjournment or postponement thereof.

As permitted by the Securities and Exchange Commission (the “SEC”), we are providing access to our proxy materials online under the SEC’s “notice and access” rules. As a result, unless you previously requested electronic or paper delivery on an ongoing basis, we are mailing to our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) instead of a paper copy of the proxy statement, and our Annual Report on Form 10-K for the fiscal year ended December

31, 2021 (the “Annual Report”) and a form of proxy card or voting instruction card (together, the “proxy materials”). This distribution process is more resource- and cost-efficient. The Notice contains instructions on how to access the proxy materials online. The Notice also contains instructions on how stockholders can receive a paper copy of our proxy materials. If you elect to receive a paper copy, our proxy materials will be mailed to you. The Notice is first being mailed, and the proxy materials are first being made available, to our stockholders on or about May 2, 2022.

All stockholders are cordially invited to attend our Annual Meeting, conducted virtually via live audio webcast at www.virtualshareholdermeeting.com/F452022. The Company has endeavored to provide stockholders attending the Annual Meeting with the same rights and opportunities to participate as they would at an in-person meeting. You will be able to attend the Annual Meeting online and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/F452022. You will also be able to vote your shares electronically at the Annual Meeting by visiting proxyvote.com and clicking the appropriate link from the Annual Meeting platform. A list of stockholders of record will be available online during the Annual Meeting, which stockholders will be able to view by referring to the Annual Meeting platform. In addition, during the ten days prior to the Annual Meeting, a list of stockholders of record will also be available at our principal executive offices located at 3601 South Congress Avenue, Building E, Austin, Texas 78704. If, as a result of the COVID-19 pandemic, our offices are not generally open to access by the public during the ten days prior to the Annual Meeting, stockholders may request to review a list of stockholders of record as of April 18, 2022, the record date for the Annual Meeting, for any purpose germane to the Annual Meeting by contacting Investor Relations at F45IR@ICRINC.COM.

To attend the Annual Meeting, vote, submit questions or view the list of registered stockholders during the Annual Meeting, you must first register for the Annual Meeting in advance by visiting www.virtualshareholdermeeting.com/F452022. Upon completing your registration, you will receive a confirmation email, which will include additional information about virtually attending the Annual Meeting. For additional details, see “ —How can I attend, participate in and vote at the Annual Meeting online?” in the “Questions and Answers” section below. This proxy statement provides detailed information about the Annual Meeting. We encourage you to read this proxy statement carefully and in its entirety. When accessing our Annual Meeting, please allow ample time for online check-in, which will begin at 4:45 p.m. Central Time on June 13, 2022. If you experience technical difficulties during the check-in process or during the Annual Meeting, please call the phone number you will receive as part of your confirmation email for assistance.

Your vote is important. Regardless of whether you participate in the Annual Meeting, we hope you vote as soon as possible. You may vote online or by phone, or, if you received paper copies of the proxy materials by mail, you may also vote by mail by following the instructions on the proxy card or voting instruction card. Voting online or by phone, written proxy or voting instruction card ensures your representation at the Annual Meeting regardless of whether you attend our virtual Annual Meeting online.

By Order of the Board of Directors,

 

/s/ Patrick Grosso

Patrick Grosso

Chief Legal Officer

Austin, TX

May 2, 2022

 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 13, 2022   The notice, the proxy statement and the Company’s Annual Report are available at ir.f45training.com.

PROXY SUMMARY

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all the information you should consider in voting your shares. Please read the complete proxy statement and our Annual Report to Stockholders for the fiscal year ended December 31, 2021 carefully before voting.

MEETING INFORMATION

 

Date:		Monday, June 13, 2022
Time:		5:00 p.m. Central Time
Virtual Meeting:		www.virtualshareholdermeeting.com/F452022
Record Date:		April 18, 2022

HOW TO VOTE

Your vote is important. You may vote your shares in advance of the Annual Meeting via the Internet, by telephone or by mail, or during the meeting by attending and voting electronically. Please refer to the section “How can I attend, participate in and vote at the Annual Meeting online?” on page 50 for detailed voting instructions. If you vote via the Internet, by telephone or plan to vote electronically during the Annual Meeting, you do not need to mail in a proxy card.

 

INTERNET		TELEPHONE		MAIL
To vote before the meeting, visit www.proxyvote.com. To vote at the meeting, visit www.proxyvote.com. You will need the control number printed on your notice, proxy card or voting instruction form.		If you received a paper copy of the proxy materials, dial toll-free (1-800-690-6903) or the telephone number on your voting instruction form. You will need the control number printed on your notice, proxy card or voting instruction form.		If you received a paper copy of the proxy materials, send your completed and signed proxy card or voting instruction form using the enclosed postage-paid envelope.

We first began sending our stockholders a Notice Regarding the Internet Availability of Proxy Materials, and made our proxy materials available, on or about May 2, 2022.

PROPOSALS

 

PROPOSAL #1 Directors		To elect the four director nominees named in the proxy statement as Class I directors of the Company, each to serve for a three-year term and until his or her successor has been duly elected and qualified, or until his or her earlier death, resignation, removal, retirement or disqualification (Proposal 1).   ✓  Our Board unanimously recommends that you vote “FOR ALL” of the director nominees.

PROPOSAL #2		To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2022 (Proposal 2).   ✓  Our Board unanimously recommends that you vote “FOR” ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2022.

BOARD QUALIFICATION AND DIVERSITY

Executive Officer Experience: 5

Technology/Digital: 2

International: 5

Franchising: 3

Board Experience: 7

Fitness/Athletics: 6

Healthcare: 3

Risk Management: 5

Consumer Brands: 5

Mergers & Acquisitions: 3

Diversity (Gender): 2

 

FISCAL 2021 FINANCIAL PERFORMANCE HIGHLIGHTS

 

•

Total revenue increased from the prior year period by 63% to $134.0 million.

 

•

Same store sales* increased 12% globally and 42% in the United States.

 

•

System-wide sales* increased 36% globally to $410.3 million, and 96% in the United States to $167.0 million.

 

•

System-wide visits* increased 31% globally to 26.8 million, and 103% in the United States to 10.8 million.

 

•

Net Franchises Sold* totaled 1,057, resulting in system-wide Total Franchises Sold of 3,301.

 

•

Net Initial Studio Openings* totaled 312, resulting in system-wide Total Studios of 1,749.

 

•

Net loss increase from the prior year period 623% to $187.2 million.

 

•

Adjusted EBITDA** increased from the prior year period by 104% to $52.0 million

 

*	For a discussion of these measures, see Appendix A to this proxy statement.

**	Adjusted EBITDA is a non-GAAP financial measure. For a discussion of this measure and for reconciliation to the nearest comparable GAAP measures, see Appendix A to this proxy statement.

TABLE OF CONTENTS

 

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE			2
Composition of our Board of Directors			2
Director Independence			9
Executive Sessions			11
Lead Independent Director			11
Board Qualifications & Diversity			11
Procedures for Recommending Individuals to Serve as Directors			12
Board Qualifications and Diversity			12
Committees of the Board of Directors			13
Role of our Board of Directors in Risk Oversight			16
Contacting the Board of Directors			16
Compensation Committee Interlocks and Inside Participation			16
Corporate Governance Guidelines			17
Code of Business Conduct and Ethics			17
Anti-Hedging Policy			17
Fiscal Year 2021 Director Compensation			17
PROPOSAL 1 — ELECTION OF DIRECTORS			20
EXECUTIVE OFFICERS			21
EXECUTIVE COMPENSATION			24
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			27
Principal Accountant Fees and Services			27
Pre-Approval of Audit and Non-Audit Services Policy			27
AUDIT COMMITTEE REPORT*			28
PROPOSAL 2 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			29
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS			30

Forward-Looking Statements and Website References

This proxy statement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may be identified by the use of words such as “intend,” “expect”, and “may”, and other similar expressions that predict or indicate future events or that are not statements of historical matters. Forward-looking statements are based on current information available at the time the statements are made and on management’s reasonable belief or expectations with respect to future events, and are subject to risks and uncertainties, many of which are beyond the Company’s control, that could cause actual performance or results to differ materially from the belief or expectations expressed in or suggested by the forward-looking statements. Further, many of these factors are, and may continue to be, amplified by the COVID-19 pandemic. Additional factors or events that could cause actual results to differ may also emerge from time to time, and it is not possible for the Company to predict all of them. Forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to update any forward-looking statement to reflect future events, developments or otherwise, except as may be required by applicable law. Investors are referred to the Company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2021, for additional information regarding the risks and uncertainties that may cause actual results to differ materially from those expressed in any forward-looking statement.

Website references throughout this proxy statement are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this document.

 

1

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

Composition of our Board of Directors

Our business and affairs are managed under the direction of our board of directors. Our amended and restated certificate of incorporation and amended and restated bylaws provide that our board of directors is divided into three classes, as nearly equal in number as practicable, with members of each class serving staggered three-year terms. Our amended and restated bylaws also provide that the authorized number of directors be fixed exclusively from time to time by resolution of the board of directors. The classification of directors has the effect of making it more difficult for stockholders to change the composition of our board. Our board of directors currently consists of 11 members with Adam Gilchrist, our Co-Founder, President and Chief Executive Officer serving as Chairman.    

Directors designated as Class I directors have initial terms expiring at this Annual Meeting. Directors up for reelection at our 2022 Annual Meeting of Stockholders may be elected to a new three-year term expiring at our 2025 Annual Meeting of Stockholders. Directors designated as Class II directors have initial terms expiring at our 2023 Annual Meeting of Stockholders. Directors up for reelection at our 2023 Annual Meeting of Stockholders may be elected to a new three-year term expiring at the 2026 Annual Meeting of Stockholders. Directors designated as Class III directors have initial terms expiring at our 2024 Annual Meeting of Stockholders. Directors up for reelection at our 2024 Annual Meeting of Stockholders may be elected to a new three-year term expiring at the 2027 Annual Meeting of Stockholders.

Pursuant to the Stockholders Agreement described under “Certain Relationships and Related Person Transactions—Stockholders’ Agreement,” certain parties to the Stockholders’ Agreement have the right to designate a certain number of nominees for election to our board of directors, as described below:

 

•

two representatives designated by GIL SPE, LLC (“GIL”), owned by Mr. Gilchrist;

 

•

for so long as MWIG LLC (“MWIG”) continues to beneficially own at least 50% of the shares of common stock issued upon conversion of our convertible preferred stock in our initial public offering (subject to adjustment for stock splits and the like), two representatives designated by MWIG, or for so long as MWIG beneficially owns at least 30% of the shares of common stock issued to MWIG upon conversion of our convertible preferred stock in our initial public offering (subject to adjustment for stock splits and the like), one representative designated by MWIG; and

 

2

•

for so long as Kennedy Lewis Management LP (“KLIM”), or its affiliates continue to beneficially own at least 30% of the shares of common stock issued upon conversion of our convertible notes into shares of common stock in our initial public offering (subject to adjustment for stock splits and the like), one representative designated by KLIM; provided that such individual is independent under the applicable standards of the SEC and the exchange upon which the Company is listed.

GIL has been deemed to have nominated Messrs. Adam Gilchrist and Chris Payne for nomination and election to our board of directors, MWIG has been deemed to have nominated Messrs. Michael Raymond and Mark Wahlberg for nomination and election to our board of directors and KLIM has been deemed to have nominated Mr. Darren Richman for nomination and election to our board of directors.

 

3

The following table sets forth information with respect to our directors as of the record date:

 

Name

Age

Class

Director Since

Current Term Expires

Position at the Company

Committee Membership

AC

CC

NCGC

Mark Wahlberg

50

I

2019

2022

Director

Lee Wallace

41

I

2021

2022

Director

M

M

Angelo Demasi

41

I

2021

2022

Director

M

Vanessa Douglas

36

I

2022

2022

Director

M

Richard Grellman

72

II

2021

2023

Director

C

C

M

Chris Payne

41

II

2019

2023

Chief Financial Officer and Director

Elizabeth Josefsberg

51

II

2021

2023

Director

M

Ben Coates

52

II

2021

2023

Director

M

Adam Gilchrist

44

III

2017

2024

Co-Founder, President, Chief Executive Officer and Chairman of Board

Darren Richman

50

III

2020

2024

Director

Michael Raymond

67

III

2019

2024

Director

AC: Audit Committee CC: Compensation Committee NCGC: Nominating and Corporate Governance Committee

M – Member C – Chairperson

Nominees for Election to a Three-Year Term Expiring at the 2025 Annual Meeting of Stockholders

Mark Wahlberg. Mark Wahlberg joined our board of directors in March 2019. He was appointed to our board of directors by MWIG LLC, a special purpose private investment vehicle he leads with FOD Capital, pursuant to MWIG’s director designation rights under the Stockholders’ Agreement (see “ —Composition of our Board of Directors”). Mr. Wahlberg is a well-known actor, producer, investor and entrepreneur. He is a co-founder and manager of numerous businesses, including Wahlburgers, a restaurant chain that has expanded to 32 locations in North America and Europe; Performance Inspired Nutrition, a sports supplement line which now includes over 50 products; Municipal Apparel LLC, a designer and retailer of sport utility apparel; and Unrealistic Ideas LLC, a production company specializing in reality and non-scripted productions; and Flecha Azul, a premium tequila brand. Mr. Wahlberg is also a co-owner of the Columbus, Ohio Mark Wahlberg Chevrolet and Mark Wahlberg Buick GMC, car dealerships. In addition, Mr. Wahlberg served on the board of directors of AQUAhydrate, Inc. from January 2011 to February 2019. A committed philanthropist, Mr. Wahlberg started the Mark Wahlberg Youth Foundation in 2001 to benefit inner-city children and teens.

 

4

We believe Mr. Wahlberg is qualified to serve on our board of directors due to his entrepreneurial experience as well as his knowledge of the fitness and wellness industries.

Lee Wallace, Ph.D. Dr. Lee Wallace joined our board of directors in July 2021. Dr. Wallace served as a consultant to the Company, on a part-time basis, from August 2016 to July 2021, where he advised our athletics department in the design and implementation of our workouts. In this role he also attended and presented at international conferences and educated trainers and members on current research and best practices in health, fitness, and safety. Dr. Wallace has also served as an academic at the University of Technology Sydney since August 2015. He holds the position as Course Director for Sport and Exercise Science, where he oversees accreditation, course administration and is a member of the academic board of the Faculty of Health. Dr. Wallace is an author of numerous academic journal publications on health and fitness and lectures in Structural and Functional Anatomy, Strength and Conditioning, and Exercise Physiology. Dr. Wallace graduated from the University of Technology Sydney, with a Doctor of Philosophy in Exercise Physiology (2012), an Honours in Human Movement (2004), and a Bachelor of Arts in Sport and Exercise Management (2002).

We believe Dr. Wallace is qualified to serve on our board of directors due to his academic background in athletics, strength and conditioning as well as his knowledge of the health and safety in fitness training.

Angelo Demasi. Angelo Demasi joined our board of directors in August 2021. Since April 2021, Mr. Demasi has served as the Chief Product & Technology Officer of Canstar, an Australian finance site. As Chief Product & Technology Officer, he is responsible for the overall product development and technology delivery at Canstar. Mr. Demasi is also a board member of Hydrogen Fuels Australia and has held such position since January 2021. Hydrogen Fuels Australia is working to launch Australia’s first modular hydrogen production and integrated FCEV refuelling operation to provide renewable clean hydrogen. Since April 2021, Mr. Demasi has acted as an advisor to the chief executive officer of Keevo-Bitkey Technologies, Inc., a San Francisco-based crypto wallet company. Prior to these roles, Mr. Demasi served as the Chief Transformation & Digital Ventures Officer of Ezcorp, Inc., a Nasdaq-listed company providing short-term cash solutions, from October 2019 to March 2021. From February 2015 to March 2019, Mr. Demasi worked as a Partner and Managing Director at Boston Consulting Group, Digital Ventures. He also acted as an advisor to the board of directors of Lodge Technology, an Australian-owned corporate venture, from 2018 to 2019. Mr. Demasi received a Bachelor of Engineering with Honours from RMIT University, and graduated from a number of professional programs, including the General Manager Program at the Australian Graduate School of Management and the Strategic Management Executive Program at the Macquarie Graduate School of Management.

We believe Mr. Demasi is qualified to serve on our board of directors due to his vast experience in corporate leadership positions and his experience advising a number of different board of directors and executive officers.

 

5

Vanessa Douglas. Vanessa Douglas joined our board of directors in April 2022. Ms. Douglas has served as the Chief Executive Officer and Managing Director of Cloud 7 Travel in Sydney Australia since November 2011. Cloud 7 Travel is a boutique travel agency which provides high net worth clients with tailored travel solutions. Ms. Douglas has also served as a corporate advisor and consultant to By Group, an Indigenous person-owned and operated building and construction company since February 2018. At By Group she advises in the areas of investment, funding and growth, risk policies and optimisation of resources and capabilities. She is also a mentor to Indigenous employees. Since November 2018, Ms. Douglas has acted as a private investor and co-founder of Crafty’s, a family friendly sports bar with operations in Queensland, Australia. In 2021, Ms. Douglas also co-founded and invested in Bird Royale, a sister company to Crafty’s, with locations in South—East Queensland, Australia. From November 2014 to October 2017, Ms. Douglas served on the Diamond Committee of the Sydney Children’s Hospital Foundation, acting as co-chair and raising funds from corporate and private sponsors. Ms. Douglas is currently finalizing a Master of Business Administration degree, with a major in Finance from the University of Technology, Sydney. Ms. Douglas holds a high distinction average. Ms. Douglas also holds an Advanced Diploma of Business and an Advanced Diploma of Marketing and Event Management from Macleay College, Sydney as well as a Diploma of Commerce from Wirtschaftschule KV Winterthur, Switzerland. Ms. Douglas is multilingual, fluent (written and oral) in English, German, Swiss-German, French, Italian and Spanish and has conducted business in more than 30 countries.

We believe Ms. Douglas is qualified to serve on our board of directors due to her depth of experience leading various companies and her business acumen obtained from founding several successful companies as well as her international cross-border experience and languages.

Directors Continuing in Office Until the 2023 Annual Meeting of Stockholders

Richard Grellman. Richard Grellman joined our board of directors in July 2021. Mr. Grellman has been a professional non-executive director since 2000. Mr. Grellman currently serves as the Chairman of the Board for FBR Ltd, a company that designs, develops, and operates dynamically stabilized robots to address global needs, and the Chairman of the Board for IPH Ltd, a holding company for intellectual property and associated companies offering a wide range of IP services and products. Mr. Grellman is also the Lead Independent Director of The Salvation Army in Australia and a board member of Excelsia College. Prior to his current directorships, Mr. Grellman served Bisalloy Steel Group Ltd as a Director and Chairman of the Audit Committee from 2002 to 2019 and the Chairman of the Board from 2019 to 2020. He also was the Chairman of the Board for SuperConcepts Pty Ltd from 2012 to 2019, AMP Foundation from 2011 to 2018, and Genworth Mortgage Insurance (Australia) Ltd from 2012 to 2016. The Council of the University of New South Wales bestowed on Mr. Grellman the degree of Doctor of the University, honoris causa, in recognition of his eminent service to the University and broader community. Mr. Grellman was also appointed to hold the office as the Tribunal of The Statutory and Other Officers Remuneration Tribunal (SOORT) by the Governor of NSW in September 2014. Prior to becoming a professional director, Mr. Grellman enjoyed a 32-year career with KPMG, serving in various roles, including as a partner from 1982 to 2000, a member of KPMG’s National Board from 1995 to 1997 and National Executive from 1997 to 2000.

 

6

We believe Mr. Grellman is qualified to serve on our board of directors due to his significant experience as a non-executive director and his expertise in accounting and business operations.

Chris Payne. Chris Payne has served as our Chief Financial Officer since June 2018. He has also served as our Treasurer and as a Director since March 2019. From April 2008 to April 2018, Mr. Payne served as the Chief Financial Officer of the World Surf League, the governing body for professional surfing and the organization responsible for professional surf competitions and surf-event broadcasting. Prior to joining the World Surf League, Mr. Payne served as Group Management Accountant for the Leisure Asset Acquisition Division of the Macquarie Group, Macquarie Leisure Operations (ASX: MLO now Ardent Leisure ALG). Mr. Payne, a qualified Chartered Accountant, began his career working in public practice specializing in M&A and Advisory Services. He received his Bachelor of Commerce with a major in Banking, Accounting and Finance from Griffith University and subsequently received a Graduate Diploma of Chartered Accounting (GradDipCA) from The Institute of Chartered Accountants.

We believe Mr. Payne’s experience in helping to build the Company and his expertise in accounting and business operations make him qualified to serve on our board of directors.

Elizabeth Josefsberg. Liz Josefsberg joined our board of directors in July, 2021. Liz Josefsberg CPT, NES has over 20 years of experience in the health, wellness and weight loss industry. Since 2013 she has served as a consultant for GreaterThan Fitness Inc., a consulting firm she founded, which specializes in wellness program development based on behavior modification and the online education of wellness through technology. Ms. Josefsberg’s work today centers on advising and consulting for companies at the intersection of weight loss, wellness and emerging health solutions. She also consults in the wearable technology sector, creates weight loss programs for companies and is deeply involved in helping technology enabled weight loss and health devices come to market. She has authored several weight-loss books, most notably, Target 100—The World’s Simplest Weight Loss Program in Six Easy Steps, and is a frequent motivational speaker and panelist at health and wellness events like CES. Prior to founding her consulting firm, Ms. Josefsberg worked for 11 years as the Director of Brand Advocacy on the science and content teams and as a celebrity weight loss coach and Leader for Weight Watchers.

We believe Ms. Josefsberg is qualified to serve on our board of directors due to her extensive knowledge and experience in the health and wellness industry.

Ben Coates. Ben Coates joined our board of directors in August 2021. He is currently a Director of Coolgardie Investments, a private investment company that he founded in 2006. Mr. Coates has actively worked with Coolgardie since 2014 and has acted in multiple roles during this period, including as a partner with Prime Production, a global translation company based in the UK, a Director with National Civil Group, an Australian civil contracting business, and Glen Eden Pastoral an Australian rural business where he currently serves as a Director. During the

 

7

period from 2007 to 2014, Mr. Coates held various roles at National Australia Bank (NAB) at both the Australia and United Kingdom offices. From 2010 to 2014, Mr. Coates served as Director of Strategy for NAB Europe Ltd. where he was responsible for strategy and implementation of compliance programs designed to ensure NAB Europe operated in accordance with updated UK banking and finance legislation. From 2007 to 2010, he served as an Executive Director at NAB Private Wealth, where he was responsible for origination and distribution of structured investments products across the group. Prior to joining NAB, Mr. Coates spent a number of years as General Manager, Funds Management at Hanover Group, where he was responsible for developing and managing the retail and wholesale fund raising activities as well as compliance and risk management. Mr. Coates received his Master of Applied Finance degree from Macquarie University and his DipFP from Deakin University.

We believe Mr. Coates is qualified to serve on our board of directors due to his breadth of financial experience, including as an investor and founder of Coolgardie Investments and from prior roles with NAB.

Directors Continuing in Office Until the 2024 Annual Meeting of Stockholders

Adam Gilchrist. Adam Gilchrist is a serial entrepreneur with 20 years’ experience in franchising, marketing and product development. Mr. Gilchrist co-founded the Company and has served as Co-Chief Executive Officer since 2014, a member of the Company’s board of directors since 2017, and Executive Chairman since July 2021. In 2019, he was appointed as sole Chief Executive Officer. The first business he founded was an e-payment service in Australia, which he sold to a public company. The second business he founded was Zippy Shell, a successful mobile self-storage company in the United States. Mr. Gilchrist also represented Australia in the Australian Schoolboy and U19 Rugby Teams and attended the Australian Institute of Sport on scholarship.

As our co-founder and Chief Executive Officer, Mr. Gilchrist brings a wealth of experience with our business and industry to our board of directors, and his demonstrated business acumen and skills in entrepreneurship and business strategy make him qualified to serve on our board of directors. Mr. Gilchrist’s board service also provides a direct and open channel of communication between the board and management.

Darren Richman. Darren Richman joined our board of directors in October 2020. Mr. Richman co-founded Kennedy Lewis with David Chene in 2017 and is currently Co-Portfolio Manager of Kennedy Lewis and Co-Chair of its Investment Committee and Executive Committee. Mr. Richman was formerly a Senior Managing Director with Blackstone’s global credit business, GSO Capital Partners (now known as Blackstone Credit) from 2006 to 2016 where he focused on special situations and distressed investments and sat on the Investment Committee for many of Blackstone Credit’s special situation-oriented funds. Before joining Blackstone, Mr. Richman worked at DiMaio Ahmad Capital, where he was a Founding Member and the Co-Head of its Investment Research Team, from 2003 to 2006. Prior to joining DiMaio Ahmad, Mr. Richman was a Vice President and Senior Special Situations Analyst at Goldman Sachs, from 1999 to 2003. Mr. Richman began his career with Deloitte & Touche, ultimately serving as a Manager in the

 

8

Firm’s Mergers & Acquisitions Services Group, from 1994 to 1999. Mr. Richman is also on the Boards of Vemo Education, Eastman Kodak and Outward Bound USA. He is a member of the Economic Club of New York and formerly served on its strategic planning committee. Mr. Richman received a BS/BA degrees in Accounting from the University of Hartford in 1993, and an MBA from NYU’s Stern School of Business in 2000. He was formerly a Certified Public Accountant and a Member of the American Institute of Certified Public Accountants.

We believe Mr. Richman is qualified to serve on our board of directors due to his broad business and financial background in special situations and opportunistic investing and his position as a board member on multiple other companies.

Michael Raymond. Michael Raymond joined our board of directors in March 2019. He was appointed to our board of directors by MWIG LLC, a special purpose private investment vehicle led by FOD Capital and Mark Wahlberg, pursuant to MWIG’s director designation rights under the Stockholders’ Agreement (see “—Composition of our Board of Directors”). Mr. Raymond has served as Manager of FOD Capital since December 2017. Mr. Raymond has practiced law for over 38 years in the areas of securities regulation, corporate finance, mergers & acquisitions and general corporate matters. From 2004 to 2019, Mr. Raymond served as a senior member in the Corporate, M&A, Private Equity, Securities and Tax Group of Dickinson Wright PLLC, a national full-service law firm. From 2008 to 2017, Mr. Raymond served as the Practice Department Manager. Mr. Raymond transitioned to Of Counsel in 2020 and continues to serve in that role in addition to his duties with FOD Capital. Mr. Raymond received his B.A. and M.S.A. (Accountancy) degrees from DePaul University, his J.D. degree from John Marshall Law School and an L.L.M. (Securities Regulation) degree from Georgetown University Law Center.    

We believe Mr. Raymond is qualified to serve on our board of directors due to his legal background, especially with regard to his extensive knowledge of corporate governance matters from his over 38 years of advising clients on the topic, as well as his business acumen which he has gained from both his legal representation of a vast number of public and private companies and from his business and investment experience in serving as Manager of FOD Capital.

Director Independence

The rules of the New York Stock Exchange (the “NYSE”) provide for a phase-in period for companies listing in conjunction with an initial public offering to achieve majority board independence and to comply with the audit, compensation and nominating committee membership requirements. Under the transition rules, the listed company must have at least one independent director on its nominating, audit, and compensation committees as of the date of listing, a majority of independent directors on the audit Committee within 90 days of its registration statement being declared effective and a majority of independent directors on the compensation and nominating committees within 90 days of its listing date and a fully independent audit Committee within one year of the its registration statement being declared effective and fully independent compensation and nominating committees and a majority independent board within one year of its listing date. Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

9

Under the rules of the NYSE, a director will only qualify as an “independent director” if the listed company’s board of directors affirmatively determines that person does not have a material relationship with the company, either directly or as a partner, shareholder or officer of an organization that has a relationship with the company. In order to be considered to be independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the Audit Committee, the board of directors or any other board committee: (1) accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries; or (2) be an affiliated person of the listed company or any of its subsidiaries.

Our board of directors undertook a review of the independence of our directors and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. Based upon information requested from and provided by each director and director nominee concerning his or her background, employment and affiliations, including family relationships, our board of directors has determined that each of Mr. Grellman, Ms. Douglas, Ms. Josefsberg, Mr. Coates, Mr. Demasi, Dr. Wallace and, as it applies to her service during the 2021 fiscal year, Ms. Zukerman, do not have relationships that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the applicable rules of the SEC, and the listing standards of the NYSE. Messrs. Gilchrist, Payne, Raymond, Richman and Wahlberg are not independent under the independence standards of the NYSE.

In making these determinations, our board of directors considered the current and prior relationships that each non-employee director has with us and all other facts and circumstances our board of directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director, and the transactions involving them described in the section titled “Certain Relationships and Related Party Transactions.” In evaluating the independence of Dr. Wallace, our board of directors considered that Dr. Wallace served as a consultant to the Company from August 2016 until the effectiveness of our registration statement relating to our initial public offering in July 2021, that such role was part-time, and that in such role Dr. Wallace received annual compensation of less than AUD $35,000. There are no family relationships among any of our directors or executive officers.

Board of Directors Leadership Structure

Our board of directors has designated Adam Gilchrist, our Chief Executive Officer, to serve as Executive Chairman of the board. Combining the roles of Chief Executive Officer and Executive Chairman allows one person to drive strategy and agenda setting at the board level while maintaining responsibility for executing on that strategy as Chief Executive Officer. Although our amended and restated bylaws and corporate governance guidelines do not require that we combine the Chief Executive Officer and Executive Chairman positions, our Board believes that having the positions combined is the appropriate leadership structure for us at this time. Our board of directors recognizes that, depending on the circumstances, other leadership models, such as separating the roles of Chief Executive Officer and Executive Chairman, might be appropriate. Accordingly, our board of directors may periodically review its leadership structure.

 

10

Executive Sessions

In order to promote open discussion among independent directors, our board holds executive sessions of independent directors at least quarterly. These executive sessions are chaired by Mr. Grellman, our Lead Independent Director.

Lead Independent Director

Our board of directors has designated Mr. Grellman as our Lead Independent Director. As Lead Independent Director, Mr. Grellman presides over periodic meetings of our independent directors, serve as a liaison between our Chairman and our independent directors and performs such additional duties as our board may otherwise determine and delegate.

Board Qualifications & Diversity

The nominating and corporate governance committee periodically reviews, and recommends to our board, the skills, experience, characteristics and other criteria for identifying and evaluating directors. Our board expects directors to be open and forthright, to develop a deep understanding of the Company’s business, and to exercise sound judgment and courage in fulfilling their oversight responsibilities. Directors should embrace the Company’s values and culture and should possess the highest levels of integrity.

The nominating and corporate governance committee evaluates the composition of our board annually to assess whether the skills, experience, characteristics and other criteria established by our board are currently represented on our board as a whole, and in individual directors, and to assess the criteria that may be needed in the future in light of the Company’s anticipated needs. While we do not have a formal diversity policy, our board of directors and the nominating and corporate governance committee also seek to achieve a diversity of occupational and personal backgrounds on the Board, including diversity with respect to demographics such as gender, race, ethnic and national background, geography, age and sexual orientation.

The nominating and corporate governance committee reviews the qualifications of director candidates and incumbent directors in light of the criteria approved by our board and recommends the Company’s candidates to our board for election by the Company’s stockholders at the applicable annual meeting. We also assess qualifications and characteristics of our directors, including racial and ethnic diversity, as part of our board’s annual self-evaluation process. We believe our board is well positioned to provide effective oversight and strategic advice to our management.

 

11

Procedures for Recommending Individuals to Serve as Directors

The nominating and corporate governance committee also considers director candidates recommended by the Company’s stockholders. Any stockholder who wishes to propose director nominees for consideration by our nominating and corporate governance committee, but does not wish to present such proposal at an annual meeting of stockholders, may do so at any time by sending each proposed nominee’s name and a description of his or her qualifications for board membership to the chair of the nominating and corporate governance committee in writing, c/o Chief Legal Officer, at F45 Training Holdings Inc., 3601 South Congress Avenue, Building E, Austin, TX 78704. The recommendation should contain all of the information regarding the nominee required under the “advance notice” provisions of our amended and restated bylaws (which can be provided free of charge upon request by writing to our Chief Legal Officer at the address listed above). The nominating and corporate governance committee evaluates nominee proposals submitted by stockholders in the same manner in which it evaluates other director nominees.

Board Qualifications and Diversity

The following chart shows how these skills, experience, characteristics and other criteria, including diversity of viewpoints, are currently represented on our board. This chart is not intended to be an exhaustive list for each director, but instead intentionally focuses on the primary skillsets each director contributes. We believe the combination of the skills and qualifications shown below demonstrates how our board is well-positioned to provide effective oversight and strategic advice to our management.

 

Executive Officer Experience

Technology /Digital

International

Franchising

Board Experience

Fitness/ Athletics

Healthcare

Risk Management

Consumer Brands

Mergers & Acquisitions

Diversity (Gender)

Lee Wallace

X

X

Angelo Demasi

X

X

X

X

Vanessa Douglas

X

X

X

X

X

Richard Grellman

X

X

Chris Payne

X

X

X

X

X

Elizabeth Josefsberg

X

X

X

X

X

Ben Coates

X

X

Adam Gilchrist

X

X

X

X

X

X

Darren Richman

X

X

X

Michael Raymond

X

X

X

X

X

X

X

X

X

Mark Wahlberg

X

X

X

 

12

Committees of the Board of Directors

Our board of directors established an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. The composition and responsibilities of each of the committees of our board of directors are described below. Members of each committee will serve on these committees until their resignation or until otherwise determined by our board of directors. Our board of directors may establish other committees as it deems necessary or appropriate from time to time. Each committee operates under a written charter, available on our website at https://ir.f45training.com/governance/governance-documents/default.aspx.

Committee Membership; Meetings and Attendance

We completed our initial public offering on July 19, 2021. As a result, our current board and its committees did not hold any meetings between January 1, 2021 and July 19, 2021. Subsequently, between July 19, 2021 and December 31, 2021:

 

•

our board of directors held two meetings;

 

•

our Audit Committee held two meetings;

 

•

our Compensation Committee held two meetings; and

 

•

our Nominating and Corporate Governance Committee held one meeting.

Each of our incumbent directors attended at least 75% of the meetings of our board of directors and the respective committees of which he or she was a member held during the period such incumbent director was a director during the fiscal year ended December 31, 2021.

Directors are expected to attend the Annual Meeting absent unusual circumstances. The Annual Meeting will be the Company’s first annual meeting of stockholders.

Audit Committee

Our Audit Committee consists of Messrs. Grellman, Coates and Demasi, each of whom meets the requirements for independence under the listing standards of the NYSE and SEC rules and regulations. Ms. Zukerman also served on our Audit Committee during a portion of fiscal 2021 and during her service she qualified as independent under the listing standards of the NYSE and SEC rules and regulations. Mr. Grellman is the chair of our Audit Committee and is an “audit committee financial expert” as such term is defined in Item 407(d)(5) of Regulation S-K. Our Audit Committee, among other things, has responsibility for:

 

•

appointing a qualified firm to serve as the independent registered public accounting firm to audit our financial statements;

 

13

•

helping to ensure the independence and overseeing performance of the independent registered public accounting firm;

 

•

reviewing and discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing with management and the independent registered public accounting firm our interim and year-end financial statements;

 

•

reviewing our financial statements and our critical accounting policies and estimates;

 

•

reviewing and discussing the adequacy and effectiveness of our internal controls and disclosure controls;

 

•

developing procedures for employees to submit concerns confidentially and anonymously regarding accounting, internal accounting controls, audit or federal securities matters;

 

•

overseeing our policies on risk assessment and risk management;

 

•

overseeing our compliance program with respect to legal and regulatory requirements, including our code of conduct and ethics;

 

•

reviewing related party transactions;

 

•

reviewing and discussing practices with respect to risk assessment and management; and

 

•

pre-approving all audit and all permissible non-audit services (other than de minimis non-audit services) to be performed by the independent registered public accounting firm.

Compensation Committee

Our Compensation Committee consists of Mr. Grellman, Dr. Wallace and Ms. Josefsberg, each of whom meets the requirements for independence under the listing standards of the NYSE and SEC rules and regulations. In addition, each member of our Compensation Committee is also a non-employee director, as defined pursuant to Rule 16b-3 of the Exchange Act. Mr. Grellman is the chair of our Compensation Committee. Our Compensation Committee, among other things, has responsibility for:

 

•

reviewing, approving and determining, or making recommendations to our board of directors regarding, the compensation of our executive officers, including our Chief Executive Officer;

 

14

•

administering our equity compensation plans and agreements with our executive officers;

 

•

reviewing, approving and administering incentive compensation and equity-based compensation plans that are subject to the approval of our board of directors;

 

•

overseeing our overall compensation philosophy; and

 

•

reviewing compliance by our executive officers and directors with our stock ownership guidelines or requirements.

Nominating and Corporate Governance Committee

Our Nominating and Corporate Governance Committee consists of Mr. Grellman, Dr. Wallace and Ms. Vanessa Douglas, each of whom meets the requirements for independence under the listing standards of the NYSE and SEC rules and regulations. Ms. Zukerman also served on the Nominating and Corporate Governance Committee during her service as a member of our Board of Directors and during such service satisfied the requirements for independence under the listing standards of the NYSE and SEC rules and regulations. Dr. Wallace is the chair of our Nominating and Corporate Governance Committee. Our Nominating and Corporate Governance Committee, among other things, has responsibility for:

 

•

identifying, evaluating and selecting, or making recommendations to our board of directors regarding, candidates for election to our board of directors;

 

•

overseeing the evaluation and the performance of our board of directors and its committees;

 

•

considering and making recommendations to our board of directors regarding the size, structure, composition and functioning of our board of directors and its committees;

 

•

overseeing our corporate governance practices;

 

•

overseeing succession planning; and

 

•

developing and making recommendations to our board of directors regarding corporate governance guidelines and matters.

 

15

Role of our Board of Directors in Risk Oversight

In general, management is responsible for the day-to-day oversight and management of strategic, operational, legal, compliance, cybersecurity and financial risks, while our board, as a whole and through its committees, is responsible for the oversight of our risk management framework. Consistent with this approach, management reviews both the framework and certain specific risks with our board and Audit Committee at regular board and Audit Committee meetings as part of management presentations that focus on particular business functions, operations, or strategies, and presents steps taken by management to eliminate or mitigate such risks. While our board is ultimately responsible for the risk oversight of our Company, our Audit Committee has primary responsibility for management and mitigation of the risks facing our Company, including major financial, cybersecurity and control risks, and oversight of the measures initiated by management to monitor and control such risks.

Our Audit Committee also monitors compliance with legal and regulatory requirements and considers and approves or disapproves any related person transactions. Our Compensation Committee has responsibility to review the risks arising from our compensation policies and practices applicable to all employees and evaluate policies and practices that could mitigate any such risk. Our Nominating and Corporate Governance Committee has responsibility to review risks relating to our corporate governance practices. These committees provide regular reports on our risk management practices to our full board, as necessary. Our board believes that the Company’s current leadership structure supports its risk oversight function.

Contacting the Board of Directors

Stockholders and other interested parties who wish to communicate with our board or any individual director may do so in writing, c/o Chief Legal Officer, at F45 Training Holdings Inc., 3601 South Congress Avenue, Building E, Austin, TX 78704. Communications we receive that relate to accounting, internal accounting controls, auditing matters or securities law matters will be referred to the Audit Committee unless the communication is directed otherwise. You may communicate anonymously and/or confidentially. Each communication will be reviewed by our Chief Legal Officer to determine whether it is appropriate for presentation to our board or the applicable director(s). The purpose of this screening is to allow our board (or the applicable individual director(s)) to avoid having to consider irrelevant or inappropriate communications (such as advertisements, solicitations, product inquiries or any offensive or otherwise inappropriate materials).

Compensation Committee Interlocks and Inside Participation

Our Compensation Committee is composed of Mr. Grellman, Dr. Wallace and Ms. Josefsberg. None of the members of our Compensation Committee is or has been an officer or employee of the Company. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or Compensation Committee (or other board committee performing equivalent functions) of any entity that has one or more of its executive officers serving on our board of directors or Compensation Committee.

 

16

Corporate Governance Guidelines

Our board of directors has also adopted Corporate Governance Guidelines to formalize its governance practices, which serve as a framework within which our board of directors and its committees operate. These principles cover a number of areas, including the role of our board of directors, board composition and leadership structure, director independence, director selection, qualification and election, director compensation, executive sessions, CEO evaluation, succession planning, annual board assessments, board committees, director orientation and continuing education, stockholder engagement and others. A copy of our Corporate Governance Guidelines is available on our website at ir.f45training.com.

Code of Business Conduct and Ethics

In addition to the Corporate Governance Guidelines, the board of directors has adopted a Code of Business Conduct and Ethics applicable to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. This Code of Business Conduct and Ethics, in addition to our Corporate Governance Guidelines, serve as the foundation for the Company’s system of corporate governance. They also provide guidance for maintaining ethical behavior, require that directors and employees comply with applicable laws and regulations, prohibit conflicts of interest and provide mechanisms for reporting violations of the Company’s policies and procedures.

In the event the Company makes any amendment to, or grants any waiver from, a provision of the Code of Business Conduct and Ethics that applies to the principal executive officer, principal financial officer or principal accounting officer that requires disclosure under applicable SEC or NYSE rules, the Company will disclose such amendment or waiver and the reasons therefor on its website at ir.f45training.com.

Anti-Hedging Policy

The Company has adopted an Insider Trading Policy which, among other things, prohibits our directors, officers, employees and consultants from engaging in the following types of transactions in Company securities: (a) short term trading, (b) short sales, (c) transactions involving options or derivatives and (d) hedging transactions.

Fiscal Year 2021 Director Compensation

Prior to the completion of our initial public offering, only Mr. Raymond received compensation for his services as a non-employee director in 2021. Mr. Raymond was entitled to $250,000 per year for his services, paid quarterly in arrears.

 

17

Following the completion of our initial public offering, we implemented a non-employee director compensation program pursuant to which each non-employee director is eligible to receive compensation for his or her service consisting of annual cash retainers and equity awards. For purposes of such compensation arrangements, a “non-employee director” refers to a director who is not an employee of ours. We do not compensate our employee directors for their service on our board of directors. Our non-employee directors receive the following annual retainers for their service, paid quarterly and prorated for any partial year of service:

 

Position		Retainer
Board Member		$	100,000
Audit Committee Chair			20,000
Compensation Committee Chair			15,000
Nominating and Corporate Governance Committee Chair			10,000
Audit Committee Member			10,000
Compensation Committee Member			7,500
Nominating and Corporate Governance Committee Member			5,000
Lead Independent Director			25,000

Our non-employee directors may elect to receive the cash portion of their compensation entirely in the form of restricted stock that will vest quarterly. None of our non-employee directors made such an election in 2021.

Equity awards for non-employee directors consist of an annual equity award of restricted stock valued at $200,000, pro-rated for any partial year of service, based on the closing price of our common stock on the date of grant. Grants are made upon a director’s initial appointment and on the date of and immediately following our regular annual meeting of stockholders (provided that the first grants were made following the completion of our initial public offering on July 23, 2021). Annual restricted stock awards vest in full on the one year anniversary of the date of grant; provided that the initial equity awards granted on July 23, 2021 will vest at the Annual Meeting.

Directors are reimbursed for reasonable out-of-pocket expenses incurred in connection with their activities as directors.

Fiscal Year 2021 Non-Employee Director Compensation Table

 

Name		Fees Earned or Paid in Cash ($)				Stock Awards ($) (1)				Total ($)
Ben Coates		$	36,094			$	182,466			$	218,560
Angelo Demasi		$	36,094			$	182,466			$	218,560
Richard Grellman		$	82,500			$	200,000			$	282,500
Elizabeth Josefsberg		$	53,750			$	200,000			$	253,750
Michael T. Raymond		$	50,000			$	200,000			$	250,000
Darren Richman(2)		$	0			$	0			$	0
Mark Wahlberg		$	50,000			$	200,000			$	250,000
Lee Wallace		$	56,250			$	200,000			$	256,250
Ruth Zukerman(3)		$	56,719			$	200,000			$	256,719

 

18

(1)

Amounts shown in this column represent the aggregate grant date fair value (calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 “Compensation—Stock Compensation”) of stock awards granted during the year. A description of the methodologies and assumptions we use to value equity awards and the manner in which we recognize the related expense are described in Note 15 to our consolidated financial statements, Stock-Based Compensation, in our Annual Report on Form 10-K for the year ended December 31, 2021. These amounts may not correspond to the actual value eventually realized by each director because the value depends on the market value of our common stock at the time the award vests. As of December 31, 2021, Mr. Coates held 12,653 unvested restricted stock awards, Mr. Demasi held 12,653 unvested restricted stock awards, Mr. Grellman held 13,201 unvested restricted stock awards, Ms. Josefsberg held 13,201 unvested restricted stock awards, Mr. Raymond held 13,201 unvested restricted stock awards, Mr. Richman held zero unvested restricted stock awards, Mr. Wahlberg held 13,201 unvested restricted stock awards, Dr. Wallace held 13,201 unvested restricted stock awards and Ms. Zukerman held 13,201 unvested restricted stock awards. None of our non-employee directors during 2021 held any stock options as of December 31, 2021.

(2)	Mr. Richman waived his right to compensation in 2021.

(3)	Ms. Zukerman resigned as a non-employee director effective February 13, 2022.

 

19

OTHER MATTERS

Other Business

We are not currently aware of any business to be acted upon at the Annual Meeting other than the matters discussed in this proxy statement. The form of proxy accompanying this proxy statement confers discretionary authority upon the named proxy holders with respect to amendments or variations to the matters identified in the accompanying Notice of Annual Meeting and with respect to any other matters which may properly come before the Annual Meeting or any adjournment or postponement thereof. If other matters do properly come before the Annual Meeting, or at any such adjournment or postponement of the Annual Meeting, we expect that shares of our common stock represented by properly submitted proxies will be voted by the proxy holders in accordance with the recommendations of our board. 

Submission of Stockholder Proposals for the 2023 Annual Meeting

Rule 14a-8 Proposals. For any proposal to be considered for inclusion in our proxy statement and form of proxy for submission to the stockholders at our 2023 Annual Meeting of Stockholders, it must be submitted in writing and comply with the requirements of Rule 14a-8 of the Exchange Act. Such proposals must be received by the Company in writing, c/o our Chief Legal Officer, at F45 Training Holdings Inc., 3601 South Congress Avenue, Building E, Austin, TX 78704 no later than the close of business on January 2, 2023.

Advance Notice Proposals and Nominations. In addition, our bylaws provide notice procedures for stockholders to nominate a person as a director and to propose business to be considered by stockholders at an Annual Meeting of Stockholders (but not for inclusion in the proxy statement). Notice of a nomination or other proposal of business must be delivered to the Company in writing, c/o our Chief Legal Officer, at F45 Training Holdings Inc., 3601 South Congress Avenue, Building E, Austin, TX 78704 no later than the close of business on the 90th day, nor earlier than the close of business on the 120th day, prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 30 days after such anniversary date, to be timely notice by the stockholder must be so delivered not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of (i) the 90th day prior to such annual meeting or (ii) the 10th day following the day on which public announcement of the date of the annual meeting is first made by us. Accordingly, for our 2023 Annual Meeting of Stockholders, notice of a nomination or proposal must be delivered to us no earlier than the close of business on February 13, 2023 and no later than the close of business on March 15, 2023. Nominations and proposals also must satisfy other requirements set forth in the bylaws.

For purposes of these proposals, “close of business” shall mean 5:00 p.m. local time at the principal executive offices of the Company on any calendar day, whether or not the day is a business day.

 

46

Householding Information

Unless we have received contrary instructions, we may send a single copy of the Notice or this proxy statement to any household at which two or more stockholders reside. This process, known as “householding,” reduces the volume of duplicate information received at any one household, helps to reduce our expenses, and benefits the environment. However, if stockholders prefer to receive multiple sets of our disclosure documents at the same address this year or in future years, the stockholders should follow the instructions described below. Similarly, if an address is shared with another stockholder and together, both of the stockholders would like to receive only a single set of our disclosure documents, the stockholders should follow these instructions: If the shares are registered in the name of the stockholder, the stockholder should notify us in writing, c/o our Chief Legal Officer, at F45 Training Holdings Inc., 3601 South Congress Avenue, Building E, Austin, TX 78704 to inform us of his or her request. If a broker holds the shares, the stockholder should contact such broker directly.

Delinquent Section 16(a) Reports.

Section 16(a) of the Exchange Act requires the Company’s directors and executive officers and persons who own beneficially more than ten percent of a registered class of the Company’s equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. As a practical matter, the Company assists its directors and officers by monitoring transactions and completing and filing Section 16 reports on their behalf. Based solely on a review of the reports filed for the year ended December 31, 2021 and related written representations, the Company believes that during fiscal year 2021, all of our directors and executive officers and any persons who own more than ten percent of our common stock filed the required reports on a timely basis, except for (i) one Form 3 filed by each of GIL SPE, MWIG, Mark Wahlberg, Ben Coates and Angelo Demasi; (ii) one Form 4 filed by MWIG relating to a sale of shares of our common stock; (iii) one Form 4 filed by each of Angelo Demasi and Ben Coates relating to an acquisition of restricted stock; and (iv) one Form 4 filed by Kennedy Lewis Capital Partners Master Fund III LP relating to the purchase of shares of our common stock.

.

Where You Can Find More Information

We file annual and quarterly reports and other reports and information with the SEC. We distribute to our stockholders annual reports containing financial statements audited by our independent registered public accounting firm and, upon request, quarterly reports for the first three quarters of each fiscal year containing unaudited financial information. In addition, the reports and other information are filed through Electronic Data Gathering, Analysis and Retrieval (known as “EDGAR”) system and are publicly available on the Securities and Exchange Commission’s website, located at http://www.sec.gov.

 

47

We will provide without charge to you, upon written or oral request, a copy of the Annual Report on Form 10-K for the fiscal year ended December 31, 2021, including the financial statements and schedules. Any requests for copies of information, reports or other filings with the SEC should be directed to the Chief Legal Officer, F45 Training Holdings Inc., 3601 South Congress Avenue, Building E, Austin, TX 78704. The Annual Report and this proxy statement are also available online at ir.f45training.com.

 

 

48

Appendix A

Non-GAAP Financial Measures and Other Financial Data

Non-GAAP Financial Measures

This proxy statement contains financial information calculated other than in accordance with U.S. generally accepted accounting principles (“GAAP”). In particular, it includes Adjusted EBITDA. Management believes that Adjusted EBITDA is useful to management as it allows investors to evaluate the effectiveness of the Company’s business strategies, make budgeting and capital allocation decisions, and compare our performance against that of other peer companies using similar measures. Adjusted EBITDA is defined as net income before interest, taxes, depreciation and amortization and adjusted to exclude the impact of sales tax liability, transaction expenses, certain legal costs and settlements, COVID-19 concessions, growth and new market development expense as well as certain other items identified as affecting comparability, when applicable. Adjusted EBITDA eliminates non-cash depreciation and amortization expense that results from our capital investments and intangible assets, as well as income taxes, which may not be comparable with other companies based on our tax structure. Adjusted EBITDA should be considered in addition to, and not as a substitute for, net income in accordance with GAAP as a measure of performance. Other companies may define Adjusted EBITDA differently and, as a result the Company’s measures of Adjusted EBITDA, it may not be directly comparable to those of other companies. A reconciliation of Adjusted EBITDA to the nearest comparable GAAP financial measure is included below.

Financial Metrics and Other Data

This proxy statements includes several key financial metrics and other data used by the Company management in assessing the Company’s results of operations:

“Initial Studio Openings” means the number of studios that were determined to be first opened during such period. Prior to October 1, 2021, We classify an Initial Studio Opening to occur in the first month in which the studio first generates monthly revenue of at least $4,500. Starting on October 1, 2021, we classify an Initial Studio Opening to occur in the month in which we record the initial studio opening in our internal systems.

Any studios that do not have an Initial Studio Opening under the prior definition are included as of October 1, 2021. Initial Studio Openings are not adjusted downward for studios that were temporarily closed due to the COVID-19 pandemic or otherwise.

“New Franchises Sold” means, for any specific period, the number of franchises sold during such period using the methodology set forth below for “Total Franchises Sold.”

“Open Studios” means the number of studios that were open for business as of a certain date. A studio may be classified as an Open Studio regardless of whether or not it generated minimum monthly revenue of $4,500. During the COVID-19 pandemic, a significant portion of our network was forced to temporarily close, which reduced the number of Open Studios. As studios re-open in accordance with state and local regulations, they are reflected in the Open Studios figures.

“Same store sales” means, for any reporting period, studio-level revenue generated by a comparable base of franchise studios, which we define as open studios that have been operating for more than 16 months.

“System-wide Sales” are defined as all payments made to our studios and includes payment for classes, apparel and other sales for a given period. We track System-wide Sales as an indication of the strength of our franchisee network.

“System-wide Visits” means the number of registered individual workouts for any specified period. A workout is registered when the consumer checks into a class.

 

A-1

“Total Franchises Sold” represents, as of any specified date, (i) the total number of signed franchise agreements in place as of such date for which an establishment fee has been paid and (ii) the total number of franchises committed in a multi-studio agreement in place as of such date for which an upfront payment has been made, in each case that have not been terminated. Each new franchise is included in the number of total franchises sold from the date on which such franchise first satisfies the condition in clause (i) or (ii) above, as applicable. total franchises sold includes franchise arrangements in all stages of development after signing a franchise agreement, and includes franchises with open studios. Franchises are removed from total franchises sold upon termination of the franchise agreement.

“Total Studios” as of any specified date, means the total cumulative Initial Studio Openings as of that date less cumulative permanent studio closures as of that date. Total Studios are not adjusted downward for studios that were temporarily closed due to the COVID-19 pandemic or otherwise.

 

A-2

F45 Training Holdings Inc.

GAAP to Non-GAAP Reconciliation

(in thousands)

(unaudited)

 

		Year Ended December 31,
		2021				2020
Net loss		$	(182,715	)		$	(25,289	)
Interest expense, net			59,353				9,399
(Benefit) provision for income taxes			(7,057	)			3,062
Depreciation and amortization			3,149				1,090
Amortization of deferred costs			2,545				1,558
EBITDA		$	(124,725	)		$	(10,180	)
Sales tax reserve (a)			935				515
Transaction fees (b)			10,790				15,688
Loss on derivative liabilities (c)			48,603				8,818
Certain legal costs and settlements (d)			7,949				4,741
Stock-based compensation (e)			88,665				—
Recruitment (f)			61				119
COVID concessions (g)			8,282				5,365
Relocation (h)			3,930				78
Development costs (i)			5,395				—
Charitable donation (j)			2,046				—
Inventory write-off (k)			70				329
Adjusted EBITDA		$	52,001			$	25,473

 

(a)	Represents the impact of one-time sales tax liability arising from a change in timing of enforceability of certain contractual terms in arrangements with franchisees.

 

(b)	Represents transaction costs incurred as a part of a reorganization, certain acquisition-related costs, and the issuance of preferred and common shares, including legal, tax, accounting and other professional services.

 

(c)	Represents loss on derivative liabilities associated with a convertible note.

 

(d)	Represents certain one-time legal costs, primarily related to litigation activities and legal settlements.

 

(e)	Represents stock-based compensation of our employees, non-employees and directors.

 

(f)	Represents one-time recruitment expense of executive leadership and essential public-company roles.

 

(g)	Represents concessions made to studios impacted by COVID, including one time COVID-19 related write-offs.

 

(h)	Represents costs incurred as a part of the relocation of our corporate headquarters.

 

(i)	Represents one-time non-recurring costs incurred with launch of new brands.

 

(j)	Represents one-time charitable donation made in the amount of total PPP loan forgiveness pursuant to the use of proceeds discussed in our IPO prospectus.

 

(k)	Represents inventory written off.

 

A-3

F45 TRAINING HOLDINGS INC.         3601 SOUTH CONGRESS AVENUE, BUILDING E         AUSTIN, TEXAS 78704		VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above   Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on June 12, 2022. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
		During The Meeting - Go to www.virtualshareholdermeeting.com/F452022   You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.
		VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on June 12, 2022. Have your proxy card in hand when you call and then follow the instructions.
		VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

D84926-P74391                                     KEEP THIS PORTION FOR YOUR RECORDS

— — — — — — — — — — — —  — — — — — — — — — — — — — — — — — — — —  — — — — — — — — — — — — — — — —

DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

 

F45 TRAINING HOLDINGS INC.   The Board of Directors recommends you vote FOR all of the following director nominees:

For All     ☐

Withhold All     ☐

For All Except     ☐

To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.

1.

Election of Directors

Nominees:

01) Mark Wahlberg 02) Lee Wallace, Ph.D. 03) Angelo Demasi 04) Vanessa Douglas

The Board of Directors recommends you vote FOR the following proposal:

For

Against

Abstain

2.  To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2022.

☐

☐

☐

NOTE: Such other business as may properly come before the meeting or any adjournment thereof.   The shares represented by this proxy when properly executed will be voted in the manner directed herein by the undersigned Stockholder(s). If no direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations. If any other matters properly come before the meeting, the person named in this proxy will vote in their discretion.

Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.

Signature [PLEASE SIGN WITHIN BOX]

Date

Signature (Joint Owners)

Date

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:

The Notice and 2022 Proxy Statement and 2021 Annual Report are available at www.proxyvote.com.

We will be conducting our 2022 Annual Meeting of Stockholders virtually

at www.virtualshareholdermeeting.com/F452022.

— — — — — — — — — — — —  — — — — — — — — — — — — — — — — — — — —  — — — — — — — — — — — — — — — — —

D84927-P74391      

 

F45 TRAINING HOLDINGS INC.   THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS   ANNUAL MEETING OF STOCKHOLDERS   JUNE 13, 2022 5:00 P.M. CENTRAL TIME   The stockholder(s) hereby appoint(s) Chris Payne and Patrick Grosso, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of common stock of F45 Training Holdings Inc. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 5:00 p.m. Central Time on June 13, 2022, via live audio webcast at www.virtualshareholdermeeting.com/F452022, and any adjournment or postponement thereof.   THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE STOCKHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE BOARD OF DIRECTORS’ RECOMMENDATIONS. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING OF STOCKHOLDERS OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF (INCLUDING, IF APPLICABLE, ON ANY MATTER WHICH THE BOARD OF DIRECTORS DID NOT KNOW WOULD BE PRESENTED AT THE ANNUAL MEETING OF STOCKHOLDERS BY A REASONABLE TIME BEFORE THE PROXY SOLICITATION WAS MADE OR FOR THE ELECTION OF A PERSON TO THE BOARD OF DIRECTORS IF ANY NOMINEE NAMED IN PROPOSAL 1 BECOMES UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE).   PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE

CONTINUED AND TO BE SIGNED ON REVERSE SIDE