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STOCK - BASED COMPENSATION | 12 Months Ended
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Dec. 31, 2023
Share-Based Payment Arrangement [Abstract] |
STOCK - BASED COMPENSATION | STOCK-BASED COMPENSATION 2021 Equity Incentive Plan In connection with the Company’s IPO, the Company adopted the 2021 Equity Incentive Plan (the “2021 Plan”), which allows for issuance of stock options (including incentive stock options and non-qualified stock options), restricted stock units (“RSUs”), including performance-based awards, and other types of awards. The maximum number of shares of common stock that may be issued under the 2021 Plan is 35,166,753, which is the sum of (i) 11,500,000 new shares, plus (ii) an additional number of shares consisting of (a) shares that were available for the issuance of awards under any prior equity incentive plans in place (which shall include the Prior Stock Plans (as defined below) and the Spyce Plan (as defined below)) prior to the time the Company’s 2021 Plan became effective and (b) any shares of the Company’s common stock subject to outstanding stock options or other stock awards granted under the Prior Stock Plans that on or after the Company’s 2021 Plan became effective, terminate or expire prior to the exercise or settlement; are not issued because the award is settled in cash; are forfeited because of the failure to vest; or are reacquired or withheld (or not issued) to satisfy a tax withholding obligation or the purchase or exercise price. The total number of shares available for grant as of December 31, 2023, was 10,572,899. Options granted generally have vesting terms between twelve months and four years and have a contractual life of 10 years. The Company issues shares of Class A common stock upon the vesting and settlement of RSUs and upon the exercises of stock options under the 2021 Plan. The 2021 Plan is administered by the board of directors, or a duly authorized committee of the Company’s board of directors. Options granted to members of the Company’s board of directors generally vest immediately. 2009 Stock Plan and 2019 Equity Incentive Plan Prior to the Company’s IPO, the Company granted stock options, RSUs and performance-based restricted stock awards (“PSUs”) to its employees, as well as nonemployees (including directors and others who provide substantial services to the Company) under the Company’s 2009 Stock Plan and 2019 Equity Incentive Plan (collectively, the “Prior Stock Plans”). Awards permitted to be granted under the Prior Stock Plans include incentive stock options to the Company’s employees and non-qualified stock options to the Company’s employees and non-employees, as well as stock appreciation rights, restricted stock awards, RSUs (including PSUs), and other forms of stock awards to the Company’s employees, directors and consultants and any of the Company’s affiliated employees and consultants. Options granted in the fiscal year ended December 26, 2021 generally have vesting terms between one year and four years and have a contractual life of 10 years. No further stock awards will be granted under the Prior Stock Plans now that the 2021 Equity Incentive Plan is effective; however, awards outstanding under the Prior Stock Plans will continue to be governed by their existing terms. Spyce Acquisition In conjunction with the Spyce acquisition, the Company issued shares of Class S stock which converted to the Class A common stock upon the Company’s IPO. See Note 6. Shares of Class S stock that were issued to certain Spyce employees, and the corresponding shares of Class A common stock received by such employees in connection with the Company’s IPO, are subject to time-based service requirements and vested on September 7, 2023, as these requirements were met. As the value is fixed, the grant date fair value of these shares represents the fair value of the shares on the acquisition date. For the fiscal years ended December 31, 2023 and December 25, 2022, the Company recognized stock-based compensation expense of $2.4 million and $3.4 million, respectively, related to the vested portion of such shares. 2021 Employee Stock Purchase Plan In conjunction with the IPO, the Company’s board of directors adopted, and the Company’s stockholders approved the Company’s 2021 employee stock purchase plan (the “ESPP”). The Company’s ESPP authorizes the issuance of 3,000,000 shares of common stock under purchase rights granted to the Company’s employees or to the employees of any of its designated affiliates. The number of shares of the Company’s common stock reserved for issuance will automatically increase on January 1 of each year for a period of 10 years, beginning January 1, 2023, by the lesser of (i) 1% of the total number of shares of the Company’s common stock outstanding on December 31 of the immediately preceding year; and (ii) 4,300,000 shares, except before the date of any such increase, the Company’s board of directors may determine that such increase will be less than the amount set forth in clauses (i) and (ii). On January 1, 2023, the ESPP authorized shares increased by 1,111,331 shares to 4,111,331 in accordance with the above. As of December 31, 2023, there had been no offering period or purchase period under the ESPP, and no such period will begin unless and until determined by the administrator. Stock Options Prior to the Company’s IPO, the Company granted stock options to its employees, as well as nonemployees (including directors and others who provide subst antial services to the Company) under the Prior Stock Plans, and subsequent to its IPO, under the 2021 Plan. In addition, as part of the Spyce acquisition, see Note 6 for further details, the Company assumed certain options to purchase shares of common stock issued pursuant to the Spyce Food Co. 2016 Stock Option and Grant Plan (the “Spyce Plan”), which, following such assumption, are exercisable for 96,151 shares of the Company’s Class A common stock with a weighted average exercise price of $8.95. The portion of the assumed options under the Spyce plan related to vesting prior to the closing date of the acquisition is included in the fair value of the equity consideration transferred in the acquisition when measuring goodwill. The portion of the assumed options under the Spyce plan that vest after the closing date of the acquisition will be recognized as compensation expense as the assumed options vest. The following table summarizes the Company’s stock option activity for the fiscal years ended December 31, 2023 and December 25, 2022, including options assumed pursuant to the Spyce Plan, as described above:
(dollar amounts in thousands except share and per share amounts) | Number of Shares |  |  |  | Weighted- Average Exercise Price Per Share |  | Weighted-Average Remaining Contractual Term (In Years) |  | Aggregate Intrinsic Value
Balance—December 26, 2021 | 13,773,414 |  |  |  |  | $ | 6.87 |  |  | 7.42 |  | $ | 337,269 |
Options granted | 1,482,632 |  |  |  |  | 16.63 |  |  |  |  |
Options exercised | (957,617) |  |  |  |  | 4.97 |  |  |  |  |
Options forfeited | (437,993) |  |  |  |  | 12.83 |  |  |  |  |
Options expired | (46,514) |  |  |  |  | 8.20 |  |  |  |  |
Balance—December 25, 2022 | 13,813,922 |  |  |  |  | $ | 7.86 |  |  | 6.63 |  | $ | 34,454 |
Options granted | 1,588,094 |  |  |  |  | 8.66 |  |  |  |  |
Options exercised | (929,963) |  |  |  |  | 5.79 |  |  |  |  |
Options forfeited | (1,081,299) |  |  |  |  | 11.25 |  |  |  |  |
Options expired | (171,366) |  |  |  |  | 11.71 |  |  |  |  |
Balance—December 31, 2023 | 13,219,388 |  |  |  |  | 7.77 |  |  | 5.97 |  | $ | 53,758 |
Exercisable—December 31, 2023 | 10,308,519 |  |  |  |  | 6.81 |  |  | 5.26 |  | $ | 49,544 |
Vested and expected to vest—December 31, 2023 | 13,219,388 |  |  |  |  | 7.77 |  |  | 5.97 |  | $ | 53,758 |
The weighted-average fair value of options granted in fiscal years 2023 and 2022 was $9.07 and $8.02, respectively, all of which were granted to employees. The weighted average fair value of options granted in fiscal year 2021 was $7.84 and $4.47 for stock options issued to employees and non-employees, respectively. The fair value of each option granted has been estimated as of the date of the grant using the Black-Scholes option-pricing model with the assumptions during the fiscal years ended December 31, 2023, December 25, 2022 and December 26, 2021 included in the table below. The Company has elected to account for forfeitures as they occur.
Input | Fiscal Year Ended December 31, 2023 | Fiscal Year Ended December 25, 2022 | Fiscal Year Ended December 26, 2021
Risk-free interest rate | 3.50%-4.90% | 1.59%-3.95% | 0.46%-1.08%
Expected term | 5.81-6.22 years | 5.08-6.60 years | 5.00-6.08 years
Expected Volatility | 45.11% | 44.25 | % | 41.00 | %
Dividend yield | 0% | 0 | % | 0 | %
Fair Value of Common Stock—Prior to the Company’s IPO, the absence of an active market for the Company’s common stock requires the Company to estimate the fair value of its common stock. Subsequent to the Company’s IPO, its board of directors determines the fair market value of its common stock based on its closing price as reported on close of business the day immediately preceding the date of grant on the New York Stock Exchange. Risk-Free Interest Rate—The yield on actively traded non-inflation indexed U.S. Treasury notes with the same maturity as the expected term of the underlying options was used as the average risk-free interest rate. Expected Term—The expected term of options granted to was determined based on management’s expectations of the options granted, which are expected to remain outstanding. The Company calculated the expected term using the simplified method for “plain vanilla” stock option awards. Expected Volatility—There is no substantive share price history to calculate volatility and, as such, the Company has elected to use an approximation based on the volatility of other comparable public companies, which compete directly with the Company, over the expected term of the options. Dividend Yield—The Company has not issued regular dividends on common shares in the past nor does the Company expect to issue dividends in the foreseeable future. As such, the dividend yield has been estimated to be zero. As of December 31, 2023, there was $13.2 million in unrecognized compensation expense related to unvested stock options arrangements and is expected to be recognized over a weighted average period 1.93 years. Restricted Stock Units and Performance Stock Units Restricted stock units During the fiscal year ended December 26, 2021 and prior to the Company’s IPO, excluding the founder PSUs and Spyce PSUs (each as described below), the Company issued 1,980,125 RSUs to certain employees, and 50,000 RSUs to members of its board of directors, both of which vest only upon the satisfaction of both service-based and liquidity event-related performance conditions. The fair value of these RSUs was determined based on contemporaneous third-party valuations of the Company’s common stock, sales of the Company’s redeemable convertible preferred stock to outside investors in arms-length transactions (including the Company’s IPO), the Company’s operating and financial performance, the lack of marketability, and the general and industry-specific economic outlook, amongst other factors. The grant date fair value of RSUs is recognized as compensation expense over the requisite service period, using the accelerated attribution method, once the liquidity event-related performance vesting condition becomes probable of being achieved. The service-based vesting condition is generally satisfied by the award holder providing services to us, typically over a four-year period for employees and a one-year period for members of the Company’s board of directors. The liquidity event-related performance vesting condition was satisfied upon the effectiveness of the Company’s IPO registration statement. Stock-based compensation expense for RSUs that had not met the service-based vesting condition as of December 31, 2023 will be recorded over the remaining requisite service period. During the fiscal years ended December 31, 2023 and December 25, 2022, the Company issue d 428,428 a nd 724,077 RSUs, respectively, to certain employees, which vest upon the satisfaction of certain service periods. The fair value of these RSUs was determined based on the Company’s closing stock price the business day immediately preceding the date of grant. The service period of these RSUs is satisfied over a range of 0 to 4 years. The RSUs are excluded from common stock issued and outstanding until the satisfaction of these vesting conditions and are not considered a participating security for purposes of calculating net loss per share attributable to common stockholders. The following table summarizes the Company’s RSU activity for fiscal years ended December 31, 2023 and December 25, 2022:
(dollar amounts in thousands except per share amounts) | Number of Shares |  | Weighted- Average Grant Date Fair Value
Balance—December. 27, 2020 | — |  |  | $ | — |
Granted | 2,418,793 |  |  | 24.20 |
Released | (15,000) |  |  | 23.00 |
Forfeited, cancelled, or expired | (11,367) |  |  | 29.51 |
Balance—December. 26, 2021 | 2,392,426 |  |  | $ | 24.18 |
Granted | 724,077 |  |  | 19.45 |
Released | (838,106) |  |  | 23.29 |
Forfeited, cancelled, or expired | (497,716) |  |  | 25.12 |
Balance—December. 25, 2022 | 1,780,681 |  |  | 23.40 |
Granted | 428,428 |  |  | 9.07 |
Released | (587,078) |  |  | 22.08 |
Forfeited, cancelled, or expired | (670,514) |  |  | 21.19 |
Balance—December. 31, 2023 | 951,517 |  |  | $ | 17.41 |
As of December 31, 2023, unrecognized compensation expense related to RSUs was $8.2 million and is expected to be recognized over a weighted average period of 1.17 years. The fair value of shares earned as of the vesting date during the fiscal years ended December 31, 2023, December 25, 2022 and December 26, 2021 was $6.3 million, $15.3 million and $0.4 million respectively. Performance stock units In October 2021, the Company granted 2,100,000 PSUs to each founder (the “founder PSUs”) for a total of 6,300,000 PSUs, under the 2019 Equity Incentive Plan. The founder PSUs vest upon the satisfaction of a service condition and the achievement of certain stock price goals. The founder PSUs are excluded from common stock issued and outstanding until the satisfaction of these vesting conditions and are not considered a participating security for purposes of calculating net loss per share attributable to common stockholders. The founder PSUs are eligible to vest beginning on the one-year anniversary of the effective date of the registration statement of the Company’s IPO, and expire ten years after the IPO date. The founder PSUs are comprised of seven tranches that are eligible to vest based on the achievement of stock price goals, ranging from $30.0 - $75.0 per share, measured over a consecutive 90-calendar day trailing trading period during the performance period as set forth below.
| Company Stock Price Target | Number of PSUs Eligible to Vest
1 | $ | 30.00 |  | 900,000 |
2 | $ | 37.50 |  | 900,000 |
3 | $ | 45.00 |  | 900,000 |
4 | $ | 52.50 |  | 900,000 |
5 | $ | 60.00 |  | 900,000 |
6 | $ | 67.50 |  | 900,000 |
7 | $ | 75.00 |  | 900,000 |
The Company estimated the grant date fair value of the founder PSUs based on multiple stock price paths developed through the use of a Monte Carlo simulation model within a hybrid framework with two possible scenarios (IPO and Change of Control). A Monte Carlo simulation model also calculates a derived service period for each of the seven vesting tranches, which is the measure of the expected time to achieve each Company stock price target, as described above. A Monte Carlo simulation model requires the use of various assumptions, including the underlying stock price, volatility, expiration term, and the risk-free interest rate as of the valuation date, corresponding to the length of time remaining in the performance period, and expected dividend yield. The derived service period calculation also requires the cost of equity assumption to be used in the Monte Carlo simulation model. Term and volatility are typically the primary drivers of this valuation. An expiration term of 10 years (as defined in the grant agreements) was considered in the IPO scenario while an expiration term of 3 years was considered in the Change of Control scenario. A volatility of 52.0 percent was considered within the IPO scenario consistent with the maximum term to expiration; whereas, a common stock volatility of 90.5 percent was considered in the Change of Control scenario, which is based on the ASC 718 analysis. The weighted-average grant date fair value of the founders PSUs was $16.35 per share. The Company will recognize total stock-based compensation expense of $103.0 million over the derived service period of each tranche, which is between 1.7 to 4.4 years, using the accelerated attribution method as long as the founders satisfy the service-based vesting condition. As of December 31, 2023 unrecognized compensation expense related to PSUs was $28.5 million and is expected to be recognized over a weighted average period of 1.24 years. Subsequent to the Company’s IPO, the Company issued 321,428 PSUs to the Spyce founders (“Spyce PSUs”) based on three separate performance-based milestone targets. The Company will recognize stock compensation expense related to each performance-based milestone target as it becomes probable of occurring, based on the stock price on the date of grant. During the fiscal years ended December 31, 2023 and December 25, 2022, the Company h as not recorded any stock-based compensation expense related to the Spyce PSUs. Unrecognized compensation expense related to the Spyce PSUs is $9.8 million, which will be expensed if the performance-based milestone targets become probable of being met. During the fiscal years ended December 31, 2023 and December 25, 2022 the Company did not issue any PSUs. As described above, the Company granted a total of 6,621,248 PSUs during the fiscal year ended December 26, 2021 with a weighted average grant date fair value of $15.56. There were no grants, releases, forfeitures, cancellations, or expirations since the grant date. A summary of stock-based compensation expense recognized fiscal years ended December 31, 2023, December 25, 2022 and December 26, 2021 is as follows:
(dollar amounts in thousands) | Fiscal Year Ended December 31, 2023 | Fiscal Year Ended December 25, 2022 | Fiscal Year Ended December 26, 2021
Stock-options | $8,878 | $10,505 | $15,414
Restricted stock units | 8,557 | 32,037 | 7,219
Performance stock units | 32,097 | 36,194 | 6,264
Total stock-based compensation | $49,532 | $78,736 | $28,897
Included within the $15.4 million of stock-based compensation expense for stock options during the fiscal year ended December 26, 2021, the Company recorded $5.4 million of stock-based compensation expense for options with a performance-based vesting condition that were satisfied at the closing of the IPO. Stock-based compensation expense is recorded within general and administrative expenses within the Company’s consolidated statements of operations.

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