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Item 9A. Controls and Procedures

2023-03-10 compared with 2022-03-11 · 665 added, 33 removed, 98 unchanged (88% of the section changed)

Controls and Procedures

Disclosure Controls and Procedures

Management’s Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required financial disclosure.

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Based upon this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of December 31, 2022.

Management’s Annual Report on Internal Control over Financial Reporting

This Annual Report on Form 10-K does not include a report of management’s assessment regarding our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) or an attestation report of our independent registered accounting firm due to a transition period established by rules of the SEC for newly public companies.

Additionally, our independent registered accounting firm will not be required to opine on the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer an “emerging growth company” as defined in the JOBS Act.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the fiscal year ended December 31, 2021.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f).

Internal control over financial reporting is a process designed to provide

reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with GAAP.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management, including our principal executive officer and principal financial officer, has assessed the effectiveness of our internal control over financial reporting as of December 31, 2022, based on criteria established in the framework Internal Control-Integrated Framework (2013) , issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on the results of our evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2022.

Our independent registered accounting firm will not be required to opine on the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer an “emerging growth company” as defined in the JOBS Act.

Changes in Internal Controls Over Financial Reporting

Limitations on the Effectiveness of Controls

Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives as specified above.

Management does not expect, however, that our disclosure controls and procedures will prevent or detect all errors and fraud.

Any control system, no matter how well designed and operated, is based on certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met.

Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

Our management, including the Chief Executive Officer and the Chief Financial Officer, recognizes that any set of controls and procedures, no matter how well-designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives.

Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, with the Company have been detected.

These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.

Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of controls.

For these reasons, internal control over financial reporting may not prevent or detect misstatements.

Other Information

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Directors, Executive Officers and Corporate Governance

The information called for by Item 10 is incorporated herein by reference to the definitive Proxy Statement of the Company relating to the 2022 Annual Meeting of Stockholders (the "Definitive Proxy Statement"), which the Company intends to file within 120 days after the close of its fiscal year ended December 31, 2021.

BOARD OF DIRECTORS

The following table sets forth the name, age, and position, as of March 10, 2023, of individuals who currently serve as directors on the board of directors.

Name Age Position

Aaron Rollins 48 Executive Chairman of the board of directors

Todd Magazine 58 Director, President and Chief Executive Officer

Adam Feinstein 51 Director

Daniel Sollof 39 Director

Caroline Chu 42 Director

Thomas Aaron 61 Director

Pamela Netzky 48 Director

Kenneth Higgins 57 Director

Class I—Directors with Terms Expiring in Fiscal 2025

Todd Magazine has served as a member of the board of directors of the Company since January 2023.

Todd has served as the Company's President and Chief Executive Officer since January 2023.

Magazine brings to AirSculpt more than 30 years of experience in retail operations and brand-building.

Prior to joining the company, he served as the CEO of Blink Fitness, a subsidiary of Equinox, for 10 years in which he led the company of over 1,500 employees from four locations to over 100 and increased membership 25x.

Previously, he was North American President of Pfizer's OTC business, held president's roles for Gatorade and Quaker Oats at PepsiCo, and led various marketing teams at Procter & Gamble.

Magazine received a BA from The University of Michigan and his MBA from Northwestern University's Kellogg School of Management.

We believe that Mr.

Magazine’s industry knowledge, as well as his leadership experience, make him an appropriate member of our board of directors.

Daniel Sollof has served as a member of the board of directors of the Company since June 2021 and served as a member of the board of managers of Elite Body Sculpture from October 2018 until the IPO.

Sollof joined VSCP in August 2014 and serves as a General Partner for the firm.

In addition to sourcing and evaluating potential investment opportunities, Mr.

Sollof works closely with VSCP’s portfolio companies.

He has been a Board Observer at HealthChannels (ScribeAmerica) since October 2016.

From July 2015 to August 2017, he served as a member of the b oard of d irectors of Imedex, Inc.

Prior to joining VSCP, Mr.

Sollof served as Vice President and Research Analyst for Barclays Capital/Lehman Brothers August 2007 to August 2014, focusing on the Healthcare Facilities and Medical Supplies & Devices Sectors.

Prior to Barclays Capital/Lehman Brothers, Mr.

Sollof worked as a Valuation and Business Modeling Analyst in the Transaction Advisory Services group at Ernst & Young from September 2005 to July 2007.

Sollof received a B.S.

in Management Science from the University of California – San Diego and is a CFA charterholder.

We believe that Mr.

Sollof’s industry knowledge, as well as his leadership experience, make him an appropriate member of our board of directors.

Pamela Netzky has served as a member of our board of directors since October 2021.

Netzky co-founded Skinny Pop Popcorn in 2010 and served as its President until July 2014.

In 2014, SkinnyPop Popcorn sold a majority stake to TA Associates, a leading private equity firm, and changed its name to Amplify Snack Brands.

Netzky transitioned to become a Senior Advisor of Amplify Snack Brands in 2014 and was named a board member of the company.

In 2015, Amplify Snack Brands went public on the New York Stock Exchange (formerly NYSE:

Netzky continued to serve on the board of directors until its sale to The Hershey Company (NYSE:

HSY) in 2018 in a transaction valued at approximately $1.6 billion.

Netzky has shown dedicated support to the City of Chicago as well as the arts, education and health care.

She has been recognized for her philanthropic pursuits by The Illinois Holocaust Museum.

Netzky earned a BA from DePaul University.

We believe that Ms.

Netzky’s leadership experience makes her an appropriate member of our board of directors.

Class II—Directors with Terms Expiring in Fiscal 2023

Adam Feinstein has served as a member of the board of directors since June 2021.

He served as the non-executive chairman of the board of directors of the Company from September 2021 to January 2023 and as non-executive chairman of the board of managers of Elite Body Sculpture from October 2018 until the IPO.

Feinstein founded Vesey Street Capital Partners, L.L.C.

(VSCP) in 2014 and has served as Managing Partner of the firm since August 2014.

Feinstein has 25 years of experience working with many of the leading healthcare services companies.

He has been chairman of the b oard of d irectors of HealthChannels (ScribeAmerica), a provider of medical scribe support and value-based healthcare solutions, since October 2016 and QualityMetric, a provider of health and disease specific surveys, since August 2020.

He has served as a member of the b oard of d irectors of Pathgroup, a leading pathology services company since August 2016.

Feinstein has served as a board member of Safecor Health, which provides pharmaceutical unit dose packaging services for hospitals and health systems, since August 2021.

He was a board member of Surgery Partners, Inc.

SGRY) from September 2015 to December 2019 and Imedex, Inc.

from July 2015 to August 2017.

Prior to founding VSCP, Mr.

Feinstein was the Senior Vice President of Corporate Development, Strategic Planning and Office of the Chief Executive Officer at LabCorp from June 2012 to August 2014.

At LabCorp, he oversaw mergers and acquisitions, corporate development, strategic partnerships and corporate strategy and managed the company’s partnerships with large hospital systems.

Prior to LabCorp, Mr.

Feinstein served as the Managing Director in Equity Research at Barclays Capital/Lehman Brothers for 14 years.

He was ranked #1 in the Institutional Investor All America Research Survey in the Health Care Facilities category for eight years.

Feinstein is a CFA charterholder and has a B.S.

in Business from the Smith School at the University of Maryland.

He also completed the Nashville Healthcare Council Fellows program.

We believe that Mr.

Feinstein’s public company experience, industry knowledge, as well as his leadership experience, make him an appropriate member of our board of directors.

Thomas Aaron has served as a member of our board of directors since October 2021.

Aaron joined Cincinnati Financial Corporation (Nasdaq:

CINF) in November 2019 and currently serves as a member of the board of directors, as a member of CINF’s audit committee, and as a member of the boards of directors of CINF’s property casualty insurance companies and other subsidiaries.

From 2016 to 2017, Mr.

Aaron served as Senior Vice President of Finance of Community Health Systems, Inc.

Aaron was appointed to serve as Executive Vice President and Chief Financial Officer of CYH in May 2017, a position in which he served through December 2019.

Prior to joining CYH, Mr.

Aaron had a distinguished, 32-year career at Deloitte leading audit and consulting services to, among others, national healthcare organizations.

Aaron is a Certified Public Accountant and holds a B.S.

in Accounting from the University of Kentucky.

We believe that Mr.

Aaron’s leadership experience makes him an appropriate member of our board of directors.

Kenneth Higgins has served as a member of our board of directors since October 2021.

Higgins currently serves as the managing director and co-founder of Northborne Partners, LLC, a middle market-focused mergers and acquisitions advisory firm.

Previously, Mr.

Higgins spent 4.5 years at BMO Capital Markets Corp.

(a subsidiary of Bank of Montreal (NYSE:

BMO)) from 2016 to 2021.

Higgins received his Bachelor of Business Administration from the University of Michigan School of Business and his Juris Doctor degree from Harvard Law School.

We believe that Mr.

Higgin’s leadership experience makes him an appropriate member of our board of directors.

Class III—Directors with Terms Expiring in Fiscal 2024

Aaron Rollins is our founder and he served as the Company's Chief Executive Officer from 2012 to January 2023.

With the appointment of Todd Magazine as CEO, Dr.

Rollins was appointed Executive Chairman of the board of directors and no longer serves as the Company's Chief Executive Officer.

Rollins is the cosmetic surgeon to the stars, as well as, the founder of Elite Body Sculpture.

He currently serves as a board adviser to Safecor Health, a portfolio company affiliated with our Sponsor.

Rollins is considered a specialist in body sculpting and has performed thousands of laser liposuction procedures.

He is a life-long art lover who studied sculpture and to fulfill his dream of combining art and science, he eventually attended medical school.

Rollins went to medical school at the McGill University Faculty of Medicine in Montreal, Canada after completing his undergraduate studies at McGill University.

He has received many awards for his distinguished work, including the I.D.E.A.

Bronze Medal for medical inventions and the “Great Distinction” honor at McGill University.

He is affiliated with the American College of Surgeons, American Board of Laser Surgery, American Academy of Cosmetic Surgery and the American Society of Liposuction Surgery.

He is also a member of the World Academy of Cosmetic Surgery.

Rollins was awarded the Compassionate Doctor certification in 2013.

We believe that Dr.

Rollins’ industry knowledge, as well as his leadership experience, make him an appropriate member and Executive Chairman of our board of directors.

Caroline Chu has served as a member of our board of directors since October 2021.

Previously, Ms.

Chu spent 16 years at Goldman Sachs Group, Inc.

from June 2002 to February 2018.

She served as an investment analyst in Equity Research, a public equities investor in Goldman Sachs Principal Strategies and portfolio manager and Managing Director in Goldman

Sachs Investment Partners.

Chu also served as Co-Head of Equities and Managing Director for Alwyne Management LP from May 2018 to January 2020.

Chu received her B.S.

degrees in Economics and Management Science from the Massachusetts Institute of Technology in 2002.

We believe that Ms.

Chu’s leadership experience makes her an appropriate member of our board of directors.

CORPORATE GOVERNANCE

Corporate Governance Highlights

Corporate governance is key to a strong and accountable board of directors.

We strive to adopt practices that will promote the long-term interests of the Company and its stockholders, including the below examples.

✓ Accountability.

Our common stock outstanding on the Record Date is entitled to one vote per matter presented to stockholders ✓ Annual Board and Committee Self-Evaluations

✓ We meet Nasdaq’s definition of a controlled company, but we do not take advantage of the controlled company exemptions ✓ Annual Named Executive Officer Performance Evaluation by the Compensation Committee of the Board

✓ Six of the eight members of our Board are “independent” under Nasdaq’s definition of independence ✓ “Pay for Performance” Philosophy Drives Executive Compensation

✓ Our Audit, Compensation, and Nominating & Corporate Governance Committees are each composed entirely of unaffiliated independent directors ✓ Limitation on Management Directors.

Our CEO and Executive Chairman are the only members of management who serve as a director

✓ Regular Board and Committee Executive Sessions of Independent Directors ✓ Audit Committee Approval Required for Related Party Transactions

✓ Lead Independent director ✓ No “Poison Pill” (Stockholder Rights Plan)

✓ Separate CEO and Chairman of the Board ✓ Commitment to Diversity, Equity and Inclusion

✓ Independent Executive Compensation Consultant ✓ Established Whistleblower Policy

✓ Risk Oversight by the Board and the Audit Committee ✓ Commitment to Environmental, Social and Governance Leadership

Board Composition and Election of Directors

Our business and affairs are managed under the direction of the board of directors.

The primary responsibilities of the board of directors are to provide oversight, strategic guidance, counseling and direction to our management.

The board of directors meets on a regular basis and additionally as required.

The number of directors is fixed by our board of directors, subject to the terms of our amended and restated certificate of incorporation, our amended and restated bylaws and our Stockholders Agreement (as defined below).

Our board of directors consists of eight directors, six of whom qualify as “independent” under the Nasdaq listing standards.

Directors are (except for the filling of vacancies and newly created directorships) elected by the holders of a plurality of the votes cast by the holders of shares present in person or represented by proxy at the meeting and entitled to vote on the election of such directors.

Our board of directors is divided into three classes with staggered three-year terms.

Only one class of directors is elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms.

Our directors are divided among the three classes as follows:

• the Class I directors are Todd Magazine, Daniel Sollof and Pamela Netzky, and their terms expire at the fourth annual meeting of stockholders;

• the Class II directors are Adam Feinstein, Kenneth Higgins and Thomas Aaron, and their terms expire at the second annual meeting of stockholders;

• the Class III directors are Dr.

Aaron Rollins and Caroline Chu, and their terms expire at the third annual meeting of stockholders.

Each director’s term continues until the election and qualification of his or her successor, or his or her earlier death, resignation, disqualification or removal.

No decrease in the number of directors will shorten the term of any incumbent director.

Our board of directors is authorized to assign members of the board of directors already in office to the three classes;

provided, that each class include a specified director designated pursuant to our Stockholders Agreement (as defined below).

This classification of our board of directors may have the effect of delaying or preventing changes in control of our company.

In addition, we entered into a stockholders agreement with affiliates of Sponsor and Dr.

Aaron Rollins in connection with our initial public offering (the “Stockholders Agreement”).

This agreement grants affiliates of our Sponsor and Dr.

Aaron Rollins the right to designate nominees to our board of directors subject to the maintenance of certain ownership requirements in us.

See “Certain Relationships and Related Party Transactions—Stockholders Agreement.”

In accordance with our corporate governance guidelines and subject to the Stockholders Agreement, our independent directors will designate a lead independent director in the event that the Company does not have an independent chairperson of the board of directors.

With the transition of Dr.

Aaron Rollins into the executive chairman role, Adam Feinstein has been designated as the lead independent director of the Company.

Our corporate governance guidelines also provide that the independent directors shall meet periodically in executive session but no less than two times per year or whatever minimum has been set by the Nasdaq listing standards.

Controlled Company Exemption

We meet the definition of a “controlled company” under the Nasdaq listing standards, and thus we qualify for the “controlled company” exemption to the board of directors and committee composition requirements under the Nasdaq listing standards.

If we were to rely on this exemption, we would be exempt from the requirements that (1) our board of directors be comprised of a majority of independent directors, (2) we have a nominating and corporate governance committee composed entirely of independent directors, and (3) our compensation committee be comprised solely of independent directors.

The “controlled company” exemption does not modify the independence requirements for the audit committee, and we comply, and intend to continue complying, with the requirements of the Sarbanes-Oxley Act and the Nasdaq listing standards, which require that our audit committee be composed of at least three members and entirely of independent directors within one year from the date of this prospectus.

We do not, and do not intend to, rely on the "controlled company" exemption under the Nasdaq listing standards and we have taken all actions necessary to comply with such requirements, including appointing a majority of independent directors to the board of directors and establishing certain committees composed entirely of independent directors within the time frames set forth under the Nasdaq listing standards.

However, as long as we remain a “controlled company” these requirements will not apply to us and we may, in the future, seek to utilize some or all of these exemptions.

Annual Board and Committee Performance Review

Pursuant to our corporate governance guidelines, the nominating and corporate governance committee is responsible for reporting annually to the board of directors an evaluation of the overall performance of the board of directors.

Additionally, the charters of the audit committee, compensation committee, and nominating and corporate governance committees each provide that the respective committee is responsible for performing or participating in an annual evaluation of its performance, the results of which are presented to the board of directors.

Board Meeting Attendance

During the fiscal year ended December 31, 2022 (“Fiscal 2022”), our board of directors met seven times, our audit committee met four times, our compensation committee met seven times and our nominating and corporate governance committee met three times.

Each director attended the board of directors' meetings and all of the meetings of the committees of the board of directors on which such director served in Fiscal 2022.

The board of directors and its committees also approved certain actions by unanimous written consent in lieu of a meeting.

It is our policy that our directors attend annual meetings of stockholders.

Committees of the Board of Directors

Our board of directors has 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 serve on these committees until their resignation or until as otherwise determined by our board of directors.

Each of the committees operates under its own written charter adopted by the board of directors, each of which is available on our website at https://investors.elitebodysculpture.com .

Audit Committee

Our audit committee consists of Thomas Aaron, Caroline Chu, and Kenneth Higgins, with Thomas Aaron serving as Chairperson.

The composition of our audit committee meets the requirements for independence under current Nasdaq listing standards and SEC rules and regulations.

Each member of our audit committee meets the financial literacy requirements of Nasdaq listing standards.

In addition, our board of directors has determined that Thomas Aaron is an audit committee financial expert within the meaning of Item 407(d) of Regulation S-K under the Securities Act of 1933.

Our audit committee, among other things:

• reviews our consolidated financial statements and our critical accounting policies and practices;

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

• helps to ensure the independence and performance of the independent registered public accounting firm;

• discusses the scope and results of the audit with the independent registered public accounting firm and reviews, with management and the independent registered public accounting firm, our interim and year-end results of operations;

• pre-approves all audit and all permissible non-audit services to be performed by the independent registered public accounting firm;

• oversees the performance of our internal audit function when established;

• reviews the adequacy of our internal controls;

• oversees cybersecurity controls, risks and policies

• develops procedures for employees to submit concerns anonymously about questionable accounting or audit matters;

• reviews our policies on risk assessment and risk management;

• reviews and approves or disapproves all related party transactions.

Our audit committee operates under a written charter that satisfies the applicable rules of the SEC and the listing standards of Nasdaq.

Compensation Committee

Our compensation committee consists of Caroline Chu, Thomas Aaron, and Kenneth Higgins, with Caroline Chu serving as Chairperson.

The composition of our compensation committee meets the requirements for independence under Nasdaq listing standards and SEC rules and regulations.

Each member of the compensation committee is also a non-employee director, as defined pursuant to Rule 16b-3 promulgated under the Exchange Act.

The purpose of our compensation committee is to discharge the responsibilities of our board of directors relating to compensation of our executive officers.

Our compensation committee, among other things:

• reviews, approves and determines, or makes recommendations to our board of directors regarding, the compensation of our executive officers;

• administers our stock and equity incentive plans;

• reviews and approves, or makes recommendations to our board of directors regarding, incentive compensation and equity plans;

• establishes and reviews general policies relating to compensation and benefits of our employees.

Our compensation committee operates under a written charter that satisfies the applicable rules of the SEC and the listing standards of Nasdaq.

The charter provides that the compensation committee may, in its sole discretion and at the expense of the Company, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser.

However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.

To assist the compensation committee in meeting its responsibilities, the committee engaged Haigh & Co.

(“Haigh”) as its independent outside compensation consultant to regularly provide executive compensation market analysis and insight, with respect to our executive officers.

Haigh only provides services to the compensation committee with respect to executive and director compensation and does not provide any other services to the Company.

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee consists of Kenneth Higgins and Pamela Netzky, with Kenneth Higgins serving as Chairperson.

The composition of our nominating and corporate governance committee meets the requirements for independence under Nasdaq listing standards and SEC rules and regulations.

Our nominating and corporate governance committee, among other things:

• identifies, evaluates and selects, or makes recommendations to our board of directors regarding, nominees for election to our board of directors and its committees;

• evaluates the performance of our board of directors and of individual directors;

• considers and makes recommendations to our board of directors regarding the composition of our board of directors and its committees;

• reviews developments in corporate governance practices;

• oversees environmental, social and governance (ESG) matters;

• evaluates the adequacy of our corporate governance practices and reporting;

• develops and makes recommendations to our board of directors regarding corporate governance guidelines and matters.

The nominating and corporate governance committee operates under a written charter that satisfies the applicable listing requirements and rules of Nasdaq.

Section 16(a) Reporting

Section 16(a) of the Exchange Act requires that our directors, executive officers, and greater than 10% stockholders file reports with the SEC relating to their initial beneficial ownership of our securities and any subsequent changes.

These reports are commonly referred to as Form 3, Form 4 and Form 5 reports.

They must also provide us with copies of the reports.

Based solely on a review of the copies of such forms in our possession, and on written representations from the reporting persons, we believe that all of these reporting persons complied with their filing requirements for the fiscal year ended December 31, 2022.

Code of Business Conduct and Ethics

Our board of directors has a Code of Business Conduct and Ethics applicable to our directors, officers and employees.

The Code of Business Conduct and Ethics is accessible on our website at https://investors.elitebodysculpture.com/corporate-governance/governance .

If we make any substantive amendments to the Code of Business Conduct and Ethics or grant any waiver, including any implicit waiver, from a provision of the Code of Business Conduct and Ethics to our officers, we will disclose the nature of such amendment or waiver on that website or in a report on Form 8-K.

EXECUTIVE OFFICERS

Below is a list of the names, ages, positions, and a brief account of the business experience of the individuals who serve as our executive officers as of March 10, 2023.

On December 30, 2022, the board of directors terminated the employment of Ronald Zelhof as Chief Operating Officer and President of the Company, effective December 30, 2022.

As discussed below, Mr.

Zelhof entered into a Separation and General Release Agreement (“Separation Agreement”) with the Company, which provides for the severance benefits specified in Section 7 of his employment agreement (previously filed as Exhibit 10.10 to the Company’s Registration Statement on Form S-1 (File No.

333-260067)) and continued vesting of certain equity awards.

Name Age Position

Todd Magazine (1)

58 Chief Executive Officer and Director

Dennis Dean 50 Chief Financial Officer

Aaron Rollins (1)

48 Executive Chairman of the board of directors

(1) See “Board of Directors” for a description of Todd Magazine’s and Dr.

Aaron Rollins' experience.

Dennis Dean has served as our Chief Financial Officer since June 1, 2021.

Dean has over 20 years of experience in multi-site healthcare services.

Prior to joining the Company, Mr.

Dean served as Senior Vice President of Finance and Operations for Envision Healthcare from January 2019 to December 2020.

Dean also served as Chief Accounting Officer and Corporate Controller for Surgery Partners and its predecessor company, Symbion, from 2008 through 2018 and was part of the team which took Surgery Partners public in 2015.

Prior to joining Symbion, he co-founded Resource Partners, LLC, a healthcare-focused financial consulting firm, and began his career at Deloitte.

Dean is a Certified Public Accountant and holds a B.S.

in Accounting and an MAcc from Western Kentucky University.

Executive Compensation

The information called for by Item 11 is incorporated herein by reference to the Definitive Proxy Statement referenced above in Item 10.

This section provides an overview of the compensation of our principal executive officer and our next two most highly-compensated executive officers for Fiscal 2022.

We refer to these individuals as our named executive officers.

Our named executive officers for 2022 were:

Aaron Rollins, our Chief Executive Officer;

Zelhof, our Chief Operating Officer;

• Dennis Dean, our Chief Financial Officer

Summary Compensation Table

The following table sets forth the compensation awarded to, earned by or paid to our named executive officers (“NEOs”) in respect of their service to us during Fiscal 2022 and the fiscal year ended December 31, 2021 (“Fiscal 2021”).

Name and Principal Position Year Salary

Non-Equity Incentive Plan Compensation

All Other Compensation

Aaron Rollins

2022 875,000 — 2,276,023 340,375 13,170 3,504,568

Chief Executive Officer

2021 558,333 430,833 27,606,116 404,668 6,644 29,006,594

Zelhof 2022 575,000 — 747,843 172,500 1,868,952 3,364,295

Chief Operating Officer

2021 445,833 5,558,542 13,803,051 — 18,817 19,826,243

Dennis Dean 2022 500,000 — 650,298 145,875 22,402 1,318,575

Chief Financial Officer

2021 247,917 2,219,167 13,803,051 — — 16,270,135

(1) Amounts in this column reflect cash bonus awards paid in connection with our initial public offering to Mr.

Zelhof, in the amount of $4,750,000, and to Mr.

Dean, in the amount of $1,800,000 and bonuses paid prior to our initial public offering in the amounts of $35,000, paid to Dr.

Rollins in connection with an adjustment to his base salary, $570,00, paid to Mr.

Zelhof in connection with mid-year performance achievement milestones, and $225,000, paid to Mr.

Dean as a sign-on bonus.

(2) Amounts in this column for 2022 represent the grant date fair value, as determined in accordance with FASB ASC Topic 718, of a one-time equity award in connection with our annual executive long term compensation program made up of 50% restricted stock unit awards ("RSUs") and 50% performance-based restricted stock unit awards ("PSUs") granted pursuant to the Company’s 2021 Equity Incentive Plan (the “2021 Plan”).

Each of the performance-based restricted stock unit award amounts are based on achievement of a relative Total Shareholder Return ("rTSR") as compared to a specified peer company group.

These awards can range from 0% to 200% as the highest level of award amounts that may be earned.

Amounts in this column for 2021 represent the grant date fair value, as determined in accordance with FASB ASC Topic 718, of one-time equity awards in connection with our initial public offering.

For further information regarding the 2021 equity awards, please see the discussion under the heading “Treatment of IPO Equity Awards.”

(3) Amounts in this column reflect annual incentive compensation payments earned by our named executive officers in 2022.

Amounts in this column also reflect the Equityholder Bonus that Dr.

Rollins earned in 2021, including the termination fee paid to Dr.

Rollins in 2021, as described under “Narrative Disclosure to the Summary Compensation Table—Equityholder Bonus for Dr.

Rollins” below.

(4) On December 30, 2022, Ronald Zelhof, the Chief Operating Officer, entered into a Separation Agreement with the Company.

In connection with the Separation Agreement, a severance amount was paid to the executive based on Mr.

Zelhof's employment contract.

Amounts shown in the “All Other Compensation” column represent the severance payment to Mr.

Zelhof in 2022 and medical, dental and vision insurance policy premiums paid by us.

Narrative Disclosure to Summary Compensation Table

Annual Base Salary

Each named executive officer's base salary is a fixed component of compensation for each year for performing specific job duties and functions.

The 2022 annual base salaries for our named executive officers are set forth in the Summary Compensation Table above.

In May 2021, our board of directors approved an increase to Dr.

Rollins’ annual base salary from $300,000 to $600,000 and an increase to Mr.

Zelhof’s annual base salary from $300,000 to $500,000.

Rollins’ annual base salary was further increased to $875,000 and Mr.

Zelhof’s annual base salary was further increased to $575,000, in each case, in connection with our initial public offering and effective as of October 28, 2021.

Dean’s annual base salary when he began employment with the Company, effective June 1, 2021, was $395,000 and Mr.

Dean’s annual base salary was increased from $395,000 to $500,000 in connection with our initial public offering and effective as of October 28, 2021.

Annual Cash Bonuses

In addition to their annual base salary, our named executive officers are eligible for an annual cash performance bonus for each fiscal year based upon achievement of our performance targets, as determined by our board of directors in its sole and absolute discretion.

For 2022, Dr.

Zelhof and Mr.

Dean were eligible to receive an annual incentive cash compensation of 100%, 75% and 75%, respectively, of their annual base salary based on annual EBITDA performance.

In February of 2022, our board of directors approved the 2022 budgeted EBITDA target of $60.0 million and budgeted revenue target of $177.5 million.

For the 2022 performance period, our EBITDA was $43.1 million and our revenue was $168.8 million.

As a result of our performance versus company objectives and each named executive officer’s performance versus their respective individual objectives, Dr.

Zelhof and Mr.

Dean earned bonuses of $340,375, $172,500 and $143,875, respectively.

These bonuses will be paid during the first quarter of 2023.

Annual Equity Awards

We awarded RSUs and PSUs to each of Dr.

Zelhof and Mr.

Dean (the “Annual Awards”) in 2022 from our 2021 Equity Incentive Award Plan.

The Annual Awards for Dr.

Zelhof and Mr.

Dean were 50% in the form of RSUs and 50% in the form of PSUs.

The number of RSUs granted to Dr.

Zelhof and Mr.

Dean in connection with their Annual Awards cover 64,386 shares of our common stock, 21,156 shares of our common stock and 18,396 shares of our common stock, respectively.

The RSUs vest one-third annually over the first three anniversaries of the date of grant, subject to continued employment on such date, except as otherwise described under “Potential Payments and Benefits upon Termination or Change in Control” below.

Zelhof and Mr.

Dean, the number of PSUs granted to them in connection with their 2022 Annual Awards cover 64,385 shares of our common stock, 21,155 shares of our common stock and 18,396 shares of our common stock, respectively.

The PSUs vest based on the Company's total shareholder return relative to a specified peer group (the "rTSR").

Based on the rTSR, the awards can settle in shares in a range of 0% to 200% of the total units.

Vesting of the PSUs is subject to continued employment on the date the performance goal is achieved, except as otherwise described under “Potential Payments and Benefits upon Termination or Change in Control” below.

Upon a change in control (as defined in the 2021 Plan), the performance conditions underlying the PSUs are deemed satisfied at 100% and the PSUs remain subject solely to time-based vesting over the remainder of the three year performance period, subject to continued service on such date except as otherwise described under “Potential Payments and Benefits upon Termination or Change in Control” below.

All of our current named executive officers are eligible to participate in our employee benefit plans, including our medical, dental, and vision, in each case on the same basis as all of our other employees, except that we pay for the full cost of premiums of such benefits for our named executive officers.

We generally do not provide perquisites or personal benefits to our named executive officers.

Employment Agreements

On October 5, 2021, we entered into Amended and Restated Employment Agreements with each of Dr.

Zelhof and Mr.

Dean in connection with our initial public offering (the “Amended and Restated Employment Agreements”), which agreements became effective upon completion of our initial public offering.

Except as noted below with respect to Mr.

Zelhof, the Amended and Restated Employment Agreements applied with respect to all of the compensation disclosed int the Summary Compensation Table above.

The Amended and Restated Employment Agreements each provide that the executive will receive a base salary of $875,000 (in the case of Dr.

Rollins), $575,000 (in the case of Mr.

Zelhof) and $500,000 (in the case of Mr.

Dean), which may be reviewed annually and may be increased, but not decreased, without the executive’s consent.

The Amended and Restated Employment Agreements also provide that the executive is eligible to receive an annual performance-based cash bonus with a target annual bonus of 100% of base salary (in the case of Dr.

Rollins) and 75% of base salary (in the case of Mr.

Zelhof and Mr.

Dean), which bonus is earned based on the achievement of performance targets, as determined annually by our board of directors.

Any annual bonus, to the extent earned, is paid in a lump sum.

The Amended and Restated Employment Agreements also provided that the executive would receive a special one-time equity award grant as soon as reasonably practicable following the completion of our initial public offering, which equity grants are described under “IPO Equity Awards” above.

Under the Amended and Restated Employment Agreements, the executives are also eligible to participate in the Company’s annual equity grant program, with the first such annual equity grant in the first quarter of 2022.

Pursuant to his Amendment and Restated Employment Agreement, for Dr.

Rollins, the 2022 annual equity grant has a grant date fair value equal to 200% of base salary, with a portion of such award being in the form of time-vesting restricted stock units that vest over three years in equal annual installments.

All equity awards are subject to the approval of our board of directors.

The Amended and Restated Employment Agreements for each of Mr.

Zelhof and Mr.

Dean also provided that the executive would receive a special one-time cash bonus in a lump sum payment as soon as reasonably practicable following the completion of our initial public offering in the amount of $4,750,000 (in the case of Mr.

Zelhof) and $1,800,000 (in the case of Mr.

Under the Amended and Restated Employment Agreements the executive may terminate their respective employment at any time and for any reason with 60 days’ prior written notice, provided, however, that we may accelerate the executive’s last day of employment to any date within the 60-day notice period without converting the resignation into anything other

than a voluntary resignation.

We may terminate the executive’s employment immediately for “disability” (as defined in the Amended and Restated Employment Agreements) or immediately upon written notice for “cause” (as defined below).

In the event that the executive’s employment is terminated due to his death or disability, for “cause” or upon his resignation without “good reason” (as defined below), we must provide the executive (or his beneficiaries) with (i) any unpaid base salary through the date of termination, (ii) payment for any accrued but unused paid time off, (iii) following submission of proper expense reports, reimbursement for expenses properly incurred, and (iv) all other vested entitlements or benefits to which he is entitled (collectively, the “Accrued Benefits”).

If we terminate the executive’s employment without cause (which in the case of Mr.

Zelhof must be with 90 days’ written notice) or the executive terminates his employment for “good reason” (as defined below), then we must provide the executive with the Accrued Benefits and subject to the executive’s execution and non-revocation of a release of claims, a lump sum payment equal to two times (in the case of Dr.

Rollins) and one and one-half times (in the case of Mr.

Zelhof and Mr.

Dean), the sum of (i) executive’s annual base salary, plus (ii) his target annual bonus, in each case at the rates and target amounts in effect as of such termination of employment.

For purposes of the Amended and Restated Employment Agreements with each of Dr.

Rollins and Mr.

Zelhof, “cause” generally means the executive’s (i) fraud, embezzlement or other misappropriation of funds or property of the Company or any of its subsidiaries or affiliates (each, a “Company Group Member”) or any persons or professional for which the Company or its subsidiaries or affiliates provides business, management, administrative, marketing or other support services (“Managed Practices”), (ii) any gross misconduct that is injurious, directly or indirectly, in any material respect to any Company Group Member or any Managed Practice, (iii) failure to perform, or breach of, in any material respect, of any obligations under the Employment Agreement or any other agreement between the executive and any Company Group Member, (iv) exclusion, debarment, termination or suspension under any Medicare, Medicaid, TRICARE or other federal, state or government health care program, or commission or conviction of, indictment for or plea of guilty or no contest to, any felony or any crime involving moral turpitude, embezzlement, fraud or self-dealing or any crime which could reasonably be expected to subject the executive, any Company Group Member, services or Managed Practice to exclusion, debarment, termination or suspension under any Medicare, Medicaid, TRICARE or other federal, state or government health care program, (v) use of alcohol or controlled substances that impairs the executive’s ability to perform his duties and responsibilities with respect to any Company Group Member or Managed Practice in any material respect, (vi) challenging the legality, validity or enforceability of any of the Managed Practice documents, (vii) termination by a Managed Practice owned or controlled by the executive of a managed services agreement with any Company Group Member for reasons other than a material breach of such agreement by any Company Group Member, (viii) the willful breach by a Managed Practice owned or controlled by the executive of a management services agreement with any Company Group Member, or (ix) the executive’s failure to give timely notice of his resignation under the employment agreement.

With respect to items (ii), (iii), (viii) and (ix), any such action will only constitute “cause” if the board of directors notifies the executive in writing of such action and the executive has not remedied the action within 30 days of such notice.

Rollins, “cause” is also defined to include his license to practice medicine in the State of California or New York being revoked, terminated, cancelled, suspended, relinquished or placed on probationary status.

For purposes of the Amended and Restated Employment Agreement with Mr.

Dean, “cause” generally is defined in the same manner as set forth above for Dr.

Rollins and Mr.

Zelhof, however prongs (iv), (vii) and (viii) of the “cause” definition described above do not apply to Mr.

Dean and are replaced with a prong that includes Mr.

Dean’s conviction of, or plea of guilty or no contest to, a felony or crime involving moral turpitude.

For purposes of the Amended and Restated Employment Agreements, “good reason” generally means (i) a material reduction of title authority, duties or responsibilities with the Company, (ii) a material reduction in base salary, (iii) relocation of principal place of work to a place more than 25 miles from the Company’s headquarters in Miami, Florida, or, in the case of Mr.

Dean, 35 miles from Nashville, Tennessee, or (iv) a material breach by the Company of the employment agreement.

Good reason will not exist unless the executive notifies the Company in writing of such action not later than 30 days after its initial occurrence and the Company has not remediated the action within 15 days of such notice.

If the Company cannot remedy the action or condition for reasons beyond its control it may get a 15-day extension of the cure period.

Executive Chair Agreement with Dr.

In connection with his appointment to Executive Chairman of the board of directors, Dr.

Rollins entered into an amended and restated employment agreement as of January 4, 2023 (the “Second Amended and Restated Employment Agreement”) (previously filed as Exhibit 10.2 to the Company’s current report on Form 8-K, dated December 30, 2022).

The compensation outlined above for Dr.

Rollins’ Amended and Restated Employment Agreements remains the same under his Second Amended and Restated Employment Agreement, as amendments reflect the change in his role with the Company and extend the term of his Second Amended and Restated Employment Agreement through October 29, 2024.

Separation Agreement for Mr.

On December 30, 2022, the board of directors terminated the employment of Ronald Zelhof as Chief Operating Officer and President of the Company.

In connection with such termination of employment Mr.

Zelhof entered into a Separation and General Release Agreement (“Separation Agreement”) with the Company (previously filed as Exhibit 10.2 to the Company’s current report on Form 8-K, dated December 30, 2022), which provides for the severance benefits specified in Section 7 of his Amended and Restated Employment Agreement (previously filed as Exhibit 10.10 to the Company’s Registration Statement on Form S-1 (File No.

333-260067)).

In addition, in connection with confirming that certain restrictive covenants remain in effect and waive of the notice period under his Amended and Restated Employment Agreement, Mr.

Zelhof is entitled to remain eligible to earn a portion of the PSUs granted to Mr.

Zelhof in 2021 and 2022 through March 31, 2024 and December 31, 2024, respectively, and partial accelerated vesting for 176,388 RSUs.

Employee Covenants Agreement

We also entered into an Employee Covenants Agreement with Dr.

Rollins dated as of October 2, 2018 (the “Rollins Covenants Agreement”), which agreement includes customary confidentiality and non-disparagement provisions, as well as provisions relating to assignment of inventions.

On October 5, 2021, we entered into an amendment to the Rollins Covenants Agreement, which became effective upon completion of our initial public offering.

The Rollins Covenants Agreement, as amended, also includes non-competition and non-solicitation of employees and customers provision that run during Dr.

Rollins employment with the Company and for a period of twelve months after termination of employment.

Outstanding Equity Awards at Fiscal Year-End

As of December 31, 2022, our named executive officers held outstanding equity-based awards of the Company as listed in the table below.

Name Grant Date Number of Shares or Units That Have Not Yet Vested

Market Value of Shares or Units That Have Not Yet Vested

Equity Incentive Plan Awards:

Number of Unearned Shares or Units That Have Not Vested (#) (3)

Equity Incentive Plan Awards:

Market Value of Unearned Shares or Units That Have Not Vested ($) (2)

Aaron Rollins

11/4/2021 649,136 2,401,803 — —

Chief Executive Officer

11/4/2021 — — 811,420 3,002,254

2/25/2022 64,386 238,228 — —

2/25/2022 — — 64,385 238,225

11/4/2021 — — — —

Chief Operating Officer

11/4/2021 — — 99,603 368,531

2/25/2022 — — — —

2/25/2022 — — 8,782 32,493

Dennis Dean 11/4/2021 324,568 1,200,902 — —

Chief Financial Officer

11/4/2021 — — 405,710 1,501,127

2/25/2022 18,396 68,065 — —

2/25/2022 — — 18,396 68,065

(1) Includes RSU awards granted in connection with the IPO Awards.

RSUs vest in three equal installments on each of November 2, 2022, November 2, 2023 and November 2, 2024.

Also includes RSU awards granted on February 25, 2022 that vest in three equal installments on each of January 1, 2023, 2024 and 2025.

(2) Based on the closing sale price of AirSculpt common stock on NASDAQ of $3.70 per share on December 30, 2022.

(3) Includes PSU awards granted in connection with the IPO Awards.

PSU awards vest based on achievement of performance conditions over a three-year performance period, as described under “IPO Awards” above.

PSUs are included at 100% performance.

Also, includes PSU awards granted on February 25, 2022, which vest based on achievement of a relative total shareholder return as described under "Annual Equity Awards" section above.

(4) Under the Separation Agreement with Ron Zelhof, 180,744 PSUs related to his IPO Awards and 8,782 PSUs from his award on February 25th, 2022 would remain outstanding.

If the performance objectives are met by March 31, 2024 for the IPO awards and December 31, 2022 for the remaining awards, the awards would vest accordingly.

Potential Payments and Benefits upon Termination or Change in Control

As discussed under “Employment Agreements,” the Amended and Restated Employment Agreements provide for certain severance payments in connection with our NEOs termination of employment under certain circumstances.

Treatment of IPO Equity Awards

As detailed above under “IPO Awards,” we granted to each of Dr.

Zelhof and Mr.

Dean RSUs and PSUs in connection with our initial public offering.

The RSU and PSU grants provide for the following treatment in connection with certain qualifying terminations of employment or a change in control.

All references to “change in control” in this section refer to such term as it is defined in the 2021 Plan.

In the event of a termination of Dr.

Rollins without cause, for good reason or due to his death or disability, (i) all unvested RSUs granted to Dr.

Rollins will accelerate and vest in full as of the date of such termination and (ii) all unvested PSUs will remain outstanding and eligible to vest pro-rata, based on time employed during the performance period, subject to achievement of the specified performance condition during the performance period.

The terms “cause” and “good reason” are as defined in Dr.

Rollins’s employment agreement.

On a change in control, all PSUs will be converted into time-vesting RSUs at target amounts, with cliff vesting at the end of the applicable performance period.

Upon a qualifying termination of employment following a change in control, all unvested RSUs and PSUs will accelerate and vest in full as of the date of such termination.

Zelhof and Mr.

In the event of a termination of Mr.

Zelhof or Mr.

Dean without cause, for good reason or due to death or disability, (i) all unvested RSUs that would have vested during the twelve month period following the executive’s termination of employment will vest as of the date of such termination and (ii) all unvested PSUs will remain outstanding and eligible to vest pro rata, based on time employed during the performance period, for a period of 12 months following termination of employment, subject to achievement of the specified performance condition during such twelve month period.

The terms “cause” and “good reason” are as defined in the executive’s employment agreement.

On a change in control, all PSUs will be converted into time-vesting RSUs at target amounts, with cliff vesting at the end of the applicable performance period.

Upon a qualifying termination of employment during the eighteen month period immediately following a change control, all unvested RSUs and PSUs will accelerate and vest in full as of the date of such termination.

Director compensation

The following table sets forth the compensation awarded to, earned by or paid to the non-employee members of our board of directors in respect of their service to our board of directors during our Fiscal 2022.

Rollins’ compensation for Fiscal 2022 is included in the “Summary compensation table” above and as described in the accompanying narrative description.

Other than as set forth in the table below, we did not pay any compensation to any of the members of our board of directors for Fiscal 2022.

Name Fees Earned or Paid in Cash

All Other Compensation

102,500 201,591 1,498 305,589

100,000 201,591 1,955 303,546

Kenneth Higgins 107,500 201,591 4,386 313,477

Pamela Netzky

82,500 201,591 2,711 286,802

(1) The amounts in this column represent annual cash retainers, committee chair and committee membership fees.

Any director who is an officer of the Company and any director who is nominated by Vesey Street Capital Partners, L.L.C., including Messrs.

Feinstein and Sollof, did not receive any AirSculpt director compensation.

(2) The amounts in this column represent the grant date fair value, as determined in accordance with FASB ASC Topic 718, of awards of restricted stock units granted under the 2021 Plan.

Awards granted in connection with our initial public offering settle one year after grant.

Aggregate restricted stock unit awards outstanding as of December 31, 2022 are 18,427 for each of Mr.

Higgins and Ms.

Narrative to Director Compensation Table

In connection with our initial public offering, we adopted a formal policy governing the compensation of our non-employee directors.

Any director who also serves as an employee receives no additional compensation for services as a director or as a member of a committee of our board of directors.

Compensation for our non-employee directors (other than Adam Feinstein and Daniel Sollof, who are not compensated for their service as directors) includes an annual cash retainer of $75,000.

In addition, non-employee directors (other than Adam Feinstein and Daniel Sollof, who are not compensated for their service as directors) also receive an additional cash retainer for service on the audit committee, compensation committee, or nominating and corporate governance committee of our board of directors.

The chairman of the audit committee receives an additional cash retainer of $20,000, and the other members of the audit committee will receive an additional cash retainer of $10,000.

The chairmen of the compensation committee or nominating and corporate governance committee each receive an additional cash retainer of $15,000, and each other member of such committee will receive an additional cash retainer of $7,500.

All cash retainers for service on committees of our board of directors are payable quarterly.

All cash retainers will be pro-rated for any partial periods of service.

In addition to cash compensation, each non-employee director (other than Adam Feinstein and Daniel Sollof, who are not compensated for their service as directors) receives an annual RSU grant, which will be granted at each annual meeting of our stockholders and will vest upon the earlier of (i) the first anniversary of the date of grant or (ii) the day prior to our next annual meeting of stockholders.

For Fiscal 2022, we granted 18,427 RSUs under the 2021 Plan to each of our non-employee directors which RSUs will vest on May 11, 2023, subject to each non-employee director’s continued service through such date.

Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters

The information called for by Item 12 is incorporated herein by reference to the Definitive Proxy Statement referenced above in Item 10.

Beneficial Ownership

The following table sets forth information regarding the beneficial ownership of our common stock as of March 10, 2023 by (i) each person, or group of affiliated persons, known by us to beneficially own more than 5% of our common stock, (ii) each of our directors and named executive officers, and (iii) all of our directors and executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the SEC.

These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to such securities.

To our knowledge, except as otherwise indicated, all persons listed below have sole voting and investment power with respect to the shares beneficially owned by them, subject to applicable community property laws.

Applicable percentage ownership is based on 56,385,671 shares of common stock outstanding as of March 10, 2023.

RSUs that may vest and settle within 60 days of March 10, 2023 are deemed to be outstanding and to be beneficially owned by the person holding the RSUs for the purpose of computing the percentage ownership of that person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.

Unless otherwise indicated, the address for each listed stockholder is:

1111 Lincoln Road, Suite 802, Miami Beach, Florida 33139.

Common Stock beneficially owned

Name and address of beneficial owner

5% stockholders:

Aaron Rollins 13,992,180 24.82 %

Entities affiliated with Vesey Street Capital Partners, L.L.C.

29,324,180 52.00 %

Thrivent Financial for Lutherans 5,169,819 9.17%

Directors and named executive officers:

Zelhof 757,618 1.34 %

Dennis Dean 212,567 *

Aaron Rollins 13,992,180 24.82 %

Adam Feinstein (1)

29,324,180 52.00 %

Daniel Sollof — *

Caroline Chu 43,910 *

Thomas Aaron 31,910 *

Kenneth Higgins 40,910 *

Pamela Netzky 13,910 *

All executive officers and directors as a group (9 persons)

44,417,185 78.77 %

* Represents less than 1%.

(1) Consists of 13,575,862 shares of common stock held directly by VSCP EBS Aggregator, L.P., a Delaware limited partnership (“VSCP EBS”), 4,374,714 shares of common stock held directly by Vesey Street Capital Partners Healthcare Fund-A, L.P., a Delaware limited partnership (“VSCP Health Fund A”), and 11,373,604 shares of common stock held directly by EBS Aggregator Blocker Holdings, LLC, a Delaware limited liability company (“Aggregator Blocker Holdings”).

Feinstein serves as managing partner of Vesey Street Capital Partners, L.L.C., a Delaware limited liability company (“VSCP Fund”), which is the general partner of Vesey Street Capital Partners Healthcare GP, L.P., a Delaware limited partnership, which serves as the general partner of VSCP EBS and VSCP Health Fund A.

and the manager of Aggregator Blocker Holdings.

The address for Mr.

Feinstein, VSCP EBS, VSCP Health GP, Aggregator Blocker Holdings and VSCP Fund is c/o Adam Feinstein, 428 Greenwich Street, New York, NY 10013.

(2) Shares voting power and investment power of the 11,373,604 shares of common stock with investors in EBS Aggregator Blocker Holdings, LLC.

Equity Compensation Plan Information

The following table provides certain information with respect to all of our equity compensation plans in effect as of December 31, 2022:

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted-average exercise price of outstanding options, warrants and rights (2)

Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))

Equity compensation plans approved by security holders (1)

3,526,634 $0 1,495,846

Equity compensation plans not approved by security holders — — —

Total 3,526,634 $0 1,495,846

(1) Total reflects outstanding stock options, RSUs and PSUs granted pursuant to our 2021 Equity Incentive Plan as of December 31, 2022.

The number of shares of common stock reserved for issuance under the 2021 Plan will automatically increase on January 1 of each year, beginning on January 1, 2023, and continuing through and including January 1, 2031, by four percent (4%) of the aggregate number of shares of common stock issued and outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by our board of directors prior to the applicable January 1.

(2) The weighted-average exercise price of outstanding options, warrants and rights is $0 because there are no outstanding options and the outstanding RSUs and PSUs have no exercise price.

Certain Relationships and Related Transactions, and Director Independence

The information called for by Item 13 is incorporated herein by reference to the Definitive Proxy Statement referenced above in Item 10.

Professional Services Agreements

We entered into professional services agreements (the “Professional Services Agreements”), effective October 2, 2018, with our Sponsor, Dr.

Aaron Rollins and other equity holders (collectively the “Advisors”), where the Advisors provided certain managerial and advisory services to us.

Each of the Advisors had an ownership interest in EBS Parent LLC.

Under the Professional Services Agreements, we agreed to pay the Advisors an aggregate annual fee of the greater of $500,000 or 2% of consolidated earnings before interest, tax, depreciation and amortization, less any amounts paid to Dr.

Rollins as an equityholder bonus paid to Dr.

Rollins pursuant to the terms of the Employment Agreement with Dr.

Rollins, payable in advance quarterly installments, and the fee was allocated between the Advisors based on the outstanding Class A Units of EBS Parent LLC held by such Advisor.

Under the agreements, we also reimbursed the Advisors for any out-of-pocket expenses incurred related to providing their services.

During the years ended December 31, 2020 and 2019, the Company incurred management fees of approximately $500,000 each year, including the equityholder bonus paid to Dr.

Rollins pursuant to the terms of the Employment Agreement with Dr.

The Professional Services Agreements were terminated immediately prior to the completion of our initial public offering for an aggregate termination fee of $1,000,000, including an equityholder bonus paid to Dr.

Rollins pursuant to the terms of the Employment Agreement with Dr.

Management Services Agreements and Continuity Agreements

We have entered into MSAs with Elite Body Sculpture, PC (California), EBS Florida, PLLC, EBS Minnesota, LLC, Madison Avenue Medical PLLC (New York) (the “New York Professional Association”), EBS Tennessee, PLLC, EBS—Texas, PLLC, EBS Utah, LLC, EBS Virginia, LLC, and EBS Washington, PLLC.

Each of these Professional Associations is owned by Dr.

Aaron Rollins.

Aaron Rollins does not receive any additional compensation as a result of his ownership interest in these Professional Associations.

In July 2020, we entered into an MSA with EBS Arizona, LLC, which is owned by Dr.

Aaron Rollins’ father, Dr.

Pursuant to this MSA, during Fiscal 2022 and Fiscal 2021, Dr.

Rollins received compensation of $48,655 and $39,750, respectively, for his role as medical director of our center located in Scottsdale, Arizona.

In connection with each of the MSAs, we entered into Continuity Agreements with Dr.

Aaron Rollins and Dr.

provided that, because of limitations under New York law, there is no Continuity Agreement in place with respect to the New York Professional Association.

Stockholders Agreement

In connection with our initial public offering, we entered into a stockholders agreement with affiliates of our Sponsor, and Dr.

Aaron Rollins in connection with our initial public offering (the “Stockholders Agreement”).

The Stockholders Agreement requires us to, among other things, nominate a number of individuals designated by affiliates of our Sponsor for election as our directors at any meeting of our stockholders (each a “Sponsor Director”) such that, upon the election of each such individual, and each other individual nominated by or at the direction of our board of directors or a duly-authorized committee of the board of directors, as a director of our Company, and taking into account any director continuing to serve without the need for re-election, the number of Sponsor Directors serving as directors of our Company will be equal to:

• if affiliates of our Sponsor together beneficially own 25% or more of our outstanding shares of common stock, two Sponsor Directors;

• if affiliates of our Sponsor together beneficially own 10 % or more, but less than 25%, of our outstanding shares of common stock, one Sponsor Director.

For so long as the Stockholders Agreement remains in effect, Sponsor Directors may be removed only with the consent of our Sponsor.

In the case of a vacancy on our board of directors created by the removal or resignation of a Sponsor Director, the Stockholders Agreement requires us to nominate an individual designated by affiliates of our Sponsor for election to fill the vacancy.

Additionally, for so long as affiliates of our Sponsor hold at least 25% of our outstanding shares of common stock, we must take all necessary action to ensure that the number of directors serving on our board of directors will not exceed eight without the consent of affiliates of our Sponsor.

Further, for so long as affiliates of our Sponsor are entitled to designate two Sponsor Directors for election to our board of directors, we are required to take all necessary action to cause the chairperson of our board of directors to be an individual chosen by affiliates of our Sponsor.

Additionally, the Stockholders Agreement grants Dr.

Aaron Rollins the right to nominate one director (the “Rollins Director”) to our board of directors for so long as Dr.

Aaron Rollins beneficially owns 10% or more of our outstanding shares of common stock.

For so long as the Stockholders Agreement remains in effect, the Rollins Director may be removed only with the consent of Dr.

Aaron Rollins.

In the case of a vacancy on our board of directors created by the removal or resignation of the Rollins Director, the Stockholders Agreement requires us to nominate an individual designated by Dr.

Aaron Rollins for election to fill the vacancy.

The stockholders agreement also requires us to obtain customary director indemnity insurance and enter into indemnification agreements with the Sponsor Directors and the Rollins Director.

Registration Rights Agreement

In connection with our initial public offering, we entered into a registration rights agreement with our Sponsor and Dr.

Aaron Rollins.

The registration rights agreement provides our Sponsor and Dr.

Aaron Rollins with certain demand registration rights, including shelf registration rights, in respect of any shares of our common stock held by it, subject to certain conditions.

In addition, in the event that we register additional shares of common stock for sale to the public, we will be required to give notice of such registration to our Sponsor and Dr.

Aaron Rollins, and, subject to certain limitations, include shares of common stock held by them in such registration.

The agreement includes customary indemnification provisions in favor of our Sponsor and Dr.

Aaron Rollins, any person who is or might be deemed a control person (within the meaning of the Securities Act and the Exchange Act) and related parties against certain losses and liabilities (including reasonable costs of investigation and legal expenses) arising out of or based upon any filing or other disclosure made by us under the securities laws relating to any such registration.

Dividend Recapitalization

In February 2021, the Company made a $3 million distribution to EBS Parent LLC.

In May 2021, the Company amended the Credit Agreement by adding an incremental $52.0 million senior secured term loan.

The proceeds from this loan plus excess cash on the balance sheet were used to pay a distribution to EBS Parent LLC of approximately $59.7 million and the related fees for this transaction.

Indemnification of Officers and Directors

We are party to indemnification agreements with each of our officers and directors.

The indemnification agreements provide the officers and directors with contractual rights to indemnification, expense advancement and reimbursement, to the fullest extent permitted under Delaware law.

Additionally, we may enter into indemnification agreements with any new directors or officers that may be broader in scope than the specific indemnification provisions contained in Delaware law.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our officers and directors pursuant to the foregoing agreements, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act, and is therefore unenforceable.

Policies and Procedures for Related Party Transactions

Our audit committee charter provides that the audit committee has the primary responsibility for reviewing and approving or disapproving “related party transactions,” which are transactions between us and related persons in which the aggregate amount involved exceeds or may be expected to exceed the lesser of $120,000 or 1% of our assets and in which a related person has or will have a direct or indirect material interest.

For purposes of this policy, a related person will be defined as a director, executive officer, nominee for director or greater than 5% beneficial owner of our common stock, in each case since the beginning of the most recently completed year, and their immediate family members.

Our board of directors adopted a policy governing the review and approval of related party transactions by the audit committee.

Director Independence

Our board of directors has undertaken a review of the independence of each director.

Based on information provided by each director concerning his or her background, employment and affiliations, our board of directors has determined that Thomas Aaron, Caroline Chu, Adam Feinstein, Kenneth Higgins, Pamela Netzky and Daniel Sollof do not have a relationship 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 listing standards of Nasdaq.

In making these determinations, our board of directors considered the current and prior relationships that each non-employee director has with our company, including the fact that Adam Feinstein and Daniel Sollof are affiliates of our Sponsor, which owns 52.0% of our common stock.

Principal Accounting Fees and Services

The information called for by Item 14 is incorporated herein by reference to the Definitive Proxy Statement referenced above in Item 10.

SEC regulations and the Nasdaq listing standards require our audit committee to engage, retain, and supervise our independent registered public accounting firm.

Our audit committee annually reviews our independent registered public accounting firm’s independence, including reviewing all relationships between the independent registered public accounting firm and us and any disclosed relationships or services that may impact the objectivity and independence of the independent registered public accounting firm, and the independent registered public accounting firm’s performance.

Grant Thornton LLP has served as our independent registered public accounting firm since 2018.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

Pursuant to the audit committee charter, the audit committee is responsible for the oversight of our accounting, reporting, and financial practices.

The audit committee has the responsibility to select, appoint, engage, oversee, retain, evaluate, and terminate our external auditors;

pre-approve all audit and non-audit services to be provided, consistent with all applicable laws, to us by our external auditors;

and establish the fees and other compensation to be paid to our external auditors.

During 2022, the audit committee pre-approved all audit and permitted non-audit services provided by Grant Thornton LLP.

The following sets forth fees billed by Grant Thornton LLP for the audit of our annual financial statements and other services rendered for the fiscal years ended December 31, 2022 and December 31, 2021:

Fiscal year ended December 31,

Audit fees (1)

$ 405,326 $ 578,515

Audit-related fees

119,480 85,180

All other fees

$ 524,806 $ 663,695

(1) “ Audit fees ” include fees for professional services rendered for the audit of our consolidated financial statements, reviews of the interim consolidated financial statements included in quarterly reports, the review of our Registration Statement on Form S-1 for our initial public offering and services that are normally provided by Grant Thornton LLP in connection with the financial statement audit.

(2) “ Tax fees ” include fees for tax compliance and advice.

Exhibits, Financial Statement Schedules

19 unchanged sentences

10-Q 001-40973 10.16 12/03/21

4.4 Description of R egistrant’s S ecurities

4.4 Description of Registrant’s Securities

10-K 001-40973 4.4 03/11/22

10.1 Form of Indemnification Agreement by and between the Company and each of its directors and officers

10-Q 001-40973 10.1 12/03/21

10.2 Fifth Amendment to Credit Agreement by and among the Company, EBS Enterprises LLC, the Guarantors party thereto, the Lenders party thereto and First Eagle Alternative Capital Agents, Inc.

(formerly known as THL Corporate Finance), as Agent

10-Q 001-40973 10.2 12/03/21

10.2 Credit Agreement dated as of November 7, 2022, among AirSculpt Technologies, Inc., as Holdings, EBS Intermediate Parent LLC, as Intermediate Holdings, EBS Enterprises LLC, as the Borrower, the several lenders from time to time party hereto, and Silicon Valley Bank, as Administrative Agent, Issuing Lender and Swingline Lender

8-K 001-40973 10.1 11/09/22

10.3 Form of Management Services Agreement

4 unchanged sentences

10-Q 001-40973 10.6 12/03/21

10.6† Amended and Restated Employment Agreement between EBS Enterprises, LLC and Dr.

Aaron Rollins

10-Q 001-40973 10.5 12/03/21

10.7† Amended and Restated Employment Agreement between EBS Enterprises, LLC and Ronald Zelhof

10-Q 001-40973 10.9 12/03/21

10.6† Second Amended and Restated Employment Agreement between the Company and Dr.

Rollins, dated January 4, 2023

8-K 001-40973 10.3 01/06/23

10.7† Separation and General Release Agreement between the Company and Ronald Zelhof, dated December 30, 2022

8-K 001-40973 10.2 01/06/23

10.8† Amended and Restated Employment Agreement between EBS Enterprises, LLC and Dennis Dean

6 unchanged sentences

10-Q 001-40973 10.8 12/03/21

10.11† Form of Restricted Stock Agreement between AirSculpt Technologies, Inc., EBS Parent LLC and Ronald Zelhof

10-Q 001-40973 10.11 12/03/21

10.11† Form of AirSculpt Technologies, Inc.

10 unchanged sentences

8-K 001-40973 10.1 03/03/21

10.15† Employment Agreement between the Company and Todd Magazine, dated December 29, 2022

8-K 001-40973 10.1 01/06/23

21.1 List of Subsidiaries

17 unchanged sentences

March 10, 2023

Aaron Rollins

/s/ Todd Magazine

Todd Magazine

Chief Executive Officer

(Principal Executive Officer)

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Dr.

Aaron Rollins and Dennis Dean, jointly and severally, his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any amendments to this report, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Todd Magazine and Dennis Dean, jointly and severally, his or her attorneys-in-fact, each with the power of substitution, for him or her in any and all capacities, to sign any amendments to this report, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

SIGNATURES TITLE DATE

Aaron Rollins Chief Executive Officer, Director

/s/ Todd Magazine Chief Executive Officer, Director

(Principal Executive Officer) March 10, 2023

Aaron Rollins

Todd Magazine

/s/ Dennis Dean Chief Financial Officer

(Principal Financial and Accounting Officer) March 10, 2023

/s/ Adam Feinstein Non-Executive Chairman of the Board March 11, 2022

Aaron Rollins Executive Chairman of the Board March 10, 2023

Aaron Rollins

/s/ Adam Feinstein Director March 10, 2023

Adam Feinstein

8 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures