DEF: Xponential Fitness Sets Date for 2025 Annual Stockholders Meeting, Outlines Proposals

Xponential Fitness will hold its 2025 Annual Meeting of Stockholders virtually on May 21, 2025, to vote on the election of a Class I Director and the ratification of its independent accounting firm.

Summary

• Xponential Fitness, Inc. will hold its 2025 Annual Meeting of Stockholders on May 21, 2025, at 10:00 a.m. Pacific Time, in a virtual-only format.
• Stockholders of record as of March 31, 2025, are entitled to vote on the proposals.
• The meeting will address the election of one Class I Director to serve until the 2028 annual meeting, the ratification of Deloitte & Touche LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025, and any other business that may properly come before the meeting.
• The Board of Directors recommends voting for the election of Mark Grabowski as Class I Director and for the ratification of Deloitte & Touche LLP.
• The company is making the proxy statement and 2024 Annual Report available to stockholders electronically via the Internet.
• As of the record date, there were 34,778,438 shares of Class A common stock, 13,739,013 shares of Class B common stock, and 4,002,273 shares of Class A common stock issuable upon conversion of Series A preferred stock entitled to vote at the meeting.

Sentiment

Score: 7

Explanation: The document is a standard proxy statement, which is generally neutral in tone. The information is factual and procedural, with no significant positive or negative indicators.

Positives

• The company is providing electronic access to proxy materials to reduce environmental impact.
• Stockholders have multiple options for voting, including phone, internet, and mail.
• The company has designed the format of the Annual Meeting to ensure that stockholders are afforded the same rights and opportunities to participate as they would at an in-person meeting, using online tools to ensure stockholder access and participation.

Negatives

• The annual meeting is virtual-only, which may limit some stockholders' participation.
• Mark Lawrence informed the Board on April 21, 2025 that he was not standing for re-election at the Annual Meeting.

Risks

• The division of the Board of Directors into three classes with staggered three-year terms may delay or prevent a change of management or control of the company.
• The Tax Receivable Agreement (TRA) could require substantial payments, potentially exceeding actual tax savings, and may negatively impact liquidity.
• Challenges by tax authorities to the tax attributes underlying the TRA could lead to overpayments that cannot be recouped.

Future Outlook

The company will continue to operate its business through Xponential Holdings LLC and fund dividends to stockholders by causing Xponential Holdings LLC to make distributions, subject to debt agreement limitations.

Management Comments

• Mark King, Director and Chief Executive Officer, urged stockholders to promptly vote their shares.
• The Company has designed the format of the Annual Meeting to ensure that stockholders are afforded the same rights and opportunities to participate as they would at an in-person meeting, using online tools to ensure stockholder access and participation.

Industry Context

This announcement is a standard corporate procedure for publicly traded companies, ensuring stockholders are informed and have the opportunity to participate in key decisions.

Comparison to Industry Standards

• Holding a virtual-only annual meeting is becoming increasingly common, aligning with practices adopted by companies like Apple and Alphabet to enhance accessibility and reduce costs.
• The staggered board structure is a common governance mechanism used by companies such as Oracle and Salesforce to provide stability and continuity in leadership.
• The use of Deloitte & Touche LLP as the independent auditor is consistent with industry practice, as they are one of the Big Four accounting firms, similar to the selection of PwC by Microsoft and EY by Amazon.

Management Changes

Corporate Governance

Related Party Transactions

• In March 2023, Spartan Fitness Holdings, LLC (Spartan Fitness), which currently owns and operates 112 Club Pilates studios, entered into a unit purchase agreement with Snapdragon Spartan Investco LP (the Spartan SPV), a special purpose vehicle controlled and managed by Mr. Grabowski, Chairman of our Board of Directors, pursuant to which the Spartan SPV agreed to invest an aggregate of approximately $30 million in the equity of Spartan Fitness.
• In addition, Mr. Grabowski invested an aggregate of $1.2 million as a limited partner in the Spartan SPV.
• We earned revenues from a CycleBar studios franchisee comprised of a former member of our senior management, Ryan Junk, our former Chief Operating Officer, and Lindsay Junk, former President of YogaSix and spouse of Ryan Junk.
• In May 2024, our Board of Directors approved the sale of one of our vehicles to Mr. Anthony Geisler, our former Chief Executive Officer and former Board member, for $275,000.

Stakeholder Impact

• Stockholders have the opportunity to vote on key proposals.
• Directors and executive officers are subject to policies on insider trading and compensation clawbacks.
• The Tax Receivable Agreement could impact the company's financial performance and liquidity.

Next Steps

• Stockholders are encouraged to vote on the proposals.
• The company will announce preliminary voting results at the Annual Meeting and report final results in a Current Report on Form 8-K.

Key Dates

Keywords

Annual Meeting, Proxy Statement, Stockholders, Board of Directors, Director Election, Deloitte & Touche LLP, Corporate Governance, Xponential Fitness