Table of Contents WEWORK COMPANIES INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2019 (UNAUDITED) The We Company will consolidate the financial results of its subsidiaries, including the We Company Partnership, for financial accounting purposes. In addition to The We Company’s indirect partnership interests in the We Company Partnership, certain members of management and their related entities also hold partnership interests in the We Company Partnership (as described further below). In July 2019, the Company executed an amendment to the Amended 2018 Warrant, immediately prior to the reorganization transactions discussed above, to trigger an automatic exercise of the warrant just prior to the reorganization. Just prior to the reorganization, the early exercise provision was triggered and the outstanding Amended 2018 Warrant which was funded during 2019 was exercised for the issuance of 22,727,273 shares of Series G-1 Preferred Stock. The exercise of the warrant also further triggered the conversion of the $1.0 billion principal amount of the Convertible Note to 9,090,909 shares of Series G-1 Preferred Stock which also occurred just prior to the reorganization. In July 2019, the Company issued certain members of management profits interests in the We Company Partnership and cancelled certain existing share-based payment awards. With respect to each profits interest, the recipients have also been granted one share of Class C common stock (as described further below). Profits interest will be subject to certain time based, market-based and/or performance-based vesting criteria. The issuance of profits interests represent modifications of the existing awards and any excess fair value of the replacement award over the fair value of the original award immediately before modification will be recognized as incremental compensation cost in accordance with ASC 718. In July and August 2019, the Company amended its restated certificate of incorporation to authorize a total of 50,967,800 shares of Class C Common Stock. The Class C Common Stock has no economic rights however the shares have voting rights similar to those of the Class B Common Stock. Except as expressly provided by the Company’s Restated Certificate of Incorporation or as provided by law, the holders of shares of Class C Common Stock shall at all times vote together with the holders of Class A Common Stock and Class B Common Stock as a single class on all matters (including the election of directors) submitted to vote or for the consent of the stockholders of the Corporation. In July and August 2019, the Company closed on the acquisition of three companies for a total contract price of approximately $120.0 million, paid $60.0 million in cash and the remaining in Class A Common Stock and Series AP-4 Acquisition Preferred Stock. In August 2019, an individual that is a principal stockholder, executive officer and director of the Company received an award of 9,438,483 profits interests. The individual also surrendered 9,438,483 shares received upon his early exercise of certain unvested stock options in satisfaction of a loan plus accrued interest receivable by the Company in the amount of approximately $365.4 million. The vesting provisions of the profits interest units are identical to that of the shares surrendered. Any excess fair value of the profits interest over the fair value of the shares immediately before they were surrendered will be recognized as incremental compensation cost in accordance with ASC 718. In August 2019, the Company executed definitive documentation for the combination of ARK, the recently launched global real estate acquisition and management platform, with the existing real estate investment platform for the WPI Fund. As a result of the ARK/WPI combination, all of the real estate investment and asset management activities of The We Company will be combined into a single platform comprising multiple investment vehicles (including the ARK Master Fund and the WPI Fund) managed by a single sponsor vehicle majority-owned by the Company. In August 2019, a wholly owned subsidiary, WeWork Companies LLC, entered into a binding commitment letter (the “Commitment Letter”) with JPMorgan Chase Bank, N.A., and affiliates of several of the underwriters in this offering for a new senior secured credit facility (the “2019 Credit Facility”). The Commitment Letter states that the 2019 Credit Facility will provide for senior secured financing of up to $6.0 billion, consisting of (1) a letter of credit reimbursement F-129