Equity-Based Compensation

3 Months Ended

Mar. 31, 2025

Share-Based Payment Arrangement [Abstract]

Note 9 – Equity-Based Compensation

The Company’s parent, Phoenix Equity Holdings, LLC (“Phoenix Equity”), has granted equity awards to employees of the Company under the 2024 Long-Term Incentive Plan (the “2024 Incentive Plan”). The 2024 Incentive Plan provides for the issuance of 900,000 Class A Units, 2,813,900 Class B Units and 1,000,000 Phantom Units. As of March 31, 2025, Phoenix Equity had issued all authorized Class A Units and Class B Units and 30,000 Phantom Units under the 2024 Incentive Plan.

A summary of the activity under the 2024 Incentive Plan for the three months ended March 31, 2025 is presented below.


	Number of Units		Weighted Average Per Share Grant Date Fair Value
Nonvested at December 31, 2024		3,175,150	$	55.74
Granted - Phantom Units		30,000		55.74
Vested		—		—
Forfeited		—		—

Nonvested at March 31, 2025		3,205,150	$	55.74

During the three months ended March 31, 2025, Phoenix Equity granted 30,000 Phantom Unit awards contingent on the achievement of a performance condition, all of which will vest only upon the Company undergoing a liquidity event (e.g., change in control). No compensation cost will be recognized for the Phantom Unit awards until a liquidity event occurs. The Company has elected to account for forfeitures as they occur.

As of March 31, 2025, there was $178.7 million of total unrecognized compensation cost related to nonvested equity awards granted under the 2024 Incentive Plan, measured based on the fair value of the awards; that cost is expected to be recognized at the time a liquidity event occurs.

The fair value of each unit granted under the 2024 Incentive Plan was valued on the date of grant under an independent third-party valuation, which included a combination of an income approach, based on the present value of estimated future cash flows, and a market approach based on market data of comparable businesses. The weighted-average assumptions used in the valuation of performance unit awards granted for the three months ended March 31, 2025, are presented in the table below:


	2025
Dividend yield (a)		—	%
Risk-free interest rate (b)		4.38	%
Expected volatility (c)		57.50	%
Expected term (in years) (d)		5.0
Discount for lack of marketability (e)		30.00	%

(a)	The Company has no history or expectation of paying cash dividends on its awards.

(b)	The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected life of the awards in effect at the time of grant.

(c)

Volatility was estimated based on the different interests being appraised, leveraging historical volatility for comparable publicly traded organizations within its industry. The Company lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies within the industry with chara

eristics similar to the Company.

(d)	The expected term represents the estimated period, in years, until a liquidity event occurs.

(e)	Discount for lack of marketability was determined using the Restricted Stock Studies, Chaffee Put Option, Finnerty’s Put Option, and Qualitative Mandelbaum Factor approaches.