The Company historically, through Spaceco Management Equity LLC (the “Management Company”) under the Spaceco Management Equity LLC Equity Incentive Plan (the “Equity Incentive Plan”), granted P Units to certain employees of the Company and its subsidiaries, in exchange for their services to the Company. Management Company has an economic interest in the Company, but no other interests or business operations other than issuing P Units directly to management employees on behalf of the Company.

The accounting for grants of P Units by the Company to Management Company and Management Company’s contemporaneous issuance of P Units to individual Company employees represents a distribution from the Company immediately followed by a contribution from Management Company, which together would have no financial statement impact. As a result, the Company refers to P Units issued to Management Company as though the Company had issued P Units directly to the employee.

The P Units entitled the holder to receive cash distributions from the Company, including, but not limited to upon a sale or change in control of the Company, provided that the proceeds received exceed the defined threshold value in the individual award agreements. Vesting was dependent on service-based and performance-based vesting conditions, as discussed in further detail below.

The P Units were subject to time-based vesting conditions (Time-Based Units). The Time-Based Units generally vested over 5 years with 20% vesting at each annual vesting date. In some cases, the Company recognized expense as of the grant date for the portion of an award that was legally vested on the grant date as a result of years of service performed prior to the grant date. Time-Based Units were also subject to an accelerated vesting upon a change of control event, which included an initial public offering. A corporate conversion would cause all P units to be converted into new shares of the Company based upon the fair market value of the P Units immediately prior to such conversion.

The Company recorded compensation cost for Time-Based Units over the requisite service period using the straight-line method.

The P Units are equity-classified and the Company has made a policy election to account for forfeitures as they occur. The Company estimates the grant date fair value using a Black-Scholes Option Pricing Model. The following assumptions were used for the determination of grant date fair value for the P Units granted during the year ended December 31, 2023. There were no grants of P Units during the years ended December 31, 2025 or 2024.

Because the Company was not publicly traded in 2023, expected volatility was calculated using the historical volatilities of similar, publicly traded companies.

In February 2025, in connection with the IPO, all 18,063,207 P Units outstanding were converted into 11,187,501 shares of the Company’s common stock on a 0.62-for-1 basis. All unvested P Units vested immediately. The Company recognized share-based compensation expense of $1.4 million and $1.0 million for the years ended December 31, 2025 and 2024, respectively. These expenses were included in general and administrative expenses in all periods presented in the consolidated statement of income. As of December 31, 2025, there are no P Units outstanding.

Phantom Plan

On September 23, 2024 the Company adopted a Transaction Bonuses plan (the “Phantom Plan”), pursuant to which the Company granted Phantom Units through Management Company to select employees providing services to the Company and/or its subsidiaries.

The Phantom Units were subject to service and performance-based vesting conditions. The Phantom Units were entitled to payment if the recipient was employed in the period in which a distribution event to P Unit holders, such as a change in control, initial public offering or liquidation event was consummated. The Phantom Units were not entitled to any payments until a distribution to the Company’s unitholders in excess of the $470.2 million threshold value occurred. The Company does not recognize any compensation cost for Phantom Units as these events are not considered probable, until the event actually occurs.

The Company estimates grant date fair value using a Black-Scholes Option Pricing Model and probability weighted expected returns for various exit scenarios. The following assumptions were used for the determination of grant date fair value for the Phantom Units granted during the year ended December 31, 2024. There were no grants of Phantom Units during the year ended December 31, 2025.

In connection with the IPO in February 2025, the Phantom Units were settled for $6.6 million in cash, which was recognized as share-based compensation expense in general and administrative expenses in the consolidated statements of income.

2025 Stock Incentive Plan

The 2025 Stock Incentive Plan (the “2025 Plan”) was adopted by our Board on February 12, 2025 and approved by our shareholders on February 12, 2025. The 2025 Plan provides for the grant of stock options (including incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock, restricted stock units, performance-based awards, other stock-based awards, or any combination thereof. Employees, directors or consultants or any of our subsidiaries or affiliates are eligible to receive an award under the 2025 Plan, to the extent that an offer of such award is permitted by applicable law, stock market or exchange rules, and regulations or accounting or tax rules and regulations. Each award will be set forth in a separate grant notice or agreement and will indicate the type and terms and conditions of the award.

As of December 31, 2025, no awards were granted under the 2025 Plan. The total number of shares of the Company’s common stock that was authorized for awards under the 2025 Plan was 11.5 million shares.