benefit plan (the “Class B Unit Incentive Plan”) to provide incentives to directors, managers, officers, employees, consultants, advisors and/or other service providers of the Company’s Former Parent or its subsidiaries in the form of the Former Parent’s Class B Units (“Incentive Units”). Incentive Units have a participation threshold of $1.00 and are divided into three tranches (“Tranche I,” “Tranche II,” and “Tranche III”). Tranche I Incentive Units are subject to performance-based, service-based and market-based conditions. The grant date fair value for the Incentive Units was $5.19 per unit.

On July 29, 2021, the Company’s Former Parent amended the Class B Unit Incentive Plan so that the Tranche I and the Tranche III Incentive Units immediately became fully vested, subject to continued employment or provision of services, upon the closing of the transaction stipulated in the Agreement and Plan of Merger (the “Gig Business Combination Agreement”) dated June 4, 2021. The Company’s Former Parent also amended the Class B Unit Incentive Plan so that the Tranche II Incentive Units will vest on any liquidation event, as defined in the Class B Unit Incentive Plan, rather than only upon the occurrence of an Exit Sale (as defined therein), subject to the market-based condition stipulated in the Class B Unit Incentive Plan prior to its amendment. The modification date fair value of the Incentive Units was $9.06 per unit.

During the three months ended March 31, 2025, the Company’s Former Parent disposed of its interest in BigBear. The liquidity event triggered the measurement of the market-related conditions of the unvested Tranche II Incentive Units. The market conditions were not met, and as a result, all unvested Incentive Units were forfeited.

On December 7, 2021, the Company adopted the BigBear.ai Holdings, Inc. 2021 Long-Term Incentive Plan (the “Plan”). The purpose of the Plan is to promote the long-term success of the Company and the creation of stockholder value by providing eligible employees, prospective employees, consultants and non-employee directors of the Company the opportunity to receive stock- and cash-based incentive awards.

Pursuant to the Plan, the Company’s Board of Directors grants certain grantees stock options (“Stock Options”) to purchase shares of the Company’s common stock. The Stock Options vest over four years with 25% vesting on the one year anniversary of the grant date and 6.25% vesting on the last day of each calendar quarter thereafter until the grant is fully vested. Vesting is contingent upon continued employment or service to the Company and is accelerated in the event of death, disability, or a change in control, subject to certain conditions; both the vested and unvested portion of a grantee’s Stock Options will be immediately forfeited and cancelled if the grantee ceases employment or service to the Company. The Stock Options expire on the 10th anniversary of the grant date.

The table below presents the activity and other information on the outstanding stock options:


	Stock Options Outstanding	Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value





























Outstanding as of December 31, 2025	1,735,338	$	2.80	7.56	$	4,684


Exercised	(36,489)	1.84

Expired	(156,415)	2.09
Outstanding as of March 31, 2026	1,542,434	$	2.86	7.60	$	1,628

Vested and exercisable as of March 31, 2026	1,052,505	$	2.74	7.10	$	1,423

					As of
					March 31, 2026
Unrecognized compensation costs related to the stock options					$	1,436
Weighted average recognition period for unrecognized compensation costs					2.63 years

During the three months ended March 31, 2026, pursuant to the Plan, the Company’s Board communicated the key terms and committed to grant Restricted Stock Units (“RSUs”) to certain employees and certain nonemployee directors and consultants. The Company granted 6,262,159 RSUs to employees and zero RSUs to nonemployee directors during the three months ended March 31, 2026. RSUs granted to employees generally vest over four years, with 25% vesting on the one year anniversary of the grant date and then 6.25% per each quarter thereafter on the two, three and four year anniversary of the grant date. RSUs granted to nonemployee directors vest 25% each quarter following the grant date or 100% upon the first anniversary of the grant date. Vesting of RSUs is accelerated in the event of death, disability, or a change in control, subject to certain conditions.

The table below presents the activity and other information on the outstanding RSUs:


	RSUs Outstanding	Weighted-Average Grant Date Fair Value Per Share




















Unvested as of December 31, 2025	11,832,102	$	2.73
Granted	6,262,159	3.58
Vested	(1,017,849)	2.28
Forfeited	(221,334)	2.50
Unvested as of March 31, 2026	16,855,078	$	3.08

		As of
		March 31, 2026
Unrecognized compensation costs related to the RSUs		$	46,268
Weighted average recognition period for unrecognized compensation costs		2.45 years

Pursuant to the Plan, the Company’s Board communicated the key terms and granted Performance Stock Units (“PSUs”) to certain employees. The Company grants PSUs to certain employees with performance measures specific to the role of that employee or as a retention incentive (“Discretionary PSUs”). During the three months ended March 31, 2026, the Company granted no Discretionary PSUs. The Company granted zero Short-Term Incentive PSUs (“STI PSUs”) to employees, which contain performance measures based on a combination of the Company’s financial performance as well as the individual’s personal performance. The number of STI PSUs that will vest is based on the achievement of the performance criteria during each respective annual measurement period, provided that the employees remain in continuous service on each vesting date. Vesting will not occur unless a minimum performance criteria threshold is achieved.


	PSUs Outstanding	Weighted-Average Grant Date Fair Value Per Share




















Unvested as of December 31, 2025	2,830,998	$	3.37

Vested	(1,040,410)	3.84
Forfeited	(1,790,588)	3.68
Unvested as of March 31, 2026	—	$	—

Concurrently with the adoption of the Plan, the Company’s Board adopted the 2021 Employee Stock Purchase Plan (the “ESPP”), which authorizes the grant of rights to purchase common stock of the Company to employees, officers and directors (if they are otherwise employees) of the Company. As of March 31, 2026, the Company reserved an aggregate of 9,240,007 common shares (subject to annual increases on January 1 of each year and ending in 2031) of the Company’s common stock for grants under the ESPP. During the three months ended March 31, 2026, zero shares were sold under the ESPP. As of March 31, 2026, the

Equity-based compensation expense related to purchase rights issued under the ESPP is based on the Black-Scholes OPM fair value of the estimated number of awards as of the beginning of the offering period. Equity-based compensation expense is recognized using the straight-line method over the offering period.


	December 1, 2025

Price of common stock on the grant date	$	6.05
Expected term (in years)	0.5
Expected volatility(1)	110%
Risk-free rate of return	3.75%
Expected annual dividend yield	—%

Fair value of the award on the grant date	$	2.76

As of March 31, 2026, there was approximately $0.3 million of unrecognized compensation costs related to the ESPP, which is expected to be recognized over the remaining weighted average period of 0.17 years.

The table below presents the total equity-based compensation expense recognized for Class B Units, Stock Options, RSUs, PSUs, and ESPP in selling, general and administrative expense, cost of revenues, and research and development for the following periods:


	Three Months Ended March 31,
		2026		2025
Equity-based compensation expense in selling, general and administrative		$	1,997	$	4,087
Equity-based compensation expense in cost of revenues		1,179		2,536
Equity-based compensation expense in research and development		247		777
Total equity-based compensation expense		$	3,423	$	7,400