Q. Unit-based compensation

Non-employee Director Phantom Unit Plan

The Board adopted the Phantom Plan in June 2025. Under the terms of the Phantom Plan, the Board’s Compensation Committee may grant Phantom Unit awards annually to non-employee Directors for the right to receive cash compensation, once vested, equal to the fair market value of the Company’s Class A Units, subject to any maximum payment value the Compensation Committee may set.

Once vested, the grants will be paid on the first to occur of (i) termination of service without cause, (ii) a change of control, or (iii) the third anniversary of the grant date. The 2026 and 2025 grants are subject to an aggregate maximum payment value of $3.0 million and $2.6 million, respectively.

Grants awarded subsequent to fiscal 2025 will vest 100% on the first anniversary of the grant date or upon the grantee’s death (if before). Once vested, awards will be paid as noted above. In the event a grantee terminates his or her services as a director, unvested awards will be forfeited. In the event a grantee’s services terminate for cause, both vested and unvested awards will be forfeited.

The table below summarizes activity related to the Phantom Plan as of July 31, 2026:

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As of July 31, 2026 and 2025, we recognized non-cash compensation expense of $2.7 million and $0.4 million, respectively, for the grants in accordance with FASB ASC Topic 718, Compensation – Stock Compensation. As of July 31, 2026, the 2025 grants of 76,374 are fully vested.  The 2026 grants have a weighted-average remaining contractual term of 0.2 years for vesting purposes as of July 31, 2026. The fair value of each grant is estimated on each balance sheet date using the average closing price of one Class A Unit for the ten trading days preceding the applicable measurement date as quoted on the OTC market, per the Phantom Plan. The grants have a fair value of $22.67 per Unit as of July 31, 2026.