Black Rifle Coffee Company Annual report [Section 13 and 15(d), not S-K Item 405]

Annual report [Section 13 and 15(d), not S-K Item 405]

Equity-Based Compensation

Equity-Based Compensation

12 Months Ended

Dec. 31, 2025

Incentive Units

Authentic Brands maintains an equity incentive plan (the “2018 Equity Incentive Plan”) under which it granted Incentive Units (as defined in the 2018 Equity Incentive Plan) to employees or non-employee directors prior to the Business Combination. As of December 31, 2025, 8,472 Incentive Units remained outstanding under the 2018 Equity Incentive Plan, and no new Incentive Units have been granted under the 2018 Equity Incentive Plan since the completion of the Business Combination. The Board of Directors has the authority to determine the terms and conditions of each grant under the 2018 Equity Incentive Plan, and 200,000 non-voting units have been authorized thereunder. These units may contain certain service and performance related vesting provisions. The Incentive Units were awarded to eligible employees and non-employee directors and entitle each grantee to receive non-voting member units upon vesting, subject solely to the employee’s continuing employment or the non-employee director’s continuing service on the Board of Directors.

The grant date estimated fair value of the Incentive Units was based upon an option pricing model valuation of the awards at the grant date. The Company utilized the probability-weighted expected return method. The Incentive Units have no strike price; however, participation thresholds, as defined in the 2018 Equity Incentive Plan were established at the grant date and must be exceeded for the holder of the unit to participate in any distributions of the Company. The following assumptions were utilized in determining the fair value of the units at the grant date:


Expected dividend			—
Expected volatility			60% to 85%
Risk-free interest rate			0.13% to 2.53%
Expected life of incentive awards (in years)			1 to 5 years
Grant date performance and market threshold			$35,000 to $1,250,000

The computation of expected volatility is based on a weighted average of comparable public companies within the Company’s industry. Expected life is based on the estimated liquidity event timing. The risk-free interest rate is based on the yield of zero-coupon U.S. Treasury securities of comparable terms. The Company does not anticipate paying dividends in the foreseeable future. The Company recognizes pre-vesting forfeitures as they occur rather than estimate the forfeiture rate at the grant date.

The following table summarizes the changes in the number of Incentive Units for the years ended December 31, 2025, 2024 and 2023:


	Incentive Units	Weighted Average Grant Date Fair Value
Granted and outstanding at January 1, 2023	14,210	$	192.52
Granted	—	—
Forfeited	(5,625)	215.31
Granted and outstanding at December 31, 2023	8,585	$	213.81
Granted	—	—
Forfeited	(113)	215.31
Granted and outstanding at December 31, 2024	8,472	$	213.79
Granted	—	—
Forfeited	—	—
Granted and outstanding at December 31, 2025	8,472	$	213.79
Vested at December 31, 2025	8,418	$	213.78

As of December 31, 2025, the equity compensation expense related to nonvested Incentive Units was fully recognized. As of December 31, 2024 and 2023, total unrecognized equity compensation expense related to nonvested Incentive Units to be recognized was $134 and $421, respectively, over a weighted average period of approximately one year for 2024 and two years for 2023.

In connection with the Business Combination, the Company adopted the 2022 Omnibus Incentive Plan (the “Omnibus Plan”), which replaced the 2018 Equity Incentive Plan, and the 2022 Employee Stock Purchase Plan (the “ESPP”) (see disclosed below).

Stock Options

The Company grants stock options to employees under the Omnibus Plan that vest ratably over three years and expire after seven years. The grant date estimated fair value of the stock options is based upon a Black-Scholes model valuation of the options at the grant date. The following weighted average assumptions were utilized in determining the fair value of options granted:


	Year Ended December 31,
	2025	2024	2023
Weighted average grant date fair value	$1.08	$2.21	$2.58
Expected dividend yield	—	—	—
Expected volatility	71%	66%	65%
Risk-free interest rate	3.92%	4.32%	4.17%
Options term (in years)	4.5	4.5	4.5

Since inception and prior to 2024, the Company computed expected volatility based on a weighted average of comparable public companies within the Company’s industry. Beginning in 2024, the Company utilizes its own history to estimate volatility based on the annualized historical daily volatility of the Company’s stock price. The Company uses the “simplified method” prescribed by the Securities and Exchange Commission Staff Accounting Bulletin No. 107, Share-Based Payment, to calculate the expected term of options granted. The risk-free interest rate is based on the yield of zero-coupon U.S. Treasury securities of comparable terms. The Company does not anticipate paying dividends in the foreseeable future. The Company recognizes pre-vesting forfeitures as they occur rather than estimate the forfeiture rate at the grant date.

The following table summarizes information about stock options activities for the years ended December 31, 2025, 2024 and 2023:


	Stock Options	Weighted Average Exercise Price
Granted and outstanding at January 1, 2023	792,370	$	9.77
Granted	3,813,166	4.66
Forfeited	(1,192,196)	6.43
Outstanding at December 31, 2023	3,413,340	$	5.19
Granted	2,680,584	3.94
Forfeited	(666,967)	6.53
Exercised	(2,546)	5.05
Outstanding at December 31, 2024	5,424,411	$	4.41
Granted	6,112,707	1.84
Forfeited	(2,852,731)	3.74
Exercised	—	—
Outstanding at December 31, 2025	8,684,387	$	2.82
Vested and exercisable at December 31, 2025	1,643,474	$	4.42

As of December 31, 2025, 2024 and 2023, total unrecognized equity compensation expense related to stock options to be recognized was $6,447, $7,540 and $7,228, respectively, over a weighted average period of approximately two years for all three years.

Restricted Stock Units

The Company grants restricted stock unit (“RSU”) awards to employees and non-employee directors under the Omnibus Plan that vest annually over approximately three years. The grant date fair values are based on the closing price of the Class A Common Stock of the Company on the date of grant.

The following table summarizes information about the RSUs under the Omnibus Plan for the years ended December 31, 2025, 2024 and 2023:


	Restricted Stock Units	Weighted Average Grant Date Fair Value
Granted and outstanding at January 1, 2023	823,829	$	10.68
Granted	2,008,519	4.90
Forfeited	(685,484)	6.49
Vested	(461,909)	9.70
Nonvested at December 31, 2023	1,684,955	$	5.77
Granted	1,726,212	4.02
Forfeited	(476,399)	5.16
Vested	(701,816)	5.87
Nonvested at December 31, 2024	2,232,952	$	4.51
Granted	4,884,485	1.87
Forfeited	(1,204,272)	2.92
Vested	(1,283,401)	4.20
Nonvested at December 31, 2025	4,629,764	$	2.23

As of December 31, 2025, 2024 and 2023, total unrecognized equity compensation expense related to RSUs to be recognized was $6,963, $7,031 and $7,711, respectively, over a weighted average period of approximately two years for all three years.

Performance-Based Restricted Stock Units

On December 29, 2022, the Company granted 8,462,412 performance-based restricted stock units (“PSUs”) to a key employee which vest if certain market capital growth rates are achieved each year through April 2027. Vested PSUs are settled in shares of the Company Class A Common Stock equal to the number of PSUs granted. The PSUs are forfeited upon termination of employment before the performance period ends. PSUs granted during the year ended December 31, 2022 have a weighted-average grant date fair value of $0.46 per share. All PSUs were unvested as of December 31, 2025. The Company used the Monte Carlo pricing model to estimate the fair value of PSUs utilizing the following assumptions at the grant date:


Expected dividend			—
Expected volatility			65%
Risk-free interest rate			3.97%
Award term years			4.3
Valuation date share price			$6.21

As of December 31, 2025, 2024 and 2023, total unrecognized equity-based compensation expense related to PSUs to be recognized was $382, $976 and $1,901, respectively, over a weighted average period of approximately two years for 2025, three years for 2024, and four years for 2023.

Employee Stock Purchase Plan

In September 2022, the Company began offering shares of its Class A Common Stock under its ESPP adopted in connection with the Business Combination, whereby eligible employees may acquire an equity interest in the Company through payroll contributions. At the end of a six-month offering period, shares are purchased at 85% of the stock price at enrollment date or purchase date, whichever is lower.