Company: WBI
Filing Date: 2025-09-15
Form Type: S-1/A
Source: 0001193125-25-202719
Chunk: 418

Company: WaterBridge Infrastructure LLC
Filing Date: 2025-09-15
Form: S-1/A
Chunk 418
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 embedded derivatives identified are initially recorded at fair value and subsequently remeasured at fair value at the end of each reporting period, with changes in fair value recognized in earnings. The Series A-1 Preferred Units contained redemption features that required separate accounting as embedded derivatives. As discussed further in Note 10 –Mezzanine Equity, the Series A-1 Preferred Units were redeemed under an arrangement other than the terms of the embedded derivative, resulting in a final measurement of the embedded derivative of zero on the redemption date of the Series A-1 Preferred Units. As a result, the company recognized a gain on derivative instrument of $4.5 million for the year ended December 31, 2023. There were no gains or losses on derivative instruments for the year ended December 31, 2024. The derivative instruments were fully redeemed as of December 31, 2024, and 2023.

Share-Based Compensation

The Company accounts for share-based compensation expense for incentive units granted in exchange for employee services. Our management and employees currently participate in two equity-based incentive plans, managed by WBR and WB II, both indirect parents of the Company. The WBR plan (“WBR Plan”) is governed by the Amended and Restated LLC Agreement of WBR, dated as of June 24, 2019 (the “WBR LLC Agreement”) and the WB II Plan (“WaterBridge II Plan”) is governed by the Amended and Restated Limited Liability Company Agreement of WB II, dated as of June 24, 2019 (the “WB II LLC Agreement” and collectively with the WBR LLC Agreement, the “WBR and WB II LLC Agreements”). The management incentive units consist of time-based awards of profits interests in both WBR and WB II (the “Incentive Units”), and each of the WBR and WB II LLC Agreements authorizes the issuance of 10,000 Incentive Units.

<div align='center'>F-68</div>

The Incentive Units represent a substantive class of equity for WBR and WB II and are accounted for under FASB ASC 718, Compensation – Stock Compensation. Features of the Incentive Units include the ability for WBR and WB II to repurchase Incentive Units during a 180-day option period, whereby the fair value price is determined as of the termination date, not the repurchase date, which temporarily takes away the rights and risks and rewards of ownership from the Incentive Unit holder during the option period.