Company: WBI
Filing Date: 2025-09-08
Form Type: S-1/A
Source: 0000950170-25-113383
Chunk: 421

Company: WaterBridge Infrastructure LLC
Filing Date: 2025-09-08
Form: S-1/A
Chunk 421
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 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.

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### Notes to the Consolidated Financial Statements
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. Under ASC 718, a feature for which the employee could bear the risks, but not gain the rewards, normally associated with equity ownership requires liability classification. WBR and WB II classifies the Incentive Units as liability awards. The liability related to the Incentive Units is recognized at WBR and WB II as the entity’s responsible for satisfying the obligations. Share-based compensation expense pushed down to the Company is recognized as a deemed non-cash contribution to members’ equity on the consolidated balance sheets. The share-based compensation expense is recognized consistent with WBR and WB II’s classification of a liability award resulting in the initial measurement, and subsequent remeasurements, recognized ratably over the vesting period.

The Incentive Units’ value is derived from a combination of its threshold value