Company: WBI
Filing Date: 2025-09-18
Form Type: 424B4
Source: 0001193125-25-206805
Chunk: 371

Company: WaterBridge Infrastructure LLC
Filing Date: 2025-09-18
Form: 424B4
Chunk 371
---
”), and the Amended and Restated Limited Liability Company Agreement of WB NDB (the “WB NDB LLC Agreement”) authorizes the issuance of 10,000 Incentive Units.

The Incentive Units represent a substantive class of equity of WB NDB and are accounted for under Financial Accounting Standards Board (“FASB”) ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). Features of the Incentive Units included the ability for WB NDB to repurchase Incentive Units during a 180-day option period, whereby the fair value price was 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. WB NDB classified the Incentive Units as liability awards. The liability related to the Incentive Units was recognized at WB NDB as the entity responsible for satisfying the obligation. Share-based compensation income or expense allocated to the Company was recognized as a deemed non-cash contribution to or distribution from member’s equity on the consolidated balance sheets. The share-based compensation income or expense was recognized consistent with WB NDB’s classification of a liability award resulting in the initial measurement, and subsequent remeasurements, recognized ratably over the vesting period.

At each reporting period, WB NDB’s Incentive Units were remeasured at their fair value, consistent with liability award accounting, using a Monte Carlo Simulation. The Monte Carlo Simulation requires judgment in developing assumptions, which involve numerous variables. These variables include, but are not limited to, the expected unit price volatility over the term of the awards, the expected distribution yield and the expected life of Incentive Units. The vested portion of WB NDB’s Incentive Unit liability was allocated pro rata to the Company, and other WB NDB operating subsidiaries, as general and administrative income or expense on the consolidated statements of operations. The allocation was based on the Company’s share of the aggregate equity value derived in WB NDB’s business enterprise valuation.

The Company updated its assumptions each reporting period based on new developments and adjusted such amounts to fair value based on revised assumptions, if applicable, over the vesting period. For the years ended December 31, 2024 and 2023, the fair values of the Incentive Units were estimated using various