Company: LGN
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0002052568-25-000018
Chunk: 154

Company: Legence Corp.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 154
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 determined the exchanges were contemporaneous and effectuated as part of the UP-C structure. The key terms and vesting conditions of the Rollover Series A Profits Interests and Rollover Restricted Series C Interests remain consistent with those of the original Series A Profits Interests and Restricted Series C Common Interests, respectively. The Corporate Reorganization resulted in a modification of the Series A Profits Interests and Restricted Series C Common Interests, the impact of which is described as follows:•Series A Profits Interests - Time Interests: The Time Interests will continue to be remeasured at fair value at each reporting date with an offset to equity based on indirect capital contributions from the issuers (refer to “Note 2—Summary of Significant Accounting Policies"). As the modification did not result in a change to the fair value measurement approach, no incremental compensation cost was recognized during the period.•Series A Profits Interests - Performance Interests: The modification was determined to be an improbable-to-improbable modification (“Type IV Modification”) under ASC 718. As such, the modification date fair value establishes a new measurement basis for the awards of $14.7 million. Compensation cost will be recognized based on this modified fair value when or if certain liquidity events  occur.•Series A Profits Interests - Exit Interests: The modification was determined to be a Type IV Modification under ASC 718. As such, the modification date fair value establishes a new measurement basis for the awards of $11.7 million. Compensation cost will be recognized based on this modified fair value when or if a change of control  occurs.•Restricted Series C Common Interests: The Rollover Restricted Series C Interests will continue to be remeasured at fair value at each reporting date. As the modification did not result in a change to the fair value measurement approach, no incremental compensation cost was recognized during the period.The result of this modification established the new measurement basis for the Series A Interests and the Restricted Series C Interests. 

31

Legence Corp.Notes to Condensed Consolidated Financial Statements - (Continued)(Unaudited)

Modifications of Series A InterestsOn September 16, 2025, the Company modified the Series A Interests such that (i) the Time Interests shall be deemed vested solely for the purpose of distributions and (ii) the vesting conditions for the Performance and Exit Interests changed, including that the change of control exit condition is no longer required for the Exit Interests