What the changes say
- Solaris Energy Infrastructure faces high customer concentration in its Power Solutions segment, with one data center customer driving 47% of consolidated revenues.
- The company expanded its debt obligations significantly through Stateline term loans and convertible notes while navigating new tariffs and short-selling allegations.
What changed since the prior 10-K
New
- NewRisks Related to Our Operations and Industry
Distributed power generation services in some applications compete with access to the grid
Distributed power services could face lower demand if large-scale utility grid projects are completed and customers only use our offering for temporary backup power.
- NewRisks Related to Our Operations and Industry
We are subject to a number of risks associated with Stateline
Our Stateline entity with MZX Tech accounts for approximately 41% of generation assets and carries risks including concentrated AI customer reliance and financing needs.
- NewRisks Related to Our Operations and Industry
Tariffs and other trade measures could adversely affect our results of operations, financial position and cash flows
New baseline U.S. tariffs and trade policies could increase material input costs and cause delays in meeting customer orders.
- NewRisks Related to Regulatory Matters
Increased attention to sustainability matters may impact our business
Increased attention to sustainability and aspirational climate targets may result in higher costs, reduced demand, and potential litigation.
- NewRisks Related to Our Class A Common Stock
We may be subject to short selling strategies and are party to various proceedings and claims related thereto from time to time
Short-selling strategies and critical research reports like the one from Morpheus Research may cause stock price instability and divert management time.
- NewRisks Related to Our Class A Common Stock
The issuance of shares of our Class A common stock upon conversion of each of the 2030 Notes and 2031 Notes will dilute the ownership interests of our stockholders and could depress the trading price of our Class A common stock
The issuance of Class A common stock upon conversion of the 2030 and 2031 Notes will dilute existing stockholders and could depress the stock price.
- NewRisks Related to Our Class A Common Stock
Provisions in the Indentures governing the 2030 Notes and 2031 Notes could delay or prevent an otherwise beneficial takeover of us
Provisions in the 2030 and 2031 Note indentures regarding fundamental changes and make-whole events could deter third-party takeover attempts.
- NewRisks Related to Our Class A Common Stock
The conditional conversion feature of the 2030 Notes and 2031 Notes, if triggered, may adversely affect our financial condition and operating results
Conditional conversion features of the 2030 and 2031 Notes could create liquidity strains or force current liability reclassifications.
- NewRisks Related to Our Class A Common Stock
The accounting method for each of the 2030 Notes and 2031 Notes could adversely affect our reported financial condition and results
Accounting for the 2030 and 2031 Notes as debt discounts will result in higher non-cash interest expense and lower reported income.
- NewRisks Related to Our Class A Common Stock
In addition, certain change of control events have the effect of accelerating the payments due under the Tax Receivable Agreement, which could be substantial and accordingly serve as a disincentive to a potential acquirer of our company
Tax Receivable Agreement payments accelerate upon change of control events, serving as a disincentive to potential acquirers, alongside Delaware forum selection clauses.
Dropped
- DroppedRisks Related to Our Operations and Industry
Our entry into scaled distributed power solutions is expected to enhance our position as a mobile equipment and logistics solution provider to the industries we service as well as diversify our business
- DroppedRisks Related to Our Operations and Industry
Changes in U.S. trade policy, including the imposition of tariffs and the resulting consequences, could adversely affect our business, prospects, financial condition and operating results
Entry into scaled distributed power solutions and management lack of experience.
- DroppedRisks Related to Our Operations and Industry
Combining our business with MER’s may be more difficult, costly or time-consuming than expected and the combined company may fail to realize the anticipated benefits of the contribution, which may adversely affect the combined company’s business results and negatively affect the value of our Class A common stock
- DroppedRisks Related to Regulatory Matters
Increased attention to environmental, social and governance (“ESG”) matters may impact our business
- DroppedRisks Related to Our Class A Common Stock
The market price for our Class A common stock following the closing the MER Acquisition may be affected by factors different from those that historically have affected or currently affect our Class A common stock
Reworded
- 68% rewrittenRisks Related to Our Class A Common Stock
Future sales of our Class A common stock in the public market, or the perception that such sales may occur, could reduce our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute your ownership in us
Added cross-references and clarified mechanics regarding future sales and dilution from Class A common stock.
- 59% rewrittenRisks Related to Our Class A Common Stock
Certain of our executive officers and directors have significant duties with, and spend significant time serving, entities that may or may not compete with us and, accordingly, may have conflicts of interest in allocating time or pursuing business opportunities
Retained core executive conflict disclosures regarding time allocation with overlapping industry entities.
Was: Certain of our directors, including our Chairman and Chief Executive Officer, have significant duties with, and spend significant time serving, entities that may or may not compete with us and, accordingly, may have conflicts of interest in allocating time or pursuing business opportunities
- 58% rewrittenRisks Related to Our Operations and Industry
Reliance upon a small number of large customers may adversely affect our revenue and operating results
Added exact figures showing one data center customer accounted for 47% of 2025 consolidated revenues and another accounted for 13%.
Was: Reliance upon a few large customers may adversely affect our revenue and operating results
- 45% rewrittenRisks Related to Regulatory Matters
We are subject to environmental and occupational health and safety laws and regulations that may expose us to significant costs and liabilities
Removed introductory preamble regarding the operational context of the MER acquisition from environmental and safety disclosures.
- 35% rewrittenRisks Related to Financial Condition
We have incurred indebtedness in connection with the operation of the Company and may incur additional indebtedness in the future, and such indebtedness may limit our operating or financial flexibility and could subject us to potential defaults under the applicable financing agreements
Disclosed the May 2025 Stateline Term Loan with Stonebriar Commercial Finance for up to $550 million in delayed draw debt.
Was: We incurred significant additional indebtedness in connection with the MER Acquisition and may incur additional indebtedness in the future, and such indebtedness may limit our operating or financial flexibility and could subject us to potential defaults under the applicable financing agreements
- 30% rewrittenRisks Related to Financial Condition
Our ability to use our net operating loss (“NOL”) carryovers may be limited
Updated U.S. federal NOL carryovers to $595.8 million and state carryovers to $270.4 million as of December 31, 2025.
- 27% rewrittenRisks Related to Our Operations and Industry
We may grow through acquisitions and our failure to properly plan and manage those acquisitions may adversely affect our performance. Alternatively, we may wish to grow through acquisitions but may fail to find suitable targets or execute such acquisitions which may adversely affect our performance
Expanded acquisition risk to explicitly cover failure to find suitable targets or execute deals effectively.
Was: We may grow through acquisitions and our failure to properly plan and manage those acquisitions may adversely affect our performance
- 24% rewrittenRisks Related to Our Operations and Industry
We expect to face significant competition in the future as the distributed power industry evolves
Replaced references from 'mobile power industry' to 'distributed power industry' to match evolving segment terminology.
Was: We expect to face significant competition in the future as the mobile power industry evolves
- 24% rewrittenRisks Related to Our Operations and Industry
We may be unable to adapt our distributed power technologies to meet increasing customer needs and power loads, which could result in increased downtime of our power generation offering and disruptions to the power supply to our customers
- 21% rewrittenRisks Related to Our Operations and Industry
Our customers may not continue to outsource their power system needs
- 21% rewrittenRisks Related to Our Operations and Industry
We engage in transactions with related parties and such transactions present possible conflicts of interest that could have an adverse effect on us
All 45 risk factors
Headings as the filing states them, in filing order.
Risks Related to Our Operations and Industry
- 01We may be unable to adapt our distributed power technologies to meet increasing customer needs and power loads, which could result in increased downtime of our power generation offering and disruptions to the power supply to our customers24% rewritten
- 02Distributed power generation services in some applications compete with access to the gridNew
- 03We expect to face significant competition in the future as the distributed power industry evolves24% rewritten
- 04Reliance upon a small number of large customers may adversely affect our revenue and operating results58% rewritten
- 05We are subject to a number of risks associated with StatelineNew
- 06We face significant competition, as well as the prospect of further consolidation in the industry and amongst current and potential customers, either of which may impede our ability to gain market share or cause us to lose market share, or that could make adoption of new product offerings or services difficult
- 07Our Power Solutions segment is dependent on our relationships with key suppliers to obtain equipment
- 08Many of our power systems involve long sales cycles
- 09Our customers may not continue to outsource their power system needs21% rewritten
- 10The volatility of oil and natural gas prices may adversely affect the demand for our systems, products and services, and negatively impact our results of operations
- 11Sustained levels of inflation and associated changes in monetary policy may result in increases to the cost of our goods, services and personnel, which in turn could cause our capital expenditures and operating costs to rise
- 12Tariffs and other trade measures could adversely affect our results of operations, financial position and cash flowsNew
- 13Our business is subject to inherent risks some of which are beyond our control, such as disasters and extreme or seasonal weather events or workforce matters. These risks may be self-insured or may not be fully covered under our insurance policies
- 14Events outside of our control, including a pandemic or outbreak of an infectious disease, political unrest, armed conflicts and economic recessions occurring around the globe, could materially adversely affect our business, liquidity, results of operations and financial condition
- 15We may grow through acquisitions and our failure to properly plan and manage those acquisitions may adversely affect our performance. Alternatively, we may wish to grow through acquisitions but may fail to find suitable targets or execute such acquisitions which may adversely affect our performance27% rewritten
- 16We engage in transactions with related parties and such transactions present possible conflicts of interest that could have an adverse effect on us21% rewritten
- 17Our failure to protect our proprietary information and intellectual property rights, or any successful intellectual property challenges or infringement proceedings against us, could result in a loss in our competitive advantage or market share
- 18Technological advancements in the products and technologies we provide could have a material adverse effect on our business, financial condition and results of operations
- 19We are subject to cybersecurity risks. A cyber incident could occur and result in information theft, data corruption, operational disruption and/or financial loss
- 20We rely on a few key employees whose absence or loss could adversely affect our business
- 21If we are unable to access the services of a sufficient number of skilled and qualified workers, or are required to significantly increase wages to attract or retain such workers, our capacity and profitability could be diminished and our growth potential could be impaired
- 22We are subject to extensive government laws and regulations concerning our employees, and the cost of compliance with such laws and regulations could be material
- 23Unsatisfactory safety performance may negatively affect our customer relationships and, to the extent we fail to retain existing customers or attract new customers, adversely impact our revenues
Risks Related to Financial Condition
- 24Our business depends on domestic capital spending by the industries we service, and reductions in capital spending could have a material adverse effect on our liquidity, results of operations and financial condition
- 25We may be adversely affected by uncertainty in the global financial markets or the deterioration of the financial condition, and resulting credit risk, of our customers
- 26Our financing agreements subject us to various financial and other restrictive covenants. These restrictions may limit our operational or financial flexibility and could subject us to potential defaults under our financing agreements
- 27Our ability to use our net operating loss (“NOL”) carryovers may be limited30% rewritten
- 28We have incurred indebtedness in connection with the operation of the Company and may incur additional indebtedness in the future, and such indebtedness may limit our operating or financial flexibility and could subject us to potential defaults under the applicable financing agreements35% rewritten
Risks Related to Regulatory Matters
- 29We are subject to environmental and occupational health and safety laws and regulations that may expose us to significant costs and liabilities45% rewritten
- 30Increased attention to sustainability matters may impact our businessNew
- 31Anti-indemnity provisions enacted by many states may restrict or prohibit a party’s indemnification of us
- 32Changes to applicable tax laws and regulations or exposure to additional income tax liabilities could affect our operating results and cash flows
Risks Related to Our Class A Common Stock
- 33Our stock price could be volatile, and you may not be able to resell shares of your Class A common stock at or above the price you paid
- 34We may be subject to short selling strategies and are party to various proceedings and claims related thereto from time to timeNew
- 35Future sales of our Class A common stock in the public market, or the perception that such sales may occur, could reduce our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute your ownership in us68% rewritten
- 36The issuance of shares of our Class A common stock upon conversion of each of the 2030 Notes and 2031 Notes will dilute the ownership interests of our stockholders and could depress the trading price of our Class A common stockNew
- 37Provisions in the Indentures governing the 2030 Notes and 2031 Notes could delay or prevent an otherwise beneficial takeover of usNew
- 38The conditional conversion feature of the 2030 Notes and 2031 Notes, if triggered, may adversely affect our financial condition and operating resultsNew
- 39The accounting method for each of the 2030 Notes and 2031 Notes could adversely affect our reported financial condition and resultsNew
- 40Holders of our Class A common stock may not receive dividends on our Class A common stock
- 41Our principal stockholders collectively hold a significant amount of the voting power of our common stock
- 42Certain of our executive officers and directors have significant duties with, and spend significant time serving, entities that may or may not compete with us and, accordingly, may have conflicts of interest in allocating time or pursuing business opportunities59% rewritten
- 43In addition, certain change of control events have the effect of accelerating the payments due under the Tax Receivable Agreement, which could be substantial and accordingly serve as a disincentive to a potential acquirer of our companyNew
- 44Solaris Inc. will be required to make payments under the Tax Receivable Agreement for certain tax benefits that it may claim, and the amounts of such payments could be significant
- 45In certain cases, payments under the Tax Receivable Agreement may be accelerated and/or significantly exceed the actual benefits, if any, Solaris Inc. realizes in respect of the tax attributes subject to the Tax Receivable Agreement
Other Solaris Energy Infrastructure 10-Ks
- FY2024 10-K risk factors40 risks
Solaris Energy Infrastructure faces substantial risks from oil and gas price volatility and oilfield capital spending cycles. Entry into distributed power and the MER acquisition bring new integration, regulation, and supplier concentration risks. The Power Solutions segment is significantly dependent on a single data center client.
Filed Mar 05, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.