Solaris Energy Infrastructure, Inc.

Item 1: Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

]

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN**STOCKHOLDERS’**EQUITY

(Unaudited)

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN**STOCKHOLDERS’**EQUITY

(Unaudited)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

SOLARIS ENERGY INFRASTRUCTURE, INC.**

**Notes to the Unaudited Condensed Consolidated Financial Statements

(Dollars in millions, except share and per share amounts)

1. Business and Basis of Presentation

Business

Solaris Energy Infrastructure, Inc. (referred to as the “Company,” “we,” “us,” “our” and “Solaris” either individually or together with its consolidated subsidiaries, as the context requires) and its consolidated subsidiaries provide mobile and scalable equipment-based solutions for use in distributed power generation as well as the management of raw materials used in the completion of oil and natural gas wells. Headquartered in Houston, Texas, Solaris serves multiple U.S. end markets, including energy, data centers, and other commercial and industrial sectors. Solaris delivers these offerings through its Solaris Power Solutions and Solaris Logistics Solutions business segments.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared using generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all information or notes required by GAAP for annual financial statements and should be read together with the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 5, 2025.

These consolidated financial statements reflect all normal recurring adjustments that are necessary for fair presentation. All material intercompany transactions and balances have been eliminated upon consolidation. Operating results for the three months ended March 31, 2025 and 2024 are not necessarily indicative of the results that may be expected for the full year or for any interim period.

2. Business Segments

We reporttwo distinct business segments. These segments differ by their revenue-generating activities and align with how our Chief Executive Officer, who is our chief operating decision maker (CODM), assesses operating performance and allocates resources.

Our reporting segments are:

Our CODM evaluates the performance of our business segments and allocates resources based on Adjusted EBITDA. We define EBITDA as net income plus depreciation and amortization expense, interest expense, and income tax expense. We define Adjusted EBTIDA as EBITDA plus stock-based compensation and certain non-cash items and any extraordinary, unusual or non-recurring gains, losses or expenses.

In making resource allocation decisions, our CODM primarily considers budget-to-actual variances in Adjusted EBITDA on a monthly basis.

Summarized financial information by business segment is shown below.

The financial information by business segment for prior periods has been restated to reflect the changes in reportable segments following the MER acquisition in September 2024.

The following table presents a reconciliation of total segment adjusted EBITDA to income before income tax expense.

Segment assets are presented below.

Significant segment expenses and other segment items, representing the difference between segment revenue and adjusted EBITDA, are comprised of the following:

3. Summary of Significant Accounting Policies

(a) Recently Issued Accounting Standards

Recently Adopted

In November 2023, the FASB issued ASU No. 2023-07,Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which enhances reportable segment disclosure requirements, primarily by requiring additional information about significant segment expenses. The guidance is effective for annual periods beginning after December 15, 2023 and interim periods beginning after December 15, 2024. The Company adopted this guidance

effective January 1, 2024 for annual reporting and on January 1, 2025 for interim periods. The Company has applied the amendments retrospectively to all prior periods presented in the condensed consolidated financial statements. See Note 2. “Business Segments” for further details on segment information.

Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03,Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses. This update requires entities to disclose specified information about certain costs and expenses, including the amounts related to (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depletion expense, disaggregated within relevant expense captions on the statement of operations. It also requires qualitative descriptions for amounts not separately disaggregated and the total amount of selling expenses, along with the entity’s definition of selling expenses. In January 2025, the FASB issued ASU 2025-01,Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures: Clarifying the Effective Date. The guidance is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently assessing the impact of this ASU on its disclosures.

In December 2023, the FASB issued ASU No. 2023-09,Income Texas (Topic 740): Improvements to Income Tax Disclosures, which requires disaggregation of information included in a reporting entity’s income tax disclosures through effective tax rate reconciliation and information on income taxes paid. The guidance is effective for annual periods beginning after December 15, 2024. The Company is in the process of evaluating the potential effects of this ASU on its financial statements but does not expect it will have a material impact.

(b) Use of Estimates

The preparation of these condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the reporting date, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(c) Restricted Cash

Restricted cash includes amounts that are limited in their use due to contractual agreements or are designated for specific purposes and are not readily available for general use. In our condensed consolidated balance sheets, we classify these amounts as restricted cash. As of March 31, 2025, we hadno restricted cash. As of December 31, 2024, our restricted cash was restricted for capital expenditures.

The following table presents a reconciliation of cash, cash equivalents and restricted cash reported in the condensed consolidated balance sheets that total to the same amounts shown in the condensed consolidated statements of cash flows.

(d) Accounts Receivable and Allowance for Credit Losses

Accounts receivable are stated at the net amount expected to be collected. We record accounts receivable at the invoice amount, plus accrued revenue that is not yet billed, less an estimated allowance for credit losses. Total unbilled revenue included in accounts receivable as of March 31, 2025 and December 31, 2024 was $9.2 million and $9.0 million, respectively.

In our determination of the allowance for credit losses, we pool receivables with similar risk characteristics and consider a number of current conditions, past events and other factors, including the length of time trade accounts

receivable are past due, previous loss history and the condition of the general economy and the industry as a whole, and apply an expected loss percentage. The expected credit loss percentage is determined using historical loss data adjusted for current conditions and forecasts of future economic conditions. Along with the expected credit loss percentage approach, we apply a case-by-case review on individual trade receivables when deemed appropriate. The related expense associated with the recognition of the allowance for credit losses was included in other operating expense on our condensed consolidated statements of operations. Adjustments to the allowance may be required depending on how potential issues are resolved and when receivables are collected. Accounts deemed uncollectible are written off against the allowance for credit losses when our customers’ financial condition deteriorates, impairing their ability to make payments, including in cases of customer bankruptcies.

For receivables related to leasing arrangements, we evaluate the collectability of lease payments over the lease term. When it is probable that we will collect substantially all lease payments due under the arrangement, we recognize leasing revenue on a straight-line basis. If collectability is not probable, we recognize leasing revenue on a cash basis. For leasing arrangements, we typically collect the first and last month’s payments at lease inception, which provides a form of collateral. Based on this assessment and our historical experience, we do not maintain a general allowance for uncollectible lease receivables, as no significant losses have been incurred or are expected.

The following activity related to our allowance for credit losses on customer receivables reflects the estimated impact of the current economic environment on our receivable balance.

(e) Property, plant and equipment and equipment held for lease

Property, plant and equipment, as well as equipment held for lease, are initially recorded at cost, except for assets acquired in a business combination, which are recorded at fair value on the acquisition date. At period-end, these assets are reported at their initial measurement (whether at cost or fair value) less accumulated depreciation.

Depreciation is calculated using the straight-line method over the estimated useful lives of the assets except for turbine engine cores. Consistent with prior periods, turbine engine cores represent a significant component of our turbines and are depreciated using the units of production method based on an expected life of 30,000 fired hours. To reflect this distinct depreciation method and usage-based nature of these assets, turbine engine cores are now presented as a separate line item in the table below, Power Generation – Turbine engine core. In prior periods, these assets were depreciated using this same units of production method and included within Power Generation – Ancillary equipment 3-20 years.

We capitalize interest on borrowings directly attributable to the acquisition or construction of certain capital assets. The capitalized interest is included in the cost of the asset and is subsequently depreciated over its estimated useful life.

Expenses for maintenance and repairs are charged to operations as incurred, while betterments that increase the value or significantly extend the life of the related assets are capitalized. When assets are sold or disposed of, the related cost and accumulated depreciation are removed from the consolidated balance sheets, and any resulting gain or loss is recognized in the condensed consolidated statement of operations.

Property, plant and equipment and equipment held for lease are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Recoverability is assessed by comparing the carrying amount of the asset to its estimated undiscounted future cash flows. If the carrying amount exceeds the estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount exceeds the asset’s fair value.

(f) Revenue

Service Revenue

We recognize revenue based on the transfer of control to the customer, reflecting the consideration expected to be received in exchange for our services and products. We assess customers’ ability and intention to pay based on factors such as historical payment experience and financial condition, and we typically bill customers on a weekly or monthly basis. Contracts with customers are generally on 30- to 60-day payment terms.

Contracts may include bundled pricing covering multiple performance obligations, such as combinations of systems, mobilization services and sand transportation coordination. In these instances, we allocate the transaction price to each performance obligation identified in the contract based on relative stand-alone selling prices, or estimates of such prices, and recognize revenue as control of each product or service is transferred to the customer.

Variable consideration may include discounts, price concessions and incentives. We estimate variable consideration based on the expected amount to be received and accrue revenue to reflect updates related to variable consideration as performance obligations are fulfilled.

Leasing Revenue

Leasing revenue is recognized on a straight-line basis over the lease term, reflecting the consumption of benefits derived from the leased assets. Lease payments are generally fixed, with no significant variable lease payments. Leasing arrangements may be renewed, subject to price negotiations with customers.

Future minimum lease payments to be received under our long-term lessor arrangements as of March 31, 2025, including payments from leases that have already commenced and leases that will commence in the future based on estimated commencement dates, were as follows:

Disaggregation of Revenue

We categorize revenue from contracts with customers by revenue-generating activity, in alignment with ourtwo reportable segments. This includes service revenue recognized under ASC 606,Revenues from Contracts with Customers, and leasing revenue recognized under ASC 842,Leases. The table below presents information on our disaggregated revenue.

4. Property, Plant and Equipment

Property, plant and equipment consists of the following:

The Company recorded property, plant and equipment depreciation expense of $9.3 million and $9.8 million for the three months ended March 31, 2025 and 2024, respectively.

5. Equipment Held for Lease

Equipment held for lease represents equipment used in our capacity as lessor in leasing activities. The assets classified as equipment held for lease consist of the following:

Construction in progress represents deposits and progress billings for turbines and other equipment that has not yet been delivered. We anticipate beginning depreciation once these assets are delivered and ready for use, which is expected to occur within the next 12 months. For the three months ended March 31, 2025, we incurred total interest cost of $8.5 million, of which $2.8 million was recognized as capitalized interest.

For the three months ended March 31, 2025, we recorded depreciation expense of $7.3 million related to equipment held for lease. There wasno comparable depreciation expense in the three months ended March 31, 2024, as these assets were acquired since the third quarter of 2024 as part of the Solaris Power Solutions segment acquisition and subsequent growth program.

6. Intangible Assets

Intangible assets consist of the following.

During the three months ended March 31, 2025 and March 31, 2024, we recorded amortization expense of $3.4 million and $0.2 million, respectively.

7. Accrued Liabilities

Accrued liabilities were comprised of the following at March 31, 2025 and December 31, 2024:

8. Debt

Below is an overview of our outstanding debt.

9. Fair Value Measurements and Financial Instruments

The Company’s financial assets and liabilities, as well as certain nonrecurring fair value measurements such as goodwill impairment and long-lived assets impairment, are to be measured using inputs from the three levels of the fair value hierarchy, of which the first two are considered observable and the last unobservable, which are as follows:

The carrying amount of the Company’s financial instruments, consisting of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued liabilities and other current liabilities, including insurance premium financing, as reflected in our consolidated balance sheets, approximates fair value due to their short-term nature.

Additionally, the carrying amounts outstanding under our debt agreements with variable rates, as reflected in our consolidated balance sheets, approximate fair value as the effective interest rate approximates market rates. The carrying value of amounts outstanding under our finance and operating lease obligations, as reflected in our condensed consolidated balance sheets, approximates fair value as the borrowing rate approximate market rates. The estimated fair values of these financial instruments are determined using Level 2 inputs within the fair value hierarchy.

Credit Risk

The financial instruments that are subject to concentrations of credit risk mainly include cash and cash equivalents, restricted cash, and trade receivables.

As of March 31, 2025 and December 31, 2024, the balances of our cash and cash equivalents and restricted cash held with financial institutions total $16.7 million and $159.9 million, respectively, which are above the insured limits set by the Federal Deposit Insurance Corporation. We consistently monitor the financial health of these institutions.

The majority of our accounts receivable have payment terms of 60 days or less. As of March 31, 2025, two customers accounted for 35% and 13% of our total accounts receivable. The concentration of customers operating within the oil and natural gas industry may increase our overall exposure to credit risk, as these customers may be similarly affected by shifts in economic, regulatory or other external factors. If a customer defaults, our gross profit and cash flows may be adversely affected. To manage this credit risk, we conduct credit evaluations, monitor customer payment behavior, and, when necessary, pursue legal remedies, such as filing of liens.

10. Equity and Noncontrolling Interest

Dividends

In order to allow Solaris Inc. to pay quarterly cash dividends to holders of its shares of Class A common stock, Solaris LLC paid dividend distributions totaling $8.2 million and $5.3 million to all Solaris LLC unitholders in the three months ended March 31, 2025 and 2024, respectively. Of these amounts, $4.7 million and $3.6 million were paid to Solaris Inc. in the three months ended March 31, 2025 and 2024, respectively, all of which was used by it to pay quarterly cash dividends to holders of its shares of Class A common stock. Additional pro-rata distributions to certain Solaris LLC unitholders amounting to $1.2 million were made in the three months ended March 31, 2025 pursuant to the Company’s Tax Receivable Agreement. See Note 12. “Income Taxes” for further details on the Tax Receivable Agreement.

Noncontrolling Interest

The noncontrolling interest balance represents the economic interest in Solaris LLC held by parties other than Solaris Inc. As of March 31, 2025 and December 31, 2024, the noncontrolling interest ownership percentage is 44.3% and 44.7%, respectively**.**

Exchange of Solaris LLC Units

In April and May 2025, a total of 1,967,606 Solaris LLC Units were exchanged for an equal number of shares of Class A common stock, and a corresponding number of shares of Class B common stock were cancelled resulting in an increase in the Company’s ownership interest in Solaris LLC.

11. Earnings Per Share

Basic earnings per share of Class A common stock is computed by dividing net income attributable to Solaris by the weighted-average number of shares of Class A common stock outstanding during the same period. Diluted earnings per share is computed giving effect to all potentially dilutive shares.

The following table sets forth the calculation of earnings per share, or EPS, for the three months ended March 31, 2025 and 2024:

The following number of weighted-average potentially dilutive shares were excluded from the calculation of diluted earnings per share because the effect of including such potentially dilutive shares would have been antidilutive upon conversion:

12. Income Taxes

Income Taxes

Solaris Inc. is a corporation and, as a result, is subject to United States federal, state and local income taxes. Solaris LLC is treated as a partnership for United States federal income tax purposes and therefore does not pay United States federal income tax on its taxable income. Instead, the Solaris LLC unitholders, including Solaris Inc., are liable for United States federal income tax on their respective shares of Solaris LLC’s taxable income reported on the unitholders’ United States federal income tax returns. Solaris LLC is liable for income taxes in those states not recognizing its status as a partnership for United States federal income tax purposes.

For the three months ended March 31, 2025 and 2024, we recognized a combined United States federal and state expense for income taxes of $3.9 million and $1.9 million, respectively. The effective combined United States federal and state income tax rates were 23.2% and 20.3% for the three months ended March 31, 2025 and 2024, respectively. For the three months ended March 31, 2025 and 2024, our effective tax rate differed from the statutory rate primarily due to Solaris LLC’s treatment as a partnership for United States federal income tax purposes.

The Company’s deferred tax position reflects the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting. The largest components of the Company’s deferred tax position relate to the Company’s investment in Solaris LLC and net

operating loss carryovers. The Company recorded a deferred tax asset and additional paid-in capital for the difference between the book value and the tax basis of the Company’s investment in Solaris LLC. This difference originates from the equity offerings of Class A common stock, exchanges of Solaris LLC units (together with a corresponding number of shares of Class B common stock) for shares of Class A common stock, and issuances of Class A common stock, and corresponding Solaris LLC units, in connection with stock-based compensation.

Based on our cumulative earnings history and forecasted future sources of taxable income, we believe that we will be able to realize our deferred tax assets in the future. As the Company reassesses this position in the future, changes in cumulative earnings history, excluding non-recurring charges, or changes to forecasted taxable income may alter this expectation and may result in an increase in the valuation allowance and an increase in the effective tax rate.

Section 382 of the Internal Revenue Code of 1986, contains rules that limit the ability of a company that undergoes an “ownership change” to utilize its net operating loss and tax credit carryovers and certain built-in losses recognized in years after the “ownership change.” An “ownership change” is generally defined as any change in ownership of more than 50% of a corporation’s stock over a rolling three-year period by stockholders that own (directly or indirectly) 5% or more of the stock of a corporation, or arising from a new issuance of stock by a corporation. If an ownership change occurs, Section 382 generally imposes an annual limitation on the use of pre-ownership change net operating loss carryovers to offset taxable income earned after the ownership change. We do not believe the Section 382 annual limitation related to historical ownership changes impacts our ability to utilize our net operating losses; however, if we were to experience a future ownership change our ability to use net operating losses may be impacted.

Payables Related to the Tax Receivable Agreement

On May 17, 2017, in connection with its initial public offering, Solaris Inc. entered into a Tax Receivable Agreement (the “Tax Receivable Agreement”) with the then-existing members of Solaris LLC. The Tax Receivable Agreement was later amended on June 27, 2023. As of March 31, 2025, our liability under the Tax Receivable Agreement was $73.7 million, all of which was non-current, representing 85% of the net cash savings in United States federal, state and local income tax or franchise tax that Solaris Inc. anticipates realizing in future years from certain increases in tax basis and certain tax benefits attributable to imputed interest as a result of Solaris Inc.’s acquisition (or deemed acquisition for United States federal income tax purposes) of Solaris LLC units in connection with our initial public offering or pursuant to previous exercises of the Redemption Right or the Call Right (each as defined in the Solaris LLC Agreement) and additional tax basis arising from any payments Solaris Inc. makes under the Tax Receivable Agreement.

The projection of future taxable income involves significant judgment. Actual taxable income may differ from our estimates, which could significantly impact our liability under the Tax Receivable Agreement. Therefore, in accordance with ASC 450, Contingencies, we have recorded a liability under the Tax Receivable Agreement related to the tax savings we may realize from certain increases in tax basis and certain tax benefits attributable to imputed interest as a result of Solaris Inc.’s acquisition (or deemed acquisition for United States federal income tax purposes) of Solaris LLC units in connection with the IPO or pursuant to previous exercises of the Redemption Right or the Call Right (each as defined in the Solaris LLC Agreement) and additional tax basis arising from any payments Solaris Inc. makes under the Tax Receivable Agreement. Solaris LLC may make cash distributions to Solaris Inc. in order for Solaris Inc. to satisfy its obligations under the Tax Receivable Agreement and will be required to distribute cash pro rata to each of the other members of Solaris LLC, in accordance with the number of Solaris LLC units owned by each member at that time.

On January 9, 2025, the Company made payments totaling $3.6 million under the Tax Receivable Agreement. Solaris LLC made a cash distribution to Solaris Inc. of $3.6 million to satisfy these obligations and concurrently made a cash distribution on a pro rata basis to certain Solaris LLC unitholders amounting to $1.2 million.

13. Concentrations

For the three months ended March 31, 2025, two customers accounted for 37% and 14% of the Company’s revenues. For the three months ended March 31, 2024, three customers accounted for 14%,12% and 11% of the Company’s revenues. As of March 31, 2025, two customers accounted for 35% and 13% of the Company’s accounts receivable. As of December 31, 2024, two customers accounted for 33% and 18% of the Company’s accounts receivable.

For the three months ended March 31, 2025, one supplier accounted for 60% of the Company’s total purchases. For the three months ended March 31, 2024, one supplier accounted for 10% of the Company’s total purchases. As of March 31, 2025, one supplier accounted for 41% of the Company’s accounts payable. As of December 31, 2024, one supplier accounted for 39% of the Company’s accounts payable.

14. Commitments and Contingencies

Litigation and Claims

In the normal course of business, the Company is subjected to various claims, legal actions, contract negotiations and disputes. The Company provides for losses, if any, in the year in which they can be reasonably estimated. In management’s opinion, there are currently no such matters outstanding that would have a material effect on the accompanying condensed consolidated financial statements other than the following.

On February 28, 2024, the Company was served with a lawsuit by Masaba Inc. in the Wyoming District Court related to alleged intellectual property infringement (the “Lawsuit”). The complaint was later amended to name the Company’s subsidiaries Solaris Oilfield Site Services Operating, LLC (“SOSSO”) and Solaris Oilfield Site Services Personnel, LLC (“SOSSP”) as defendants. The complaint seeks, among other relief, unspecified compensatory damages, rescission, pre-judgment and post-judgment interest, costs and expenses. On July 19, 2024, SOSSO and SOSSP petitioned the Patent Trial and Appeal Board of the United States Patent and Trademark Office (“USPTO”) to instituteinter partes review (“IPR”) of all claims of the patent asserted in this lawsuit (U.S. Patent No. 11,780,689 (“the ‘689 Patent”)). Pursuant to the parties’ joint request, the district court case was stayed on August 7, 2024 pending the completion of the requested IPR. On January 27, 2025, the USPTO instituted the IPR on all claims of the ‘689 Patent. A final written decision is expected in the IPR in January 2026. The Company believes that the claims asserted in the Lawsuit are without merit and will vigorously defend against them. At this time, we are unable to predict the ultimate outcome of this case or estimate the range of possible loss, if any.

On March 28, 2025, a purported stockholder of the Company filed a complaint in a putative class action lawsuit styled*Stephen Pirello v. Solaris Energy Infrastructure, Inc., et al.,*Case No. 4:25-cv-01455, in the United States District Court for the Southern District of Texas. The complaint asserts claims against the Company and certain of its officers under Sections 10(b) and 20(a) of the Exchange Act, alleging among other things that they made misleading statements and omissions relating to the Company’s acquisition of Mobile Energy Rentals LLC. The complaint further alleges that these allegedly misleading statements and omissions were revealed in the Morpheus Research report regarding the Company issued on March 17, 2025, which the complaint alleges caused a decline in the Company’s stock price. The outcome of the lawsuit is uncertain, particularly because it is at its initial stages. However, the Company believes the lawsuit is without merit and intends to vigorously defend against it.

Purchase Commitments

In the normal course of business, the Company enters into purchase commitments for products and services, primarily related to its power equipment, service equipment and parts for manufacturing equipment. As of March 31, 2025, the Company has entered into material purchase commitments for power generation equipment driven by the growth of its Solaris Power Solutions segment. These commitments are cancellable but subject to significant termination penalties, ranging from 5% to 90% of the purchase price, depending on when the order is cancelled. As of March 31, 2025, the Company had the following purchase commitments, consisting of purchases for power generation equipment:

Other Commitments

The Company has executed a guarantee of lease agreement with Solaris Energy Management, LLC, a related party of the Company, related to the rental of office space. The total future guarantee under the guarantee of lease agreement with Solaris Energy Management, LLC is $2.1 million as of March 31, 2025. Refer to Note 15. “Related Party Transactions” below for additional information regarding related party transactions recognized.

15. Related Party Transactions

The Company incurs costs for services provided by Solaris Energy Management, LLC, a company owned by William A. Zartler, the Chief Executive Officer and Chairman of the Board. These costs include rent paid for office space, travel services and other administrative costs, included in selling, general and administrative costs and other operating expense in the condensed consolidated statement of operations. For the three months ended March 31, 2025 and 2024, Solaris LLC paid $0.3 million and $0.1 million, respectively, for these services. As of March 31, 2025 and December 31, 2024, the Company included $0.1 million and $0.1 million, respectively, in prepaid expenses and other current assets on the condensed consolidated balance sheets. As of March 31, 2025 and December 31, 2024, the Company included $0.1 million of accruals to related parties in accrued liabilities on the condensed consolidated balance sheet.

As of September 30, 2024, THRC Holdings, LP, an entity managed by THRC Management, LLC (collectively, “THRC”), owned shares representing 10.4% of the outstanding shares of the Company’s Class A common stock, which also represents 5.2% of total voting shares. THRC is affiliated with certain of the Company’s customers, including ProFrac Services, LLC, and certain of the Company’s suppliers including Automatize Logistics, LLC, IOT-EQ, LLC and Cisco Logistics, LLC (collectively, “THRC Affiliates”).

THRC is no longer considered a related party as of October 1, 2024. The revenues and cost of services disclosed herein reflect transactions that occurred while THRC was considered a related party.

For the three months ended March 31, 2024, the Company recognized service revenue of $3.3 million from services provided to THRC Affiliates.

As part of the MER Acquisition, the Company acquired a lease agreement for commercial real estate with KTR Management Company, LLC, which owns 27.9% of the outstanding shares of the Company’s Class B common stock, which also represents 12.0% of total voting shares as of March 31, 2025. As of March 31, 2025, the Company recognized an operating lease right-of-use asset of $0.3 million and an operating lease liability of $0.3 million, split between current and non-current portions, on the condensed consolidated balance sheets. For the three months ended March 31, 2025, the Company incurred $0.1 million of rental expense related to the commercial real estate lease, included in cost of leasing revenue on the condensed consolidated statement of operations. During the three months ended March 31, 2025, the Company incurred $0.3 million of rental expense related to a short-term equipment rental and $0.1 million of fuel, utility and travel expenses from KTR Management Company, LLC, included in cost of leasing revenue on the condensed consolidated statement of operations. During the three months ended March 31, 2025, the Company also purchased certain equipment from KTR Management Company, LLC for $2.0 million, included as equipment held for lease on the condensed consolidated balance sheets. The equipment purchased was not marked-up and represents the same amount the Company would have paid had the Company acquired the equipment directly.

In connection with the issuance of the Convertible Senior Notes (as defined in Note 16. Subsequent Events), BlackRock Portfolio Management LLC (“BlackRock”), a holder of in excess of 5% of our total outstanding shares of common stock, purchased an aggregate principal amount of $55.0 million at the price to the public. The Company’s audit committee approved BlackRock’s participation in the Convertible Senior Notes offering on April 30, 2025.

16. Subsequent Events

Stateline Joint Venture

On April 28, 2025, the Company announced the formation of Stateline Power, LLC (“Stateline”), a joint venture between Solaris Power Solutions Stateline, LLC (“Stateline Power Solutions”), a newly formed and wholly owned subsidiary of Solaris LLC, and CTC Property LLC (“CTC”), an affiliate of a company in the evolving artificial intelligence computing space. Stateline will provide off-grid power infrastructure for CTC’s newest data center campus.

In exchange for 50.1% of the equity interest in Stateline, Stateline Power Solutions contributed non-cash assets and other pre-funded expenses valued at approximately $86.4 million. CTC will contribute approximately $86.0 million in cash for the remaining 49.9% interest. The joint venture has also entered into certain agreements for operations and equipment leasing in support of its business.

Term Loan and Revolving Credit Facility Amendments

On April 28, 2025, we entered into an amendment to our senior secured term loan agreement and an amendment to our revolving credit facility. The amendments permit, among other things, the entry of Stateline Power Solutions into the Stateline joint venture and the issuance of certain third-party financings.

Convertible Senior Notes

On May 1, 2025, the Company entered into an underwriting agreement with a group of underwriters represented by Morgan Stanley & Co. LLC in connection with a public offering of $155.0 million aggregate principal amount of its 4.75% Convertible Senior Notes due 2030 (the “Notes”). The Notes were issued on May 2, 2025 and governed by an indenture between the Company and U.S. Bank Trust Company, National Association, as trustee.

The Notes are senior, unsecured obligations of the Company and bear interest at a rate of 4.75% per annum, payable semi-annually in arrears on May 1 and November 1 of each year, beginning on November 1, 2025. The Notes will mature on May 1, 2030, unless earlier repurchased, redeemed, or converted. Prior to February 1, 2030, noteholders may convert their Notes only upon the occurrence of certain specified events. On or after February 1, 2030, the Notes may be converted at the election of the holders at any time until the second scheduled trading day immediately preceding maturity. Upon conversion, the Company may settle the Notes in cash, shares of its Class A common stock, or a combination thereof, at its election.

Concurrently with the Convertible Senior Notes offering, a delta placement of borrowed shares was conducted to facilitate hedging by certain investors. The Company did not issue any shares in connection with this arrangement.