Solaris Energy Infrastructure, Inc.SEI
Solaris Energy Infrastructure, Inc. Commitments Disclosure
Commitments and Contingencies
Tax Matters
We are subject to a number of state and local taxes that are not income-based. As many of these taxes are subject to assessment and audit by the taxing authorities, it is possible that an assessment or audit could result in additional taxes due. We accrue additional taxes when we determine that it is probable that we will have incurred a liability and we can reasonably estimate the amount of the liability.
In connection with a dispute regarding property tax exemptions for certain equipment (Cause Number CV20-09-372, styled Solaris Oilfield Site Services v. Brown County Appraisal District), the 35th District Court of Brown County, Texas initially ruled in favor of the Brown County Appraisal District on June 16, 2022, disqualifying of the equipment for certain exemptions. The Company appealed to the Eleventh District of Texas – Eastland Court of Appeals, with a hearing held on April 13, 2023. On April 18, 2024, the appellate court ruled in the Company’s favor, upholding most, but not all, of the disputed exemptions.
On June 14, 2024, the Company reached a settlement agreement with Brown County Appraisal District for $0.9 million. As a result, in the year ended December 31, 2024, the Company reversed $4.3 million of previously accrued property tax expenses related to this matter. Of this amount, $2.5 million was recorded as gain on reversal of property tax contingency, and $1.8 million reduced cost of services in the consolidated statements of operations.
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 consolidated financial statements, other than the following:
Masaba Lawsuit
On January 26, 2026, the Patent Trial and Appeal Board (“PTAB”) of the United States Patent and Trademark Office (“USPTO”) issued a final written decision holding all claims of Masaba Inc.’s (“Masaba”) U.S. Patent No. 11,780,689 (the “‘689 Patent”) unpatentable.
The ‘689 Patent is the subject of a lawsuit filed by Masaba against the Company on December 14, 2023, in the United States District Court for the District of Wyoming (the “District Court Action”), alleging infringement of the ‘689 Patent. The complaint seeks, among other relief, unspecified compensatory damages, rescission, pre-judgment and post-judgment interest, costs and expenses.
In connection with the District Court Action, on July 19, 2024, two of the Company’s subsidiaries that were named as defendants in the District Court Action filed a petition with the PTAB requesting inter parties review (“IPR”) of all claims of the ‘689 Patent. Pursuant to the parties’ joint request, the District Court Action was stayed on August 7, 2024, pending resolution of the IPR. On January 27, 2025, the USPTO instituted the IPR on all claims of the ‘689 Patent. An oral hearing was held on November 13, 2025, which resulted in the PTAB’s final written decision described above. On February 25, 2026, Masaba filed a request for Director Review of the PTAB’s decision. Pursuant to the parties’ joint request and the Court’s February 3, 2026 order, the District Court Action remains stayed until the PTAB’s decision becomes final without the possibility for further appeals.
Class Action Lawsuit
On February 17, 2026, the lead plaintiff voluntarily dismissed without prejudice his claims against all defendants in the class action lawsuit styled Stephen Pirello v. Solaris Energy Infrastructure, Inc., et al., Case No. 4:25-cv-01455, filed against the Company on March 28, 2025, in the United States District Court for the Southern District of Texas (the “Pirello Lawsuit”).
The complaint asserted 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 MER Acquisition. The complaint further alleged 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 alleged caused a decline in the Company’s stock price. As discussed above, all claims have since been dismissed without prejudice.
Derivative Lawsuits
On December 29, 2025, the plaintiff voluntarily dismissed without prejudice the derivative complaint filed on October 31, 2025, in the United States District Court for the Southern District of Texas, styled Yvens Saint-Phard v. William A. Zartler, et al., Case No. 4:25-cv-05225 (the “Saint-Phard Lawsuit”).
On January 5, 2026, the plaintiff voluntarily dismissed without prejudice the derivative complaint filed on December 10, 2025, in the United States District Court for the Southern District of Texas, styled Susana Kaszirer v. William A. Zartler, et al., Case No. 4:25-cv-05944 (the “Kaszirer Lawsuit”).
The complaints in the Saint-Phard and Kaszirer Lawsuits largely repeated the allegations made in the Pirello Lawsuit. Each complaint asserted that the alleged conduct harmed the Company and brought claims against certain of the Company’s directors and officers for breach of fiduciary duty, unjust enrichment, and violations of Sections 10(b), 14(a) and 20(a) of the Exchange Act, all of which have been voluntarily dismissed by the plaintiffs.
Purchase Commitments
As of December 31, 2025, the Company has entered into material purchase commitments for power generation equipment to support the growth of its Solaris Power Solutions segment. These commitments are cancellable by the Company but are subject to significant termination penalties ranging from 5% to 90% of the remaining purchase price, depending on timing of cancellation.
The following table summarizes the Company’s aggregate purchase commitments for power generation equipment as of December 31, 2025, based on expected payment timing assuming commitments are fulfilled:
| Amount | |||||
| Payments due by period | |||||
| 2026 | $ | 655.9 | |||
| 2027 | 184.1 | ||||
| 2028 | 11.9 | ||||
| Total purchase commitments | $ | 851.9 | |||
Purchase commitments include $304.1 million related to Stateline, which are expected to be funded using a combination of proceeds from the Stateline Term Loan and Stateline’s cash flows, with no recourse to the Company.
Other Commitments
The Company has executed a guarantee of lease agreement with Solaris Energy Management, LLC, a related party, in connection with the rental of office space. As of December 31, 2025, the total future obligation under this guarantee is $1.7 million. Refer to Note 20. “Related Party Transactions” for additional information regarding related party transactions recognized and to Note 10. “Leases,” for discussion of the Company’s operating leases.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 27, 2026 | Showing above |
| 2024 | Mar 5, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Mar 9, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 23, 2021 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.