Organization and Background of Business

3 Months Ended

Mar. 31, 2017

Organization and Background of Business

1.    Organization and Background of Business

Solaris Oilfield Infrastructure, LLC (“Solaris LLC” or the “Company”), was formed in July 2014.

Solaris LLC, based in Houston, Texas, manufactures and provides patented proppant management systems that unload, store and deliver proppant at oil and natural gas well sites. The systems are designed to address the challenges associated with transferring large quantities of proppant to the well site, including the cost and management of last mile logistics.

Solaris LLC has deployed its systems in many of the most active oil and natural gas basins in the U.S., including the Permian Basin, the Eagle Ford Shale and the SCOOP/STACK Formation.

In connection with Solaris Oilfield Infrastructure, Inc.’s (“Solaris”) initial public offering (the “IPO” or the “Offering”) in May 2017, Solaris became a holding company whose sole material asset consists of units in Solaris LLC (“Solaris LLC Units”). Solaris became the managing member of Solaris LLC and is responsible for all operational, management and administrative decisions relating to Solaris LLC’s business and will consolidate the financial results of Solaris LLC and its subsidiaries.

Solaris

Organization and Background of Business

1.     Organization and Background of Business

Solaris Oilfield Infrastructure, Inc. (“Solaris”), was incorporated on February 2, 2017 as a Delaware corporation.

Solaris was formed for the purpose of completing an initial public offering of equity (the “IPO” or the “Offering”) and related transactions in order to carry on the business of Solaris Oilfield Infrastructure, LLC and subsidiaries (“Solaris LLC” or the “Company”). As of May 11, 2017, in connection with the IPO, Solaris became a holding company whose sole material asset consists of units in Solaris LLC (“Solaris LLC Units”). Solaris became the managing member of Solaris LLC and is responsible for all operational, management and administrative decisions relating to Solaris LLC’s business.

As described in more detail in Note 4, on May 17, 2017, Solaris completed the Offering of 10,100,000 shares of the Class A common stock, par value $0.01 per share (“Class A Common Stock”), at a price to the public of $12.00 per share ($11.28 net of underwriting discounts and commissions).  After deducting underwriting discounts and commissions and offering expenses payable by Solaris, Solaris received net proceeds of approximately $113.9 million. Solaris contributed all of the net proceeds of the IPO received to Solaris LLC in exchange for Solaris LLC Units.

Solaris is a holding company and our principal asset is a membership interest in Solaris LLC.  As the managing member of Solaris LLC, Solaris operates and controls all of the business and affairs of Solaris LLC, and through Solaris LLC and its subsidiaries, conducts its business.  As a result, beginning in the second quarter of 2017, Solaris will consolidate the financial results of Solaris LLC and report non-controlling interest related to the portion of Solaris LLC Units not owned by Solaris, which will reduce net income attributable to Solaris’ Class A stockholders.