Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events

Subsequent Events
4 Months Ended
Sep. 30, 2021
Subsequent Events  
Subsequent Events

4.Subsequent Events

Initial Public Offering

On October 26, 2021, we closed the Offering of 20,297,500 shares of Class A common stock (including 2,647,500 shares of Class A common stock issued and sold pursuant to the underwriters’ exercise of their option in full to purchase additional shares of Class A common stock), at a price to the public of $13.00 per share ($12.22 per share net of underwriting discounts and commissions), resulting in gross proceeds of $263.9 million, or net proceeds of $246.1 million after deducting underwriting discounts and commissions pursuant to the Offering.

We contributed all the net proceeds of the IPO, including the net proceeds from the underwriters’ exercise of their option in full to purchase additional shares of Class A common stock, to Solaris LLC in exchange for 20,297,500 units of Solaris LLC.

Equity Incentive Plan

Effective October 26, 2021, our Board of Directors adopted the Aris Water Solutions, Inc. 2021 Equity Incentive Plan. The 2021 Plan will allow for the grant of stock options, both incentive stock options and “non-qualified” stock options; stock appreciation rights, restricted stock and restricted stock units; incentive bonuses, which may be paid in cash, stock, or a combination thereof; and other stock-based awards. A total of 5,350,000 shares of Class A common stock are issuable under our 2021 Equity Incentive Plan.

Tax Receivable Agreement

On October 26, 2021, in connection with the initial public offering, we entered into a Tax Receivable Agreement (“TRA”) with the existing owners of Solaris LLC. The TRA generally provides that we pay 85% of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax that we realize from certain increases in tax basis that occur as a result of our acquisition of the existing owners’ tax attributes. Additionally, the TRA contains terms that in the event we experience a change of control or there is an early termination under the TRA, we could be required to make an immediate payment to the existing owners.