United States securities and exchange commission logo
October 6, 2021
Amanda M. Brock
President and Chief Executive Officer
Aris Water Solutions, Inc.
9811 Katy Freeway, Suite 700
Houston, Texas 77024
Re: Aris Water
Solutions, Inc.
Registration
Statement on Form S-1
Filed September 23,
2021
File No. 333-259740
Dear Ms. Brock:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form S-1
Dividend Policy, page 61
1. We note that you have
added disclosure to indicate that you intend to pay dividends and
distributions to the
Class A Common Stock holders and Solaris LLC Unit holders
amounting to $5 million
on a quarterly basis. However, we also note that annualized
dividends of $20
million would have exceeded your free cash flow for the historical
periods presented.
Please expand your disclosures under this heading to include the
following additional
information:
The number of
Class A common shares and Solaris LLC units that will participate in
the dividends and
distributions and the corresponding per share or per unit amounts
on both a quarterly
and annualized basis.
Amanda M. Brock
FirstName
Aris Water LastNameAmanda M. Brock
Solutions, Inc.
Comapany
October NameAris Water Solutions, Inc.
6, 2021
October
Page 2 6, 2021 Page 2
FirstName LastName
Pro forma cash available for dividend and distribution payments
based on the most
recently completed fiscal year and the most recently completed
trailing twelve-month
period, utilizing the pro forma information on pages F-4 and F-5,
adjusted as
necessary for non-cash activity, actual expenditures for interest
and property, actual
borrowings and incremental borrowing that would have been
necessary to fund the
payments.
Your estimated cash available for dividend and distribution
payments for the twelve
months commencing with the quarter that would fund your initial
payments, utilizing
a similar manner of presentation with regard to the level of
detail and the nature of
adjustments, also quantifying the underlying key assumptions,
including volumes and
prices corresponding to the various operating metrics presented
on page 69, and
adhering to Item 10(b) of Regulation S-K.
Please include incremental disclosures as necessary to clarify the
rationale for all
adjustments and to describe the basis for assumptions underlying your
prospective
financial information. Additionally, provide disclosures that address
any increased costs
of being public, and changes in the amounts of interest expense and
capital expenditures.
If you were unable to pay dividends and distributions at the intended
level based on your
historical amounts, please clearly disclose why you believe that you
will be able to pay
them going forward. Please also clarify whether any debt covenants,
such as those
discussed on pages 19 and 20, would have precluded the payment of
dividends and
distributions during the historical periods or would be problematic in
the future based on
your prospective information.
2. Please expand your disclosures under this heading and/or Risk Factors
on page 28 as
appropriate to address the risks associated with your dividend and
distribution policy,
including disclosures that address the following points:
The consequence of limiting or curtailing future capital
expenditures if funds are
utilized to pay dividends and distributions;
The uncertainty of whether you will be able to borrow or
refinance debt at favorable
terms;
The prospect of having limited or diminished provisions for
unexpected cash needs;
Any subordination between units and shares if available cash is
inadequate to fund
dividends and distributions.
3. Please expand your disclosures under Liquidity and Capital Resources
on page 74 to
discuss your dividend and distribution plans, to explain how you
expect to fund such
payments in the coming fiscal year, and to discuss any salient
assumptions regarding the
prospect of having sufficient available cash, as may include
borrowing, change in interest
expense, and any implications of debt covenants that may limit your
ability to pay
dividends and distributions.
Amanda M. Brock
Aris Water Solutions, Inc.
October 6, 2021
Page 3
Exhibits
4. We note your disclosure on page 125 that your choice of forum provision
does not apply
to suits brought to enforce any liability or duty created by the Exchange
Act. Please
ensure that the provision in your amended and restated certificate of
incorporation states
this clearly, or tell us how you will inform investors in future filings
that the provision
does not apply to any actions arising under the Exchange Act.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Joseph Klinko, Staff Accountant, at 202-551-3824 or John
Cannarella,
Staff Accountant, at 202-551-3337 if you have questions regarding comments on
the financial
statements and related matters. Please contact Irene Barberena-Meissner, Staff
Attorney, at 202-
551-6548 or Laura Nicholson, Special Counsel, at 202-551-3584 with any other
questions.
Sincerely,
FirstName LastNameAmanda M. Brock
Division of
Corporation Finance
Comapany NameAris Water Solutions, Inc.
Office of Energy &
Transportation
October 6, 2021 Page 3
cc: Hillary H. Holmes, Esq.
FirstName LastName