Stabilis Solutions, Inc.

Company Overview

Business Model: STABILIS SOLUTIONS, INC. provides turnkey clean energy production, storage, transportation, and fueling solutions primarily using liquefied natural gas (LNG) to diverse end markets. The company generates revenue through LNG product sales (including production, third-party sourcing, and transportation), cryogenic equipment rental, and engineering and field support services. Additionally, STABILIS SOLUTIONS, INC. holds a 40% interest in BOMAY Electric Industries, Inc., a Chinese joint venture that builds power and control systems for the energy industry in China.

Market Position: STABILIS SOLUTIONS, INC. positions itself as one of the largest and most experienced small-scale LNG providers in North America, having delivered over 580 million gallons of LNG through more than 60,000 truck deliveries over 22 years. The company emphasizes LNG's environmental and economic benefits as a replacement for distillate fuel oil and propane, and its role in delivering natural gas to off-pipeline locations. Key competitive strengths include demonstrated project execution, comprehensive "virtual natural gas pipeline" solutions, and the ability to leverage existing capabilities into new markets.

Recent Strategic Developments:

• Galveston LNG Liquefaction Facility: STABILIS SOLUTIONS, INC. is developing a proposed 350,000 gallon-per-day waterfront LNG liquefaction facility in Galveston, Texas, expected to increase total liquefaction capacity to 480,000 gallons per day. This project is anchored by two ten-year LNG supply bunkering agreements with cruise vessel operators, commencing in 2027. The company has secured customer commitments for approximately 56% of the facility's proposed capacity. The total capital required is estimated at $350 million to $400 million, with financing progressing towards a Final Investment Decision (FID). A dedicated Jones Act-compliant LNG bunkering vessel, the Garibaldi, has been time-chartered, commencing in 2026, to serve the Port of Galveston and surrounding Gulf Coast markets.
• Data Center Power Generation Contract: In February 2026, STABILIS SOLUTIONS, INC. executed a multi-year take-or-pay contract to supply LNG for behind-the-meter power generation at a data center. Deliveries are expected to commence in Q1 2027 and continue through Q1 2029, with estimated total revenue of approximately $200 million under the initial term. This contract requires an investment of approximately $25.0 million in capital additions and working capital, to be funded by customer prepayments ($15.0 million received in February 2026, with an additional $10.0 million expected).
• DOE Export Authorization: In Q3 2022, STABILIS SOLUTIONS, INC. received authorization from the U.S. Department of Energy (DOE) to export domestically produced LNG to all free trade (FTA) and non-free trade (non-FTA) countries, up to 51.75 billion cubic feet per year (approximately 1.0 MTPA) for a term of 28 years. The company initiated exports to non-FTA countries in 2024, delivering LNG to Europe under this authorization. Existing licenses also permit import/export via truck to Canada and Mexico, and vessel imports from international sources to U.S. terminals.
• Contract Conclusions: During Q4 2025, two multi-year contracts concluded: one for temporary remote power in Louisiana (approximately 19% of 2025 revenues) and a truck-to-vessel LNG marine bunkering service in Galveston, Texas (approximately 32% of 2025 revenues). The marine customer did not extend due to the unavailability of a suitable Jones Act-compliant LNG bunkering vessel.

Geographic Footprint: STABILIS SOLUTIONS, INC. primarily operates in North America, serving customers across the United States, Canada, and Mexico. The company owns and operates LNG liquefiers in George West, Texas (100,000 LNG gallons per day capacity) and Port Allen, Louisiana (30,000 LNG gallons per day capacity). The proposed Galveston LNG liquefaction facility will further expand its presence on the Texas Gulf Coast. Through its 40% owned joint venture, BOMAY Electric Industries, Inc., the company also has an investment in the energy market in China.

Financial Performance

Revenue Analysis

Profitability Metrics (2025):

• Gross Margin: 26.4% (Calculated as (Total Revenue - Cost of Revenues) / Total Revenue = (68.2 - 50.2) / 68.2)
• Operating Margin: -1.9% (Calculated as Income (loss) from operations / Total Revenue = -1.3 / 68.2)
• Net Margin: -2.0% (Calculated as Net Income (loss) / Total Revenue = -1.4 / 68.2)

Investment in Growth:

• R&D Expenditure: Not separately disclosed.
• Capital Expenditures: $8.1 million in 2025 (vs. $9.1 million in 2024).
• Strategic Investments:
  • Preliminary work and ordering long lead time items for the proposed Galveston LNG liquefaction facility.
  • Refurbishments and upgrades to existing assets and rolling stock.
  • Anticipated $25.0 million investment in capital additions and near-term working capital for the data center power generation contract, to be funded by customer prepayments.
  • Time charter agreement for the Garibaldi LNG bunkering vessel.

Business Segment Analysis

LNG Product

Financial Performance:

• Revenue: $57.2 million (-0.2% YoY)
• Key Growth Drivers: Sales of LNG from owned liquefiers and third-party sources, transportation and logistics services. The slight decrease in revenue was primarily due to a 6.1 million gallon decrease in LNG delivered to customers and unfavorable customer mix, partially offset by higher average sales price per gallon and increased revenues from minimum take-or-pay contracts.

Product Portfolio:

• Liquefied natural gas (LNG) from owned liquefiers (George West, TX; Port Allen, LA) and a network of approximately 31 third-party production sources.
• Turnkey LNG transportation and logistics services across North America, utilizing a fleet of cryogenic trailers and outsourced services.

Market Dynamics:

• Serves diverse end markets including aerospace, agriculture, industrial, marine bunkering, mining, oil and gas, pipeline, remote power, and utility markets.
• Significant customer concentration with Carnival Corporation, Aggreko Plc, and Space Exploration Technologies Corp each accounting for more than 10% of 2025 revenues.

Cryogenic Equipment Rental

Financial Performance:

• Revenue: $5.3 million (-26.5% YoY)
• Key Growth Drivers: Rental of mobile LNG storage and vaporization assets. The decrease was due to the conclusion of multi-year contracts in Q4 2025, including temporary remote power in Louisiana and marine bunkering services in Galveston.

Product Portfolio:

• Fleet of over 170 mobile LNG storage and vaporization assets, including transportation trailers, electric and gas-fired vaporizers, ambient vaporizers, storage tanks, and mobile vehicle fuelers.
• Stationary storage and regasification assets.

Market Dynamics:

• Deploys assets on job sites to provide customers with equipment for transporting, storing, and consuming LNG.

Engineering and Field Support Services

Financial Performance:

• Revenue: $5.0 million (-32.5% YoY)
• Key Growth Drivers: Expertise in safe, cost-effective, and reliable use of LNG in various customer applications. The decrease was due to the conclusion of multi-year contracts in Q4 2025.

Product Portfolio:

• Design and integration of LNG into customer operations.
• Field service technicians for mobilization, commissioning, and reliable operation on job sites.

BOMAY Electric Industries, Inc. (Foreign Joint Venture)

Financial Performance:

• Net Equity Income: $1.2 million (-20.6% YoY)
• Revenue: $107.3 million (2025) vs. $117.5 million (2024)
• Gross Profit: $13.6 million (2025) vs. $14.5 million (2024)
• Earnings: $3.3 million (2025) vs. $4.1 million (2024)
• Operating Margin: Not directly calculable from provided data.
• Key Growth Drivers: Builds power and control systems for the energy industry in China. The decrease in equity income was due to lower net profits from the joint venture.

Product Portfolio:

• Electrical systems for the energy market in China.

Market Dynamics:

• 40% owned joint venture with Baoji Oilfield Machinery Co., Ltd. (51% owner) and AA Energies, Inc. (9% owner).
• The joint venture has a finite life set to terminate in 2028, with potential for extension.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: Not disclosed.
• Dividend Payments: No cash dividends declared or paid in fiscal years 2025 and 2024. The company anticipates retaining future earnings to fund business development and growth.
• Dividend Yield: 0.0%
• Future Capital Return Commitments: None disclosed.

Balance Sheet Position (as of December 31, 2025):

• Cash and Equivalents: $7.5 million
• Total Debt: $7.9 million (net of debt issuance costs)
• Net Cash Position: -$0.4 million (Total Debt - Cash and Equivalents)
• Credit Rating: Not disclosed.
• Debt Maturity Profile (excluding debt issuance costs):
  • 2026: $1.8 million
  • 2027: $1.2 million
  • 2028: $1.3 million
  • 2029: $1.4 million
  • 2030: $1.6 million
  • Thereafter: $0.6 million
  • Total: $7.9 million

Cash Flow Generation (2025):

• Operating Cash Flow: $8.6 million
• Free Cash Flow: $0.5 million (Operating Cash Flow - Capital Expenditures of $8.1 million)
• Cash Conversion Metrics: Not explicitly detailed.

Operational Excellence

Production & Service Model: STABILIS SOLUTIONS, INC. employs a turnkey approach to clean energy solutions, primarily using LNG. This involves building and operating cryogenic natural gas processing facilities (liquefiers) to convert natural gas into LNG. The company also sources LNG from a network of third-party producers. Its service model includes providing comprehensive transportation and logistics services, operating a large fleet of mobile cryogenic equipment for storage and vaporization, and offering engineering and field support services for LNG integration and on-site operations. This integrated approach aims to provide a "virtual natural gas pipeline" solution.

Supply Chain Architecture: Key Suppliers & Partners:

• Financial Partners: Cadence Bank (Revolving Credit Facility), AmeriState Bank (Secured Term Loan Facility).
• Marine Bunkering Partner: Seaspan Energy Ltd. (time charter for the Garibaldi LNG bunkering vessel).
• Equipment/Technology Supplier: Chart Energy & Chemicals, Inc. (purchases of $0.1 million in 2025).
• Office/Services Provider: The Modern Group (subleased office space and purchases of $0.2 million in 2025).
• LNG Supply: Network of approximately 31 third-party production sources throughout North America.

Facility Network:

• Manufacturing:
  • George West, Texas: LNG liquefier with up to 100,000 LNG gallons per day capacity.
  • Port Allen, Louisiana: LNG liquefier with up to 30,000 LNG gallons per day capacity.
  • Proposed Galveston, Texas: Waterfront LNG liquefaction facility with an expected 350,000 gallon-per-day capacity, under development.
• Research & Development: Not explicitly detailed as separate facilities.
• Distribution: Fleet of cryogenic trailers for LNG transport, marine bunkering staging sites in Texas (short-term leases).
• Office: Houston, Texas (corporate headquarters), Monterrey, Mexico.

Operational Metrics:

• LNG Delivered: Over 580 million gallons through more than 60,000 truck deliveries over 22 years.
• Liquefaction Capacity: Currently 130,000 LNG gallons per day, expected to increase to 480,000 gallons per day with the Galveston facility.
• Cryogenic Equipment Fleet: Over 170 mobile LNG storage and vaporization assets.

Market Access & Customer Relationships

Go-to-Market Strategy: STABILIS SOLUTIONS, INC. primarily utilizes a direct sales force, with representatives covering major geographic and customer vertical markets. The company also engages in trade shows, industry conferences, and works with federal, state, and local government agencies to educate on the value of natural gas as a fuel and stay abreast of regulations.

Distribution Channels:

• Direct Sales: Enterprise sales force directly engaging customers across various end markets.
• Channel Partners: Utilizes qualified third-party providers for outsourced equipment and transportation services to support its customer base.
• Digital Platforms: Not explicitly detailed.

Customer Portfolio: Enterprise Customers:

• Tier 1 Clients (2025 revenue concentration):
  • Carnival Corporation: 32.9% of total revenue
  • Aggreko Plc: 19.4% of total revenue
  • Space Exploration Technologies Corp: 14.5% of total revenue
• Customer Concentration: The company depends on a limited number of customers, with the top three accounting for 66.8% of total revenues in 2025. The loss of a significant customer or their inability to perform could materially adversely affect operating results.
• Target Markets: Aerospace, agriculture, industrial, marine bunkering, mining, oil and gas, pipeline, remote power, and utility markets. These customers typically consume high fuel volumes, operate in mobile/temporary/off-pipeline locations, have limited access to alternative fuels, or face stringent emissions requirements.

Geographic Revenue Distribution (2025):

• United States: 94.9% of total revenue ($64.7 million)
• Mexico: 5.1% of total revenue ($3.5 million)
• Growth Markets: The company has initiated LNG deliveries to Europe in 2024 under its non-FTA export authorization, indicating an expansion into international growth markets.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The small-scale LNG market in North America is characterized by growing demand driven by environmental sustainability, energy security, and economic viability. LNG serves as a partner fuel for renewables and a replacement for higher-emission, more expensive traditional fuels like distillate fuel oil and propane. Key drivers include:

• Marine Bunkering: Driven by International Maritime Organization (IMO) sulfur caps and carbon emission targets, with 851 LNG-fueled vessels globally and 670 new builds on order by 2033.
• Aerospace / Rocket Propulsion: LNG is increasingly preferred for reusable rocket propulsion due to higher energy density, safety, and production cost-effectiveness.
• Remote Power Generation (including Data Centers): LNG offers rapid deployment and significant natural gas storage for data centers requiring substantial and redundant electrical power, especially where grid access or pipelines are limited.
• Environmental Benefits: Natural gas produces fewer carbon dioxide, nitrogen oxide, sulfur, and particulate matter emissions than most other fossil fuels.
• Economic Viability: Abundant North American natural gas reserves support relatively low and stable LNG prices compared to crude oil and other competing fuels.
• Safety: LNG is considered safer than diesel and propane due to rapid dissipation when spilled and higher ignition temperatures/narrow flammability range.
• Established Technology: Proven small-scale LNG production and distribution technologies are widely available, reducing technology risk but emphasizing operator capabilities.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Distillate Fuels: Diesel and marine gas oil (power the majority of engines and generators in target markets).
• Propane: A common alternative fuel in many industrial and agricultural applications.
• Pipeline Natural Gas: Direct pipeline access can eliminate the need for LNG in some locations.
• Compressed Natural Gas (CNG): Another natural gas alternative, particularly for transportation.
• Other Natural Gas Companies: Other small-scale LNG providers.
• Major and Independent Oil and Natural Gas Companies: Larger entities with potentially greater resources.
• Utilities and their affiliates: Possess competitive advantages such as lower cost of capital, predictable cash flows, and established customer relationships.

Emerging Competitive Threats:

• New entrants in the small-scale LNG market.
• Disruptive technologies or more efficient/cost-effective processes developed by competitors.
• Displacement of LNG by renewable energy sources or alternative fuels with lower carbon content, driven by evolving corporate sustainability mandates and regulatory changes.

Competitive Response Strategy: STABILIS SOLUTIONS, INC. aims to maintain its competitive advantage by leveraging its extensive operating experience, investing in new production and distribution assets (e.g., Galveston facility, Garibaldi vessel), and offering comprehensive "one-stop shop" off-pipeline natural gas solutions. The company focuses on growing, high-value vertical markets like marine bunkering and data centers.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics:

• Demand and Price Volatility: Business is based on assumptions about future availability and price of natural gas and LNG, which can be volatile due to supply/demand changes, weather, economic conditions, and geopolitical factors. This could decrease sales prices or increase supply costs.
• Competition: Highly competitive market with numerous competitors, including distillate fuels, propane, pipeline natural gas, CNG, and other natural gas companies. Some competitors have greater financial, technological, and market resources.
• Technological Obsolescence: Risk that current liquefaction processes or LNG as a fuel source could be rendered obsolete or uneconomical by new technologies, legal/regulatory requirements, or more efficient processes.
• Failure of LNG as Competitive Energy Source: If natural gas is not competitive with other energy sources (coal, oil, nuclear, renewables) in target markets, it could adversely affect expansion strategy and ability to deliver LNG commercially.

Operational & Execution Risks

Supply Chain Vulnerabilities:

• LNG Supply Availability: Inability to purchase or receive physical delivery of sufficient quantities and/or quality of LNG or natural gas at economically attractive prices could impact delivery obligations and lead to contract terminations.
• Operational Risks: Operation of LNG infrastructure, liquefaction, and other facilities involves significant risks such as equipment breakdowns, operational errors, industrial accidents, labor disputes, and natural disasters, leading to interruptions, increased costs, or decreased revenues.
• Construction Risks: Construction of new infrastructure (e.g., Galveston facility) involves significant capital, operational, regulatory, environmental, political, legal, and economic risks, including cost overruns, delays, and failure to secure financing or full capacity utilization.
• Contractor Dependence: Timely and cost-effective completion of infrastructure projects is highly dependent on contractor performance, which can be affected by design issues, subcontractor availability, equipment failures, and financial condition.
• Equipment and Personnel Integration: Challenges in integrating new equipment and personnel to meet customer obligations, particularly for new contracts like the data center power generation project, could lead to losses and reputational damage.
• Insurance Insufficiency: Insurance may be insufficient to cover all losses from property damage or operational incidents, especially for natural disasters (no business interruption insurance for hurricanes).

Financial & Regulatory Risks

Market & Financial Risks:

• Funding Needs: Expects increased working capital needs for expansion (Galveston, data center). May require additional funding through debt or equity, which may not be available on favorable terms or at all, potentially delaying or eliminating expansion efforts.
• Profitability: May incur significant expenses and operating losses in the foreseeable future, and may not maintain profitability, impacting company value and ability to raise capital.
• Debt Covenants: Risk of failing to maintain compliance with debt covenants (e.g., consolidated debt service ratio), which could lead to acceleration of debt repayment and adversely affect liquidity and operations.
• Customer Concentration: High dependence on a limited number of customers (top three accounted for 66.8% of 2025 revenues). Loss or non-performance by a significant customer could materially impact operating results and cash flow.
• Stock Volatility: Common stock is thinly traded and volatile, influenced by financial fluctuations, infrastructure development issues, regulatory approvals, key agreements, litigation, technological innovations, and economic conditions.
• Inflation: Continued inflationary pressure on costs (fuel, repairs, maintenance, electricity, wages, insurance) may not be fully passed through to customers, adversely impacting future results and operating cash flows.
• Legal Proceedings: Involvement in various legal actions and audits, with potential for unfavorable outcomes, substantial claims, and significant costs.

Regulatory & Compliance Risks:

• Environmental, Health, and Safety Laws: Extensive federal, international, state, and local laws and regulations (e.g., CAA, CWA, RCRA, OSHA, USCG, PHMSA, NGA, NEPA) govern operations, requiring permits and compliance, with potential for increased costs, restrictions, and liabilities for non-compliance.
• Greenhouse Gas/Climate Change Regulations: Potential for new federal, state, or foreign regulations to reduce GHG emissions could increase compliance costs, require new controls, or reduce demand for natural gas products.
• Fossil Fuel Concerns: Public concerns about fossil fuels could lead to legislative/regulatory actions or litigation, adversely affecting operations or customer demand for LNG.
• Changes in Legislation/Regulations: Future changes in laws or interpretations related to LNG liquefaction, storage, regasification, transportation, export, or import could cause additional expenditures, restrictions, and delays.
• Trucking Safety Regulations: Dependence on third-party LNG transportation providers subject to FMCSA and state regulations; non-compliance or loss of providers could adversely affect business.

Geopolitical & External Risks

Geopolitical Exposure:

• Foreign Operations: Operations and investments in Mexico and China (BOMAY joint venture) expose the company to risks from weakening foreign economies, unforeseen operating/financial/political/cultural factors, and strained diplomatic relations.
• Trade Relations: Changes in U.S. trade policy, including tariffs, could increase economic uncertainty, reduce demand for LNG, or increase operating costs.
• Sanctions & Export Controls: Compliance with export restrictions and sanctions could limit business opportunities.
• Contagious Illness: Spread or resurgence of contagious illnesses (e.g., COVID-19) could lead to economic deterioration, operational disruptions, reduced cash flows, and limited access to capital.

Cybersecurity Threats: Increasing dependence on digital technologies makes the company vulnerable to cyber-attacks or information security breaches, potentially resulting in information theft, data corruption, operational disruption, and financial loss.

Innovation & Technology Leadership

Research & Development Focus: Core Technology Areas:

• Cryogenic Natural Gas Processing: Expertise in designing and operating liquefiers to convert natural gas into LNG through purification and multi-stage cooling.
• LNG Application Integration: Development of processes and procedures to improve customers' use of LNG in their operations, supported by engineering and field service teams.
• Innovation Pipeline: Not explicitly detailed beyond general statements about leveraging proven technologies and expanding into new markets.

Intellectual Property Portfolio:

• Patent Strategy: Holds patents in the US, Canada, and Mexico for the use of natural gas for well enhancement. Also holds a patent for rotary fluid processing systems and a US patent for a gas processing system. The last US patent expires in July 2039.
• Licensing Programs: Not explicitly detailed.
• IP Litigation: Not explicitly detailed.

Technology Partnerships:

• Strategic Alliances: Not explicitly detailed beyond general statements about working with third-party providers for equipment and transportation.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: J. Casey Crenshaw transitioned to Executive Chairman and Interim President and Chief Executive Officer effective January 31, 2025, replacing Westervelt T. Ballard, Jr., who mutually agreed to terminate his employment.

Board Composition:

• Independent Directors: Peter C. Mitchell (Audit Committee Chair), Edward L. Kuntz, Matthew W. Morris.
• Committees:
  • Audit Committee: Peter C. Mitchell (Chair), Edward L. Kuntz, Matthew W. Morris. Mr. Mitchell is deemed an "audit committee financial expert."
  • Compensation Committee: J. Casey Crenshaw (Chair), Peter C. Mitchell, Edward L. Kuntz, Matthew W. Morris.

Human Capital Strategy

Workforce Composition:

• Total Employees: 85 employees as of December 31, 2025.
• Geographic Distribution: Not explicitly detailed, but operations in the US, Mexico, and China (JV).
• Skill Mix: Not explicitly detailed, but emphasizes skilled employees for constructing and operating energy-related infrastructure and providing high-quality service.

Talent Management: Acquisition & Retention:

• Hiring Strategy: Aims to attract and retain employees by offering competitive compensation packages (base and incentive compensation), attractive benefits, and opportunities for advancement.
• Retention Metrics: Not explicitly detailed, but the company states it reviews and adjusts compensation to ensure competitiveness and consistency with performance.
• Employee Value Proposition: Focuses on creating a culture of opportunity, personal growth, respect, collaboration, and appreciation for diverse backgrounds and contributions.

Diversity & Development:

• Diversity Metrics: Not explicitly detailed.
• Development Programs: Supports and utilizes various employee training, educational programs, and safety programs with detailed procedures to ensure safe, reliable, and efficient operations in a highly regulated environment.
• Culture & Engagement: Prioritizes the safety of employees, contractors, customers, and communities.

Environmental & Social Impact

Environmental Commitments: Climate Strategy:

• Emissions Targets: Natural gas contains less carbon than most other fossil fuels, producing fewer carbon dioxide emissions (50-60% less than coal plants, 13-21% fewer greenhouse gas emissions than comparable gasoline/diesel vehicles).
• Carbon Neutrality: Not explicitly detailed.
• Renewable Energy: LNG is positioned as a "partner fuel for renewable energy sources."

Supply Chain Sustainability:

• Supplier Engagement: Not explicitly detailed.
• Responsible Sourcing: Not explicitly detailed.

Social Impact Initiatives:

• Community Investment: Not explicitly detailed.
• Product Impact: LNG offers environmental benefits (lower particulate matter and sulfur emissions) and economic benefits, aligning with corporate sustainability mandates.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: STABILIS SOLUTIONS, INC. did not experience significant seasonal variations in LNG volume delivered to customers during 2025. However, revenues are susceptible to variations due to changes in natural gas prices, which tend to be higher in peak winter and summer months due to heating and cooling demand.
• Economic Sensitivity: Customer demand is greatly driven by changes in oil and gas prices, influencing the release of new capital projects.
• Industry Cycles: Not explicitly detailed beyond general economic sensitivity.

Planning & Forecasting: Not explicitly detailed.

Regulatory Environment & Compliance

Regulatory Framework: STABILIS SOLUTIONS, INC. is subject to extensive federal, international, state, provincial, and local laws and regulations in the United States, Mexico, Canada, and China. These regulations cover environmental matters, health and safety, labor and employment, building codes, zoning, land use, public reporting, and taxation.

Industry-Specific Regulations:

• Construction & Operation of LNG Plants: Requires facility permits/licenses addressing building codes, storm water/wastewater discharges, waste handling, and air emissions. Local planning boards and fire departments must approve construction.
• Transportation of LNG: Subject to international, federal (USDOT, FMCSA, Hazardous Materials Regulations), and state (e.g., Railroad Commission of Texas) safety standards for qualified drivers and cryogenic containers.
• Transfer of LNG: Governed by international, federal, state, and local safety standards and operational regulations for transfers between trailers, facilities, and marine vessels. The U.S. Coast Guard (USCG) regulates waterfront facilities and oversees marine bunkering/vessel fuel transfers.
• Storage & Vaporization of LNG: Requires permits/licenses addressing waste handling and air emissions, and approval from local planning boards and fire departments.
• Export/Import Authorizations: Holds DOE authorization to export LNG to FTA and non-FTA countries (up to 1.0 MTPA for 28 years), and to import/export LNG via truck to Canada and Mexico. Also authorized to import LNG by vessel from international sources to U.S. terminals through September 2026.
• Federal Permitting: Certain federal permitting processes may trigger National Environmental Policy Act (NEPA) requirements.
• Pipeline Hazardous Materials Safety Administration (PHMSA): Promulgates detailed regulations for LNG facilities under its jurisdiction.

Trade & Export Controls:

• Export Restrictions: Compliance with DOE authorizations for LNG exports to various countries.
• Sanctions Compliance: Not explicitly detailed.

Legal Proceedings: The company is involved in various legal proceedings and claims in the normal course of business, including tax disputes. Management believes the ultimate resolution of these matters will not have a material effect on its financial position or results of operations. The federal income tax return for 2022 is under examination by the IRS.

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate: Not explicitly stated, but the company incurred $0.1 million in income tax expense on a net loss before income tax expense of -$1.3 million in 2025.
• Federal Net Operating Loss (NOL) Carryforward: Approximately $48.6 million available to offset future taxable income, excluding $81.1 million believed ineligible due to a change in ownership in 2019.
• Valuation Allowance: A valuation allowance fully reserves the company's net deferred tax assets at December 31, 2025, based on the assessment of whether deferred tax assets will be realized.
• Geographic Tax Planning: Subject to income taxes in the U.S. (federal and state), Mexico, Canada, and China (through BOMAY).
• Tax Reform Impact: The One Big Beautiful Bill Act (OBBBA) signed into U.S. law on July 4, 2025, did not have a material effect on the financial statements.

Insurance & Risk Transfer

Risk Management Framework: STABILIS SOLUTIONS, INC. maintains insurance against certain operational risks, including explosions, pollution, release of toxic substances, fires, seismic events, hurricanes, and other adverse weather conditions. However, the company does not maintain insurance against all risks and losses, specifically noting no business interruption insurance for hurricanes and other natural disasters. The occurrence of significant uninsured or underinsured events could create substantial liabilities and losses.

Risk Transfer Mechanisms: Not explicitly detailed beyond insurance coverage.