Company: SLNH
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010886
Chunk: 204

Company: Soluna Holdings, Inc
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 204
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una CloudCo Secured Note accrues interest at a rate 9.0% per annum, subject to adjustment upon an event of default. The Soluna
CloudCo Secured Note matures on June 20, 2027. On July 12, 2024, the Company, CloudCo, Soluna Cloud, and the Existing Investor entered
into a First Amendment to the Note Purchase Agreement. Additional Notes were issued for $1.25 million (“Soluna CloudCo Additional
Secured Note”) on July 12, 2024 and are subject to the same terms and conditions as the June SPA financing. On October 1, 2024,
CloudCo, Soluna Cloud and the Company entered into assignment and assumption agreements (the “Assignment Agreements”) with
the Additional Investors with respect to an aggregate of $1.25 million of notes issued by CloudCo. Pursuant to the Assignment Agreements,
the Company will be able to purchase such notes for a purchase price of $750 thousand, or 60% of face value. The assignment and assumption
will be effective once all conditions of the agreement are met including fulfilling the purchase price. The assignment and assumption
was on March 14, 2025, therefore we extinguished the remaining third party outstanding debt on the Additional Note, and a gain on extinguishment
of the debt of approximately $551 thousand was recorded. In relation to the Soluna Cloudco Secured Note, as of March 31, 2025, the Company
had an outstanding principal balance of approximately $10.7 million.

On January 14, 2022, the Company effected an initial
drawdown under the Master Equipment Finance Agreement (“MEFA”) with NYDIG in the aggregate principal amount of approximately
$4.6 million that bore interest at 14%. On January 26, 2022, the Company had a subsequent drawdown of $9.6 million. On December 20, 2022,
Soluna MC Borrowing 2021-1 LLC (“Borrower”) received a Notice of Acceleration and Repossession (the “NYDIG Notice”)
from NYDIG with respect to the MEFA, by and between Borrower, a subsidiary of Soluna MC, LLC, a subsidiary of Soluna Digital, a subsidiary
of the Company, and NYDIG. The obligations of Borrower under the MEFA and reflected in the NYDIG Notice are ring-fenced to Borrower and
its direct parent company,