Company: SLNH
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010886
Chunk: 8

Company: Soluna Holdings, Inc
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 8
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 phases, Project Dorothy 1A and 1B. As of March 31, 2025, SHI holds a 15% ownership interest in Soluna DVSL ComputeCo, LLC (“DVSL”),
owner of Project Dorothy 1A, and a 51% ownership interest in Soluna DV ComputeCo, LLC (“DVCC”), owner of Project Dorothy 1B.
On July 22, 2024, the Company closed financing for the 48 MW modular data center (the “Project Dorothy 2”). Project Dorothy
2 is financed by Soluna2 SLC Fund II Project Holdco LLC, an investment vehicle of Spring Lane Capital (“SLC”) and SDI. As
of March 31, 2025, SDI has a 12% ownership interest in Project Dorothy 2.

Going Concern and Liquidity

The Company’s condensed financial
statements as of March 31, 2025 have been prepared using generally accepted accounting principles in the United States of America (“U.S.
GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal
course of business. As shown in the accompanying condensed financial statements, the Company was in a net loss position, has negative
working capital, and has significant outstanding debt as of March 31, 2025. In addition, Soluna MC Borrowings, LLC 2021-1 (“Borrower”),
a subsidiary of Soluna MC, LLC (“Soluna MC”), a subsidiary of Soluna Digital, Inc.
(“Soluna Digital” or “SDI”), a subsidiary of the Company, has a litigation matter with NYDIG ABL LLC (“NYDIG”)
in relation to their Master Equipment Finance Agreement. See further discussion around the NYDIG litigation in Note 10. The
Company had outstanding commitments as of March 31, 2025, related to SDI of $10.4 million in capital expenditures related to Project
Dorothy 2 and Project Kati. In addition, in June 2024, Soluna AL Cloudco, LLC (“CloudCo”), a subsidiary of Soluna
Cloud, entered into an agreement (the “HPE Agreement”) with Hewlett Packard Enterprise Company (“HPE”), with
an initial pre-payment of $10.3
million and a total commitment of $34
million over a 36-month period. On March 24, 2025, CloudCo notified HPE of its