Company: SLNH
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023503
Chunk: 169

Company: Soluna Holdings, Inc
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 169
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 principal, interest, and fees and (ii) September 12, 2030. Additional Tranche Loan Commitments will have maturity
dates as set forth in their respective amendments to the Credit Agreement. For the three and nine months ended September 30, 2025, interest
expense was $168
thousand.

Proceeds
from the Generate Credit Agreement will be used to finance, refinance, develop and construct the Company’s Dorothy 1A, Dorothy 2
and Kati data center projects, fund a debt service reserve account, and pay fees and expenses. The loans bear interest at a variable rate
based on either ABR or Term SOFR, as set forth in the Generate Credit Agreement. The applicable interest rate for SOFR loans is equal
to Term SOFR plus a margin of 10.0% per annum, and for ABR loans is equal to the ABR plus a margin of 9.0% per annum. The Generate Credit
Agreement provides for a SOFR rate floor of 3.50% per annum. The Borrowers are required to pay a commitment fee of 1.00% per annum on
undrawn amounts of the Tranche B Loan Commitments and any Additional Tranche Loan Commitments. During the continuance of an event of default,
a default rate applies equal to the otherwise applicable rate plus 2.0% per annum. 

The
loans are subject to scheduled amortization, fees and prepayment premiums which will be paid through excess cash sweeps. The classification
of the outstanding principal balance of the Generate loan balance into current and non-current liabilities is contingent upon
management’s estimate of the future application of mandatory debt repayments. The Credit Agreement contains a mandatory prepayment provision,
or “cash sweep,” requiring a percentage of free cash flow, as defined in the Credit Agreement, to be applied to principal reduction
on a periodic basis. The amount expected to be prepaid via this sweep mechanism during the next twelve months is classified as current
debt. This classification relies on management’s internal cash flow forecast, which incorporates assumptions regarding future operating
performance, capital expenditures, and working capital needs. Assumptions include market volatility
risks, which are inherently unpredictable. Because the classification is dependent upon these management estimates, the actual
amount of debt paid down through the cash sweep mechanism may differ materially from the amounts classified as current liabilities. The
obligations are guaranteed by certain Company subsidiaries and secured by first-priority liens