Company: SLNH
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024045
Chunk: 49

Company: Soluna Holdings, Inc
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 49
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5 million to DVSL (the “Spring Lane Dorothy Commitment”),
and as of December 31, 2022, Spring Lane had actually contributed approximately $4.8 million. Under the Dorothy Contribution Agreement,
the Company and Spring Lane have committed to make subsequent contributions, up to their respective Company Commitment and Spring Lane
Dorothy Commitment amounts, on a pro rata basis, upon receipt of a contribution request from DVSL, as set forth in the Dorothy Contribution
Agreement and subject to the satisfaction of certain conditions described therein. The proceeds of any subsequent commitments will be
applied to pay project costs in accordance with the project budget.

In
exchange for their contributions, the Company and Spring Lane were issued 67.8% and 32.2% of the Class B Membership Interests in DVSL,
respectively, and were admitted as Class B members of DVSL. Further pursuant to the Dorothy Contribution Agreement, DVSL issued 100%
of its Class A Membership Interests to Devco.

The
Company evaluated this legal entity under ASC 810, Consolidations and determined that DVSL is a variable interest entity (“VIE”)
that should be consolidated into the Company, with a non-controlling interest recorded to account for Spring Lane’s equity ownership
of the Company. The Company has a variable interest in DVSL. The entity was designed by the Company to create an entity for outside investors
to invest in specific projects. The creation of this entity resulted in the Company, through its equity interest in DVSL, absorbing operational
risk that the entity was created to create and distribute, resulting in the Company having a variable interest in DVSL.

On
March 10, 2023, the Company along with Devco, and DVSL, a Delaware limited liability company (the “Project Company”)
entered into a Purchase and Sale Agreement (the “Purchase and Sale Agreement”) with Soluna SLC Fund I Projects Holdco, LLC,
a Delaware limited liability company (“Spring Lane”) that is wholly owned indirectly by Spring Lane Management LLC. The Project
Company was constructing a modular data center with a peak demand of 25 MW (the “Dorothy Phase 1A Facility”).

Under
a series of transactions in February 2023 and March 2023, culminating in the March 10, 2023 Purchase and Sale Agreement, the Company
sold to Spring Lane certain Class B Membership Interests for a purchase price of $7.5 million (the “