Company: SLNH
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023503
Chunk: 213

Company: Soluna Holdings, Inc
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 213
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 KKSL JVCo, respectively, and were admitted as Class B
members of KKSL JVCo. Further, SDI and Spring Lane entered into a Developer Investment Side Letter in which allows SDI to invest into
KKSL JVCo up to 49% of ownership in the Class B Membership Interests for a period of six months after August 1, 2025.

In
relation to distributions, until the Target Achievement Date (date at which Class B members achieve 16% of IRR), the Distributable Cash
received by the Company shall be distributed ninety-two and five tenths percent (92.5%) to the Class B Members on a pro rata basis, and
seven and five tenths percent (7.5%) to the Class A Member, until each of the Class B Members has received its Target Return; (ii) second,
after the Target Achievement Date, the portion of Distributable Cash received by the Company shall be distributed fifty percent (50%)
to the Class A Member (or its respective assigns), and fifty percent (50%) to the Class B Members (or their respective assigns), pro
rata in accordance with their Membership Interests.

The
Company evaluated this legal entity under ASC 810, Consolidations and determined that this entity is a VIE, as the equity holders
as a group do not have the characteristics of a controlling financial interest. Even though SLC has all of the Class B membership, SDI
holds all the Class A membership, which gives them the ability to control the significant decisions made in the ordinary course of business.
The Company has the right to receive benefits that could potentially be significant to the VIE through its Class A membership interest,
as it is eligible to receive 50% of distributions upon SLC obtaining a specified internal rate of return. The non-controlling shareholders
do not hold substantive participating rights, voting rights or liquidation rights.

    39

The
carrying amount of the assets and liabilities was as follows for KKSL JVCo:

 Schedule
of Variable Interest Entities of Assets and Liabilities 

    (Dollars in thousands) 
    September
    30, 2025 

    Current assets: 

    Cash and restricted cash 
    $3,622 
  
    Due from intercompany 
     725 
  
    Prepaid expenses and other
    current assets 
     2,888 
  
    Total current assets 
     7,235 

    Other assets,