Company: SLNH
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024045
Chunk: 48

Company: Soluna Holdings, Inc
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 48
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 Accounting Standards Board (“FASB”) issued ASU No. 2024-04, Debt - Debt with Conversion and
Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. ASU 2024-04 clarifies the requirements for
determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion to improve relevance
and consistency. The new standard is effective for the Company for its annual periods beginning after December 15, 2025 and interim periods
within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of adopting the
standard.

14. Variable Interest Entities and Voting Interest Entities

On
January 26, 2022, DVSL was created in order to construct, own, operate and maintain data centers in order to support the mining of cryptocurrency
assets, batch processing and other non-crypto related activities (collectively, the “Project”). On May 3, 2022, SCI entered
into a Bilateral Master Contribution Agreement (the “Bilateral Contribution Agreement”) with Spring Lane Capital, pursuant
to which Spring Lane agreed, pursuant to the terms and conditions of such agreement, to make one or more capital contributions to, and
in exchange for equity in, SCI or one of its subsidiaries up to an aggregate amount of $45 million, as amended in the third quarter of
fiscal year 2024 to fund certain projects to develop green data centers co-located with renewable energy assets (the “Spring Lane
Commitment”).

On
August 5, 2022, the Company entered into a Contribution Agreement (the “Dorothy Contribution Agreement”) with Spring Lane,
Soluna DV Devco, LLC (“Devco”), an indirect wholly owned subsidiary of SCI, and DVSL an entity formed in order to further
the Company’s development for Project Dorothy, (each, a “Party” and, together, the “Parties”). Pursuant
to the Dorothy Contribution Agreement, the Company committed to a capital contribution of up to approximately $26.3 million to DVSL (the
“Company Commitment”), and on August 5, 2022, the Company was deemed to have contributed approximately $8.1 million, through
payment of capital expenditures and development costs made on behalf of DVSL by the Company prior to August 5, 2022. Further under the
Agreement, Spring Lane committed to a capital contribution of up to $12.