Company: SLNH
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010886
Chunk: 168

Company: Soluna Holdings, Inc
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 168
---
ELA”) between
SDI SL Borrowing - 1, LLC (the “Borrower”) and SLC. On that date, SLC lent the Borrower $720,000 to purchase medium voltage
cables and low voltage switchboards. This debt was later assigned to ComputeCo on the Effective Date. Subsequently, the Borrowing amount
in full by issuing the Investor Class B Membership Interests in the Dorothy 2 project valued at three times the borrowing amount (i.e.,
$2.16 million).

As of March 31, 2025 SLC owns 88% and SDI owns 12% of ComputeCo. Subsequent
to March 31, 2025, the Company transferred its Class B Membership to SLC, resulting in 0% Class B Membership Interests held by the Company
as of April 4, 2025. SDI still retains 100% Class A Membership Interests in ComputeCo.

The Company evaluated this legal entity under ASC
810, Consolidations and determined that this is not a VIE. This entity is a VOE primarily due to there being sufficient equity at
risk to finance its activities, the equity holders as a group having the characteristics of a controlling financial interest and the entity
is not structured with non-substantive voting rights. The Company’s consolidation model is based on the concept of power. Given
the Company’s Class A membership interest, the Company has the ability to control the significant decisions made in the ordinary
course of the business of ComputeCo. Even though SLC has a majority of the Class B membership, the Company holds all the Class A membership,
which gives them the ability to control the significant decisions made in the ordinary course of business. The non-controlling shareholders
do not hold substantive participating rights, voting rights or liquidation rights.

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

 Schedule of Variable Interest Entities of Assets and Liabilities

    (Dollars in thousands) 
    March 31, 2025  
    December 31, 2024 

    Current assets: 

    Cash and restricted cash 
    $394  
    $402 
  
    Accounts receivable, intercompany 
     2,868  
     2,868 
  
    Prepaids and other current assets 
     55  
     41 
  
    Other receivable, related party 
     3,344