Company: SLNH
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010886
Chunk: 206

Company: Soluna Holdings, Inc
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 206
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 to be used to purchase necessary equipment for the progression
of D2 and Project Kati. Any loans made under the Equipment Loan Agreement have a maturity date of May 16, 2027 and bear interest at a
rate of 15% per annum. The Equipment Loan Agreement includes customary covenants for loans of this nature, as well as a multiple on invested
capital provision, which requires us to pay, in addition to principal and interest, an amount equal to the difference of (i) the greater
of (a) the principal amount of the Loan being repaid plus all interest previously paid or simultaneously being paid to Lender in
respect of such principal of the Loan, and (b) the principal amount of the Loan being repaid multiplied by three, minus (ii) the
sum of the principal amount of the Loan being repaid plus all interest previously paid or simultaneously being paid to Lender in
respect of such principal of the Loan. On May 17, 2024, the SDI Borrower drew down $720 thousand of the Loan. On July 22, 2024, SDI Borrower
satisfied and repaid the borrowing amount in full by issuing the Lender Class B Membership Interests in the D2 valued at three times the
borrowing amount (i.e., $2.16 million). The redemption of debt through equity created approximately a $1.4 million loss on debt extinguishment
for the year ended December 31, 2024. On March 21, 2025, the SDI Borrower drew down $250 thousand of the Loan, in relation to Project
Kati. The amount is outstanding as of March 31, 2025.

On March 12, 2025, the SW Borrower, a Delaware limited
liability company and subsidiary of SW Holdings, itself a subsidiary of SDI, a Nevada corporation and wholly owned subsidiary of the Company,
entered into the Galaxy Loan Agreement with SW Holdings and Galaxy Digital LLC. The Galaxy Loan Agreement provides for a term loan facility
in the principal amount of $5.0 million (the “Term Loan Facility”). The Term Loan Facility bears interest at a rate of 15.0%
per annum, subject to an increase of 5.0% (for a total of 20.0%) in the event an Event of Default has occurred and is continuing. The
Term Loan Facility matures on March 12, 2030 and includes scheduled payments over a five