Company: SLNH
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001756
Chunk: 1475

Company: Soluna Holdings, Inc
Filing Date: 2025-03-31
Form: 10-K
Item: Item 4
Chunk 1475
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%
of the costs relating to the construction and operation of the Dorothy Phase 1A Facility, compared to its 67.8%
share until that time, including during the calendar year 2022. After
Spring Lane Capital realizes an 16% Internal Rate of Return hurdle on its investments, the Company retains the right to 50% of the profits
on DVSL. In connection with the Spring Lane transactions and agreements, Soluna DV Services, LLC. will be providing
the operations and maintenance services to DVSL. DVCC expects to receive a margin of 20% for
services rendered on certain expenses.

     F-40 

Concurrently
with the Sale, the Company, Spring Lane, Devco and the Project Company entered into (a) the Fourth Amended and Restated Limited Liability
Company Agreement of the Project Company, dated as of March 10, 2023 (the “Fourth A&R LLCA”), an amendment and restatement
of the Third Amended and Restated Limited Liability Company Agreement of the Project Company dated as of March 3, 2023, and (b) the Amended
and Restated Contribution Agreement, dated as of March 10, 2023 (the “A&R Contribution Agreement”), an amendment and
restatement of the Contribution Agreement dated as of August 5, 2022. The Fourth A&R LLCA provides for certain updates in respect
of Spring Lane’s majority ownership. The A&R Contribution Agreement reflects updated pro rata member funding percentages as
a result of the Sale as well as updated contribution caps for each of the Company and Spring Lane.

As
of January 1, 2023, there were no changes in the Limited Liability Agreement of DVSL other than those related to incorporating the new
investment and the purpose and design of DVSL has not changed. The Company evaluated the concepts under ASC 810 for DVSL after the change
in membership interest, concluding that this resulted in the Project Company not being structured with non-substantive voting rights,
as the noncontrolling shareholders have disproportionately fewer voting rights but the activities are not conducted on their behalf.
This, in conjunction with there being sufficient equity at risk to finance its activities and the equity holders as a group having the
characteristics of a controlling financial interest in DVSL, results in DVSL not meeting the definition of a VIE. The Company’s
consolidation model is based on the concept of power. Given the Company’s Class A membership interest