Company: SLNH
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023503
Chunk: 209

Company: Soluna Holdings, Inc
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 209
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, Texas. This facility is owned by DVSL
II and operated by Soluna US Services, LLC, and may engage in cryptocurrency, batch processing, and other non-crypto related activities.
It is adjacent to two other company modular data center projects at the same site.

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Project
Dorothy 2 is financed by Soluna2 SLC Fund II Project Holdco LLC, an investment vehicle of SLC with
a capital contribution of up to $29.98 million, and the Developer, as the parent company of DVSL II, with an initial capital contribution
of up to $4.6 million. As of the Effective Date, the Company and the Developer became co-owners of DVSL II. In exchange for contributions
to DVSL II, the Company and SLC were initially issued 42% and 58% of the Class B Membership Interests in DVSL II respectively, and were
admitted as Class B members of DVSL II. Further, DVSL II issued 100% of its Class A Membership Interests to SDI. In relation to distributions,
once ERCOT Achievement Date has been met ( date on which SLC and the Company have mutually agreed upon the parameters for power trading
or demand response program in the ERCOT market) until the Target Return Date (last day of quarter in which the Class B members achieve
an 18% internal rate of return), the Class A members will obtain 7.5% of the distributable cash with the remaining 92.5% being distributed
to the Class B members on a pro-rata basis. After the Target Return Date is met, 50% of distributable cash will be allocated to the Class
A members and 50% allocated to the Class B members in accordance with their membership interests.

Project
Dorothy 2 allows the Developer to invest in DVSL II, with the total ownership of the Developer and its affiliates capped at 49% of the
Class B Membership Interests. This investment can occur within 30 days after the Effective Date (treated equally to the initial Investor),
from day 31 to 180 days after the Effective Date (subject to a purchase price formula with a 20% discount rate), or after 180 days with
the initial Investor’s approval.

On
May 16, 2024, the Company secured $1.0 million in financing from SLC for equipment and machinery for Project Dorothy 2 through an Equipment
Loan Agreement (the