Company: SLNH
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023503
Chunk: 95

Company: Soluna Holdings, Inc
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 95
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 (“DRS”)
programs. This designation positioned Project Dorothy as a contributor to grid flexibility and resilience in the Texas power market,
while also enabling us to diversify our revenue streams.

Under
the DRS program, we commit to maintaining a specified level of curtailment capacity—measured as load reduction availability—on
a monthly basis. When called upon by ERCOT, we are required to reduce the facility’s power consumption by the committed amount.
In exchange, we receive compensation for maintaining this curtailment readiness, regardless of whether an actual dispatch occurs.

Participation
in the program allows us to generate incremental revenue and offset power costs at Project Dorothy, enhancing its cost-efficiency. As
a result, the facility ranks among the lowest-cost operators in the sector. Since registration, Project Dorothy has successfully fulfilled
its obligations in the Winter, Spring, and Summer DRS periods, and is currently enrolled in the Fall standby period.

Project
Dorothy 2

We
began planning for the 48 MW expansion of Project Dorothy in 2023 – known as Project Dorothy 2. We partnered with SLC who agreed
to finance up to $30 million of the project cost. We closed the initial financing contribution and operation agreement with SLC in July
2024 and broke ground in the third quarter of 2024. Initial energization and ramp-up began as of May 2025. This has enabled the commencement
of the commissioning of the first of 3 phases, of 16 MW, that began in May 2025 and was completed at the end of October 2025, as the site is now fully operational. As each phase was commissioned, it began to generate revenue, both due to Bitcoin Hosting
and Demand Response Services. D2 features a superior financial waterfall structure and enhanced management and development fees for Soluna
compared to D1A, allowing us to benefit from improved income once the facility is operational.

Project
Grace

Project
Grace is a 2 MW project located at the D2 site focused on next generation data center designs for AI. It contemplates new direct liquid
cooling technologies, proprietary building and power designs – called Helix.

Project
Sophie

Project
Sophie is a 25 MW data center, based in Murray, Kentucky connected to the grid (“Sophie”). The project has a Power Purchase
Agreement (“PPA”) that requires the curtailment of the site during certain hours of the day to help balance the Kentucky