Company: SLNH
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024045
Chunk: 2

Company: Soluna Holdings, Inc
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 2
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BL LLC (“NYDIG”) in relation
to their Master Equipment Finance Agreement. See further discussion around the NYDIG litigation in Note 10. The
Company had outstanding commitments as of June 30, 2025 related to SDI of $10.1 million in capital expenditures related to Project
Dorothy 2 and Project Kati. In addition, in June 2024, Soluna AL Cloudco, LLC (“CloudCo”), a subsidiary of Soluna
Cloud, entered into an agreement (the “HPE Agreement”) with Hewlett Packard Enterprise Company (“HPE”), with
an initial pre-payment of $10.3
million and a total commitment of $34
million over a 36-month period. On March 24, 2025, CloudCo notified HPE of its termination of the HPE Agreement and, on March 26,
2025, HPE notified CloudCo of its termination of the HPE Agreement for cause, effective immediately, due to CloudCo’s material
breach of its payment obligations that remained uncured for more than thirty (30) days. In accordance with the terms of the HPE
Agreement, upon a termination for cause by HPE, CloudCo must pay HPE the remaining payment stream under the term of the HPE
Agreement of approximately $19.3
million as of June 30, 2025, including all upfront payments and monthly charges, plus any fees incurred for the terminated Services
(as defined in the HPE Agreement). CloudCo has not made any additional payments under the HPE Agreement since CloudCo notified HPE
of its termination of the HPE Agreement.

    9

These
factors, among others indicate that there is substantial doubt about the Company’s ability to continue as a going concern within
one year after issuance of these condensed consolidated financial statements as of June 30, 2025, or August 14, 2025.

The
ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining
the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.
In the near term, management is evaluating and implementing different strategies to obtain financing to fund the Company’s expenses
and growth to achieve a level of revenue adequate to support the Company’s current cost structure. Financing strategies may include,
but are not limited to, stock issuances, project level equity, debt borrowings, partnerships and/or collaborations