Company: SLNH
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001756
Chunk: 1469

Company: Soluna Holdings, Inc
Filing Date: 2025-03-31
Form: 10-K
Item: Item 4
Chunk 1469
---
 $9.2 million and outstanding interest and penalty
balance of approximately $2.3 million. This settlement did not result in the admission of any liability on the part of SHI, whose declaratory
judgment remains the subject of litigation.

In
September 2023, Atlas Technology Group LLC (“Atlas”) filed a complaint against Soluna MC LLC, Soluna Computing, Inc., and
Soluna Holdings, Inc. (collectively, the “Atlas Defendants”) in the Supreme Court of New York regarding a co-location services
agreement. Atlas alleged that Soluna MC’s termination of the agreement was a breach, seeking a return of pre-paid fees of approximately
$464 thousand, additional damages of at least $7.9 million, and reimbursement of legal fees. The complaint also mentioned alter ego liability
and corporate veil piercing.

The
Atlas Defendants filed a motion to dismiss, and on April 17, 2024, the Court dismissed three of the four counts. The remaining count
was answered on May 6, 2024, with counterclaims against Atlas. The Court denied the dismissal of Soluna Computing, Inc. and Soluna Holdings,
Inc. as parties, leading to an appeal filed on May 7, 2024.

On
June 25, 2024, Atlas and the Atlas Defendants entered into a settlement agreement. Soluna MC recorded a gain on the settlement of approximately
$254 thousand for the year ended December 31, 2024, in Other Expense, net on the Consolidated Financial Statements.

     F-38 

14.
Related Party Transactions

MeOH
Power, Inc.

On
December 18, 2013, MeOH Power, Inc. and the Company executed a Senior Demand Promissory Note (the Note) in the amount of $380 thousand
to secure the intercompany amounts due to the Company from MeOH Power, Inc. upon the deconsolidation of MeOH Power, Inc. Interest accrues
on the Note at the Prime Rate in effect on the first business day of the month, as published in the Wall Street Journal. At the Company’s
option, all or part of the principal and interest due on this Note may be converted to shares of common stock of MeOH Power, Inc. at
a rate of $0.07 per share. Interest began accruing on January 1, 2014. The Company recorded a full allowance against the Note. As of
December 31,