Company: SLNH
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023503
Chunk: 71

Company: Soluna Holdings, Inc
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 71
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 of the business of DVSL. The non-controlling shareholders do not hold
substantive participating rights, voting rights or liquidation rights. This results in the Project Company being a voting interest entity
(“VOE”), therefore allowing the Company to continue to consolidate. Effective January 1, 2023, the Company’s ownership
in DVSL was reduced from 67.8% to 14.6%; see above for details.

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In
September 2025, the Company agreed to terms of a debt facility with Generate under a Credit and Guarantee Agreement, as discussed in
Note 8. Several events occurred in connection with the debt facility, [1] the Company completed a restructuring of the subsidiaries that
comprise “Project Dorothy 1A” and “Project Dorothy 2” (herein referred to as the “Dorothy Restructuring”),
[2] Soluna DVSL ComputeCo LLC, Soluna DVSL II ComputeCo LLC, and Soluna KK I ComputeCo LLC entered into a First Priority Leasehold Deed
of Trust (the “Deed of Trust”) with Generate which provides Generate with the power of sale and right of entry and possession
of the Trust Property.

Following
the Dorothy Restructuring, Project Dorothy 1A consists of Soluna DVSL JVCo, LLC (“DVSL JVCo”), which has Class A units owned
by SDI and Class B units owned by SLC (Soluna SLC Fund I). DVSL JVCo is then the sole parent of Soluna DVSL HoldCo, LLC (“DVSL
HoldCo”), which holds 100% of the Class A units in DVSL. The Class B units of DVSL ComputeCo are held by the Company. The total
ownership of Project Dorothy 1A remains such that the Developer holds all Class A units and that SLC holds 85.4% of Class B units with
the Company holding the remaining 14.6% of Class B units.

The
Company noted that 1) there is no substantive change to the ascending view of the organizational chart since the Company (through SDI
and newly created DVSL JVCo and DVSL ComputeCo) beneficially own the Class A units (i.e., managing units) of DVSL and 2) there are no
substantive kick-out rights that exist within Project Dorothy 1A that would cause SDI to not have the ability to direct the activities
that most significantly