Company: SLNH
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024045
Chunk: 21

Company: Soluna Holdings, Inc
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 21
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20.0%) in the event
an Event of Default as defined within the Galaxy Loan Agreement has occurred and is continuing. The Term Loan Facility matures on March
12, 2030 and includes scheduled payments over a five-year term. For the three and six months ended June 30, 2025, the Company incurred
approximately $236 thousand and $277 thousand in interest expense in relation to the Term Loan Facility, which includes interest paid
on the note and amortization of deferred financing costs.

The
SW Borrower may voluntarily prepay all or part of the Term Loan Facility at any time together with accrued and unpaid interest on the
principal amount to be prepaid up to the date of prepayment. The SW Borrower shall prepay all or part of the Term Loan Facility with
100% of the Net Cash Proceeds (as defined therein) received upon the occurrence of (i) an Asset Sale or Casualty Event (each as defined
therein), (ii) an Equity Issuance (as defined therein), (iii) an issuance or incurrence of Indebtedness (as defined therein), or (iv)
an Extraordinary Receipt (as defined therein), each subject to certain exceptions. In addition, certain principal payments are subject
to the payment of a premium amount equal to 50% of the remaining amount of interest payable on such principal amount through the scheduled
maturity date, if paid on or prior to the 30-month anniversary of the closing date, and 25% of the remaining amount of interest payable
on such principal amount through the scheduled maturity date, if paid after the 30-month anniversary of the closing date.

The
Galaxy Loan Agreement includes certain restrictions (subject to certain exceptions outlined in the Galaxy Loan Agreement) on the
ability of the SW Loan Parties and their subsidiaries to undertake certain activities, including to incur indebtedness and liens,
enter into sale or lease-back transactions, merge or consolidate with other entities, dispose or transfer their assets, pay
dividends or make distributions, make investments, make Restricted Payments (as defined therein), enter into burdensome agreements
or transact with affiliates. In addition, the SW Loan Parties are subject to three financial covenants – a minimum debt
service coverage ratio, a minimum current ratio, and cash in customer deposit account must equal or be greater than related customer
liabilities. As of the date of these condensed consolidated financial statements, the Company is in compliance with all covenants in
relation to the Galaxy