Company: SLNH
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001756
Chunk: 62

Company: Soluna Holdings, Inc
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1
Chunk 62
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H200 Blackwell architecture also caused some customers to delay purchases. Although release timelines were impacted by design issues,
the prospect of next-generation technology contributed to hesitancy in NVIDIA H100 GPU acquisition. Competitive pressure from alternative
GPU vendors further softened demand and market pricing. As a result, Soluna Cloud’s business progressed more slowly than anticipated.
Revenues were first recognized in December 2024, with modest growth in early 2025. During the last six months, our engagement with potential
financing and operating partners for AI/HPC confirmed that rather than continuing the effort to lease and resell GPU/HPC chips, refocusing
on our core strength - creating, developing, financing and operating our extensive pipeline of potential bitcoin and AI hosting facilities
- will create far more value for us and our shareholders.

In
light of these developments, on March 24, 2025, CloudCo sent notice of its termination of the HPE Agreement for convenience.
Subsequently, on March 26, 2025, HPE sent notice 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 March 31, 2025 (approximately $20.0 million as of December 31, 2024), including all upfront payments and monthly charges, plus
any fees incurred for the terminated Services (as defined in the HPE Agreement).

45

SEPA

On
August 12, 2024, we entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, LTD., a Cayman Islands exempt
limited company (“YA”). Pursuant to the terms of the SEPA, we agreed to issue and sell to YA, from time to time, and YA agreed
to purchase from us, up to $25 million of shares of our common stock (the “SEPA Shares”). We and YA also entered into a registration
rights agreement (the “Registration Rights Agreement”), pursuant to which we agreed to prepare and file with the SEC a Registration
Statement on Form S-1, registering the resale of the SEPA Shares. On November 12, 2024, we filed a registration statement on