Company: SLNH
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001756
Chunk: 1863

Company: Soluna Holdings, Inc
Filing Date: 2025-03-31
Form: 10-K
Item: Item 6
Chunk 1863
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 owned subsidiary of SCI, and DVSL an entity formed in order to further
the Company’s development for Project Dorothy, (each, a “Party” and, together, the “Parties”). Pursuant
to the Dorothy Contribution Agreement, the Company committed to a capital contribution of up to approximately $26.3 million to DVSL (the
“Company Commitment”), and on August 5, 2022, the Company was deemed to have contributed approximately $8.1 million, through
payment of capital expenditures and development costs made on behalf of DVSL by the Company prior to August 5, 2022. Further under the
Agreement, Spring Lane committed to a capital contribution of up to $12.5 million to DVSL (the “Spring Lane Dorothy Commitment”),
and as of December 31, 2022, Spring Lane had actually contributed approximately $4.8 million. Under the Dorothy Contribution Agreement,
the Company and Spring Lane have committed to make subsequent contributions, up to their respective Company Commitment and Spring Lane
Dorothy Commitment amounts, on a pro rata basis, upon receipt of a contribution request from DVSL, as set forth in the Dorothy Contribution
Agreement and subject to the satisfaction of certain conditions described therein. The proceeds of any subsequent commitments will be
applied to pay project costs in accordance with the project budget.

In
exchange for their contributions, the Company and Spring Lane were issued 67.8%
and 32.2%
of the Class B Membership Interests in DVSL, respectively, and were admitted as Class B members of DVSL. Further pursuant to the
Dorothy Contribution Agreement, DVSL issued 100%
of its Class A Membership Interests to Devco.

The
Company evaluated this legal entity under ASC 810, Consolidations and determined that DVSL is a variable interest entity (“VIE”)
that should be consolidated into the Company, with a non-controlling interest recorded to account for Spring Lane’s equity ownership
of the Company. The Company has a variable interest in DVSL. The entity was designed by the Company to create an entity for outside investors
to invest in specific projects. The creation of this entity resulted in the Company, through its equity interest in DVSL, absorbing operational
risk that the entity was created to create and distribute, resulting in the Company having a variable interest in DVSL.

On
March 10, 2023, the Company along with Devco, and DVSL,