Company: SLNH
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010886
Chunk: 112

Company: Soluna Holdings, Inc
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 112
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 to hosting
customers’ Bitcoin mining operations in the second quarter of 2023. All 25 MW of Project Sophie now perform data hosting services.
The Company has since sold all Bitcoin miners at Project Sophie and redeployed the capital.

The Company’s Texas site (“Project Dorothy”),
located at a wind farm, holds the potential for up to 100 MW of power generation. By June 2024, SHI had energized 50 MW of the site across
two phases, Project Dorothy 1A and 1B. As of March 31, 2025, SHI holds a 15% ownership interest in Soluna DVSL ComputeCo, LLC (“DVSL”),
owner of Project Dorothy 1A, and a 51% ownership interest in Soluna DV ComputeCo, LLC (“DVCC”), owner of Project Dorothy 1B.
On July 22, 2024, the Company closed financing for the 48 MW modular data center (the “Project Dorothy 2”). Project Dorothy
2 is financed by Soluna2 SLC Fund II Project Holdco LLC, an investment vehicle of Spring Lane Capital (“SLC”) and SDI. As
of March 31, 2025, SDI has a 12% ownership interest in Project Dorothy 2.

Going Concern and Liquidity

The Company’s condensed financial
statements as of March 31, 2025 have been prepared using generally accepted accounting principles in the United States of America (“U.S.
GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal
course of business. As shown in the accompanying condensed financial statements, the Company was in a net loss position, has negative
working capital, and has significant outstanding debt as of March 31, 2025. In addition, Soluna MC Borrowings, LLC 2021-1 (“Borrower”),
a subsidiary of Soluna MC, LLC (“Soluna MC”), a subsidiary of Soluna Digital, Inc.
(“Soluna Digital” or “SDI”), a subsidiary of the Company, has a litigation matter with NYDIG ABL LLC (“NYDIG”)
in relation to their Master Equipment Finance Agreement. See further discussion around the NYDIG litigation in Note 10. The
Company had outstanding commitments as of March 31, 2025, related to SDI of $10.4 million in capital expenditures related to Project
Dorothy 2 and Project K