Company: SLNH
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024045
Chunk: 22

Company: Soluna Holdings, Inc
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 22
---
 Loan Agreement.

Proceeds
of the Term Loan Facility will be used to issue a distribution to SW Holdings, the proceeds of which may be used to make a distribution
to SDI.

In
connection with the Galaxy Loan Agreement, on March 12, 2025, the SW Loan Parties and the Lender entered into a security agreement to
secure the obligations under the Term Loan Facility by a lien on substantially all the assets and properties of SW Borrower and SW Holdings,
subject to certain exceptions. The SW Borrower is the owner and operator of the Company’s Project Sophie data center.

    18

In
connection with the Galaxy Loan Agreement, on March 12, 2025, SDI and the Lender entered into a Limited Guarantee Agreement pursuant
to which SDI guarantees the Loss Liabilities (as defined therein) and, after the occurrence of a Recourse Trigger Event (as defined therein),
the obligations under the Loan Agreement.

Equipment
Loan Agreement

On
May 16, 2024, SDI SL Borrowing – 1, LLC, an affiliate of the Company (the “SDI Borrower”), entered into a loan agreement
(the “Equipment Loan Agreement” or the “Loan”) with Soluna2 SLC Fund II Project Holdco LLC (the “Lender”,
and collectively, the “Parties”). As further amended on February 28, 2025, the Equipment Loan Agreement provides for the
Company to borrow, from time to time, up to $4.0 million, to be used to purchase necessary equipment for the progression of Project Dorothy
2 and Project Kati. Any loans made under the Equipment Loan Agreement have a maturity date of May 16, 2027 and will bear interest at
a rate of 15% per annum. The Equipment Loan Agreement includes customary covenants for loans of this nature including financial reporting,
monthly updates, event reporting, as well as conduct of business. In addition, the Equipment Loan Agreement contains a multiple on invested
capital (“MOIC”) provision, which requires the Company to pay, in addition to principal and interest, an amount equal to
the difference of (i) the greater of (a) the principal amount of the Loan being repaid plus all interest previously paid or simultaneously
being paid to Lender in respect of such principal of the Loan, and (b) the principal amount of the Loan being repaid multiplied by three,
minus (ii) the sum of the principal amount of the Loan being