Company: SLNH
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023503
Chunk: 69

Company: Soluna Holdings, Inc
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 69
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 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, a Delaware limited liability company (the “Project Company”)
entered into a Purchase and Sale Agreement (the “Purchase and Sale Agreement”) with Soluna SLC Fund I Projects Holdco, LLC,
a Delaware limited liability company (“Spring Lane”) that is wholly owned indirectly by Spring Lane Management LLC. The Project
Company was constructing a modular data center with a peak demand of 25 MW (the “Dorothy Phase 1A Facility”).

Under
a series of transactions in February 2023 and March 2023, culminating in the March 10, 2023 Purchase and Sale Agreement, the Company
sold to Spring Lane certain Class B Membership Interests for a purchase price of $7.5 million (the “Sale”). After giving
effect to the Sale, the Company owned 6,790,537 Class B Membership Interests (constituting 14.6% of the Class B Membership Interests)
and Spring Lane owns 39,791,988 Class B Membership Interests (constituting 85.4% of the Class B Membership Interests). The cash portion
of the purchase price paid by Spring Lane to the Company was approximately $5.8 million, which represented the purchase price of $7.5
million less the Company’s pro rata share of certain contributions funded entirely by Spring Lane in the earlier portion of this
series of transactions occurring during February 2023 and March 2023. As a further part of these transactions, the parties agreed that
from January 1, 2023 onwards, the Company would bear only 14.6% of the costs relating to the construction and operation