Company: SLNH
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001756
Chunk: 5

Company: Soluna Holdings, Inc
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1
Chunk 5
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 programs. This designation positioned Project Dorothy as a contributor
to grid flexibility and resilience in the Texas power market, while also enabling us to diversify our revenue streams.

Under the DRS program, we commit to maintaining a specified level of curtailment
capacity—measured as load reduction availability—on a monthly basis. When called upon by ERCOT, we are required to reduce
the facility’s power consumption by the committed amount. In exchange, we receive compensation for maintaining this curtailment
readiness, regardless of whether an actual dispatch occurs.

Participation in the program allows us to generate incremental revenue
and offset power costs at Project Dorothy, enhancing its cost-efficiency. As a result, the facility ranks among the lowest-cost operators
in the sector. Since registration, Project Dorothy has successfully fulfilled its obligations in the Winter, Spring, and Summer DRS periods,
and is currently enrolled in the Fall standby period.

Project Dorothy 2 

We began planning for the 48 MW expansion of Project
Dorothy in 2023 – known as Project Dorothy 2. We partnered with SLC who agreed to finance up to $30 million of the project cost.
We closed the initial financing contribution and operation agreement with SLC in July 2024 and broke ground in the third quarter of 2024.
Initial energization and ramp-up is expected by the end of the second quarter of 2025. D2 features a superior financial waterfall structure
and enhanced management and development fees for Soluna compared to D1A, allowing us to benefit from improved income once the facility
is operational.

Project Grace

Project Grace is a 2 MW project located at the
D2 site focused on next generation data center designs for AI. It contemplates new direct liquid cooling technologies, proprietary
building and power designs – called Helix.

Project Sophie

Project Sophie is a 25 MW data center, based in Murray,
Kentucky connected to the grid (“Sophie”). The project has a Power Purchase Agreement (“PPA”) that requires the
curtailment of the site during certain hours of the day to help balance the Kentucky grid. We own 100% of the facility, which was completed
in 2021.

Sophie is focused on Bitcoin Hosting of multiple large
customers. The data center generates revenue via a combination of fixed services fees and profit share,
while energy cost is passed through. For the year ended December 31, 2024, there are approximately 9,300 Bitcoin miners installed,