Company: SLNH
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023503
Chunk: 172

Company: Soluna Holdings, Inc
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 172
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 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 repaid plus all interest previously paid or simultaneously
being paid to Lender in respect of such principal of the Loan.

On
May 17, 2024, the SDI Borrower drew down $720 thousand of the Loan with the Lender. On July 22, 2024, the SDI Borrower satisfied and
repaid the borrowing amount in full by issuing the Investor Class B Membership Interests in the Dorothy 2 project valued at three times
the borrowing amount (i.e., $2.16 million). The redemption of debt through equity created approximately a $1.4 million loss on debt extinguishment
for the year ended December 31, 2024.

On
March 21, 2025, the SDI Borrower drew down $250 thousand of the Loan with the Lender, in relation to Project Kati. In addition, on June
11, 2025 and July 16th, the SDI Borrower drew down an additional $269.2 thousand and $291.4 thousand of the Loan with the Lender, in
relation to Project Kati. The total amount of equipment loans of $810.6 thousand was outstanding prior to the assignment of equipment
and payoff of the loan. The SDI Borrower shall repay the Loans under these Borrowing Requests with a different MOIC Payment than as defined
in the Equipment Loan