Company: SLNH
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023503
Chunk: 207

Company: Soluna Holdings, Inc
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 207
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 Soluna and
Navitas amended and restated the Existing LLCA to (a) reflect (i) Navitas’s additional capital contribution of approximately $7.6
million and receipt of an additional 7,597 Membership Interests, for a total of 12,097 Membership Interests and 49% ownership of DVCC,
and (ii) Soluna’s additional capital contribution of $1.34 million and receipt of an additional 1,340 Membership Interests, for
a total of 12,590 Membership Interests and 51% ownership of DVCC, and (b) describe the respective rights and obligations of the Members
and the management of DVCC. As of September 30, 2025, Navitas owns 49% and Soluna owns 51% of DVCC.

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The
Company evaluated this legal entity under ASC 810, Consolidations and determined that DVCC is a VIE that should be consolidated
into the Company, with a non-controlling interest recorded to account for Navitas’ equity ownership of DVCC. The Company has a
variable interest in DVCC. 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 DVCC, absorbing operational risk that the entity
was created to create and distribute, resulting in the Company having a variable interest in DVCC.

DVCC
is a VIE of the Company due to DVCC being structured with non-substantive voting rights. This is due to the following two factors being
met as outlined in ASC 810-10-15-14 that require the VIE model to be followed.

    a.
    The
    voting rights of the Company are not proportional to their obligation to absorb the expected losses of the legal entity. The Company
    gave Navitas veto rights over significant decisions, which resulted in Soluna having fewer voting rights relative to their obligation
    to absorb the expected losses of the legal entity.

    b.
    Substantially
    all of DVCC’s activities are conducted on behalf of the Company, which has disproportionally fewer voting rights.

Also,
the Company is the primary beneficiary due to having the power to direct the activities of DVCC that most significantly impact the performance
of DVCC due to its role as the manager handling the day-to-day activities of DVCC as well as majority ownership and the obligation to
absorb losses or gains