Company: SLNH
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010886
Chunk: 77

Company: Soluna Holdings, Inc
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 77
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 machines installed, resulting in an installed hashrate of 817 PH/s.
For the year ended December 31, 2024, D1B consumed over 44,500 MWh of Curtailed Energy and for the three months ended March 31, 2025,
D1B consumed over 13,000 MWh of Curtailed Energy. D1B is co-owned by Navitas, which owns approximately 49% of D1B, while we own the remaining
51%.

In November 2023, we completed registration of Project
Dorothy in one of the ERCOT’s Demand Response Services (“DRS”) 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.

39

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. This will enable the commencement of the commissioning
of the first of 3 phases, each of 16MW, that will occur between May and October 2025 when the site is expected to be fully operational.
As each phase is commissioned, it will begin to generate revenue, both due to Bitcoin Hosting and Demand Response Services. D2 features
a superior financial waterfall structure and enhanced management and development fees for Soluna compared to D1A,