SLNH 10-K & 10-Q changes, risk factors and insider trading

•Our recurring losses from operations will require additional capital to support our business and objectives and grow our business.

•We have a limited operating history, and we may not recognize operating income in the future.

•We have financed our strategic growth primarily by issuing new shares of our common stock in public offerings and the issuance of debt, and plan to raise additional capital through similar offerings in the future, and our inability to do so on favorable terms may adversely affect our operations and the market price of our securities.

•If we cannot achieve or maintain profitability, stockholders could lose all or part of their investment.

•Our level of existing debt may negatively impact our liquidity, restrict our operations and ability to respond to business opportunities, and increase our vulnerability to adverse economic and industry conditions.

•We may be unable to meet our remaining obligations under the terminated HPE Agreement (as defined below) which could lead to a default under that agreement.

•Joint ventures, joint ownership and strategic partner arrangements and other projects pose unique challenges, and we may not be able to fully implement or realize synergies, expected returns or other anticipated benefits associated with such projects.

•We may not be able to timely complete our future strategic growth initiatives or within our anticipated costs estimates, if at all.

•Our business plan is heavily dependent upon acquisitions and strategic alliances and our ability to identify, acquire or ally on appropriate terms, and successfully integrate and manage any acquired companies or alliances will impact our financial condition and operating results.

•We are subject to risks associated with our need for significant electrical power.

•Global economic and geopolitical events, policies and conflicts may adversely affect our business, financial condition and results of operations.

•We may not be able to continue to develop our technology and keep pace with technological developments, or otherwise compete with other companies, many of which have greater resources and experience.

•If we fail to effectively manage our growth, our business, financial condition, and results of operations could be harmed.

•Our new services and changes to existing services could fail to attract or retain users or generate revenue and profits, or otherwise adversely affect our business.

•We have concentrated our operations and, thus, are particularly exposed to changes in the regulatory environment, market conditions and natural disasters in the state of Texas where our data centers are located.

•Our success depends on external factors affecting the Bitcoin industry.

•Our profitability depends in-part on Bitcoin prices and the stability of Digital Asset markets, which are highly volatile and largely unregulated.

•Regulatory changes or actions may alter the nature of an investment in us or restrict the use of cryptocurrencies in a manner that adversely affects our business, prospects, or operations.

•Security breaches and irreversible transactions could result in the loss of our cryptocurrencies.

•Uncertainty around the adoption, use, and global demand for cryptocurrencies could adversely affect our business.

•Because most of our and our hosted customers’ miners are designed specifically to mine Bitcoin and may not be readily adaptable to mining other cryptocurrencies, a sustained decline in Bitcoin’s value could adversely affect our business and results of operations.

•Our data center business could be harmed by prolonged power outages, power and fuel shortages, capacity constraints and increases in power costs.

•Our reliance on a third-party pool service provider for our mining revenue payouts may have a negative impact on our operations. The same may be true in the case of our hosted customers.

•Declining block rewards, reliance on transaction fees, and network forks could adversely affect our mining operations.

•Climate change and evolving regulations could adversely impact our business.

•We may be affected by price fluctuations in the wholesale and retail power markets.

•The development and acceptance of competing blockchain platforms or technologies may cause consumers to use alternative distributed ledgers or other alternatives.

•We may be unable to secure, develop, finance, construct, commission and operate HPC and AI data center projects on the timetable or economics we expect.

•Our HPC and AI data center business is subject to rapid changes in customer requirements, technology standards and infrastructure design, which may increase costs, delay development or make our facilities less competitive.

•We may be unable to procure, install or integrate specialized equipment required for HPC and AI workloads, including electrical, cooling, networking and other long-lead-time components, on acceptable terms or at all.

•Tariffs, trade restrictions, import duties, export controls and other changes in trade policy may increase our capital costs, disrupt our supply chain and adversely affect the development and operation of our data centers..

•Our business has and is expected to continue to have significant customer concentration.

•Failure to attract, grow and retain a diverse and balanced customer base, including key magnet customers, could harm our business and operating results.

•We are heavily dependent on our senior management, and a loss of a member of our senior management team could cause the market prices of our securities to suffer.

•We depend upon third-party suppliers for power, and we are vulnerable to service failures and price increases by such suppliers and to volatility in the supply and price of power in the open market.

•Our business model depends upon the demand for data centers.

•Insiders continue to have substantial control over the Company.

•We are subject to complex environmental, health and safety laws and regulations that may expose us to significant liabilities for penalties, damages or costs of remediation or compliance.

•Provisions in our Articles (as defined below), our Bylaws (as defined below), and Nevada law may discourage a takeover attempt even if a takeover might be beneficial to our stockholders.

•If we are unable to protect our information systems against service interruption or failure, misappropriation of data or breaches of security, our operations could be disrupted, we could be subject to costly government enforcement actions and private litigation and our reputation may be damaged.

•We incur significant costs as a result of operating as a public company.

•We may become involved in litigation arising in the ordinary course of our business that may materially adversely affect us.

•The market price of our securities is likely to be volatile, which may cause investment losses for our shareholders.

•Because there has been limited precedent set for financial accounting of Bitcoin and other cryptocurrency assets, the determination that we have made for how to account for cryptocurrency assets transactions may be subject to change.

•If we are not able to comply with the applicable continued listing requirements or standards of Nasdaq, Nasdaq could delist our common stock or Series A Preferred Stock or broker-dealers may be discouraged from effecting transactions in shares of our securities.

•Substantial blocks of our common stock may be sold into the market as a result of our being party to the SEPA (as defined below) and you may experience immediate and substantial dilution in the net tangible book value per share of our common stock.

•It is not possible to predict the actual number of shares we will sell under the SEPA, or the actual gross proceeds resulting from those sales.

On September 12, 2025, we caused our subsidiaries, Soluna DVSL ComputeCo, LLC , Soluna DVSL II ComputeCo, LLC, and Soluna KK I ComputeCo, LLC (collectively, the “Borrowers”) to enter into a Credit and Guaranty Agreement (the “Credit Agreement”) with Generate Lending, LLC, as administrative agent and collateral agent (the “Agent”), and Generate Strategic Credit Master Fund I-A, L.P. (the “Lender”). The Credit Agreement provides for senior secured term loan commitments in an aggregate principal amount of up to $35.5 million, comprised of (i) Tranche A-1 ($5.5 million), (ii) Tranche A-3 ($11.5 million), and (iii) Tranche B ($18.5 million). In addition, the Credit Agreement permits the Borrowers to request one or more Additional Tranche Loan Commitments (as defined in the Credit Agreement), in the aggregate amount of up to $64.5 million, subject to the approval of the Lender and the Agent, for project-level financing of eligible projects. As of December 31, 2025, we have drawn $17.0 million and have approximately $16.2 million in principal outstanding.

•Restrict our ability to raise new financing or make strategic investments;

•Require significant cash flows to cover interest and principal payments;

•Impose covenants that limit our ability to pay dividends, repurchase shares, make acquisitions, incur additional debt, or create liens;

•Make us more vulnerable to downturns or limit our ability to pursue growth opportunities.

Appointment of Chief Financial Officer

On January 19, 2026, Michael Picchi was appointed as the CFO and Treasurer of the Company, effective April 1, 2026 (the “Effective Date”). Mr. Picchi began his employment with the Company on March 2, 2026, in the role of Head of Finance.

In conjunction with the appointment of a new CFO and Treasurer, the Company will accept David Michaels’ resignation from his position as interim CFO and Treasurer of the Company, effective immediately upon the effectiveness of the appointment of a new CFO and Treasurer.

On March 24, 2026, we entered into a Standby Equity Purchase Agreement (the “2026 SEPA”) with YA II PN, LTD., a Cayman Islands exempt limited company (“YA”). In accordance with the terms of the SEPA, YA has agreed to purchase up to an aggregate of $250.0 million of shares of common stock (the “2026 SEPA Shares”) from time to time subject to the limits and the conditions of the 2026 SEPA. Pursuant to the 2026 SEPA, we issued to YA a commitment fee of $250 thousand of shares of common stock (the “Commitment Shares”).

In February 2026, we received approval from the Electric Reliability Council of Texas (“ERCOT”) to commence the initial energization and phased commissioning of Project Kati 1. This milestone represents the transition of the project from the development phase to operational status. The Company expects to begin recognizing hosting and/or mining revenue from this facility as capacity is ramped up throughout the first half of 2026. Project Kati 1 is the Company’s 83 MW wind-powered data center campus located in South Texas, specifically designed for high-density Bitcoin mining operations. The site’s energization is structured in two primary blocks: Kati 1A (48 MW) and Kati 1B (35 MW). Both blocks are being deployed utilizing a three-phase commissioning approach, with full energization of the 83 MW campus expected to be completed during 2026. Kati 1B includes a 12 MW deployment with Cormint Data Systems ("Cormint"), where Cormint will design, procure, and deliver eight modular data center units to enable efficient deployment by minimizing on-site labor and accelerating energization timelines. Powered entirely by the Las Majadas wind energy project, Project Kati represents one of Soluna’s largest sites to date and is designed to scale efficiently to support large industrial compute workloads.

Project Kati 2

We have signed a Memorandum of Understanding ("MOU") with Metrobloks, a data center developer and operator focused on AI-ready infrastructure, to enter into a co-development partnership to build Project Kati 2. The initial development will be a 100+ MW Critical IT ("CIT") AI and HPC data center at Soluna’s Project Kati 2 campus in Willacy County, Texas. This is expected to be the first phase of a larger campus, with an expansion roadmap supporting more than 300 MW of total CIT capacity.

We have entered a MOU with Siemens, a leading technology company in electrification, automation and digitalization. The project will deploy and validate a behind-the-meter power-and-controls approach to manage rapid, GPU-driven swings in power demand when running AI and high-performance computing workloads directly on renewable energy. The 2 MW pilot, expected to be deployed at Soluna’s Project Grace site in Texas, will integrate Siemens’ electrical infrastructure, controls, and monitoring through a structured commissioning process to document performance under fast load steps and variable compute demand, creating a repeatable blueprint for future behind-the-meter AI deployments at renewable generation sites.

2025 Financial Highlights:

•$76 Million Unrestricted Cash Position — Reported at end of 2025, the record cash balance reflected the compounding effect of operating momentum, capital raises, at-the-market offerings, warrant exercises, and disciplined financial management, providing us with meaningful runway to execute on our construction and development pipeline.

•$100 Million Credit Facility from Generate Capital — We closed a scalable credit facility up to $100 million in September, with $17.0 million drawn through December 31, 2025 funding for active project refinancing and construction. The facility provides a durable capital foundation for the 1 GW pipeline and its expansion.

•$32 Million Registered Direct Offering — Closed in December, the offering strengthened our balance sheet heading into 2026, providing liquidity to support continued growth across operating sites and projects under construction.

•$20 Million from Spring Lane Capital for Project Kati 1 — Secured in June and closed in July, the investment funded the first phase of Kati construction and demonstrated Spring Lane's conviction in our model, with a commitment to support up to $100 million across the broader pipeline.

•$5 Million Non-Dilutive Debt Financing from Galaxy Digital — Secured in March, the five-year term loan is project-level secured with limited recourse to the parent company, validating the standalone cash flow strength of our infrastructure assets and our ability to attract institutional debt capital.

2025 Corporate Highlights

•Surpassed 1 GW of Renewable-Powered Computing — With the addition of Projects Gladys and Fei in August, we crossed 1 GW of renewable-powered computing in operation, construction, and development, a landmark milestone reflecting the scalability of the behind-the-meter model.

•Resolved NYDIG Claim — We reached a full settlement with NYDIG in September, clearing a significant overhang and restoring focus on long-term growth.

•Project Kati Groundbreaking — The official groundbreaking on September 18, 2025 marked the start of construction on our largest project to date, a 166 MW wind-powered data center in Texas, and a tangible signal of our transition from developer to operator at scale.

•Power Pipeline Grows to 4.3 GW — The long-term power pipeline expanded to 4.3 GW, driven by new curtailment assessments, active term sheet discussions, and development launches across multiple new projects, positioning us as a platform-scale infrastructure company.

•Second Utility Patent Awarded — Our second utility patent was awarded in March, broadening the scope of its Modular Data Center patent and strengthening the intellectual property foundation of the Renewable Computing model.

•4 EH/s of Hash Rate Under Management — Surpassed in September following the commissioning of Dorothy 2 and fleet upgrades across all sites, this operational milestone directly underpins hosting revenue growth and demonstrates the scale of our managed computing infrastructure.

The following table summarizes the balances for the Project sites for cryptocurrency mining revenue, data hosting revenue, high-performance computing service revenue, demand response revenue, cost of cryptocurrency mining revenue, exclusive of depreciation, cost of data hosting revenue, exclusive of depreciation, cost of high-performance computing services, and cost of depreciation during the year ended December 31, 2025:

Cryptocurrency Mining Revenue: Cryptocurrency mining revenue decreased during the year ended December 31, 2025, compared to 2024, primarily driven by the April 2024 halving event which reduced block rewards by 50%. Average Hashprice declined year-over-year by 21.5% resulting in lower revenues. We earned 113.2 Bitcoins in 2025 compared to 274 in 2024. Average monthly hashrate was lower in 2025 by approximately 10.7% impacting revenue by $1.8 million versus prior year, the decrease in earned Bitcoin was driven by the halving event. The market price impact resulted in a $3.8 million revenue unfavorable versus prior year.

Data Hosting Revenue: Hosting revenue decreased for the year ended December 31, 2025, compared to 2024, driven by two primary factors. First, the April 2024 Bitcoin Halving reduced the effective dollar value per Petahash ("PH") per day, lowering yields across both fixed-fee and profit-sharing contracts. Second, the exit of a major 20 MW customer in December 2024 resulted in a shift in our contract mix. While this capacity was fully backfilled by March 2025, the new customers were onboarded under a profit-sharing structure which, while providing higher upside potential, resulted in a lower baseline revenue yield compared to the prior fixed-fee model. These declines were partially offset by the phased energization of the D2 facility, which began contributing to revenue in the third quarter of 2025.

Demand Response Service: Demand response service revenue decreased for the year ended December 31, 2025, compared to 2024, reflecting both unfavorable market conditions and operational constraints. Lower average ERCOT clearing prices per MW reduced the overall economic incentive per event. Operationally, our program participation was limited by planned outages at the Dorothy site related to the Project Dorothy 2 ("D2") substation interconnection. These factors collectively resulted in lower capacity bids and decreased total revenue from curtailment services.

Cost of cryptocurrency mining revenue decreased slightly for the year ended December 31, 2025, compared to 2024. This variance was primarily driven by lower electricity consumption and associated operating expenses, reflecting a marginal reduction in total power utilization during the period.

Cost of data hosting revenue decreased for the year ended December 31, 2025, compared to 2024. This decline was primarily driven by a transition in the customer contract mix, as the Company moved from fixed-rate volume arrangements to electricity pass-through contracts. This shift reduced the Company’s direct exposure to power costs for those hosting arrangements. The decrease was partially offset by the phased energization of D2 beginning in the second quarter of 2025, which resulted in higher total megawatt ("MW") capacity and an associated increase in operating expenses during the second half of the year.

Cost of High-Performance Computing Services: Cost of High-Performance Computing Services represents the direct production expenses associated with providing AI and HPC processing capabilities. For the year ended December 31, 2024, this cost totaled approximately $5.7 million, which was related to the agreement executed with HPE effective July 1, 2024, to acquire access to essential datacenter and cloud services necessary for supporting our AI and HPC processes.

Cost of High-Performance Computing Services was not material for 2025 due to the termination of the HPE contract.

Cost of Data Hosting Revenue- depreciation: Cost of data hosting revenue-depreciation increased mainly due to D2 becoming energized during fiscal year 2025.

We have concluded that non-compliance with the forward-looking financial covenant under our project-level credit facility is probable at upcoming measurement dates, and the relief we have obtained is limited and temporary.

Soluna DVSL ComputeCo, LLC, Soluna DVSL II ComputeCo, LLC, Soluna KK I ComputeCo, LLC, and, following the Briscoe Project Acquisition, the Tranche C Borrower (collectively, the “Borrowers”) are parties to a Credit and Guaranty Agreement with Generate Lending, LLC, as administrative and collateral agent, and Generate Strategic Credit Master Fund I-A, L.P., as lender (as amended, the “Amended Credit Agreement”), which requires the Borrowers to maintain (i) a minimum trailing Debt Service Coverage Ratio of 1.60:1.00 and (ii) a minimum Forward Contracted DSCR of 1.20:1.00. The Forward Contracted DSCR gives credit only to revenue under executed customer contracts; merchant revenue and other revenue we anticipate but have not yet contracted — including revenue we may reasonably expect from prospective or pipeline customers — is assigned no value in the calculation. Because of this design, we concluded that it is probable the Borrowers will fail to satisfy the Forward Contracted DSCR at one or more measurement dates during the twelve months following June 30, 2026, absent new customer contracts or a further amendment to the Amended Credit Agreement.

On August 7, 2026, the Borrowers entered into a limited waiver, consent and amendment (the “August 2026 Amendment”) under which the DSCR and Forward Contracted DSCR were not required to be calculated for the June 30, 2026 measurement date. This relief is narrow: it applies only to that single test date, does not extend for more than one year from the balance sheet date, and covenant testing resumes at the September 30, 2026 measurement date. The effectiveness of the August 2026 Amendment was conditioned on our prepaying in full the Tranche A-1 and Tranche A-3 Loans, which we did on August 10, 2026 for an aggregate amount of approximately $19.1 million, including a $3.9 million prepayment premium. Following that prepayment, the Forward Contracted DSCR no longer applies to the Dorothy 1A and Dorothy 2 borrowers. However, the Forward Contracted DSCR continues to apply to the Tranche C Loan, which financed our April 1, 2026 acquisition of the Briscoe Wind Farm and had approximately $9.6 million outstanding, net of debt discount and issuance costs, immediately following the prepayment.

A failure to satisfy the Forward Contracted DSCR that is not remedied within five days constitutes an event of default under the Amended Credit Agreement. Following an uncured event of default, the lender may declare all outstanding principal and accrued interest immediately due and payable and exercise other remedies, including foreclosing on the first-priority liens securing the facility. Such a default could also trigger cross-default provisions under our other financing arrangements. We can provide no assurance that we will obtain sufficient new contracted revenue before the September 30, 2026 measurement date, that our lender will grant a further waiver, or that we will be able to negotiate an amendment on acceptable terms or at all. Because we concluded that future compliance was not probable, we classified the entire $27.5 million of gross principal outstanding under the Amended Credit Agreement as a current liability on our condensed consolidated balance sheet as of June 30, 2026, which may affect how investors, analysts and counterparties assess our financial condition and liquidity.

Our acquisition of the Briscoe Wind Farm has introduced a new merchant power generation business that exposes us to operating and market risks that are not present in, and are not addressed by the risk factors applicable to, our historical Bitcoin mining and data center hosting businesses.

On April 1, 2026, we acquired 100% of the membership interests in Briscoe Wind Farm, LLC, an approximately 150 MW, 81-turbine wind generation facility located in Briscoe and Floyd Counties, Texas, which exposes us to the following risks:

•Wholesale power price and curtailment risk. Briscoe sells power into the wholesale market at its nodal settlement point and, for a portion of output, under a Power Purchase Agreement with Golden Spread Electric Cooperative, Inc. The balance of Briscoe’s output is exposed to merchant ERCOT prices, which are volatile and can be negative. Briscoe has experienced negative nodal pricing as a result of severe congestion on transmission lines within the ERCOT West Hub region, meaning that at times we may be required to pay to deliver power rather than being paid for it, or may curtail generation, either of which would reduce Wind Energy Generation revenue.

•Wind resource variability. Revenue from this business depends on wind conditions at a single site. Wind resource varies seasonally and from year to year in ways that are difficult to predict, and periods of below-average wind would reduce generation and revenue with no offsetting contractual protection.

•Turbine operations and maintenance cost volatility. At closing, 10 of the facility’s 81 turbines were not operating, and we initiated gearbox and main bearing repairs that continued into the third quarter of 2026. We recognized approximately $1.5 million of scheduled and unscheduled turbine and facility maintenance costs during the period, and operations and maintenance costs at Briscoe may vary significantly and unpredictably from period to period, including as a result of unplanned equipment failures.

•Single-asset operational concentration. Unlike our data center portfolio, which is diversified across multiple sites, our wind energy generation business is concentrated entirely in the Briscoe facility. Any operational disruption, casualty loss, transmission outage, adverse weather event, or unfavorable regulatory development affecting that single facility would affect the entirety of this revenue stream, with no diversification across other generating assets to offset it.

•Decommissioning obligations. We are contractually obligated to remove the wind energy facility and restore the leased sites upon expiration of the underlying land leases. We recorded an asset retirement obligation of approximately $3.6 million at acquisition (approximately $3.7 million as of June 30, 2026, after accretion), representing management’s current estimate of future removal and restoration costs based on an independent decommissioning study. Actual decommissioning costs may differ materially from this estimate as a result of changes in regulation, engineering or technology, permitting requirements, inflation, or other factors, and could be higher than currently estimated.

For the six months ended June 30, 2026 and 2025, our Bitcoin / Data Center Hosting Business accounted for approximately 79% and 46% of total revenue, respectively. Revenue in this business has been concentrated among a limited number of customers. For the six months ended June 30, 2026, four customers accounted for 79% of hosting revenue and 63% of total revenue.

Wind Energy Generation Business

With the acquisition of Briscoe in April 2026, we have added a new revenue stream: Wind Energy Generation. Briscoe derives its revenue from the sale of power and renewable energy credits ("RECs"). Briscoe sells power to the wholesale market at its nodal settlement point and is recorded as the underlying energy is generated. Commencing in 2023, Briscoe sold an increasing portion of its power through a PPA with GSEC. At times, Briscoe may be subject to negative pricing at its nodal settlement point when selling electricity within the wholesale market due to severe congestion on the transmission lines within the ERCOT West Hub region. Within Wind Energy Generation revenue for the Company are three forms of revenue:

•Merchant revenue- sale of power/ wholesale energy to third party

•PPA revenue- sale of energy under the PPA. Sales to the Company's Dorothy entities are eliminated in consolidation.

•REC revenue- renewable energy credits for each megawatt of hour of energy delivered For the three months ended June 30, 2026 and 2025, our Wind Energy Generation Business represented approximately 2% and 0% of total revenue, respectively. For the six months ended June 30, 2026 and 2025, our Wind Energy Generation Business represented approximately 1% and 0% of total revenue, respectively. We note that Briscoe Wind has gross revenue of approximately $2.5 million from its three forms of revenue noted above, for the three and six months ended June 30, 2026, however since approximately $2.2 million of PPA revenue is used at the Company's Dorothy sites, the PPA revenue are eliminated on the condensed consolidated financial statements, which also decreases the cost of revenue for proprietary mining and data center hosting.

*Project Kati 2.* Our first planned large-scale HPC development is Project Kati 2 in Willacy County, Texas, engineered for more than 350 MW of CIT capacity and developed through our joint venture with Metrobloks. See Note 16 — Variable Interest Entities. We expect Project Kati 2 to serve as the initial platform for Soluna HPC, Inc.'s leasing and hosting business. During the three months ended June 30, 2026, we selected and began onboarding a general contractor to lead the design-build process; advanced detailed design documentation to approximately 50% completion; executed a letter of intent with a prospective tenant and commenced commercial lease negotiations; and executed letters of intent with electrical equipment suppliers to secure long-lead procurement. We can give no assurance that we will enter into a definitive lease with this or any prospective tenant, or as to the terms of any such lease.

*Project Dorothy 3.* We are also advancing Project Dorothy 3, planned for more than 300 MW CIT of AI and HPC capacity at a new land site in North Texas. Environmental due diligence, survey work, and fiber studies are in progress, and schematic design and master planning have commenced. We are coordinating with the interconnecting utility regarding expanded load at the campus, including the option to potentially convert existing Bitcoin load to AI and HPC use. Additional projects in our development pipeline remain in various stages of evaluation, engineering, and development. These activities include site and feasibility studies, power and land procurement, engineering and design work, customer engagement, and evaluation of potential financing and partnership structures.

*Power position.* Our acquisition of the Briscoe Wind Farm and the consolidation of our ownership interests in the Project Dorothy 1 campus during 2026 are intended to increase our control over the power resources supporting these developments, which we believe shortens the time required to deliver energized capacity to AI and HPC customers.

*Capital and organization.* Developing AI-ready capacity at scale requires capital substantially in excess of the amounts required for our existing Bitcoin operations. We have engaged an investment bank to assist with capital formation for Project Kati 2 and continue to evaluate project-level equity, debt, and partnership structures. In July 2026, we appointed a Chief Development Officer to lead the growth of our AI and HPC business.

•YA II PN, LTD ("Yorkville" or "YA") - an investment vehicle affiliated with Yorkville Advisors Global, LP. We have Standby Equity Purchase Agreements (SEPAs), where the company can sell shares to YA over time in exchange for cash, giving the Company flexible access to capital without a traditional underwritten offering. In addition, on April 15, 2026, the Company entered into a Securities Purchase Agreement (the “SPA”) YA, pursuant to which the Company issued to YA a Promissory Note payable to YA, providing for an unsecured loan in the aggregate principal amount of up to $12.0 million, which was fully paid by June 30, 2026.

Discussions began in December 2025 with potential customers for the data center campus. In March and April of 2026, those discussions continued with several additional potential customers. The final stages of the design RFP were completed in April 2026 and design work has begun. Since then, the Company has selected its architectural and engineering firms and onboarded a general contractor, with detailed design now approximately 50% complete. In June 2026, the Company also signed a letter of intent, that includes exclusivity, with a potential tenant and is in formal commercial and lease negotiations. In parallel, long-lead equipment procurement activity has advanced, with LOIs signed with key electrical equipment providers.

With this acquisition, Soluna achieves full vertical integration for Project Dorothy, owning both the renewable energy source and the data center infrastructure it powers.

Project Dorothy 1B Acquisition

On May 19, 2026, we acquired Navitas's equity interest in D1B for approximately $8.8 million, giving us complete equity ownership of D1B. With the Briscoe Wind Farm providing 150 megawatts of owned renewable power and now 100% equity control of both D1A and D1B, we have assembled the full generation-to-compute ownership chain of 50 MWs at Project Dorothy 1. This ownership position is a prerequisite for converting the campus to AI and high-performance computing workloads, and for marketing Dorothy 3, the Company’s next-phase AI infrastructure development, to prospective customers.

Kati 2 Joint Venture

In connection with the development of the Kati 2 project of the Company, on June 3, 2026 (the “Effective Date”), Soluna HPC KK II HoldCo, LLC (the “Soluna Member”), a wholly owned subsidiary of Soluna HPC, Inc., a wholly owned subsidiary of the Company, entered into a limited liability company agreement (the “Joint Venture Agreement”) with DC Kati Venture LLC (the “Metrobloks Member”) to govern the terms of operation of Soluna MB KK II JVCo, LLC (the “Joint Venture”). The Metrobloks Member is managed by Metrobloks LLC. The Joint Venture will invest in a newly formed entity to develop and operate a multi-phase data center development in Willacy County, Texas, frequently referred to as project “Kati 2” (such data center, “Project Kati 2”). The first phase of Project Kati 2 shall be a 100 MW critical IT data center development (“Phase I”) and the second phase of Project Kati 2 will develop an additional 250 MW critical IT data center development (“Phase II”).

The Soluna Member and the Metrobloks Member are the sole members of the Joint Venture, with the Soluna Member holding 100% of the Class A Interests and the Metrobloks Member holding 100% of the Class B Interests as of the Effective Date. The Joint Venture is a manager-managed limited liability company, with the Soluna Member serving as the manager.

Pursuant to the terms of the Joint Venture Agreement, as of the Effective Date, the Soluna Member contributed the Phase I Property (as defined with the Joint Venture Agreement), a purchase agreement to acquire the Phase II Property (as defined within the Joint Venture Agreement), and funded certain operating expenses of approximately $6.7 million. Subject to the closing of the purchase agreement, the Soluna Member has committed to fund a capital contribution of approximately $19.1 million to complete the acquisition of the Phase II Property as well as an additional capital commitment of up to $2.0 million to fund certain operating expenses as they become due. After the Soluna Member has received repayment of its capital contributions, recognized a 14% IRR on its capital contributions and received $100,000 per Gross PPA MW of Project Kati 2, the Soluna Member and the Metrobloks Member shall each receive 50% of additional distributions.