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Enables Prepayment of Convertible Notes and AI Data Center Expansion

ALBANY, N.Y., October 03, 2024--(BUSINESS WIRE)--Soluna Holdings, Inc. ("Soluna" or the "Company"), (NASDAQ: SLNH), a developer of green data centers for intensive computing applications, including Bitcoin mining and AI, today announced its agreement with its convertible noteholders and amendments of its agreements with the holder of its Series B Preferred Stock, important milestones toward access to the previously announced $25 million Standby Equity Purchase Agreement ("SEPA") with a fund managed by Yorkville Advisors Global L.P. ("Yorkville").

Soluna entered into the following agreements with the convertible noteholders and the holder of Series B stock, satisfying a number of the conditions precedent to access the SEPA. They include:

• Convertible Noteholders Agreement: Noteholders will consent to the SEPA, prepayment of the remaining convertible notes and waive rights to participate in the SEPA. In return, the Company will pay a $750,000 waiver fee, prepay a 20% note prepayment premium, and acquire certain Soluna Cloud notes at a discount.

• Series B Preferred Stock Agreement: The holder of Series B will consent to the SEPA, waive participation rights, and agree to warrant and stock conversion limitations. In return, the Company will reprice the current conversion price, reprice existing warrants and issue new warrants to the holder.

In order to access the SEPA, the Company will file an S-1 registration statement with the Securities and Exchange Commission which must be declared effective before it can begin to obtain funding. This is the only remaining significant step since, as previously announced, Yorkville and Soluna mutually agreed not to proceed with the prepaid advances, and to continue to work only within the SEPA.

Key Uses of the Financing Include:

• Retiring existing Convertible Notes reducing leverage and dilution overhang.

• Funding critical Soluna Cloud AI operations and data center development activities.

• Deploying additional capital into projects to significantly improve equity cash flows.

• Strengthening the Company’s balance sheet.

Operationally this means Soluna expects to:

• Advance its Helix AI data center designs.

• Prepare for the build-out of Project Grace – a 2 MW AI data center adjacent to its flagship Project Dorothy 2.

• Accelerate the development of the 166 MW Project Kati and 187 MW Project Rosa.

• Complete the acquisition of new sites for up to 20 MW of additional AI data centers for its Colocation business.