Soluna Holdings, a developer of green data centers for intensive computing applications including Bitcoin mining and AI, announced today that it has entered into a $25 million Standby Equity Purchase Agreement (SEPA) with a fund managed by Yorkville Advisors Global L.P.
This financing will enable Soluna to:
— Fund critical Soluna Cloud AI operations and data center development activities.
— Deploy more capital into projects to significantly improve equity cash flows.
— Retire its existing Convertible Notes.
— Strengthen the balance sheet.
This new funding will enable Soluna to advance its AI data center designs, prepare for the build-out of a 2 MW AI data center adjacent to its flagship Project Dorothy, accelerate the development of the 166 MW Project Kati – which includes AI – and complete the acquisition of new sites for up to 20 MW of additional AI data center development. And the secured Convertible Notes will be replaced with more flexible unsecured financing.
The Yorkville SEPA offers flexible terms designed to support Soluna’s growth objectives:
— Two Initial tranches – The initial $10 million Advance will net $9.3 million to Soluna and will be provided in two tranches, 70% at closing following receipt of third party consents and satisfaction of customary closing conditions and 30% upon the effectiveness of an S-1 registration to be filed and obtaining necessary shareholder approvals via a shareholder meeting to be scheduled.
— Unsecured and flexible – The funding is unsecured, with a one-year term and 0% interest, free from warrants or other complex financial instruments.
— Managed conversion – This agreement includes caps and floors on monthly conversions, subject to meeting certain conditions, that offer predictability in managing equity.
— Additional drawdowns – Further access to the remaining $15 million SEPA is possible as the initial advance is repaid and thereafter, providing continued financial flexibility.
Northland Capital Markets acted as the sole placement agent.
KEY QUOTES:
“The convergence of renewable energy and computing is real. The energy demands of all forms of computing, including AI, are on the rise. With this financing, and simplification of our capital structure, we are now well-positioned to bring our winning formula to bear on the new opportunities ahead. By deploying this fresh capital to fuel business development in AI Hosting and Cloud and to accretive data center projects we can begin to scale the Soluna story.”
“This financing’s lack of warrants and other variable features will help us achieve our goal to simplify our capital structure while delivering much-needed growth capital, both of which return great value to Soluna and our shareholders.”
– John Belizaire, CEO of Soluna
