Soluna, Applied Digital Form 50 MW AI Data Center Venture

Soluna Holdings, Inc. (Nasdaq: SLNH) and Applied Digital Corporation entered into a Subscription Agreement on October 20, 2026, to form a joint venture for a 50 megawatt data center. The facility is planned for Project Dorothy 3, a development site near Silverton in Briscoe County, Texas, adjacent to the Briscoe Wind Farm. The project is designed specifically for artificial intelligence and high-performance computing workloads.

Under the terms of the agreement, the joint venture will be owned by two entities: Soluna HPC D3 STX HoldCo, LLC, an indirect wholly owned subsidiary of Soluna Holdings, and APLD STX Holdings LLC, an indirect wholly owned subsidiary of Applied Digital. The structure allocates 49% of the issued and outstanding membership interests to the Soluna entity and 51% to the Applied entity.

The consideration for Soluna’s stake includes a Ground Sublease between Soluna DV Services, LLC, acting as landlord, and STX-01 LLC, a subsidiary of the project company acting as tenant. The Subscription Agreement attributes a value of $18,750,000 to this sublease for Soluna’s investor entity. Additionally, Soluna STX Borrower HoldCo, LLC will contribute STX JV Intermediate Holdings, LLC, a newly formed holding company, to the project company. In exchange for its 51% interest, the Applied investor entity is obligated to contribute $19,515,306 in cash. This cash amount is subject to a dollar-for-dollar credit for any development work or long lead-time equipment procurement costs that Applied or its affiliates actually pay prior to the closing.

Both parent companies are guaranteeing their respective subsidiaries' obligations under the agreement. The closing of these transactions is expected to occur on or before December 1, 2026, which is designated as the Outside Date. This timeline is contingent upon several conditions being satisfied or waived. Key conditions include the absence of legal injunctions restraining the transactions and the occurrence of a specific Tax Abatement Vote defined in the agreement.

The agreement also requires internal approvals from ChronoScale Holdings Corporation and its applicable affiliates regarding a Data Center Lease. Furthermore, both Soluna Holdings and Applied Digital must approve the Transaction Documents, which include the LLC Agreement and various ancillary agreements. The closing is also conditional on the issuance of a Leasehold Title Policy by the applicable title company.

If the closing has not occurred by the Outside Date, either party may terminate the Subscription Agreement. However, if all conditions are satisfied except for the Tax Abatement Vote or the issuance of the Leasehold Title Policy, the Outside Date will automatically extend by 30 days for one time only.