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Subsequent Events | 3 Months Ended
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Mar. 31, 2022
Subsequent Events [Abstract] |
Subsequent Events |
| 16. | Subsequent Events
On April 11, 2022, the Company entered into the Stock Purchase Agreement with Purchaser, pursuant to which the Company sold on such date all of the issued and outstanding shares of capital stock of its wholly-owned subsidiary, MTI Instruments for approximately $9.25 million in cash, subject to certain adjustments as set forth in the Stock Purchase Agreement. The consideration paid by the Purchaser to the Company was based on an aggregate enterprise value of approximately $10.75 million. In addition, pursuant to the Stock Purchase Agreement, the Purchaser entered into certain employment and restrictive covenant agreements between the Company and certain employees, including MTI Instrument’s president and chief executive officer, Moshe Binyamin. As a result of the Sale, the Company exited the instruments business and expects that it will be focused on developing and monetizing green, zero carbon computing and cryptocurrency mining facilities. On April 13, 2022, the Company issued to certain institutional lenders (the “Lenders”) promissory notes in an aggregate principal amount of $10.0 million for an aggregate purchase price of $10.0 million (the “Notes”). The Company also issued Class D common stock purchase warrants (the “Warrants”) to purchase up to an aggregate of 1,000,000 shares of common stock of the Company at an exercise price of $11.50 per share. These Notes were the third and final tranche of an aggregate financing of $20.0 million. The Notes have a maturity date five years from the date of issuance (each a “Maturity Date”), upon which dates the Notes shall be payable in full, and accrue interest at a rate of two percent (2%) per annum. The Notes may be repaid, at such Lender’s sole election, either (a) at the applicable Maturity Date or (b) upon the first business day of each month that the Company completes an offering of its shares of the Company’s 9.0% Series A Cumulative Perpetual Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”) by presenting its Note in whole or in part as legal tender to purchase such shares of Series A Preferred Stock at price per share of Series A Preferred Stock on the date immediately preceding the closing of such subscription, provided that if the Notes are not repaid by May 2, 2022, the Notes shall automatically be subscribed for shares of the Series A Preferred Stock. If any Event of Default occurs, the outstanding principal amount of the Notes, liquidated damages and other amounts owing in respect thereof through the date of acceleration, will become, at the Lender’s election, immediately due and payable in cash. The Notes may be prepaid or redeemed upon written notice to the other party. The Warrants are immediately exercisable for two years upon issuance. Exercise of the Warrants is subject to beneficial ownership limitations such that the Lenders may not exercise the Warrants to the extent that such exercise would result in each of the Lenders being the beneficial owner in excess of 4.99% (or, upon election of such Lender, 9.99%) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon such exercise, which beneficial ownership limitation may be increased or decreased up to 9.99% upon notice to the Company, provided that any increase in such limitation will not be effective until 61 days following notice to the Company. On April 26, 2022, the Company entered into an Underwriting Agreement (the “Underwriting Agreement”) with Univest Securities, LLC, as representative of the several underwriters named therein, in connection with the offer and sale to such underwriters, in a firm commitment public offering (the “Underwritten Offering”) of 525,714 shares (the “Underwritten Shares”) of the Company’s 9.0% Series A Cumulative Perpetual Preferred Stock, par value $0.001 per share, with a $25.00 liquidation preference per share. Pursuant to the Underwriting Agreement, the Company also granted the underwriters a 45-day option to purchase up to an additional 78,857 shares (the “Option Shares”) of the Series A Preferred Stock on the same terms as the Shares sold in the Offering (the “Over-Allotment Option”). On April 29, 2022, the Company closed the Underwritten Offering and issued and sold 525,714 shares of Series A Preferred Stock pursuant to the Underwriting Agreement for aggregate gross proceeds of approximately $9.2 million less underwriting discounts of 7.0% ($0.6 million) and other offering fees and expenses, resulting in aggregate net proceeds to the Company of approximately $8.56 million. In the event that the Over-Allotment Option is exercised by the underwriters in full, that would result in additional aggregate gross proceeds of approximately $1.38 million less applicable underwriter discounts and other offering fees and expenses. The Company intends to use the net proceeds from the Offerings (as defined below) primarily for the acquisition, development and growth of data centers, including cryptocurrency mining processors, other computer processing equipment, data storage, electrical infrastructure, software and real property (i.e., land and buildings) and business, and for working capital and general corporate purposes, which include, but are not limited to, operating expenses. Also pursuant to the Underwriting Agreement, the Company agreed to issue to the Univest Securities, LLC, in connection with the Underwritten Offering, warrants to purchase up to a number of shares of common stock, par value $0.001 per share, of the Company (the “Common Stock”), representing 5% of the Underwritten Shares and any Option Shares sold, at an initial exercise price of $9.152 per share, subject to certain adjustments (the “Underwriter’s Warrants”). On April 29, 2022, the Company issued to Univest Securities, LLC or its designee Underwriter’s Warrants to purchase up to 26,285 shares of Common Stock. In the event all of the Option Shares are sold, the Company will issue additional Underwriter’s Warrants to purchase up to 3,942 shares of Common Stock to Univest Securities, LLC or its designee. Concurrently with the Underwritten Offering, on April 29, 2022, pursuant to certain outstanding promissory notes in an aggregate principal amount of $20 million issued to certain institutional lenders, which Notes provide the Lenders with an option to elect that such Notes be repaid by the Company in shares of Series A Preferred Stock and subscription agreements, each dated April 29, 2022, by and between the Company and each of the Lenders, the Company issued an aggregate of 1,142,857 shares of Series A Preferred Stock in full satisfaction of the Company’s obligations under the Notes in a registered direct offering. On May 3, 2022, SCI entered into a Bilateral Master Contribution Agreement (the "Contribution Agreement") with Soluna SLC Fund I Projects Holdco LLC, a Delaware limited liability company (“Spring Lane”), pursuant to which Spring Lane has agreed, pursuant to the terms and conditions of such agreement, to make one or more capital contributions to, and in exchange for equity in, SCI or one of its subsidiaries up to an aggregate amount of $35 million to fund certain projects to develop green data centers co-located with renewable energy assets (the "Spring Lane Commitment"). We anticipate that these capital contributions, once deployed into the projects, will help develop three behind-the-meter (BTM) projects designed to convert wasted renewable energy into clean computing services such as bitcoin mining and artificial intelligence. The Contribution Agreement outlines the framework for the Spring Lane Commitment; however, neither we nor Spring Lane are obligated to completed any projects under such agreement and any actual capital contributions are subject to various conditions precedent, including the receipt of requisite lender and other consents, acceptance by Spring Lane of specific projects and negotiations of agreements regarding those projects, including milestones and structure.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 855 -URI https://asc.fasb.org/topic&trid=2122774 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 855 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6842918&loc=SL6314017-165662 + Details
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