The disclosure and our analysis
Evidence dates
Evidence: Soluna Holdings Form 8-K reporting a subscription agreement dated October 20, 2026, filed October 21, 2026; Soluna press release dated October 21, 2026, furnished as Exhibit 99.1 to a separate Form 8-K. Both read October 23, 2026.
What Soluna disclosed
Soluna and certain of its affiliates entered into a subscription agreement with affiliates of Applied Digital to form STX JV Holdings LLC, the project company. At closing, an Applied affiliate would acquire 51% of the project company's membership interests and a Soluna affiliate would acquire 49%. [Source 1]
The filing says the project company will develop a data center referred to as Dorothy 3A, consisting of approximately 75 megawatts of gross capacity, or 50 megawatts of critical IT capacity, in Briscoe County, Texas. The press release describes the project as a planned 50 MW critical IT data center for AI and HPC at Project Dorothy 3, Soluna's development site near Silverton. [Source 1] [Source 2]
Soluna describes Dorothy 3 as co located with Briscoe Wind, which it calls a 150 MW wind farm, near its Dorothy 1 and Dorothy 2 projects. Subject to definitive documentation, Soluna says Phase 1 (50 MW critical IT) is expected to draw power from both Briscoe Wind and the grid. The 150 MW figure is the wind farm's size as Soluna states it; the release does not say how much of that output would serve the data center. [Source 2]
Disclosed economics
1. **Soluna's contribution:** a ground sublease interest with an attributed value of $18,750,000, plus a newly formed intermediate holding company. [Source 1]
2. **Applied's contribution:** $19,515,306 in cash, reduced dollar for dollar by qualifying development and long lead equipment payments Applied makes before closing. [Source 1]
3. **Pre closing costs:** The filing says certain development work related to the project has begun at the site and will continue through closing, and certain equipment may be procured, at Applied's cost. If the deal terminates without closing, Soluna's investor entity must reimburse 80% of those funded costs, up to $45 million, on a schedule with interest. [Source 1]
4. **Ground sublease:** at closing, a Soluna entity would enter a 99 year ground sublease with STX-01 LLC, a project company subsidiary. [Source 1]
5. **Warrant:** Soluna would issue Applied or an affiliate a seven year warrant for up to 7,644,444 Soluna common shares at $0.74 per share. [Source 1]
Conditions and status
Closing is expected on or before December 1, 2026. That date can extend by 30 days if only the tax abatement vote remains outstanding, or by 10 days if only title deliverables remain, but not beyond December 31, 2026. Conditions include the tax abatement vote, a leasehold title policy, ChronoScale's and the parties' internal approvals, and execution of the LLC agreement and other transaction documents. The filing says that, other than a form of assignment agreement, the ancillary agreements, including the data center lease with ChronoScale, the construction contract and the ground leases, had not been finalized as of the report. [Source 1]
ChronoScale Holdings, which Soluna's release describes as majority owned by Applied, has signed a nonbinding letter of intent to lease the planned facility. Soluna says there is no assurance a definitive lease will be signed on those terms or at all. [Source 2]
On our status vocabulary, this project is Proposed as of October 23, 2026. A signed subscription agreement exists, but the joint venture has not closed, the reviewed sources do not show the tax abatement approved, and the facility is not Leased. The filing says development work has begun at the site but does not describe its scope, so we do not treat it as evidence that the data center is Under construction. Nothing reviewed establishes energization or availability.
Buyer analysis
This is our analysis, not a company statement. The planned tenant is an Applied affiliate, so the first 50 MW of critical IT appears intended for related party use rather than open colocation inventory. Buyers looking at West Texas wind sited capacity should treat Dorothy 3 as a development to watch, not a source of near term space.
The structure is worth noting for operators. A power site developer is contributing land and power related assets for a minority stake, while a builder and operator funds the project and holds control. Applied is already paying for site development work before closing, protected by an 80% reimbursement obligation capped at $45 million if the deal fails.
The Briscoe County tax abatement vote is the next public milestone to check. It should appear on county commissioners court agendas.
