Company: SLNH
Filing Date: 2025-02-05
Form Type: 424B3
Source: 0001493152-25-005030
Chunk: 272

Company: Soluna Holdings, Inc
Filing Date: 2025-02-05
Form: 424B3
Chunk 272
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 the “October Warrants”) to purchase up to an aggregate of 1,776,073shares of common stock, at an initial exercise price of $ 12.50, $ 15and $ 18per share, respectively. The October Warrants are legally detachable and can be separately exercised immediately for five years upon issuance, subject to applicable Nasdaq rules.

On July 19, 2022 and on September 13, 2022, the Company entered an into an Addendum and Addendum Amendment which adjusted the terms such as maturity date, conversion prices, and the issuance of new warrants to the Noteholders. Pursuant to the Addendum and Addendum Amendment, the Company evaluated whether the new addendums qualified as debt modification or debt extinguishment. Based on ASC 470, Debt, the Company determined the Addendum and Addendum Amendment to fall under Debt Extinguishment treatment and the Company would be required to fair value the new debt, and in turn write off the existing debt on the books.

Following the debt extinguishment on July 19, 2022 as noted above, the Convertible Notes will be accounted for under the fair value method on a recurring basis upon issuance (e.g., upon execution of the Addendum) per guidance within ASC 480, and at each subsequent reporting period, with changes in fair value reported in earnings. Although the Notes are not being accounted for under 825-10, the substance of the debt is considered to be the same and is therefore considered outside the scope of ASC 470-60. As such, the Company performed a fair value analysis of the Convertible Notes. For the year-ended December 31, 2023 and quarter-ended September 30, 2024, the Company ran Monte Carlo simulations for the expected conversion dates of the Convertible Notes using risk free rates, annual volatility, daily trading volumes, likely conversion profiles, and other assumptions based on principal and accrued interest as of the period ends. The Company determined the fair value of the Convertible Notes uses certain Level 3 inputs.

| F-62 |

Changes in Level 3 Financial Liabilities Carried at Fair Value

Schedule of Changes in Level 3 Financial Liabilities Carried at Fair Value

| (in thousands)                                                 |     |   |        |   |
|:---------------------------------------------------------------|:----|:--|-------:|:--|
| Balance January 1, 2023                                        |     | $ | 12,254 |   |
| Con