Company: SLNH
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023503
Chunk: 44

Company: Soluna Holdings, Inc
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 44
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 the Fourth Amendment Agreement, the Company exercised its right to extend the maturity date of the Notes for an
additional six months, or until January 24, 2025, to enable the Company to continue to pursue its significant project development opportunities
for Soluna Cloud, Dorothy 2, and other projects. The extension of the notes caused an increase in the convertible note balance of approximately
$325 thousand and the extension fee was recorded within Other Expense, net for the year ended December 31, 2024.

The
effect of the additional penny warrants, $3.78 warrants, and the $6.00 repriced warrants including additional warrants if exercised with
the Noteholders, created a loss on debt extinguishment of approximately $5.8 million due to the fair value associated as of February
28, 2024. Such amounts were recorded as a loss on debt extinguishment and affected the Company’s warrant liability and additional
paid in capital balance account. Due to the requirement of the shareholder approval associated with the Fourth Amendment, the warrants
associated were initially treated as a liability. In addition, a warrant revaluation was done on March 31, 2024, which created a gain
on revaluation associated with the warrant liability of approximately $1.5 million.

On
May 30, 2024, shareholder approval was obtained removing the cap containment provision for the warrants, and as such, the liability accounting
treatment was no longer required. Since all other criteria were met to be treated as equity, the Company adjusted the warrant liability
as of the date of shareholder approval and reclassified balance to equity. As such, the Company accounted for the change in the fair
value of the warrant liability as of the date of the shareholder approval (May 30, 2024), in connection with its loss on revaluation
of the warrant of approximately $1.6 million.

Pursuant
to additional agreements with holders of another 51,618 outstanding warrants, similar adjustments with those warrants, resulted in a
total adjustment to 530,569 warrants. As the 51,618 warrants were not with the Noteholders, the treatment of $6.00 repriced warrants
was recorded as a deemed dividend and adjusted the Company’s earnings per share calculation for the year ended December 31, 2024.
The fair value associated with the 51,618 warrants with non-Noteholders totaled approximately $386 thousand. On
May 17, 2024, the Company permitted the holders