Company: SLNH
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001756
Chunk: 1501

Company: Soluna Holdings, Inc
Filing Date: 2025-03-31
Form: 10-K
Item: Item 5
Chunk 1501
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 and the acceleration of the remaining unpaid amounts of the contract in accordance with Section 8(h)(ii) of the HPE Agreement, a Type 1
Subsequent Event, we have recognized a liability for the remainder of the HPE Agreement on the consolidated balance sheet of our
subsidiary CloudCo, and corresponding loss on contract on our consolidated income statement, in line with the terms
and conditions of the HPE Agreement and relevant accounting standards. We have also recognized a loss on the termination of the HPE
Agreement for $28.6 million representing the remaining obligations, and a contract liability in the same amount. In addition, the
outstanding balance of the prepaid deposit of $8.6 million was offset to the liability, leaving a net liability balance of $20.0
million as of December 31, 2024.

Interest
expense: Interest expense for the year ended December 31, 2024 was approximately $2.5 million related to approximately $1.5 million
to the NYDIG loan, $900 thousand to compounded interest and deferred financing amortization expense of equipment financing loan and June
and July 2024 secured note financing, and $138 thousand to the Navitas loan. Interest expense for the year ended December 31, 2023 was
$2.7 million and related to default and continuing interest expense of the NYDIG loan of approximately $1.4 million, a financing loan
with Navitas of approximately $228 thousand, interest and other charges of approximately $212 thousand for the promissory notes issued
in January and February of 2023, and interest on amortization of warrants for the convertible debt of approximately $475 thousand, as
well as default interest charged through March 10, 2023 for the convertible holders of approximately $420 thousand.

Loss
on Debt Extinguishment and Revaluation, net: For the year ended December 31, 2024, we recorded a loss on debt extinguishment
and revaluation of approximately $7.3 million. On February 28, 2024, we entered into the Fourth Amendment Agreement with the Noteholders,
dated February 28, 2024 (the “Fourth Amendment”), and lowered the conversion price of the Convertible Notes as well as issued
new warrants and repriced additional warrants with certain exercise features. The issuance and reprice of warrants created a loss on
extinguishment of debt of approximately $5.8 million, which was partially offset by a