Company: SLNH
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024045
Chunk: 19

Company: Soluna Holdings, Inc
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 19
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 Issuance, divided by 0.9875. On July 12,
2024, the Company determined that the additional warrants were treated as a warrant liability and based on valuation, the Company booked
a warrant liability of approximately $13 thousand and a related debt discount which will be amortized over the life of the loan. Further
evaluation of the Warrants under ASC 815-10 was required to determine if the warrants meet the definition of a derivative. The warrants
are classified as a liability that are required to be adjusted to fair market value. The Company applied a discounted cash flow method
in relation to the valuation of Cloud which assumptions from forecasted projected cash flow data and other key operating assumptions
such as working cash flow were used to determine an enterprise value less any current debt in order to determine an equity value for
Cloud. As of June 30, 2025 and December 31, 2024, the warrants were fair valued, and deemed to not have any further value, as such the
Company wrote down the liability balance to $0.

A
“Qualified Issuance” includes any issuance of common stock by Soluna Cloud from the day after the Cloud Additional Warrant
date until the earlier of raising an additional $111.25 million or December 31, 2024, as well as shares issuable upon exercise or conversion
of convertible securities issued during this period, excluding certain equity compensation plan issuances.

On
October 1, 2024, CloudCo, Soluna Cloud and the Company entered into assignment and assumption agreements (the “Assignment Agreements”)
with the Additional Investors with respect to an aggregate of $1.25 million of notes issued by CloudCo. Pursuant to the Assignment Agreements,
the Company will be able to purchase such notes for a purchase price of $750 thousand, or 60% of face value. The assignment and assumption
will be effective once all conditions of the agreement are met including fulfilling the purchase price. The notes will be paid to the
note holders from an escrow that is funded in installments from the SEPA funding. The transfer is not effective until payment from the
escrow is made. The Company was required to escrow 20% of all SEPA draws until the $750 thousand purchase price is accumulated. In addition
to the 20% of SEPA funds, the Company would apply all principal payments and 50% of interest payments made to date from October 1, 2024,
until