Company: SLNH
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010886
Chunk: 31

Company: Soluna Holdings, Inc
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 31
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 “Noteholders”)
(i) secured convertible notes in an aggregate principal amount of $16.3 million for an aggregate purchase price of $15 million (collectively,
the “October Secured Notes”), which were, subject to certain conditions, convertible at any time by the investors, into an
aggregate of 1,776,073 shares of the Company’s common stock, at a price per share of $9.18 and (ii) Class A, Class B and Class C
common stock purchase warrants (collectively, the “October Warrants”) to purchase up to an aggregate of 1,776,073 shares of
common stock, at an initial exercise price of $12.50, $15 and $18 per 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 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 record the new debt at fair value, and in turn write off the
existing debt on the Company’s books.

Following the debt extinguishment on July 19, 2022
as noted above, the Convertible Notes have been 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. See below for rollforward of the fair value of the convertible debt :

 Schedule
of Fair value of Convertible Debt

    (in thousands) 

    Balance January 1, 2024 
    $8,474 
  
    Conversions of debt (January 1, 2024- March 31, 2024) 
     (1,023)
  
    Total revaluation gains (January 1, 2024- March 31, 2024) 
     (1,235)
  
    Balance March