Company: SLNH
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023503
Chunk: 161

Company: Soluna Holdings, Inc
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 161
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 (y) each issuance of
common stock of Soluna Cloud during the period commencing on the day after the date of the Warrant and ending on the earlier to occur
of (i) the conclusion of up to an additional $112.5 million of capital raised, whether in the form of debt, equity, mixed or otherwise,
by Soluna Cloud and its subsidiaries and (ii) December 31, 2024 and (z) the number of shares of common stock of Soluna Cloud issuable
upon the exercise or conversion of any convertible securities of CloudCo issued during such period (other than certain issuances pursuant
to CloudCo’s equity compensation plans). On June 20, 2024, the Company determined that the warrant should be treated as a warrant
liability and based on valuation, the Company booked a warrant liability of approximately $314 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 in 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 September 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.

    17

For
the three and nine months ended September 30, 2025, the Company incurred approximately $298
thousand and $1.0
million in interest expense in relation to the June SPA, respectively, which includes interest paid on the note and amortization of
deferred financing costs.

June
SPA Modification

On
March 21, 2025, the Note Parties entered into a Modification Agreement (the “Modification Agreement”) to, among other things:

    (i)
    provide
    for the deposit of 1,000,000 shares (the “Escrow Shares”) of the Company’s common stock, into an escrow account
    maintained by Northland Securities, Inc., pursuant to an escrow agreement (as further described below),

    (ii)
    provide