Company: SLNH
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001756
Chunk: 1834

Company: Soluna Holdings, Inc
Filing Date: 2025-03-31
Form: 10-K
Item: Item 6
Chunk 1834
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, the assignment and assumption of the Additional
Notes had not become effective, however on March 14, 2025, the Company fulfilled the agreement and assumed the assignment and assumption
of the Additional Notes.

To
further incentivize the Additional Investors, Soluna Cloud issued warrants (the “Cloud Additional Warrants”) to each Additional
Investor. These Cloud Additional Warrants are exercisable within three years from the effective date of the June SPA Amendment. They
allow the purchase of a number of shares of Soluna Cloud common stock equal to 1.25% of Soluna Cloud’s issued and outstanding common
stock as of the Cloud Additional Warrant date, divided by 0.9875, plus 1.25% of each Qualified Issuance, divided by 0.9875. On July 12,
2024, the Company determined that the additional warrants to be treated as a warrant liability and based on valuation, the Company booked
a warrant liability of approximately $13 thousand and a related debt discount in which will be amortized over the life of the loan.

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.

For
the year ended December 31, 2024, the Company incurred approximately $901 thousand in interest expense in relation to the June SPA and
June SPA Amendment.

June
SPA Modification 

On March 23, 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, par value $0.001 per share (the “Common
Stock”), into an escrow account maintained by Northland Securities, Inc., pursuant to an escrow agreement (as further described
below), (ii) provide for the issuance to the Investor of a warrant to purchase shares of Common Stock upon the release by the Investor
of its lien on the property of the Company, (iii) amend the payment schedule of the Note to provide (a) for each of the six scheduled
payments occurring after the earlier of the effectiveness of a registration statement for