Company: SLNH
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024045
Chunk: 17

Company: Soluna Holdings, Inc
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 17
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as defined below) or the date that the
    Escrow Shares and the Conversion Shares may be sold pursuant to Rule 144 under the Securities Act of 1933, as amended (the “Securities
    Act”), without any information requirements, the amount of principal and interest payable on such date shall be reduced by
    50% (the aggregate amount of the six months of such reductions, the “Specified Amount”) and (b) if the aggregate amount
    of payments on the Amended Note applied from the proceeds of the sale of the Escrow Shares on or prior to the last six scheduled
    payments is less than the Specified Amount (such difference, the “Make Whole Amount”), than the amount of each of the
    remaining scheduled payments shall be increased by an amount equal to the Make Whole Amount divided by the number of remaining scheduled
    payments,

    (iv)
    modify
    the Note such that the Note is now convertible into up to 2,500,000 shares of the Company’s common stock based (“Conversion
    Shares”) on a conversion price of $5.00,

    (v)
    amend
    the Note to provide that the Company will be a direct co-obligor with CloudCo under the Note; and

    (vi)
    amend
    the SPA to allow the Company to organize or incorporate any subsidiary, over which the Company shall have voting or beneficial control,
    which is being formed with the intent to engage in a business or line of business substantially similar to that of Soluna Cloud or
    the Company, without first paying all of the principal and interest due under the Note and without first obtaining Investor’s
    prior written consent (collectively, the “June SPA Modification”).

    16

The
joint-and-several liability arrangement is between the Company and CloudCo. While no written agreement has been created to establish
the amount that each entity agrees to pay under the obligation, the nature of the relationship is such that the Company has taken a significant
role in the economics of the Notes. The Company expects to make any necessary payments on behalf of CloudCo in order to prevent default
on the Notes because the Investor has a lien on all property and assets of the Company in connection with the Notes. Based on quantitative
analysis performed by the Company, it was determined that the terms of the debt instrument before and after the June SPA Modification
were not substantially different. Accordingly, the June SPA Modification is accounted for as a debt