Company: SLNH
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010886
Chunk: 126

Company: Soluna Holdings, Inc
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 126
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 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 March 31, 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.

For the three months ended
March 31, 2025, the Company incurred approximately $389 thousand in interest expense in relation to the June SPA, which includes interest
paid on the note and amortization of deferred financing costs.

    15

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, 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 penny warrants to purchase shares of the Company’s common stock. The number of penny warrants (exercise price at $0.01) shall equal $1.25
million divided by the 5-day VWAP of the Company’s common stock at time of issuance. The warrants will be issued at the time the
Investor removes its lien on the property of the Company. As of May 15, 2025, the lien has not yet been removed and the warrants have
not been issued,

    (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 the resale of the Escrow Shares and the Conversion Shares (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