Company: SLNH
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023503
Chunk: 65

Company: Soluna Holdings, Inc
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 65
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 30, 2024.

During
August 2025, upon the successful election to the Board, certain Awards with separation vesting incurred an extension of the vesting term
by three years. As such, a modification occurred. All such unvested equity awards were probable of vesting as of the modification date
and the change was accounted for as a Type I modification. In a Type I modification, the Company is required to calculate the incremental
difference of the awards, which equals the difference of new award value inclusive of estimated forfeitures and the fair value of the
original award as of the modification date. As of the modification date, there is no reversal or adjustment of previously recognized
stock compensation expense. The modification related to 492,645 awards of restricted stock granted to two board members. There was no
incremental compensation cost resulting from the modification since the awards are grants of restricted stock. The difference between
the fair value of the original award as of the modification date and the fair value of the new award as of the modification date are
identical, as fair value is determined based on the stock price as of that date.

During
April 2024, the Company cancelled certain vested Awards and modified the terms of certain unvested Awards, to permit different settlement
outcomes. The service period and vesting terms were changed at the time of modification. All such vested Awards were fully vested as
of the cancellation date and all compensation cost had been recognized. All such unvested equity awards were probable of vesting as of
the modification date and the change was accounted for as a Type I modification. In a Type I modification, the Company is required to
calculate the incremental difference of the awards, which equals the difference of new award value inclusive of estimated forfeitures
and the fair value of the original award as of the modification date. As of the modification date, there is no reversal or adjustment
of previously recognized stock compensation expense. The modification related to the cancellation of 48,547 under the water stock options
granted to eight board members. The options were replaced with new awards of restricted stock. The amount of incremental compensation
cost resulting from the modification was approximately $4.0 million.

The
Company will recognize the compensation expense on a straight-line basis over the service period for the entire Awards. Accordingly,
as of September 30, 2025 and December 31, 2024, the Awards from the Plans are presented within the stockholders’ equity section
of