Company: SLNH
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023503
Chunk: 119

Company: Soluna Holdings, Inc
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 119
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 2024 resulted in a loss on revaluation of approximately $4.0 million,
reflecting changes in conversion and payout assumptions and stock price volatility compared to conversion terms available to noteholders
at that date. The convertible notes were remeasured again as of September 30, 2024, resulting in a gain of approximately $2.3 million,
primarily due to the decline in the Company’s stock price, which offset prior-quarter fair value losses. In addition to these fair
value adjustments, we recognized a loss on debt extinguishment of approximately $1.4 million related to the satisfaction and redemption
of the Dorothy 2 equipment loan through the issuance of Class B Membership Interests in the Dorothy 2 project, which were valued at approximately
three times the original borrowing amount.

Fair
value adjustment, net: For the nine months ended September 30, 2025, we recognized a net loss of approximately $22.2 million
related to the revaluation of the Series A and Series B warrants issued in connection with the July 2025 Financing, which were classified
as liabilities and exercised during the three months ended September 30, 2025. The loss also includes a $13.8 million fair value adjustment
related to the revaluation of outstanding warrant liabilities as of September 30, 2025. These losses were primarily driven by the increase
in the Company’s stock price between July and September 2025, which resulted in a higher intrinsic value relative to the warrants’
original fair value. Additionally, we incurred an approximate $9.1 million loss representing the excess of the fair value of warrants
issued in connection with the July 2025 Financing over the related proceeds received, and $0.1 million in fair value adjustments related
to timing differences between SEPA draws and share issuances. These losses were partially offset by a gain of approximately $0.8 million
from the revaluation of the Generate Common Warrant during the period.

59

For
the nine months ended September 30, 2024, we recognized a net fair value adjustment loss of approximately $5.6 million, primarily related
to the issuance and repricing of additional warrants with modified exercise features pursuant to the Fourth Amendment with the Noteholders.
As a result of these modifications, the warrants were reassessed and classified as warrant liabilities, requiring recurring fair value
measurement each reporting period. The initial issuance and repricing resulted in a fair value adjustment loss of approximately $5.9
million