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

Company: Soluna Holdings, Inc
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 25
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15 million (collectively, the “October Secured Notes”), which
were, subject to certain conditions, convertible at any time by the investors, into an aggregate of 1,776,073 shares of the Company’s
common stock, at a price per share of $9.18 and (ii) Class A, Class B and Class C common stock purchase warrants (collectively, the “October
Warrants”) to purchase up to an aggregate of 1,776,073 shares of common stock, at an initial exercise price of $12.50, $15 and
$18 per share, respectively. The October Warrants are legally detachable and can be separately exercised immediately for five years upon
issuance, subject to applicable Nasdaq rules.

On
July 19, 2022 and on September 13, 2022, the Company entered into an Addendum and Addendum Amendment which adjusted the terms such as
maturity date, conversion prices, and the issuance of new warrants to the Noteholders. Pursuant to the Addendum and Addendum Amendment,
the Company evaluated whether the new addendums qualified as debt modification or debt extinguishment. Based on ASC 470, Debt, the Company
determined the Addendum and Addendum Amendment to fall under Debt Extinguishment treatment and the Company would be required to record
the new debt at fair value, and in turn write off the existing debt on the Company’s books.

Following
the debt extinguishment on July 19, 2022 as noted above, the Convertible Notes have been accounted for under the fair value method on
a recurring basis upon issuance (e.g., upon execution of the Addendum) per guidance within ASC 480, and at each subsequent reporting
period, with changes in fair value reported in earnings. See below for rollforward of the fair value of the convertible debt:

 Schedule
of Fair value of Convertible Debt

    (in
    thousands) 

    Balance
    January 1, 2024 
    $8,474 
  
    Conversions
    of debt (January 1, 2024- March 31, 2024) 
     (1,023)
  
    Total
    revaluation gains (January 1, 2024- March 31, 2024) 
     (1,235)
  
    Balance
    March 31, 2024 
     6,216 
  
    Con