Company: SLNH
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023503
Chunk: 16

Company: Soluna Holdings, Inc
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 16
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 Hedging (“ASC 815”), certain Company warrants associated with the July 2025 Equity Financing discussed in Note 9
did not meet the criteria for equity treatment. In addition, due to a side letter execution in relation to the Generate Common
Warrants as discussed in Note 8, the Generate Common Warrants were reclassified to liability treatment. As such, the warrants were
recorded on the balance sheet at fair value. This valuation was subject to re-measurement at each balance sheet date, or when the
warrant was exercised. With each re-measurement, the warrant valuation was adjusted to fair value, with the change in fair value
recognized in the Company’s condensed consolidated statement of operations. The warrants were collectively classified as a
Level 3 measurement within the fair value hierarchy due to the use of a valuation model which involves the use of unobservable
inputs. As of September 30, 2025, the Company had an outstanding warrant liability balance which represents the fair value of the
warrants of approximately $7.2
million. The Company notes, approximately $2.9
million related to the Series A and B Warrants in association with the July 2025 Equity Financing, and $4.3
million related to the Generate Common Warrants. Please refer to Note 9 in relation to the fair value assumptions for the Series A and B Warrant in association with
the July 2025 Equity Financing, and refer to Note 8 in relation to the Generate Common Warrants fair value assumptions.

Reclassification

Certain
prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on
the reported results of operations or net assets.

Correction
of an Error

While
preparing the Company’s Form 10-Q for the three and nine months ended September 30, 2025, the Company identified the following
error related to the presentation of basic and diluted Earnings Per Share (“EPS”) in its historical filing for the year ended
December 31, 2024, and for the quarters ended June 30, 2024, September 30, 2024, March 31, 2025, and June 30, 2025:

    ●
    Inclusion
    of the restricted stock awards that had not yet vested.

    11

In
accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108,