Company: SLNH
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023503
Chunk: 163

Company: Soluna Holdings, Inc
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 163
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collectively, the “June SPA Modification”).

The
joint-and-several liability arrangement is between the Company and CloudCo. While no written agreement has been created to establish
the amount that each entity agrees to pay under the obligation, the nature of the relationship is such that the Company has taken a significant
role in the economics of the Notes. The Company expects to make any necessary payments on behalf of CloudCo in order to prevent default
on the Notes because the Investor has a lien on all property and assets of the Company in connection with the Notes. Based on quantitative
analysis performed by the Company, it was determined that the terms of the debt instrument before and after the June SPA Modification
were not substantially different. Accordingly, the June SPA Modification is accounted for as a debt modification.

Subsequently,
the Company and the Investor mutually agreed that the 1,000,000
Escrow Shares would instead be issued directly to the Investor and, on April 29, 2025, the Company issued 1,000,000
shares of common stock to the Investor. When the Investor sells the 1,000,000 shares in the open market (after either SEC registration effectiveness or pursuant
to SEC Rule 144), the net cash proceeds from the sale of shares will be applied to the outstanding principal balance of the note up to
$4.00 per share, and any excess proceeds over $4.00 per share will be retained by the Investor. The Investor has until March 31, 2026
(the “Sales Period”) to sell the 1,000,000 shares to reduce the outstanding principal balance, or would have to return the
shares.

    18

July
2024 Additional Secured Note

Schedule
of Additional Secured Note Financing 

    (Dollars in thousands) 
    Maturity
    Date 
    Interest
    Rate  
    January
    1, 2025- September 30, 2025  
    July
    12, 2024- December 31, 2024 
  
    Term Loan and capitalized interest
    (excludes debt issuance cost) 
    July 12, 2027* 
     9% 
    $1,209  
    $1,278 
  
    Less: principal and capitalized interest payments 

     (658) 
     (69)
  
    Debt discount 

     -  
     (7)
  
    Gain