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Stockholders’ Equity
 9 Months Ended
Sep. 30, 2025
Equity [Abstract]  
Stockholders’ Equity

9. Stockholders’ Equity

 

Preferred Stock

 

The Company has two series of preferred stock outstanding: the Series A Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”), with a $25.00 liquidation preference; and the Series B Convertible Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”). As of September 30, 2025 and December 31, 2024, there were 4,928,545 and 4,953,545 shares of Series A Preferred Stock issued and outstanding, and as of September 30, 2025 and December 31, 2024, there was 62,500 shares of Series B Preferred Stock issued and outstanding.

 

Series A Preferred Stock

 

The Series A Preferred Stock is not convertible into or exchangeable into common stock of the Company, except upon the occurrence of a delisting event or change of control. Per the Company’s Certificate of Designations, Preferences and Rights of 9.0% Series A Cumulative Perpetual Preferred Stock (“Series A Certificate of Designations”), if there is an occurrence of delisting or change of control, the holders of Series A Preferred Stock will have the right to convert the number of preferred A shares into a number of common shares by the lesser of (a) the sum of the $25.00 liquidation preference per share of Series A Preferred Stock plus the amount of any accumulated and unpaid dividends divided by the closing price of the common stock on ten consecutive trading days preceding a delisting event, or (b) the share cap of 0.2817.

 

Series B Preferred Stock

 

On July 19, 2022, the Company entered into a Securities Purchase Agreement (the “Series B SPA”) with an accredited investor (the “Series B Investor”) pursuant to which the Company sold to the Series B Investor 62,500 shares of Series B Preferred Stock, for a purchase price of $5,000,000. The shares of Series B Preferred Stock are initially convertible, subject to certain conditions, into 46,211 shares of common stock, at a price per share of $135.25 per share, a 20% premium to the closing price of the common stock on July 18, 2022, subject to adjustment as set forth in the Certificate of Designations of Preferences, Rights and Limitations for the Series B Preferred Stock (“Series B Certificate of Designations”). On October 1, 2024, the Company agreed, as a condition of a waiver of the Series B Investor’s’ right of first refusal and participation rights in connection with the SEPA, to reduce the conversion price to $5.00 upon stockholder approval, which was obtained on November 15, 2024.

 

In addition, in 2022, the Company issued to the Series B Investor 60,000 common stock purchase warrants (the “Series B Warrants”) to purchase up to an aggregate of shares of common stock. In connection with the above referenced waiver, the exercise price of these warrants was reduced to $0.01 per share and an additional 140,000 warrants exercisable for $0.01 per share were issued. The Series B Investor exercised the 60,000 Series B Warrants on April 22, 2025 through a cashless warrant exercise resulting in the issuance of 59,131 shares of common stock.

 

 

Effective from October 1, 2024, the sale of common stock as a result of conversion of Series B Preferred Stock and exercise of the new 140,000 warrants is subject to a 12-month lockup, followed by a 12 month leak out where the holder may not sell shares during the lockup period and may sell up to 1/12th of total conversion and warrant exercise shares per month during the leak out. The effects of the modification of the Series B Preferred Stock on October 1, 2024, including repriced and newly issued penny warrants, and dividend amendments, created an extinguishment on the Series B Preferred Stock in which the Company recorded a deemed dividend of approximately $1.7 million which relates to the fair value consideration of the modified Series B Preferred Stock less the original carrying value for the year ended December 31, 2024, excluding the consideration of the Preferred B dividend as discussed below.

 

Common Stock

 

The Company has one class of common stock, par value $0.001 per share. Each share of the Company’s common stock is entitled to one vote on all matters submitted to stockholders. As of September 30, 2025 and December 31, 2024, there were 64,051,790 and 10,607,020 shares of common stock outstanding, respectively.

 

Dividends

 

Pursuant to the Certificate of Designations, Preferences and Rights of 9.0% Series A Cumulative Perpetual Preferred Stock of the Company, dividends, when, as and if declared by the Board (or a duly authorized committee of the Board), will be payable monthly in arrears on the final day of each month, beginning August 31, 2021. The Board of Directors had not declared any Series A Preferred Stock dividends beginning October 2022 through September 30, 2025, as such the Company has accumulated approximately $18.5 million of dividends in arrears on the Series A Preferred Stock through December 31, 2024, and an additional $2.8 million and $8.3 million of dividends in arrears for the three and nine months ended September 30, 2025, for a total of approximately $26.9 million.

 

The Company’s Series B Preferred Stock included a 10% accruing dividend compounded daily for 12 months from the original issue date of July 20, 2022, and annually thereafter, that may be paid in cash or stock at the Company’s option at the earlier of (i) the date the Series B Preferred Stock is converted, or (ii) the Series B Dividend Termination Date. On August 11, 2023, the Company paid a mandatory dividend on its outstanding Series B Preferred Stock in the amount of approximately $656 thousand. Pursuant to the Certificate of Designation for the Series B Preferred Stock, the Company had the option to pay the dividend in cash or shares of Common Stock. Pursuant to a Dividend Payment Agreement, the Company and the holder of the Series B Preferred Stock agreed to satisfy the payment of the dividend through the issuance of 44,000 shares of its Common Stock and 70,300 pre-funded warrants (the “Pre-funded Warrants”).

 

Effective October 1, 2024, the dividend payment obligation has been modified to be annual. The amendment resulted in annual dividend payments going forward. As a result of the amendment, the Company would be obligated to make annual dividend payments for the period starting from July 2023 as per the Series B Preferred Consent and Waiver, however, the board of directors has not yet declared any dividends for that period. As such, the Company has accumulated approximately $941 thousand dividends in arrears in relation to the Series B Preferred Stock through December 31, 2024 and an additional $173 thousand and $508 thousand for the three and nine months ended September 30, 2025, for a total of approximately $1.4 million. The dividends in arrears are included in the calculation of net loss per share as discussed below.

 

Standby Equity Purchase Agreement

 

On August 12, 2024, the Company entered into the SEPA with YA. Pursuant to the terms of the SEPA, the Company agreed to issue and sell to YA, from time to time, and YA agreed to purchase from the Company, up to $25 million of shares of the Company’s common stock (the “SEPA Shares”). The Company paid a commitment fee of approximately $250 thousand to YA and consent fee of $25 thousand to the holder of shares of Series B Preferred Stock, which was paid through the issuance of 65,320 shares of common stock. The commitment and consent fees were recorded within Other expense, net on the Company’s consolidated financial statements for the year ended December 31, 2024. The Company and YA also entered into a registration rights agreement, pursuant to which the Company agreed to prepare and file with the SEC a Registration Statement on Form S-1, registering the resale of the SEPA Shares. On November 12, 2024, the Company filed a registration statement on Form S-1 (File No. 333-282559) with the SEC for the resale by YA of 3,000,000 SEPA Shares, which was declared effective by the SEC on February 5, 2025. During the three and nine months ended September 30, 2025, the Company has issued and sold approximately 1.5 million and 3.0 million shares of common stock to YA pursuant to the SEPA for aggregate net proceeds to the Company of approximately $4.2 million and $6.2 million.

 

ATM Agreement

 

On April 29, 2025, the Company entered into the ATM Agreement” with Wainwright, as sales agent, pursuant to which the Company may offer and sell, from time to time, through Wainwright, up to $87.65 million of shares of common stock. The Company will pay Wainwright a commission of 3.0% of the aggregate gross proceeds from each sale of shares and has agreed to provide Wainwright with customary indemnification and contribution rights. During the three and nine months ended September 30, 2025, the Company sold 14,649,141 and 17,989,804 shares of common stock pursuant to the ATM Agreement for net proceeds of $20.8 million and $23.0 million after deducting sales agent commissions. The Company has sold an additional 2,690,679 shares of common stock pursuant to the ATM Agreement subsequent to September 30, 2025 for additional net proceeds of approximately $6.3 million. As of the date of these condensed financial statements, the Company has approximately $69.7 million of shares of common stock that are available for issuance under the ATM.

 

 

July 2025 Public Offering

 

On July 15, 2025, the Company entered into a securities purchase agreement with the purchasers signatory thereto, pursuant to which the Company sold in a public offering (the “July 2025 Offering”) an aggregate of (i) 8,794,544 shares of common stock (each a “Share” and collectively, the “Shares”); (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase 296,365 shares of common stock; (iii) Series A warrants (the “Series A Warrants”) to purchase 9,090,909 shares of common stock; and (iv) Series B warrants (the “Series B Warrants,” and together with the Series A Warrants, the “Common Warrants”) to purchase 9,090,909 shares of common stock.

 

Each Share or Pre-Funded Warrant was sold together with one Series A Warrant to purchase one Share and one Series B Warrant to purchase one Share. The combined public offering price for each Share (or Pre-Funded Warrant) and accompanying Common Warrants was $0.55. The Pre-Funded Warrants have an exercise price of $0.001 per share, are exercisable immediately upon issuance and will expire when exercised in full. Each Common Warrant has an exercise price of $0.55 per share and is exercisable immediately upon issuance. The Series A Warrants will expire on the five-year anniversary of the initial exercise date of July 17, 2025 and the Series B Warrants will expire on the twenty-four-month anniversary of the initial exercise date of July 17, 2025.

 

The net proceeds of the July 2025 Offering, after deducting the fees and expenses of the placement agent and other offering expenses payable by the Company, but excluding the net proceeds, if any, from the exercise of the Common Warrants, was approximately $4.2 million. The July 2025 Offering closed on July 17, 2025.

 

Based on a review of the Common Warrants, the warrants were liability treated. Based on a fair value assessment on July 17, 2025, the Common Warrants had a fair value of approximately $8.6 million. For the three and nine months ended September 30, 2025, approximately 17.1 million warrants were exercised in which the Company received approximately $9.4 million in gross proceeds, and due to change in fair value on date of exercise and the original fair value on July 17, 2025, there was a fair value adjustment loss of approximately $11.5 million. The Company also evaluated the fair value adjustment for the outstanding Common Warrants, and recognized an additional fair value loss of approximately $2.3 million.

 

The following table represents the significant fair value assumptions used for the Pre-funded, Series A, and Series B warrants issued or revalued during the three and nine months ended September 30, 2025.

 

   Three and Nine Months ended September 30, 2025 
Stock price  $0.60- 3.50 
Exercise price  $0.001- 0.55 
Expected term in years   1.79 – 5.00 
Expected dividend yield   0.00%
Volatility   130.0 – 140.0%
Risk-free interest rate   3.51- 3.99%

 

Reservation of Shares

 

The Company had reserved common shares for future issuance as follows as of September 30, 2025:

 

      
Stock options outstanding   2,645 
Restricted stock units outstanding   199,190 
Warrants outstanding*   5,722,890 
Series B Preferred Stock outstanding   1,250,000 
Number of common shares reserved   7,174,725 

*The Company noted that there are 7,722,890 warrants outstanding as of September 30, 2025. However, as noted in Note 8, on September 28, 2025, the Company executed a side letter with the Holder in relation to the Generate Common Warrants to waive a clause that requires the Company to reserve 2.0 million shares of common stock until there is an increase in the authorized shares of the Company. Accordingly, 2.0 million warrants were not included in the reservation of common shares balance.

 

As noted above in relation to the Series B Preferred Stock, as of September 30, 2025, the Series B Preferred Stock can be converted to 1,250,000 shares of the Company’s common stock at approximately $5.00 per share.

 

 

*The Company noted that there are 7,722,890 warrants outstanding as of September 30, 2025. However, as noted in Note 8, on September 28, 2025, the Company executed a side letter with the Holder in relation to the Generate Common Warrants to waive a clause that requires the Company to reserve 2.0 million shares of common stock until there is an increase in the authorized shares of the Company. Accordingly, 2.0 million warrants were not included in the reservation of common shares balance.

 

Loss per Share

 

The Company computes basic loss per common share by dividing net loss by the weighted average number of common shares outstanding during the reporting period. Diluted loss per share reflects the potential dilution, if any, computed by dividing loss by the combination of dilutive common share equivalents, comprised of shares issuable under outstanding investment rights, warrants and the Company’s share-based compensation plans, and the weighted average number of common shares outstanding during the reporting period. Dilutive common share equivalents include the dilutive effect of in-the-money stock options, which are calculated based on the average share price for each period using the treasury stock method. Under the treasury stock method, the exercise price of a stock option and the amount of compensation cost, if any, for future service that the Company has not yet recognized are assumed to be used to repurchase shares in the current period.

 

The following table sets forth the reconciliation of the numerators and denominators of the basic and diluted per share computations for operations for the three and nine months ended September 30:

 

   2025   2024   2025   2024 
(Dollars in thousands, except shares) 

Three Months Ended

September 30,

  

Nine Months Ended

September 30,

 
   2025   2024   2025   2024 
                 
Numerator:                    
Net loss  $(25,787)  $(8,093)  $(40,921)  $(19,782)
(Less) Net income (loss) attributable to non-controlling interest   (1,831)   (903)   (2,027)   3,535 
Net loss attributable to Soluna Holdings, Inc.   (23,956)   (7,190)   (38,894)   (23,317)
Less: Preferred dividends or deemed dividends   (3,840)   -    (3,840)   (452)
Less: Cumulative Preferred Dividends in arrears   (2,950)   (2,786)   (8,858)   (7,117)
Balance  $(30,746)  $(9,976)  $(51,592)  $(30,886)
Denominator:                    
Basic and Diluted EPS:                    
Common shares outstanding, beginning of period, including penny warrants and excluding restricted stock awards not vested   8,106,814    2,592,454    8,106,814    2,592,454 
Weighted average common shares issued during the period including penny warrants issued and outstanding and excluding restricted stock awards not vested as of quarter-end   18,876,209    3,795,880    7,576,258    1,728,091 
Denominator for basic and diluted earnings per common shares — weighted average common shares   26,983,023    6,388,335    15,683,072    4,320,546 
Basic and diluted loss per share  $(1.14)  $(1.56)  $(3.29)  $(7.15)

 

The Company notes as continuing operations was in a Net loss for the three and nine months ended September 30, 2025 and 2024, as such basic and diluted EPS is the same balance as continuing operations acts as the control amount in which would cause antidilution. Not included in the computation of earnings per share, assuming dilution, for the three and nine months ended September 30, 2025, were options to purchase 2,645 shares of the Company’s common stock, 199,190 nonvested restricted stock units, and 5,582,790 outstanding warrants not exercised which excludes penny warrants that can be potentially exercised. These potentially dilutive items were excluded because the calculation of incremental shares resulted in an anti-dilutive effect.

 

Not included in the computation of earnings per share, assuming dilution, for the three and nine months ended September 30, 2024, were options to purchase 3,325 shares of the Company’s common stock, 5,692 nonvested restricted stock units, and 3,222,446 outstanding warrants not exercised which excludes penny warrants that can be potentially exercised. These potentially dilutive items were excluded because the calculation of incremental shares resulted in an anti-dilutive effect.