Soluna Holdings (SLNH) Risk Analysis

The price of our common stock could decline if there are substantial sales of shares of our common stock, if there is a large number of shares of our common stock available for sale, or if there is the perception that these sales could occur. Any issuances of shares of our common stock pursuant to the terms of the Standby Equity Purchase Agreement, dated August 12, 2024 ("SEPA"), between the Company and YA II PN, Ltd. ("YA"), will dilute the percentage ownership of stockholders and may dilute the per share projected earnings (if any) or book value of our common stock. Sales of a substantial number of shares of our common stock in the public market or other issuances of shares of our common stock,or the perception that these sales or issuances could occur, could cause the market price of our common stock to decline and may make it more difficult for you to sell your shares at a time and price that you deem appropriate. Additionally, the offering price per share of our common stock under the SEPA may or may not exceed the net tangible book value per share of our common stock outstanding prior to the offering under the SEPA.

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. We do not currently have and may never obtain research coverage by securities and industry analysts. We cannot assure you that brokerage firms will provide analyst coverage of our company in the future or continue such coverage if started. In addition, investment banks may be less likely to agree to underwrite secondary offerings on our behalf than they might if we became a public reporting company by means of an underwritten initial public offering, because they may be less familiar with our company as a result of more limited coverage by analysts and the media, which could harm our ability to raise additional funding in the future. The failure to receive research coverage or support in the market for shares of our common stock will have an adverse effect on our ability to develop a liquid market for our common stock, which will negatively impact the trading price of our common stock. In the event we obtain securities or industry analyst coverage, if any of the analysts who cover us issue an adverse or misleading opinion regarding us, or if our operating results fail to meet the expectations of analysts, our stock price would likely decline. If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

The rights of the holders of shares of our Series A Preferred Stock and Series B Convertible Preferred Stock, par value $0.001 per share (the "Series B Preferred Stock" together with the Series A Preferred Stock, the "Preferred Stock"), while such shares remain outstanding, rank senior to the rights of the holders of shares of our common stock as to dividends and payments upon liquidation, dissolution or winding up of our affairs. Upon liquidation, dissolution or winding up of our affairs, the holders of shares of our Series A Preferred Stock are entitled to receive a liquidation preference of the stated value per share of $25 and the holders of shares of our Series B Preferred Stock are entitled to receive a liquidation preference of the stated value per share of $100, plus all accrued but unpaid dividends, prior and in preference to any distribution to the holders of shares of our common stock or any other class of our equity securities junior to the Preferred Stock. In addition, the holders of the Series A Preferred Stock are entitled to receive, when, as and if declared by the board of directors, cumulative cash dividends at the annual rate of 9.0% of the $25.00 liquidation preference per year. Our holders of Series B Preferred Stock are entitled to receive an annual 10% dividend, which may be paid in cash or stock at our discretion at the earlier of (i) the date the Series B Preferred Stock is converted, or (ii) the Series B Dividend Termination Date (as defined in the Certificate of Designations of Preferences, Rights and Limitations for the Series B Preferred Stock). These dividend payment obligations could impact our liquidity and reduce the amount of cash available to us for our working capital needs, capital expenditures, funding growth opportunities, acquisitions, and other general corporate purposes. Our obligations to the holders of Preferred Stock could also limit our ability to obtain additional financing or increase our borrowing costs, which could have an adverse effect on our financial condition. The preferential rights could also result in divergent interests between the holders of Preferred Stock and holders of our common stock.

Our common stock has been listed on Nasdaq since March 2020, and our Series A Preferred Stock since August 2021. To maintain these listings, we must continue to meet Nasdaq's financial and corporate governance standards, including requirements for stock price, stockholders' equity, and board independence. While we are currently in compliance, our share price has previously fallen below Nasdaq's minimum, and there is no guarantee we will continue to meet all listing requirements. On May 8, 2025, we received notice from Nasdaq indicating that we were not in compliance with the requirement to maintain a minimum bid price of $1.00 per share for continued listing on Nasdaq (the "minimum closing bid price requirement"). We were provided an initial compliance period of 180 calendar days from the date of the notice, or until November 4, 2025, to regain compliance with the minimum closing bid price requirement, pursuant to Nasdaq Rule 5810(c)(3)(A). On October 3, 2025, we received formal written notice from Nasdaq indicating that we had regained compliance with the minimum closing bid price requirement and that this matter is now closed. If we are unable to maintain our Nasdaq listings, our securities may be delisted and quoted on over-the-counter (OTC) markets instead. This would likely reduce the liquidity, market price, and visibility of our stock, and could make it more difficult for investors to sell their shares. Delisting may also limit our ability to raise capital or use our stock as consideration for acquisitions. In addition, if our common stock trades below $5.00 per share and is no longer listed on a national exchange, it could be classified as a "penny stock." This would subject trading in our stock to additional regulatory requirements, which could discourage broker-dealers from making a market in our shares and make it harder for investors to buy or sell our stock.

The market price of our securities has been and is likely to continue to be volatile, and investors in our securities may experience a decrease, which could be substantial, in the value of their securities or the loss of their entire investment in the Company for a number of reasons, including reasons unrelated to our operating performance or prospects. The market price of our securities could be subject to wide fluctuations in response to a broad and diverse range of factors, including those described elsewhere in this "Risk Factors" section as well as the following: - announcements by us regarding liquidity, significant acquisitions, equity investments and divestitures, addition or loss of significant customers and contracts, capital expenditure commitments and litigation;- our issuance of securities or debt, particularly if in connection with acquisition activities;- the sale of a significant number of shares of our common stock by shareholders;- recent changes in financial condition or results of operations, such as in earnings, revenues, or other measure of company value;- general market and economic conditions; and - announcements of technological innovations or new product introductions by us or our competitors. - Further, broad market and industry factors may have a material adverse effect on the market price of our securities regardless of our actual operating performance. In addition, stock markets have experienced in the past and may in the future experience a high level of price and volume volatility, and the market prices of equity securities of many companies have experienced in the past and may in the future experience wide price fluctuations not necessarily related to the operating performance of such companies. These broad market fluctuations may adversely affect the market price of our securities. We have issued, and may continue to issue, new shares of our common stock, which has a dilutive effect on existing stockholders. In 2025, we have primarily financed our strategic growth through at-the-market ("ATM") offerings and other issuances of our common stock. Our ATM programs allow us to raise capital as needed by selling newly issued shares into the existing trading market at prevailing market prices. We expect to continue using ATM offerings and other equity issuances to fund development plans, support capital-intensive expansion initiatives, and pursue strategic growth opportunities. However, the issuance of additional shares of our common stock dilutes the ownership interests of existing stockholders, and future equity sales could further dilute existing holdings and reduce the market price of our common stock. Any such dilution may adversely affect the value of an investment in our securities. Finally, our relatively small public float and daily trading volume have in the past caused, and may in the future result in, significant volatility in the price of our securities. As of December 31, 2025, we had approximately 75,063,284 shares of our common stock outstanding held by non-affiliates and 3,239,854 shares of our 9.0% Series A Cumulative Perpetual Preferred Stock, par value $0.001 per share (the "Series A Preferred Stock"), outstanding held by non-affiliates. Our daily trading volume for the year ended December 31, 2025, averaged approximately 5,166,232 shares of common stock and 18,012 shares of Series A Preferred Stock.

Provisions contained in our Articles of Incorporation (as amended, the "Articles") and our Bylaws (the "Bylaws") could make it more difficult for a third party to acquire us if we have become a publicly traded company. Provisions of our Articles and Bylaws impose various procedural and other requirements, which could make it more difficult for stockholders to effect certain corporate actions. For example, our Articles authorize our Board to determine the rights, preferences, privileges, and restrictions of unissued series of preferred stock without any vote or action by our stockholders. Thus, our Board can authorize and issue shares of preferred stock with voting or conversion rights that could adversely affect the voting or other rights of holders of our other series of capital stock. These rights may have the effect of delaying or deterring a change of control of our company. Additionally, our Bylaws establish limitations on the removal of directors and on the ability of our stockholders to call special meetings. For a more complete understanding of these provisions, please refer to the Nevada Revised Statutes ("NRS") and our Articles and Bylaws filed with the SEC. Though we are not currently, in the future we may become subject to Nevada's control share law. A corporation is subject to Nevada's control share law if it has more than 200 stockholders, at least 100 of whom are stockholders of record and residents of Nevada, and it does business in Nevada or through an affiliated corporation. The law focuses on the acquisition of a "controlling interest" which means the ownership of outstanding voting shares sufficient, but for the control share law, to enable the acquiring person to exercise the following proportions of the voting power of the corporation in the election of directors: (i) one-fifth or more but less than one-third; (ii) one-third or more but less than a majority; or (iii) a majority or more. The ability to exercise such voting power may be direct or indirect, as well as individual or in association with others. The effect of the control share law is that the acquiring person, and those acting in association with it, obtains only such voting rights in the control shares as are conferred by a resolution of the stockholders of the corporation, approved at a special or annual meeting of stockholders. The control share law contemplates that voting rights will be considered only once by the other stockholders. Thus, there is no authority to strip voting rights from the control shares of an acquiring person once those rights have been approved. If the stockholders do not grant voting rights to the control shares acquired by an acquiring person, those shares do not become permanent non-voting shares. The acquiring person is free to sell its shares to others. If the buyers of those shares themselves do not acquire a controlling interest, their shares do not become governed by the control share law. If control shares are accorded full voting rights and the acquiring person has acquired control shares with a majority or more of the voting power, any stockholder of record, other than an acquiring person, who has not voted in favor of approval of voting rights is entitled to demand fair value for the redemption of such stockholder's shares. Nevada's control share law may have the effect of discouraging takeovers of the corporation. In addition to the control share law, Nevada has a business combination law which prohibits certain business combinations between Nevada corporations and "interested stockholders" for two years after the "interested stockholder" first becomes an "interested stockholder," unless our Board approves the combination in advance or thereafter by both the Board and 60% of the disinterested stockholders. For purposes of Nevada law, an "interested stockholder" is any person who is (i) the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the outstanding voting shares of the corporation, or (ii) an affiliate or associate of the corporation and at any time within the two previous years was the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the then outstanding shares of the corporation. The definition of the term "business combination" is sufficiently broad to cover virtually any kind of transaction that would allow a potential acquirer to use the corporation's assets to finance the acquisition or otherwise to benefit its own interests rather than the interests of the corporation and its other stockholders. The effect of Nevada's business combination law is to potentially discourage parties interested in taking control of us from doing so if it cannot obtain the approval of our Board.

As of December 31, 2025, the Company's directors and executive officers held the current right to vote approximately 23% of the Company's outstanding voting stock. In addition, the Company's directors and executive officers have the right to acquire additional shares of our common stock by exercising their equity awards under our equity compensation plans, which could increase their voting percentage significantly. As a result, many of the Company's officers and directors acting together, may have the ability to exert significant control over the Company's decisions and control the management and affairs of the Company, and also to determine the outcome of matters submitted to stockholders for approval, including the election or removal of a director, and any merger, consolidation, or sale of all or substantially all of the Company's assets. Accordingly, this concentration of ownership may harm the future market prices of our securities by: - delaying, deferring, or preventing a change in control of the Company;- impeding a merger, consolidation, takeover, or other business combination involving the Company; or - discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of the Company.