Company: SLNH
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001756
Chunk: 1222

Company: Soluna Holdings, Inc
Filing Date: 2025-03-31
Form: 10-K
Item: Item 3
Chunk 1222
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 they do not meet the net settlement criteria within ASC 815-10-15-83. While Soluna
Holdings, Inc is publicly traded, the shares provided are specific to Soluna Cloud, Inc, which is a subsidiary of Soluna Holdings, Inc.
The shares of Soluna Cloud, Inc are not publicly traded and therefore the common stock underlying the warrant is not readily convertible
to cash. Further evaluation of the Warrants under ASC 815-10 was required to determine if the Warrants meet the definition of a derivative.
The warrants are classified as a liability that are required to be adjusted to fair market value. The Company applied a discounted cash
flow method in relation to the valuation of Cloud in which assumptions from forecasted projected cash flow data and other key operating
assumptions such as working cash flow were used to determine an enterprise value less any current debt in order to determine an equity
value for Cloud. As of December 31, 2024, the warrants were fair valued, and deemed to not have any further value, as such the Company
wrote down the liability balance to $0.

Net
(loss) Income per Share

The
Company computes basic income per common share by dividing net income by the weighted average number of common shares outstanding during
the reporting period. Diluted income per share reflects the potential dilution, if any, computed by dividing income 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.

     F-16 

Share-Based
Payments

The
Company grants options to purchase its common stock and awards restricted stock to our employees and directors under the Company’s
equity incentive plans. The benefits provided under these plans are share-based payments and the Company accounts for stock-based awards
exchanged for employee service in accordance with the appropriate share-based payment accounting guidance. Stock-based compensation represents
the cost related to stock-based awards granted to employees and directors. The Company measures