Company: SLNH
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023503
Chunk: 155

Company: Soluna Holdings, Inc
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 155
---
    Hosting and utility fees 
     1,922  
     1,036 
  
    Construction fees 
     4,852  
     2,211 
  
    Financing fee accrual 
     1,001  
     - 
  
    Membership distribution accrual 
     -  
     1,179 
  
    Other 
     298  
     150 
  
    Total 
    $12,426  
    $6,785 

    14

Contract
liability

    In June 2024, Soluna AL Cloudco, LLC (“CloudCo”), a subsidiary of Soluna Cloud, entered into an agreement
(the “HPE Agreement”) with Hewlett Packard Enterprise Company (“HPE”), with an initial pre-payment of $10.3 million
and a total commitment of $34 million over a 36-month period. On March 24, 2025, CloudCo notified HPE of its termination of the HPE Agreement
and, on March 26, 2025, HPE notified CloudCo of its termination of the HPE Agreement for cause, effective immediately, due to CloudCo’s
material breach of its payment obligations that remained uncured for more than thirty (30) days. The
HPE Agreement provided the Company access to datacenter and cloud services for AI and supercomputing applications utilizing NVIDIA H100
GPUs. In accordance with the terms of the HPE Agreement, CloudCo was required to pay all of the unpaid fees that were payable over the
entire term of the HPE Agreement. In accordance with the terms of the HPE Agreement, upon a termination for cause by HPE, CloudCo must
pay HPE the remaining payment stream under the term of the HPE Agreement, including all upfront payments and monthly charges, plus any
fees incurred for the terminated Services (as defined in the HPE Agreement). As of December 31, 2024, the Company reduced its prepaid
assets and other long-term assets by approximately $8.6 million, increased termination liability by approximately $20.0 million and recorded
a loss on contract of approximately $28.6 million to account for the termination of the contract and CloudCo’s contractual payments.
The liability has been reduced to approximately $19.3 million as of September 30, 2025. CloudCo has not made any additional payments under
the HPE Agreement since CloudCo notified HPE of its