Company: SLNH
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024045
Chunk: 53

Company: Soluna Holdings, Inc
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 53
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The
Company evaluated this legal entity under ASC 810, Consolidations and determined that DVCC is a VIE that should be consolidated
into the Company, with a non-controlling interest recorded to account for Navitas’ equity ownership of DVCC. The Company has a
variable interest in DVCC. The entity was designed by the Company to create an entity for outside investors to invest in specific projects.
The creation of this entity resulted in the Company, through its equity interest in DVCC, absorbing operational risk that the entity
was created to create and distribute, resulting in the Company having a variable interest in DVCC.

DVCC
is a VIE of the Company due to DVCC being structured with non-substantive voting rights. This is due to the following two factors being
met as outlined in ASC 810-10-15-14 that require the VIE model to be followed.

    a.
    The
    voting rights of the Company are not proportional to their obligation to absorb the expected losses of the legal entity. The Company
    gave Navitas veto rights over significant decisions, which resulted in Soluna having fewer voting rights relative to their obligation
    to absorb the expected losses of the legal entity.

    b.
    Substantially
    all of DVCC’s activities are conducted on behalf of the Company, which has disproportionally fewer voting rights.

Also,
the Company is the primary beneficiary due to having the power to direct the activities of DVCC that most significantly impact the performance
of DVCC due to its role as the manager handling the day-to-day activities of DVCC as well as majority ownership and the obligation to
absorb losses or gains of DVCC that could be significant to the Company.

Accordingly,
the accounts of DVCC are consolidated in the accompanying financial statements.

The
carrying amount of the VIE’s assets and liabilities was as follows for DVCC:

Schedule of Variable Interest Entities of Assets and Liabilities 

    (Dollars in thousands) 
    June 30, 2025  
    December 31, 2024 

    Current assets: 

    Cash and restricted cash 
    $1,560  
    $2,057 
  
    Accounts receivable 
     33  
     37 
  
    Prepaid expenses and other current assets 
     100  
     49 
  
    Other receivable, related party 
     1,582  
     1,692