Company: SLNH
Filing Date: 2025-02-03
Form Type: S-1/A
Source: 0001493152-25-004555
Chunk: 256

Company: Soluna Holdings, Inc
Filing Date: 2025-02-03
Form: S-1/A
Chunk 256
---
 an entity for outside investors to invest in specific projects. The creation of this entity resulted in Soluna, through its equity interest in DVCC, absorbing operational risk that the entity was created to create and distribute, resulting in Soluna having a variable interest in DVCC.

DVCC is a variable interest entity of Soluna due to DVCC being structured with non-substantive voting rights. This is due to two factors being met as outlined in ASC 810-10-15-14that require the Variable Interest Entity model to be followed.

| a. | The                                                                                                                                     
 voting rights of Soluna are not proportional to their obligation to absorb the expected losses of the legal entity. Soluna gave Navitas 
 veto rights over significant decisions, which results in Soluna having fewer voting rights than their obligation to absorb the expected 
 losses of the legal entity.                                                                                                             |
| b. | Substantially                                                                                                                           
 all of DVCC’s activities are conducted on behalf of Soluna, who has disproportionally fewer voting rights.                              |

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

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)                 |     | December 
 31, 2023 |        |     | December 
 31, 2022 |   |
|:---------------------------------------|:----|:---------|-------:|:----|:---------|:--|
| Current assets:                        |     |          |        |     |          |   |
| Cash and restricted cash               |     | $        |  2,575 |     | $        | - |
| Accounts receivable                    |     |          |    254 |     |          | - |
| Related party receivable- intercompany |     |          |    577 |     |          | - |
| Total current assets                   |     |          |  3,406 |     |          | - |
| Other assets- long term                |     |          |  2,172 |     |