Company: SLNH
Filing Date: 2025-01-15
Form Type: S-1/A
Source: 0001493152-25-002391
Chunk: 208

Company: Soluna Holdings, Inc
Filing Date: 2025-01-15
Form: S-1/A
Chunk 208
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 evaluate what portion of the Company’s deferred tax assets it believes are more likely than not to be realized. The Company has determined that it will not generate sufficient levels of pre-tax earnings in the future to realize the deferred tax assets relating to net operating loss carryforwards and research and development credit carryforwards recorded on the balance sheet as of December 31, 2023. Taking into consideration existing levels of permanent differences, non-deductible expenses and the reversal of significant temporary differences, the Company has determined that all other deferred tax assets recorded on the balance sheet as of December 31, 2023, will be fully realized.

| F-25 |

The valuation allowance on December 31, 2023 and 2022 was $ 36.8million and $ 30.7million, respectively. Activity in the valuation allowance for deferred tax assets is as follows as of December 31:

Schedule of Deferred Tax Asset Valuation Allowance

|                                        | (Dollars in thousands) |   |   2023 |   |     |   |   2022 |
|:---------------------------------------|:-----------------------|:--|-------:|:--|:----|:--|-------:|
| Valuation allowance, beginning of year |                        | $ | 30,651 |   |     | $ | 11,921 |
| Net operating (loss) income            |                        |   |  9,813 |   |     |   |  7,361 |
| Property, plant and equipment          |                        |   | (4,316 | ) |     |   | 10,093 |
| Stock options                          |                        |   |    566 |   |     |   |    996 |
| Research and development credit        |                        |   |     53 |   |     |   |     30 |
| Accrued expenses                       |                        |   |     24 |   |     |   |    250 |
| Valuation allowance, end of year       |                        | $ | 36,791 |   |     | $ | 30,651 |

Net operating losses:

As of December 31, 2023, the Company has unused Federal net operating loss carryforwards of approximately $ 126.2million. Of these, none will expire in 2023, $ 52million will expire between 2024 and 2035, and the remainder being carried forward indefinitely.

The Company’s and