Company: SLNH
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001756
Chunk: 2165

Company: Soluna Holdings, Inc
Filing Date: 2025-03-31
Form: 10-K
Item: Item 7A
Chunk 2165
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 value of stock options granted using the Black-Scholes model, the Company uses the historical volatility
of its stock for the expected volatility assumption input to the Black-Scholes model, consistent with the accounting guidance. The risk-free
interest rate is based on the risk-free zero-coupon rate for a period consistent with the expected option term at the time of grant.
The expected option term is calculated based on our historical forfeitures and cancellation rates.

The
fair value of restricted stock awards is based on the market close price per share on the grant date. The Company expenses the compensation
cost of these awards as the restriction period lapses, which is typically a one- to three-year service period to the Company. The shares
represented by restricted stock awards are outstanding at the grant date, and the recipients are entitled to voting rights with respect
to such shares upon issuance.

Notes
payable

The
Company records notes payable net of any discount or premiums. Discounts and premiums are amortized as interest expense or income over
the life of the note in such a way as to result in a constant rate of interest when applied to the amount outstanding at the beginning
of any given period.

Operating
segments

Operating
segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the
chief operating decision maker (“CODM”), which is composed of several members of its senior leadership team, directed by
the CEO and CFO. The CODM uses segment operating income (loss) to assess the performance of, manage the operations of, and allocate capital
and operational resources to the Company’s three reportable segments: Cryptocurrency Mining, Data Center Hosting, and High-Performance
Computing Services as described further in Note 16.

Concentration
of Credit Risk

Financial
instruments that subject the Company to concentrations of credit risk principally consist of cash equivalents and trade accounts receivable.
The Company’s trade accounts receivable are from data hosting revenue with the Company’s customers throughout the year. The
Company does not require collateral and has not historically experienced significant credit losses related to receivables from individual
customers or groups of customers in any particular industry or geographic area. The Company requires that hosting customers make a prepayment
of the next month’s estimated expenses or make a security deposit to the Company.

     F-17 

The
Company has cash deposits in excess of federally insured limits but does not believe them to be at risk.

Other
Comprehensive Income

The
Company had no