Company: SLNH
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001756
Chunk: 1414

Company: Soluna Holdings, Inc
Filing Date: 2025-03-31
Form: 10-K
Item: Item 4
Chunk 1414
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 from an asset’s amortized cost basis. Credit losses and recoveries are recorded
in General and administrative expenses in the Consolidated Statements of Operations. For the years ended December 31, 2024 and
2023, the Company had a provision for credit losses of approximately $760 thousand and $0, respectively. Recoveries of financial assets
previously written off are recorded when received. Based on the Company’s current and historical collection experience, management
recorded an allowance for expected credit losses of $244 thousand and $0 as of December 31, 2024 and December 31, 2023, respectively,
due primarily to the Company’s write-off of approximately $516 thousand for the year ended December 31, 2024 due to uncollectibilty.
The Company did not record any recoveries as of December 31, 2024 and December 31, 2023, respectively.

Notes
Receivable

The
Company’s notes receivable consists of loans made by the Company, who serves as the debt holder, to different entities, serving
as borrowers. The Company accounts for its notes receivable in accordance with ASC Topic 310, Receivables (“ASC 310”).

In
accordance with ASC 310, notes receivable are reported on the balance sheet at their amortized cost basis. The amortized cost basis is
the amount at which a financing receivable or investment is originated or acquired, adjusted for applicable accrued interest, accretion,
or amortization of premium, discount, and net deferred fees or costs, or other adjustments. The Company’s notes receivable were
all issued at their respective principal amounts. Interest income will be recognized based on the contractual rate in the loan agreement
and any premium/discount will be amortized to interest income using the effective interest rate method.

The Company recorded a loss allowance
of approximately $158 thousand related to a note receivable as of December 31, 2024 due to a collectability issue with the counterparty.
The outstanding note receivable was moved to Accounts Receivable, and a full reserve was placed on the note. The Company evaluates any
potential need for loan loss reserves on a periodic basis based on relevant internal and external factors that affect loan collectability,
including the amount of outstanding loans owed to the Company, current collection patterns and current economic trends. As these conditions
change, the Company may need to record additional allowances in future periods.

Employee
Receivables

Certain
employees have