Company: SLNH
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001756
Chunk: 2

Company: Soluna Holdings, Inc
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1
Chunk 2
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This model helps reduce revenue volatility compared to solo mining operations.

Our
mining operations are energy-intensive and require significant computational resources. We operate data centers equipped with both proprietary
and third-party hardware and software. Our proprietary data center operating system, MaestroOS, is used to optimize performance,
manage power consumption, and increase operational efficiency.

Revenue
from Bitcoin mining consists of Block Rewards and transaction fees and is recognized upon receipt in accordance with applicable accounting
guidance. Upon receipt, all digital assets are promptly converted into U.S. dollars through the Coinbase cryptocurrency exchange.

The
profitability of this business is affected by several variables, including the market price of Bitcoin, global network hash rate, mining
difficulty, electricity and infrastructure costs, and mining pool fees. In addition, Bitcoin undergoes a periodic “halving”
event approximately every four years, reducing the Block Reward and potentially impacting future revenue. For the year ended December
31, 2024, our Bitcoin Mining Business represented approximately 45% of total revenue.

7

Bitcoin
Hosting Business

We
provide colocation and hosting services for third-party Bitcoin mining customers at our data centers. Customers lease space based on
their power requirements. Our current customer base includes several large-scale (“Hyperscale”) Bitcoin miners. Contracts
typically range from 12 to 24 months in duration.

We
offer two primary commercial structures:

1.Fixed-Fee
                                            Model – Customers pay a fixed fee based on the volume of energy consumed.

2.Profit-Share
                                            Model – Customers pay a share of the profits from their mining activity, with power
                                            costs passed through.

In
2024, our Bitcoin Hosting Business accounted for approximately 50% of total revenue. Revenue in this business was concentrated among
a small number of customers. One customer accounted for 56% of hosting revenue and 28% of total revenue in 2024. This customer terminated
its agreement during the fourth quarter of 2024. As of March 2025, we replaced 100% of the lost hosting capacity with minimal operational
disruption.

High
Performance Computing (HPC) Business

In
June 2024, we began providing GPU-as-a-Service in partnership with Hewlett Packard Enterprise Company (“HPE”), offering
GPU resources to startups, enterprises, and GPU marketplaces for a fee. As further described in Item 7
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report, in
March 202