Company: SLNH
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001756
Chunk: 814

Company: Soluna Holdings, Inc
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1C
Chunk 814
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 of
operations.

     F-10 

Fair
Value Measurement

The
estimated fair value of certain financial instruments, including cash, accounts receivable and short-term debt approximates their carrying
value due to their short maturities and varying interest rates. “Fair value” is the price that would be received to sell
an asset or transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes
valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on the observability
of the inputs used in the valuation methods, the Company is required to provide the following information according to the fair value
accounting standards. These standards established a fair value hierarchy as specified that ranks the quality and reliability of the information
used to determine fair values. Financial assets and liabilities are classified and disclosed in one of the following three categories:

    Level
    1:
    Quoted
    market prices in active markets for identical assets or liabilities, which includes listed equities.
  
    Level
    2:
    Observable
    market-based inputs or unobservable inputs that are corroborated by market data. These items are typically priced using models or
    other valuation techniques. These models are primarily financial industry-standard models that consider various assumptions, including
    the time value of money, yield curves, volatility factors, as well as other relevant economic measures.
  
    Level
    3:
    These
    use unobservable inputs that are not corroborated by market data. These values are generally estimated based upon methodologies utilizing
    significant inputs that are generally less observable from objective sources.

The
fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when
measuring fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input
that is significant to the fair value measurement.

On
October 25, 2021, pursuant to a securities purchase agreement dated October 20, 2021 (the “SPA), the Company issued to certain
accredited investors Class A, Class B and Class C common stock purchase warrants (collectively, the “Warrants”) The Warrants
were considered freestanding equity-classified instruments due to their detachable and separately exercisable features and meet the indexation
criteria within derivative accounting. Accordingly, the Warrants were presented as a component of Stockholders’ Equity in accordance
with derivative accounting.

Any