Company: SLNH
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001493152-25-023503
Chunk: 116

Company: Soluna Holdings, Inc
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 116
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 the second quarter of 2025 and the subsequent increase in MWs capacity
and associated operating costs in the third quarter of 2025.

Cost
of High-Performance Computing Services: Cost of High-Performance Computing Services represents the direct production expenses
associated with providing AI and HPC processing capabilities. For the nine months ended September 30, 2024, this cost totaled approximately
$2.9 million, which was related to the agreement executed with HPE effective July 1, 2024, to acquire access to essential datacenter
and cloud services necessary for supporting our AI and HPC processes.

Revenue
from High-Performance Computing Services totaled $28 thousand for the nine months ended September 30, 2025, representing the initial
revenue contribution from this business segment. This is compared to no revenue recorded for the corresponding nine-month period ended
September 30, 2024.

Cost
of High-Performance Computing Services was not material for both the three months and the nine months ended September 30, 2025.

In
connection with the termination of the HPE Agreement on March 24, 2025, we recognized a loss of approximately $28.6 million for the year
ended December 31, 2024. This loss represented the remaining contractual obligations under the agreement.

General
and Administrative Expenses, exclusive of depreciation and amortization: General and administrative expenses, exclusive of depreciation
and amortization include cash and non-cash compensation, benefits, and related costs in support of our general corporate operations,
including general management, finance and accounting, human resources, marketing, information technology, corporate development, and
legal services.

    ●
    Stock-based
    compensation expense was approximately $5.7 million for the nine months ended September 30, 2025, compared to $3.3 million for the
    nine months ended September 30, 2024, representing an increase of approximately $2.4 million. The increase primarily reflects equity
    awards granted to directors and officers between April, June, and December of 2024, additional equity awards granted to directors
    and officers in June and September 2025, employee grants issued in June 2025 and December 2024, as well as a reduction in the estimated
    forfeiture rate from 10% to 5%. These increases were partially offset by the cessation of vesting for certain prior-year grants and
    by the impact of awards with portions that immediately vested during 2024