Company: SLNH
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001756
Chunk: 1428

Company: Soluna Holdings, Inc
Filing Date: 2025-03-31
Form: 10-K
Item: Item 4
Chunk 1428
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    Stock options 
     2,236  
     1,562 
  
    Research and development tax credit 
     227  
     227 
  
    Deferred tax assets 
     38,456  
     36,791 
  
    Valuation allowance 
     (38,456) 
     (36,791)
  
    Deferred tax assets, net of valuation allowance 
     —  
     — 

    Deferred tax liabilities: 

    Intangibles 
     (5,257) 
     (7,779)
  
    Deferred tax liabilities 
     (5,257) 
     (7,779)
  
    Deferred tax liabilities, net 
    $(5,257) 
    $(7,779)

In
connection with the strategic contract pipeline acquired in the Soluna Callisto acquisition as further discussed in Note 5, ASC 740-10-25-51
requires the recognition of a deferred tax impact of acquiring an asset in a transaction that is not a business combination when the
amount paid exceeds the tax basis on the acquisition date. As such, the Company is required to adjust the value of the strategic contract
pipeline by approximately $10.9 million and this amount will be amortized over the life of the asset.

     F-21 

Valuation
Allowance:

The
Company believes that the accounting estimate for the valuation of deferred tax assets is a critical accounting estimate because judgment
is required in assessing the likely future tax consequences of events that have been recognized in our financial statements or tax returns.
The Company based the estimate of deferred tax assets and liabilities on current tax laws and rates and, in certain cases, business plans
and other expectations about future outcomes.

As
a result of its assessment in 2024, the Company increased its valuation allowance against its deferred tax assets. The increase in the
valuation allowance caused incremental tax expense of $1.7 million to be recognized in 2024. The increase of the valuation allowance
was based upon the uncertainty surrounding the Company’s projected future taxable income, causing the Company to evaluate what
portion of the Company’s deferred tax assets it believes are more likely than not to be realized. The Company has determined that
it will not generate sufficient levels of pre-tax earnings in the future to realize the deferred tax assets relating to net operating
loss carryforwards and research and development credit carryforwards recorded on the balance sheet as of December