Company: SLNH
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001756
Chunk: 276

Company: Soluna Holdings, Inc
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1A
Chunk 276
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Our
ability to generate revenue from Bitcoin mining depends on rewards received for solving new blocks. These rewards are designed to decrease
over time through regularly scheduled “halvings.” For example, the most recent halving on April 19, 2024, reduced the reward
from 6.25 to 3.125 Bitcoin per block. This process will continue roughly every four years until the total supply reaches 21 million Bitcoin,
expected around the year 2140.

If
the price of Bitcoin does not increase proportionally—or if mining difficulty does not decrease—halvings may reduce our mining
revenue and profitability. This may also impact our hosted customers, whose ability to cover operating costs depends on the value of
rewards earned. Over time, the Bitcoin network is expected to rely more on transaction fees instead of block rewards. However, if those
fees are not high enough to support ongoing mining activity, it could reduce incentives to mine and weaken the network’s stability.
Conversely, if transaction fees rise too high, users may avoid using Bitcoin, reducing transaction volume and fee opportunities.

If
the aggregate computing power or has rate on the Bitcoin network increases significantly, for proprietary Bitcoin mining, we may incur
elevated capital expenses to maintain and upgrade our mining fleet in order to maintain market share.

In
addition, we face risks from network “forks”, where a blockchain splits into two incompatible versions—usually due
to changes in protocol adopted by only part of the network. Forks can lead to the creation of new cryptocurrencies and may cause confusion,
market volatility, or incompatibility with existing mining equipment. If we are unable to support both versions or secure the economic
benefit of the new asset, our operations and financial results could be negatively affected. Forks can also expose our systems to cybersecurity
risks and disrupt mining activity.

Together,
declining rewards, uncertain transaction fee dynamics, and network forks pose significant risks to our mining business, which could materially
impact our revenue, profitability, and overall financial condition.

28

Climate
change and evolving regulations could adversely impact our business.

Our
operations depend heavily on access to reliable and cost-effective electricity. As a result, our business is exposed to both the physical
effects of climate change and the potential for new environmental and energy regulations. Physical risks—such as extreme weather,
water shortages, and temperature changes—could disrupt our data centers, damage infrastructure, or impair our ability to operate
efficiently, particularly in regions like