Company: SLNH
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001756
Chunk: 2638

Company: Soluna Holdings, Inc
Filing Date: 2025-03-31
Form: 10-K
Item: Item 9A
Chunk 2638
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 is recognized. There is no significant financing component in these transactions.

Cryptocurrencies
are earned through participation with mining pool operators where the company provides hash rate services to the mining pool. Fair value
of the cryptocurrency award received is determined using the quoted price of the related cryptocurrency where the Company is registered
at the time of receipt. The mined cryptocurrency is immediately paid to the Coinbase wallet. Cryptocurrency is converted to U.S. dollars
nearly everyday, as SDI is not in the business of accumulating material amounts of cryptocurrency on its balance sheet.

Cryptocurrency
data center hosting

The
Company has entered customer hosting contracts whereby the Company provides hosting services which include electrical power, other utilities,
network connectivity, and management of hosting facility to cryptocurrency mining customers, and the customers pay a stated amount per MWh, a fixed rate, as well as a percentage of the profit share of net
income from the customer’s mining operations, or a combination thereof. Some contracts also include pass-through expenses which
are not recognized in revenue. The actual monthly amounts are calculated after the close of each month and billed to the customer. If
any shortfalls due to outages are experienced, service level credits may be made to customers to offset outages which prevented them
from cryptocurrency mining. Customer contract security deposits are reflected as other liabilities and are made at the time the contract
is signed and held until the conclusion of the contract relationship.

     F-13 

Deferred
revenue is primarily from advance monthly payments received and revenue is recognized when service is completed.

Demand
Response Service

The
Company provides emergency demand response solutions to ERCOT pursuant to a contractual commitment over defined service delivery periods.
This contract includes a single promise to stand ready, on a monthly basis, to deliver a set amount of curtailment (committed capacity)
per month when and if called upon by ERCOT. The Company has concluded this represents a series of distinct monthly services that are
substantially the same, with the same pattern of transfer to the customer. Accordingly, the monthly promise to stand ready is accounted
for as a single performance obligation. The Company is the principal in these arrangements as it has control over the services prior
to those services being transferred to the customer.

Capacity
fees are paid to the Company by ERCOT for its stand ready commitment to curtail MWs and are typically based on the Company’s ability
to deliver the committed capacity throughout the contractual delivery period. In general, if the Company fails to curtail the contracted