Company: SLNH
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001756
Chunk: 3114

Company: Soluna Holdings, Inc
Filing Date: 2025-03-31
Form: 10-K
Item: Item 10
Chunk 3114
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Providing
computing power to solve complex cryptographic algorithms in support of the Bitcoin blockchain (in a process known as “solving
a block”) is an output of the Company’s ordinary activities. The provision of providing such computing power is the only
performance obligation in the Company’s contracts with mining pool operators. The transaction consideration the Company receives,
if any, is noncash consideration, which the Company measures at fair value on the date received, which is not materially different than
the fair value at contract inception or the time the Company has earned the award from the pools. The consideration is all variable.
Because it is not probable that a significant reversal of cumulative revenue will not occur, the consideration is constrained until the
mining pool operator successfully places a block (by being the first to solve an algorithm) and the Company receives confirmation of
the consideration it will receive, at which time revenue 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