Company: SLNH
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001756
Chunk: 911

Company: Soluna Holdings, Inc
Filing Date: 2025-03-31
Form: 10-K
Item: Item 2
Chunk 911
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2023 and Project Sophie converted to a hosting facility within the 2023 year.

Data
Hosting Revenue: Cryptocurrency hosting services provide energized space and operating services to third-party mining companies
who locate their mining hardware at our mining locations. Services include fees for hosting the miners which could be fixed fees or profit
sharing, as well as potential additional fees for services provided such as installation charges or other services fees. The increase
was due to a full year of revenues in Project Dorothy 1A and Project Sophie switched their business model from proprietary mining to
data hosting in the second quarter of 2023 resulting in a full year of revenue in 2024.

Demand
Response Service: We saw an increase in demand response service revenue due to a full year of service for the year ended December
31, 2024 compared to only one month of service for the year ended December 31, 2023.

Cost
of Cryptocurrency Mining Revenue, exclusive of depreciation: Cost of cryptocurrency mining revenue includes direct utility
costs, site overhead expenses, and overhead costs that relate to the operations of our cryptocurrency mining facilities in Kentucky and
Texas.

The
increase in costs during the year ended December 31, 2024 compared to 2023 were due to the full Project Dorothy 1B site being active
the entire year ended December 31, 2024, versus as a startup beginning in the second quarter of 2023. Also noted, Project Sophie was
no longer a proprietary mining site by the second quarter of 2023. The increase was slightly offset with the Company operating only one
facility for the year ended December 31, 2024, compared to three facilities for the year ended December 31, 2023.

Cost
of Data Hosting Revenue, exclusive of depreciation: Cost of data hosting revenue includes utility charges, site overhead expenses,
and other charges.

Cost
of data hosting revenue increase was due to Project Dorothy 1A which began operations and hosting services in May 2023 with full year
hosting expense in 2024. Also, we transitioned to data hosting at Project Sophie in April 2023, which created an increase in costs.

Cost
of High-Performance Computing Services: Cost of high-performance computing services include operating expenses related to high
performance computing services.

49

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