Company: SLNH
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001756
Chunk: 1232

Company: Soluna Holdings, Inc
Filing Date: 2025-03-31
Form: 10-K
Item: Item 3
Chunk 1232
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liabilities as measured by the enacted tax rates. Temporary differences, net operating loss carryforwards and tax credit carryforwards
that give rise to deferred tax assets and liabilities are summarized as follows as of December 31:

 Schedule of Deferred Tax Assets

    (Dollars in thousands) 
    2024  
    2023 

    Deferred tax assets: 

    Accruals and reserves 
    $236  
    $274 
  
    Net operating loss 
     37,151  
     28,951 
  
    Property, plant and equipment 
     (1,394) 
     5,777 
  
    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