Company: SLNH
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001756
Chunk: 3117

Company: Soluna Holdings, Inc
Filing Date: 2025-03-31
Form: 10-K
Item: Item 10
Chunk 3117
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F-14 

Accounts
Receivable and Allowance 

The
Company’s accounts receivable balance consists of amounts due from its data center hosting customers and receivables for demand
response services. The Company records accounts receivable at the invoiced amount less an allowance for any potentially uncollectable
accounts under the current expected credit loss (“CECL”) impairment model and presents the net amount of the financial instrument
expected to be collected. The CECL impairment model requires an estimate of expected credit losses, measured over the contractual life
of an instrument, that considers forecasts of future economic conditions in addition to information about past events and current conditions.
Based on this model, the Company considers many factors, including the age of the balance, collection history, and current economic trends.
The Company determines the allowance based on historical write-off experience and current exposures identified. The Company reviews its
allowance for potentially uncollectible accounts under CECL monthly. Past due balances over 90 days and over a specified amount are reviewed
individually for collectability. All other balances are reviewed on a pooled basis by type of receivable. Account balances are charged
off against the allowance when the Company believes it is probable the receivable will not be recovered. The Company does not have any
off balance-sheet credit exposure related to its customers. Bad debts are written off after all collection efforts have ceased.

Allowances
for credit losses are recorded as a direct reduction from an asset’s amortized cost basis. Credit losses and recoveries are recorded
in General and administrative expenses in the Consolidated Statements of Operations. For the years ended December 31, 2024 and
2023, the Company had a provision for credit losses of approximately $760 thousand and $0, respectively. Recoveries of financial assets
previously written off are recorded when received. Based on the Company’s current and historical collection experience, management
recorded an allowance for expected credit losses of $244 thousand and $0 as of December 31, 2024 and December 31, 2023, respectively,
due primarily to the Company’s write-off of approximately $516 thousand for the year ended December 31, 2024 due to uncollectibilty.
The Company did not record any recoveries as of December 31, 2024 and December 31, 2023, respectively.

Notes
Receivable

The
Company’s notes receivable consists of loans made by the Company, who serves as the debt holder, to different entities