Company: SLNH
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001756
Chunk: 891

Company: Soluna Holdings, Inc
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1C
Chunk 891
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centers to host customers in the AI generative space.

     F-43 

The
guidance requires that segment disclosures present the measure(s) used by the Chief Operating Decision Maker (“CODM”) to
decide how to allocate resources and for purposes of assessing such segments’ performance. The Company’s CODM is
composed of several members of its senior leadership team directed by the CEO and CFO who use revenue and cost of revenues which
formulate gross profit (loss), as well as total general and administrative expenses of the reporting segments to assess the
performance of the business of our reportable operating segments and allocate resources. Operating
profit (loss) is used to evaluate actual results against expectations, which are based on comparable prior results, current budget,
and current forecast. Non-cash items of depreciation and amortization are included within both costs of sales and general and
administrative expenses, however only depreciation through the Company’s site levels are evaluated for segment
performance.

In
the adoption of ASU 2023-07, the most significant provision was for the Company to disclose
significant segment expenses (ie: costs of revenue) that are regularly provided to the CODM. Utility costs, wages and benefit
related costs, facility and equipment costs, and depreciation costs at the site level were determined to be significant segment
expenses. The CODM only reviews general and administrative expenses by site level as a whole, and not by significant
expenses. No operating segments have been aggregated to form the reportable segments. The Company does not allocate all assets to
the reporting segments as these are managed on an entity-wide basis. Therefore, the Company does not separately disclose the total
assets of its reportable operating segments.

The
Cryptocurrency Mining segment generates revenue from the cryptocurrency the Company earns through its Bitcoin mining activities,
which is currently generated from Project Dorothy, and previously from Project Sophie and Marie. The Data Center Hosting segment
generated revenue from hosting services performed to third-party Bitcoin mining customers at the Company’s data centers, which
were previously at Project Marie and currently from Project Sophie and Project Dorothy. The High-Performance Computing Services
segment currently has just begun generating revenue in December 2024 for approximately $16
thousand, as Project Ada still worked to build its customer base. Project Ada’s cost of revenue for the year ended
December 31, 2024 is approximately $5.7
million in relation to costs associated with HPE.

The
Company includes Demand Response revenue as a reconciling item of