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Accrued Liabilities
 9 Months Ended
Sep. 30, 2025
Payables and Accruals [Abstract]  
Accrued Liabilities

6. Accrued Liabilities

 

Accrued liabilities consist of the following at:

 

Schedule of Accrued Liabilities 

(Dollars in thousands)  September 30, 2025   December 31, 2024 
         
Salaries, wages, and related expenses  $1,657   $552 
Liability to shareholders for previous acquisition   363    363 
Legal, audit, tax, and professional fees   1,796    537 
Sales tax accrual   -    575 
Real estate taxes accrual   537    182 
Hosting and utility fees   1,922    1,036 
Construction fees   4,852    2,211 
Financing fee accrual   1,001    - 
Membership distribution accrual   -    1,179 
Other   298    150 
Total  $12,426   $6,785 

 

 

Contract liability

 

 

 

In June 2024, Soluna AL Cloudco, LLC (“CloudCo”), a subsidiary of Soluna Cloud, entered into an agreement (the “HPE Agreement”) with Hewlett Packard Enterprise Company (“HPE”), with an initial pre-payment of $10.3 million and a total commitment of $34 million over a 36-month period. On March 24, 2025, CloudCo notified HPE of its termination of the HPE Agreement and, on March 26, 2025, HPE notified CloudCo of its termination of the HPE Agreement for cause, effective immediately, due to CloudCo’s material breach of its payment obligations that remained uncured for more than thirty (30) days. The HPE Agreement provided the Company access to datacenter and cloud services for AI and supercomputing applications utilizing NVIDIA H100 GPUs. In accordance with the terms of the HPE Agreement, CloudCo was required to pay all of the unpaid fees that were payable over the entire term of the HPE Agreement. In accordance with the terms of the HPE Agreement, upon a termination for cause by HPE, CloudCo must pay HPE the remaining payment stream under the term of the HPE Agreement, including all upfront payments and monthly charges, plus any fees incurred for the terminated Services (as defined in the HPE Agreement). As of December 31, 2024, the Company reduced its prepaid assets and other long-term assets by approximately $8.6 million, increased termination liability by approximately $20.0 million and recorded a loss on contract of approximately $28.6 million to account for the termination of the contract and CloudCo’s contractual payments. The liability has been reduced to approximately $19.3 million as of September 30, 2025. CloudCo has not made any additional payments under the HPE Agreement since CloudCo notified HPE of its termination of the HPE Agreement.