Financial Performance - Q1 2025 revenue was reported at $5.9 million, a decline compared to the same period in 2024 due to several factors including BTC halving and market conditions[11] - Total revenue for Q1 2025 was $5.936 million, a decrease of 52.7% compared to $12.549 million in Q1 2024[29] - Cryptocurrency mining revenue decreased to $2.999 million, down 53.1% from $6.396 million in the same period last year[29] - Data hosting revenue also declined to $2.402 million, a 54.5% decrease from $5.278 million in Q1 2024[29] - The net loss attributable to Soluna Holdings, Inc. for Q1 2025 was $7.556 million, compared to a net loss of $5.254 million in Q1 2024[29] - Basic and diluted loss per share for Q1 2025 was $0.88, an improvement from a loss of $2.62 per share in Q1 2024[29] - The net loss from continuing operations for the three months ended March 31, 2025, was $7,354 million, an increase from a loss of $2,544 million in the same period of 2024[36] - Adjusted EBITDA declined to a loss of $1.6 million, down $6.8 million from Q1 2024, influenced by revenue and cost factors[15] - Adjusted EBITDA for the three months ended March 31, 2025, was $(1,648) million, down from $5,147 million in the previous year[36] Cash and Assets - Unrestricted cash increased to $9.2 million, reflecting a $1.4 million growth from December 31, 2024[11] - Total current assets increased to $15.758 million as of March 31, 2025, up from $13.495 million at the end of 2024[26] - Cash and restricted cash at the end of Q1 2025 totaled $14.448 million, an increase from $11.394 million at the end of Q1 2024[31] Liabilities and Expenses - Total liabilities rose to $63.056 million as of March 31, 2025, compared to $60.678 million at the end of 2024[26] - Operating expenses for Q1 2025 were $8.350 million, up from $6.397 million in Q1 2024, reflecting increased general and administrative costs[29] - The company reported a significant increase in stock-based compensation, totaling $1.847 million in Q1 2025 compared to $661,000 in Q1 2024[31] - Interest expense for the three months ended March 31, 2025, was $838 million, compared to $424 million in the previous year[36] Projects and Development - The company has 220MW of new projects in development, contributing to a total project pipeline of approximately 698MW across operations, construction, and development[10] - Project Dorothy 2 is expected to increase Bitcoin hosting capacity by 64%, reaching a total of 123MW, with an expected completion timeline of Q4 2025[7] - The termination of the HP Enterprises contract allows the company to refocus on crypto-mining and AI data center development[6] - The company anticipates revenue stabilization and growth as additional MW of Bitcoin hosting capacity is commissioned over the next two years[11] Patents and Technology - The second utility patent was awarded in April 2025, expanding the scope of Soluna's Modular Data Center technology[10] Historical Comparison - Total revenue for the three months ended March 31, 2024, was $12,549 million, a decrease from $11,674 million in the previous quarter[33] - Cryptocurrency mining revenue was $6,396 million, while data hosting revenue was $5,278 million for the same period[33] - Segment operating income for the three months ended March 31, 2024, was $5,703 million, compared to $3,229 million in the previous year[33] - Total cost of revenue for the three months ended March 31, 2024, was $5,615 million, compared to $4,763 million in the previous quarter[35] - The gross profit for the three months ended March 31, 2024, was $6,934 million, a decrease from $1,173 million in the previous quarter[35] - Demand response revenue for the three months ended March 31, 2024, was $875 million, while it was $507 million in the same period of 2025[35] - The total segment cost of revenue for the three months ended March 31, 2024, was $5,777 million, an increase from $5,615 million in the previous quarter[33]

Financial Performance - Cryptocurrency mining revenue decreased to $2,999,000 in Q1 2025 from $6,396,000 in Q1 2024, a decline of approximately 53%[33] - Total revenue for Q1 2025 was $5,936,000, down from $12,549,000 in Q1 2024, representing a decrease of about 53%[33] - Net loss attributable to Soluna Holdings, Inc. was $7,556,000 in Q1 2025 compared to a net loss of $5,254,000 in Q1 2024, indicating a worsening of approximately 44%[33] - Basic and diluted loss per share for Q1 2025 was $0.88, compared to $2.62 in Q1 2024[33] - For the three months ended March 31, 2025, the net loss was $7.354 million, compared to a net loss of $2.544 million for the same period in 2024, indicating a significant increase in losses[41] - The company reported a net loss of $10,873,000 for the quarter ending March 31, 2024, compared to a net loss of $5,254,000 for the previous quarter[36] Assets and Liabilities - Total current assets increased to $15,758,000 as of March 31, 2025, up from $13,495,000 as of December 31, 2024, reflecting a growth of about 17%[30] - Total assets rose to $90,049,000 as of March 31, 2025, compared to $88,040,000 as of December 31, 2024, an increase of approximately 2%[31] - Total liabilities increased to $63,056,000 as of March 31, 2025, up from $60,678,000 as of December 31, 2024, a rise of about 4%[31] - The total accumulated deficit increased to $314,304,000 by December 31, 2024, reflecting ongoing financial challenges[37] Cash Flow and Expenditures - The company’s cash position improved to $9,161,000 as of March 31, 2025, compared to $7,843,000 as of December 31, 2024, an increase of about 17%[30] - Operating cash flow for the three months ended March 31, 2025, was a net cash used of $177 thousand, a decrease from net cash provided of $3.850 million in the same period of 2024[41] - The company incurred $3.808 million in capital expenditures for property, plant, and equipment during the three months ended March 31, 2025, compared to $524 thousand in the same period of 2024[41] Debt and Financing - The company has significant outstanding debt and negative working capital as of March 31, 2025, raising concerns about its ability to continue as a going concern[47] - Total debt as of March 31, 2025, is $24,038,000, consisting of $13,848,000 in current debt and $10,190,000 in long-term debt[75] - The company executed a warrant exercise resulting in the issuance of 530,776 shares during the quarter ending September 30, 2024[37] - The company is exploring various financing strategies, including stock issuances and debt borrowings, to meet its financial obligations and support growth[48] Stock and Equity - The total number of common stock shares increased to 7,690,219 as of September 30, 2024, up from 2,882,231 shares as of March 31, 2024[37] - The Company issued 1,000,000 shares of common stock to the Investor on April 29, 2025, as part of the agreement[86] - As of March 31, 2025, the Company had approximately $9.2 million in cash on hand and has drawn approximately $2.0 million from a Standby Equity Purchase Agreement (SEPA) to fund operations and projects[49] Operational Changes - The company transitioned its focus at Project Sophie from proprietary Bitcoin mining to hosting customers' Bitcoin mining operations in Q2 2023[45] - The Company plans to focus on providing colocation services at data centers for AI generative customers after exiting active provision of HPC services[204] Segment Performance - The Cryptocurrency Mining segment generates revenue from Bitcoin mining activities, primarily from Project Dorothy[207] - The High-Performance Computing Services segment began generating revenue in December 2024, with minimal revenue reported for the three months ended March 31, 2025[207] - Demand response revenue contributed $507 million to total revenue in Q1 2025[209] - Segment operating income for Data Center Hosting was $543 million, while Cryptocurrency Mining reported an operating loss of $67 million[209] Future Outlook - The Company plans to continue evaluating different financing strategies to support operations in fiscal year 2025[50] - Future growth may be driven by the integration of new technologies and market expansion strategies[208]

Financial Performance - Revenue for the last quarter reached $150 million, a 15% increase compared to the previous quarter, driven by higher Bitcoin prices and increased mining efficiency [30]. - Future guidance estimates an annual revenue growth rate of 25% over the next three years, supported by market expansion and technological advancements [30]. Operational Efficiency - The company reported a significant increase in computational power, achieving a hashrate of 5 Exahash per second (EH/s), representing a 25% increase year-over-year [19]. - The Power Usage Effectiveness (PUE) ratio improved to 1.1, indicating a 10% increase in energy efficiency compared to the previous year [28]. - The Bitcoin mining operation's profitability improved by 30% due to reduced energy costs and optimized mining strategies [15]. Growth and Expansion - The company plans to expand its data center capacity by 30% over the next year, which is expected to enhance operational efficiency and support future growth [35]. - The company anticipates a 20% growth in hosted customer contracts, reflecting increased demand for data center colocation services [17]. - New product offerings in AI and high-performance computing are projected to contribute an additional $20 million in revenue by the end of the fiscal year [12]. - The company is exploring strategic acquisitions to enhance its capabilities in generative AI, which could potentially add $50 million in revenue over the next two years [20]. Additional Revenue Streams - The company is actively engaging in grid demand response services, which are expected to generate an additional $5 million in revenue annually [22].

Revenue Growth - Year-to-date revenue for 2024 reached $29.7 million, a $18.8 million increase or 172% compared to $10.9 million in 2023[2][8] - Third quarter revenue increased by 30% to $7.5 million, up from $5.8 million in the same quarter of 2023[8][13] Financial Performance - Adjusted EBITDA for year-to-date 2024 is $3.5 million, an increase of $8.0 million compared to a loss of $4.5 million in 2023[8] - Unrestricted cash increased by 38% from the end of 2023, reaching $8.8 million[8] Development and Expansion - The development pipeline has expanded to over 2.6 GW, with 1.2 GW currently in active Term Sheet negotiations[5][19] - Project Dorothy 2 has secured $30 million in funding for a 48 MW expansion, with groundbreaking held on August 28, 2024[8] - Project Rosa has signed term sheets for power and land for a new 187 MW data center, marking a significant step in expansion efforts[8][19] Strategic Focus - Soluna's digital infrastructure is strategically co-located with renewable energy sources to support high-performance computing applications[3][18] - The company is focused on transforming surplus renewable energy into scalable computing resources, positioning itself as a leader in renewable computing[4][18] Funding and Investment - Soluna Cloud secured $13.75 million in total funding, with an additional $1.25 million raised to enhance AI offerings[8][19]

Financial Performance - Cryptocurrency mining revenue for Q3 2024 was $2,811,000, a 57.3% increase from $1,786,000 in Q3 2023[33] - Total revenue for the nine months ended September 30, 2024, reached $29,749,000, compared to $10,948,000 for the same period in 2023, representing a 171.5% increase[33] - Operating loss for Q3 2024 was $9,016,000, compared to a loss of $3,736,000 in Q3 2023, indicating a worsening of 141.5%[33] - Net loss attributable to Soluna Holdings, Inc. for Q3 2024 was $7,190,000, compared to $6,662,000 in Q3 2023, reflecting a 7.9% increase in losses[33] - Net loss for the nine months ended September 30, 2024, was $19,782,000, an improvement from a net loss of $22,705,000 in the same period of 2023[43] - The company reported a basic and diluted loss per share of $1.29 for Q3 2024, compared to a loss of $5.96 per share in Q3 2023[33] Assets and Liabilities - Total current assets increased to $18,515,000 as of September 30, 2024, up from $14,284,000 at the end of 2023, a growth of 29.5%[30] - Total assets rose to $97,349,000 as of September 30, 2024, compared to $91,276,000 at the end of 2023, marking a 6.5% increase[31] - Total liabilities increased to $45,754,000 as of September 30, 2024, up from $37,917,000 at the end of 2023, a rise of 20.5%[31] - Cash and restricted cash totaled $10,747,000 as of September 30, 2024, compared to $9,367,000 at the end of 2023, an increase of 14.7%[30] - The total accumulated deficit as of December 31, 2023, was $250,970,000, reflecting the cumulative losses over the years[37] Equity and Stock - The company’s additional paid-in capital increased to $308,947,000 as of September 30, 2024, up from $291,276,000 at the end of 2023, a growth of 6.1%[30] - For the year ended December 31, 2023, the total equity increased to $53,359,000, up from $46,272,000 at the beginning of the year, reflecting a growth of approximately 15.5%[36] - The Company issued secured convertible notes totaling $16.3 million, convertible into 1,776,073 shares at a price of $9.18 per share[88] - The Company has 4,953,545 shares of Series A Preferred Stock and 62,500 shares of Series B Preferred Stock outstanding as of September 30, 2024[121] - The conversion price for Series B Preferred Stock was reduced to $5.00, subject to stockholder approval, from an initial price of $135.25 per share[122] Cash Flow and Financing Activities - Cash used in operating activities for the nine months ended September 30, 2024, was $3,412,000, an improvement from $4,404,000 in 2023[43] - The company reported a net cash provided by financing activities of $12,943,000 for the nine months ended September 30, 2024[43] - The company had approximately $8.8 million in cash on hand as of September 30, 2024, and is seeking additional capital raising activities, including a Standby Equity Purchase Agreement for up to $25 million[54] Operational Changes and Projects - Project Sophie has transitioned from proprietary Bitcoin mining to hosting customers' Bitcoin mining operations, with all 25 MW now performing data hosting services[47] - The company is committed to leveraging its modular data centers and renewable energy partnerships to support the growing demands of Bitcoin mining and AI[50] - The company divested specific mining assets at its Wenatchee, Washington facility in September 2022 and ceased management of operational contracts in August 2024[47] Legal and Regulatory Matters - The Company has been named in a legal proceeding regarding the Malta Rocket Fuel Area Superfund Site, with the EPA seeking approximately $358,000 plus interest for response costs[140] - NYDIG filed a complaint against the Company regarding a series of loans, with a potential judgment amount of approximately $10.3 million for principal, interest, and penalties[141] - In September 2023, Atlas Technology Group LLC filed a complaint against the company, alleging breach of a co-location services agreement, seeking approximately $464 thousand in pre-paid fees and at least $7.9 million in additional damages[145] Stock-Based Compensation - Stock-based compensation for the nine months ended September 30, 2023, totaled $602,000, reflecting the company's ongoing investment in employee incentives[37] - Total stock-based compensation for the nine months ended September 30, 2024, was $3,286,000, slightly down from $3,709,000 in 2023[43] - The Company awarded 542,896 restricted stock awards under the 2021 Plan, valued at $3.96 per share[172] Segment Performance - ComputeCo has three reportable segments: Cryptocurrency Mining, Data Center Hosting, and High-Performance Computing Services, with the latter being a new business line initiated in Q3 2024[207] - The new High-Performance Computing services utilize NVIDIA H100 GPUs and are powered by 100% carbon-free renewable energy sources[207] Future Commitments and Contributions - The Company committed to a capital contribution of up to approximately $26.3 million to DVSL, with $8.1 million contributed prior to August 5, 2022[184] - The Company closed financing for the Dorothy 2 project with a capital contribution of up to $29.98 million from Spring Lane Capital[202]

Financial Performance - Cryptocurrency mining revenue for Q2 2024 reached $4.484 million, a significant increase from $0.915 million in Q2 2023, representing a growth of 388%[33] - Total revenue for the first half of 2024 was $22.224 million, compared to $5.150 million in the same period of 2023, marking a year-over-year increase of 331%[33] - Operating loss for Q2 2024 was $3.675 million, an improvement from a loss of $7.074 million in Q2 2023[33] - Net loss attributable to Soluna Holdings, Inc. for Q2 2024 was $10.873 million, compared to a loss of $8.775 million in Q2 2023[33] - The company reported a basic and diluted loss per share of $2.97 for Q2 2024, compared to $9.54 for Q2 2023[33] - The net loss for the six months ended June 30, 2024, was $11.689 million, compared to a net loss of $16.689 million for the same period in 2023, indicating a 30% improvement in losses year-over-year[41] - The net loss for the three months ended September 30, 2023, was $6.702 million, with stock-based compensation expenses amounting to $602,000[37] Assets and Liabilities - Total current assets increased to $27.480 million as of June 30, 2024, up from $14.284 million at the end of 2023, reflecting an increase of 92%[30] - Total assets as of June 30, 2024, were $98.675 million, compared to $91.276 million at the end of 2023, indicating a growth of 8%[31] - The company’s total liabilities rose to $48.742 million as of June 30, 2024, compared to $37.917 million at the end of 2023, an increase of 28%[31] - The total accounts receivable increased to $3,434 thousand as of June 30, 2024, compared to $2,948 thousand as of December 31, 2023, with a provision for credit loss of approximately $244 thousand due to a borrower's financial difficulties[73] Cash Flow and Reserves - Cash reserves increased to $9.558 million as of June 30, 2024, up from $6.368 million at the end of 2023, representing a growth of 50%[30] - The company reported total cash and restricted cash of $12.509 million at the end of June 30, 2024, up from $10.244 million at the end of June 30, 2023, reflecting a 12.4% increase[41] - Operating cash flow for the six months ended June 30, 2024, resulted in a net cash used of $3.473 million, slightly better than the $3.836 million used in the same period of 2023[41] Stock and Equity - As of June 30, 2023, the company reported a total of 1,230,650 common shares outstanding, with an accumulated deficit of $237.606 million[37] - The company issued 113,502 shares in a securities purchase offering, raising $770,000 during the second quarter of 2023[37] - The company reported a total of 2,546,361 common shares outstanding as of December 31, 2023, following a reverse stock split at a ratio of 1-for-25 effective October 13, 2023[37] - The Company had approximately $2.7 million in note conversions and $4.0 million in revaluation losses related to fair value assessments of convertible debt for the three months ended June 30, 2024[100] Strategic Initiatives - The company formed two new wholly-owned subsidiaries, Soluna Cloud, Inc. and Soluna Energy, Inc., in 2024 to expand its cloud and renewable energy services[45] - The company continues to focus on transforming surplus renewable energy into computing resources, supporting applications like Bitcoin mining and AI[46] - The Company entered into an agreement with Hewlett Packard Enterprise for datacenter and cloud services valued at $34.0 million, with an initial pre-payment of $10.3 million[48] - The Company anticipates significant amortization expenses for intangible assets, with $9,488 thousand expected in 2025, highlighting future financial impacts[90] Legal and Regulatory Matters - The Company is involved in legal proceedings related to an EPA Demand Letter, with potential costs estimated at approximately $358,000[159] - NYDIG filed a Motion for Summary Judgment against the Company for approximately $10.3 million for principal, interest, and penalties related to the MEFA[201] - The Court dismissed three of the four counts in the complaint filed by Atlas against the Company, with one count remaining[164] Tax and Deferred Tax - The effective income tax rate for the three months ended June 30, 2024, was 7.1%, compared to 4.5% for the same period in 2023, reflecting changes in valuation allowance and estimated taxable income[91] - The company recorded a deferred tax liability of approximately $10.9 million related to the strategic contract pipeline, which will be amortized over the asset's life[92] - The company has a full valuation allowance for deferred tax assets totaling $37.2 million as of June 30, 2024, indicating ongoing evaluation of realizability[94] Impairments and Write-offs - The Company performed an impairment analysis and determined that approximately $2.4 million of equipment and leasehold improvements associated with Project Marie were impaired as of December 31, 2022[202] - The Company fully impaired its equity investment in HEL, writing it down from $750 thousand to $0 as of December 31, 2022[178] Future Outlook - The Company believes the closure of Project Marie does not represent a strategic shift, as it intends to continue operations through data hosting and proprietary mining arrangements[205] - The Company anticipates that capital contributions from Spring Lane Capital, up to $35 million, will help develop green data centers co-located with renewable energy assets[208]

Revenue Growth - Cryptocurrency mining revenue increased to $6,396,000 for Q1 2024, up 129% from $2,796,000 in Q1 2023[33] - Data hosting revenue surged to $5,278,000 in Q1 2024, compared to $286,000 in Q1 2023, representing a growth of 1,748%[33] - Total revenue for Q1 2024 reached $12,549,000, a significant increase of 307% from $3,082,000 in Q1 2023[33] Operating Performance - Operating income for Q1 2024 was $407,000, a turnaround from an operating loss of $7,012,000 in Q1 2023[33] - Net loss attributable to Soluna Holdings, Inc. narrowed to $5,254,000 in Q1 2024 from $7,062,000 in Q1 2023[33] - Basic and diluted loss per share improved to $2.62 in Q1 2024, compared to $10.30 in Q1 2023[33] Financial Position - Total current assets increased to $16,996,000 as of March 31, 2024, up from $14,284,000 at the end of 2023[30] - Total liabilities rose to $41,786,000 as of March 31, 2024, compared to $37,917,000 at the end of 2023[31] - Total stockholders' equity decreased to $48,851,000 as of March 31, 2024, down from $53,359,000 at the end of 2023[31] Cash Flow and Liquidity - The company reported a cash balance of $8,438,000 as of March 31, 2024, an increase from $6,368,000 at the end of 2023[30] - Cash and restricted cash at the end of the period increased to $11,394,000 from $5,046,000, marking a 126.5% increase year-over-year[41] - The company reported net cash provided by operating activities of $3,850,000 for the three months ended March 31, 2024, compared to net cash used in operating activities of $3,053,000 in the same period of 2023[41] Stock and Equity - The company issued 87,144 shares in a securities purchase offering, raising $439,000 during Q1 2023[36] - The total amount of common stock increased to $286,799,000 by September 30, 2023, up from $280,010,000 at the end of Q2 2023, reflecting a 2.8% increase[37] - The company has reserved a total of 3,194,141 common shares for future issuance as of March 31, 2024, including 2,165,010 outstanding warrants[131] Debt and Financing - The company has an outstanding principal balance of approximately $9.2 million and accrued interest and penalties of approximately $1.2 million related to the NYDIG loan[49] - The company entered into a $2.05 million Term Loan with an interest rate of 15%, with debt service payments beginning after the In-Service Date[120] - The NYDIG financing total outstanding debt was $9.2 million as of February 13, 2024, with a penalty fee of approximately $1.0 million applied to repossessed collateralized assets[118] Legal and Regulatory Matters - The company is involved in legal proceedings related to a complaint filed by NYDIG against a subsidiary, with ongoing litigation regarding loan agreements and collateral[141] - Atlas Technology Group filed a complaint against Soluna MC for breach of contract, seeking the return of pre-paid fees of approximately $464 thousand and additional damages of not less than $7.9 million[143] Strategic Initiatives - The company is exploring various financing strategies, including stock issuances and debt borrowings, to support its operations and growth[50] - The Company plans to concentrate its personnel and capital on the Dorothy Facility following the shutdown of the Marie facility[172] Project Performance - For the three months ended March 31, 2024, Project Marie reported total revenue of $3,000, a significant decrease from $1,045,000 for the same period in 2023, reflecting a decline in cryptocurrency mining and data hosting revenues[178] - The impairment analysis for Project Marie identified approximately $2.4 million of equipment and leasehold improvements as impaired as of December 31, 2022, due to the closure of operations[173] Management Changes - The company appointed John Tunison as Chief Financial Officer effective April 8, 2024, indicating a strategic move to strengthen its financial leadership[201]

Blockchain and Cryptocurrency Growth - The company anticipates continued growth in blockchain and cryptocurrency usage, which is critical for its operations[32] - The upcoming Bitcoin halving event in April 2024 may impact profitability and network difficulty, affecting the company's mining operations[32] Infrastructure and Efficiency - The company is focused on expanding its data center infrastructure to enhance operational capacity and efficiency[34] - The company reported a significant increase in hashrate, measuring computational power at 1 Exahash (EH/s), indicating improved mining efficiency[19] - The company aims to maintain a Power Usage Effectiveness (PUE) ratio that optimizes energy consumption in its data centers[28] - The company is committed to improving energy efficiency in Bitcoin mining, measured in joules per hash[24] - The company is leveraging grid demand response services to stabilize power supply during peak demand periods[21] Technological Advancements - The company is exploring new technologies in Artificial Intelligence (AI) to enhance operational capabilities and efficiency[12] Risk Management - The company is actively managing risks associated with economic conditions and regulatory changes that could impact its business[32] Customer Engagement - The company is focused on attracting and retaining hosted customers for its hosting operations to drive revenue growth[32]

Capacity and Projects - The company operates at a 75-megawatt capacity across two sites, Project Sophie and Project Dorothy, with over 2 Gigawatts in the long-term pipeline[201]. - Project Dorothy has a total capacity of 100 MW, with the initial 50 MW phase fully energized[221][222]. - The company has 216 MW in two new data center projects: Project Dorothy 2 (50 MW) and Project Kati (166 MW)[201]. - Project Sophie has deployed over 8,000 machines for hosting customers, filling 25 MW of capacity, and has signed new hosting term sheets for an additional 15 MW[220]. - The Kati Project is a new 166 MW modular data center co-located with a 300 MW wind farm, currently progressing through ERCOT interconnection studies[243]. - Project Dorothy 1A has achieved full capacity with approximately 7,700 Bitcoin miners deployed, resulting in an installed hashrate of 950 PH/s and consuming over 2,500 MWh of curtailed energy[239]. - Project Dorothy 1B has deployed over 7,920 Bitcoin miners, achieving an installed hashrate of 816 PH/s and consuming over 1,500 MWh of curtailed energy[240]. Revenue Streams - The company plans to host AI customers at its data centers in the future, expanding its revenue streams beyond cryptocurrency mining[205]. - Data hosting revenue increased by 307% to $4.011 million in Q3 2023 from $0.985 million in Q3 2022[250]. - Cryptocurrency mining revenue decreased by 67% to $1.786 million in Q3 2023 from $5.387 million in Q3 2022[250]. - The transition from proprietary mining to data hosting at Project Sophie contributed approximately $991 thousand in data hosting revenue in Q3 2023[256]. - The company anticipates future revenues will include block rewards, transaction fees, and hosting revenues from cryptocurrency mining customers[309]. Financial Performance - Operating loss improved by 91% to $(3.736) million in Q3 2023 compared to $(41.716) million in Q3 2022[250]. - Net loss attributable to Soluna Holdings, Inc. decreased by 88% to $(6.662) million in Q3 2023 from $(55.892) million in Q3 2022[250]. - The company reported a gain of approximately $7.8 million from the sale of its subsidiary, MTI Instruments, for about $9.4 million in cash[246]. - The company had a net loss from continuing operations of $22.7 million for the nine months ended September 30, 2023, compared to a net loss of $79.4 million for the same period in 2022[289]. - Adjusted EBITDA for the three months ended September 30, 2023, was $405 thousand, while for the nine months ended September 30, 2023, it was a loss of $4.5 million[288]. Expenses and Cost Management - General and administrative expenses for the nine months ended September 30, 2023, decreased by 27% to $11.219 million from $15.441 million in the same period of 2022[252]. - Cost of cryptocurrency mining revenue, exclusive of depreciation, decreased by 60% to $4.451 million in the nine months ended September 30, 2023, from $11.092 million in the same period of 2022[252]. - Cost of data hosting increased to approximately $2.2 million for Q3 2023, up from $1.1 million in Q3 2022, primarily due to Project Dorothy 1A costs[260]. - General and administrative expenses for Q3 2023 were approximately $2.7 million, a decrease of 52% from $5.7 million in Q3 2022, mainly due to reduced salaries and consulting fees[263]. - Salaries, benefits, and other employee expenses decreased by approximately $589 thousand in Q3 2023 compared to Q3 2022, reflecting a reduction in headcount and recruitment costs[264]. Capital and Financing - The company has secured $35 million in project-level financing for the Dorothy Project, with $12.5 million specifically allocated for its development[229]. - The NYDIG facility has a financing agreement of approximately $14.4 million for equipment financing, which has faced challenges due to cash flow issues[208]. - The company plans to fund growth through project-level capital raising and equity sales, contingent on successfully raising capital[291]. - The company generated approximately $22.8 million in net cash from financing activities during the nine months ended September 30, 2023, including $19.7 million from non-controlling interest contributions[299]. Operational Challenges - The company has experienced financial challenges, including a default on a secured note receivable of $193 thousand as of September 30, 2023[206]. - The company experienced a negative working capital position and insufficient revenue to generate net income, raising substantial doubt about its ability to continue as a going concern within one year[292]. - The shutdown of Project Marie operations in February 2023 caused a revenue decline of approximately $3.4 million[256]. - The company is actively monitoring macroeconomic factors such as inflation and interest rates that could adversely affect its operations and financial condition[294]. Market Conditions and Risks - The average price of Bitcoin increased by approximately 32% for Q3 2023 compared to Q3 2022, while it declined by approximately 17% for the nine months ended September 30, 2023 compared to the same period in 2022[255]. - Block rewards are currently fixed at 6.25 Bitcoin per block, expected to halve to 3.125 Bitcoin in April 2024, which may negatively impact revenues[310]. - The company is subject to risks related to the fluctuating valuations of cryptocurrency and general economic conditions[308]. - The company faces potential adverse impacts from pending legal proceedings and strategic alliances not achieving their objectives[308].

Company Operations - Soluna Holdings, Inc. operates through its subsidiary Soluna Computing, Inc., focusing on cryptocurrency mining using renewable energy sources[186]. - The company is focused on developing green, zero-carbon computing and cryptocurrency mining facilities following the sale of its MTI Instruments business in April 2022[261]. Project Developments - Project Marie, a 20 MW facility, faced financial challenges due to Bitcoin price declines, leading to a default on a $14.4 million loan from NYDIG[193][189]. - Project Sophie transitioned to a hosting model for Bitcoin miners, deploying over 7,600 machines and achieving an installed hash rate of approximately 812 PH/s[198][199]. - Project Dorothy, a 100 MW modular data center, has secured hosting agreements totaling 25 MW and deployed over 7,000 machines as of June 2023[205][206]. - The Company plans to concentrate resources on the Dorothy facility after impairing assets at the Marie facility due to financial difficulties[195]. - The Company plans to begin energization of Dorothy 1B in Q3 2023, having purchased over 8,250 mining machines[218]. - The Company entered into a partnership with Navitas for Project Dorothy 1B, with Navitas contributing $12.1 million for a 49% ownership stake[209]. - The Dorothy Facility is being developed in phases, with a peak demand of 50 MW for the first two phases and a potential total of 150 MW if all four phases are completed[211]. - The Kati Project is a new 166 MW modular data center co-located with a 300 MW wind farm, currently progressing through ERCOT interconnection studies[219]. Financial Performance - Cryptocurrency mining revenue decreased by 88% to $915,000 in Q2 2023 compared to $7.5 million in Q2 2022[224]. - Operating loss improved by 25% to $7.1 million in Q2 2023 from $9.4 million in Q2 2022[224]. - Net loss attributable to Soluna Holdings, Inc. was $8.8 million in Q2 2023, a 34% increase from $6.6 million in Q2 2022[224]. - Cryptocurrency mining revenue decreased by approximately $11.6 million or 76% for the six months ended June 30, 2023, totaling $3.7 million compared to $15.3 million for the same period in 2022[226]. - Data hosting revenue for the six months ended June 30, 2023 was approximately $1.4 million, a decline of $1.2 million or 46% compared to $2.7 million for the same period in 2022[226]. - Operating loss improved by $2.1 million or 13%, totaling $14.1 million for the six months ended June 30, 2023, compared to $16.2 million for the same period in 2022[226]. - Net loss from continuing operations decreased by $6.5 million or 28%, amounting to $16.7 million for the six months ended June 30, 2023, compared to $23.2 million for the same period in 2022[226]. - General and administrative expenses for the six months ended June 30, 2023 were approximately $8.5 million, a decrease of $1.3 million or 13% compared to $9.8 million for the same period in 2022[240]. - The Company recognized a gain of approximately $7.8 million from the sale of its subsidiary, MTI Instruments, in 2022[221]. - The Company reported a net loss of $16.7 million for the six months ended June 30, 2023, with approximately $3.8 million used in operations[265]. Costs and Expenses - Salaries, benefits, and other employee expenses decreased by approximately $1.6 million for the six months ended June 30, 2023, primarily due to reduced recruitment fees and bonuses[241]. - Cost of cryptocurrency mining revenue, exclusive of depreciation, decreased by approximately $3.6 million or 51% for the six months ended June 30, 2023, totaling $3.4 million compared to $7.0 million for the same period in 2022[231]. - Depreciation costs associated with cryptocurrency and data hosting revenue significantly declined to approximately $1.2 million for the six months ended June 30, 2023, compared to $9.9 million for the same period in 2022[233]. - Stock-based compensation increased by approximately $917 thousand for the six months ended June 30, 2023, due to the acceleration of grants and awards in May 2023[244]. Debt and Interest - Interest expense for the three months ended June 30, 2023, was $439 thousand, a significant decrease from $3.3 million for the same period in 2022[247]. - For the six months ended June 30, 2023, interest expense totaled $1.8 million, down from $6.2 million in the prior year[248]. - The Company reported a net loss on debt extinguishment and revaluation of $1.6 million for the six months ended June 30, 2023, primarily due to a new debt agreement with convertible noteholders[249]. - The company incurred approximately $651 thousand in accrued interest and penalties related to a $10.5 million principal balance due to NYDIG as of June 30, 2023[271]. - As of June 30, 2023, the company had an outstanding principal balance of approximately $12.9 million on secured convertible notes[270]. Cash Flow and Working Capital - Cash used in investing activities was approximately $9.6 million for the six months ended June 30, 2023, primarily due to capital expenditures of $2.9 million and equipment purchases of $7.9 million[267]. - Net cash provided by financing activities was approximately $21.8 million during the six months ended June 30, 2023, mainly from cash contributions for non-controlling interest of $19.4 million[268]. - The company has a cash position that it plans to use to fund operations and may seek additional credit facilities if necessary[262]. - As of June 30, 2023, the Company had positive working capital of approximately $6.1 million and $12.9 million in outstanding principal notes payable[260]. - The company experienced a significant increase in accounts payable, with a rise of $696 thousand as of June 30, 2023[265]. Market Conditions and Future Outlook - The average price of Bitcoin decreased approximately 31% for the six months ended June 30, 2023, compared to the same period in 2022[227]. - Bitcoin price increased from $28,478 in March 2023 to $30,477 as of June 30, 2023, following a decline from $45,539 in March 2022 to $19,784 on June 30, 2022[281]. - Current block rewards are fixed at 6.25 Bitcoin per block, expected to halve to 3.125 Bitcoin in April 2024, potentially impacting revenues negatively[281]. - Miners collect transaction fees for confirming transactions, which may vary based on network consensus, unlike fixed block rewards[282]. - As Bitcoin availability declines, the mining incentive structure is expected to shift towards a higher reliance on transaction confirmation fees[283]. - Transaction fees are anticipated to become a larger proportion of revenues for miners as the Bitcoin network expands[283]. - The company is actively monitoring macroeconomic factors such as inflation and interest rates that could adversely affect its operations and financial condition[264]. Revenue Composition - Revenues are expected to comprise block rewards in Bitcoin, transaction fees, and hosting revenues from cryptocurrency mining customers[279].