SOLUNA HOLDINGS(SLNHP) - 2024 Q3 - Quarterly Report

Financial Performance - Cryptocurrency mining revenue for Q3 2024 was $2,811,000, a 57.3$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$53,359,000, up from $46,272,000 at the beginning of the year, reflecting a growth of approximately 15.5$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]