[Executive Summary](index=1&type=section&id=executive-summary) Soluna reported continued Adjusted EBITDA improvement and steady gross margins in Q2 2025, alongside strategic project advancements and capital raising efforts [Q2'25 Performance Overview](index=1&type=section&id=q2-25-performance-overview) Soluna reported continued Adjusted EBITDA improvement and a steady gross margin of 19% in Q2 2025, demonstrating resilience despite market softness in Hashprice - Adjusted EBITDA improved by **+$2.3 million** since Q3 2024[2](index=2&type=chunk) - Adjusted EBITDA grew by **25.5% ($0.4 million)** in Q2 2025 over the prior quarter[4](index=4&type=chunk) - Maintained a steady **19% gross margin** in Q2 2025[4](index=4&type=chunk) [Management Commentary](index=1&type=section&id=management-commentary) CEO John Belizaire highlighted continued Adjusted EBITDA improvement, strong operating site margins, and the successful onboarding of first customers into Project Dorothy 2, while CFO John Tunison emphasized the achievement of the fourth consecutive quarter of Adjusted EBITDA growth amidst challenging market conditions - CEO John Belizaire stated that Q2 results demonstrate continued Adjusted EBITDA improvement and margin strength in operating sites[3](index=3&type=chunk) - First customers were welcomed into Project Dorothy 2, and capital raising toolkit was rebuilt, securing an at-the-market offering issuance[3](index=3&type=chunk) - CFO John Tunison reported the fourth consecutive quarter of Adjusted EBITDA growth, improving by **25.5% ($0.4 million)** QoQ[4](index=4&type=chunk) [Operational and Corporate Highlights](index=1&type=section&id=operational-and-corporate-highlights) Soluna advanced key projects like Kati 1 and Dorothy 2, launched new wind and solar data centers, and significantly expanded its clean energy power pipeline and hosting capacity [Project Development & Expansion](index=1&type=section&id=project-development-expansion) Soluna secured land and $20 million in funding from Spring Lane Capital to launch Kati 1, a 35 MW wind-powered data center, with construction expected to begin in Q3 2025 and initial energization targeted for early 2026 - Project Kati 1: Land secured and **$20 million** funding closed with Spring Lane Capital to launch a **35 MW** wind-powered data center, with construction expected in Q3 and energization targeted for early 2026[5](index=5&type=chunk) - Project Dorothy 2: Construction is on track, with all three building phases progressing on schedule and full energization anticipated in Q4[7](index=7&type=chunk) - **295 MW** of new projects launched in Q2, including wind-powered Projects Hedy and Ellen, and solar-powered Project Annie, diversifying the energy mix[8](index=8&type=chunk) - Increased power pipeline to **2.8 GW** of long-term clean energy capacity[8](index=8&type=chunk) [Hosting Deployments & Capacity](index=2&type=section&id=hosting-deployments-capacity) Soluna expanded hosting deployments with key partners such as Blockware and Compass Mining as capacity became available at Dorothy 1 and Dorothy 2 came online, boasting over 773 MW of data center capacity - Expanded hosting deployments with existing partners Blockware, Compass Mining, and other top-tier miners as Dorothy 1 space became available and Dorothy 2 came online[7](index=7&type=chunk) Data Center Capacity Overview | Project | Location | Power Source | Size (MW) | Model | Status | | :--- | :--- | :--- | :--- | :--- | :--- | | Dorothy 1A | TX | Wind | 25 | BTC Hosting | Operating | | Dorothy 1B | XL | Wind | 25 | BTC Mining | Operating | | Sophie | KY | Grid | 25 | BTC Hosting | Operating | | Dorothy 2 | TX | Wind | 48 | BTC Hosting | Construction | | Kati | TX | Wind | 166 | BTC Hosting / AI | Shovel Ready | | Grace | IX | Wind | 2 | AI Hosting | Development | | Rosa | X | Wind | 187 | BTC Hosting / AI | Development | | Hedy | TX | Wind | 120 | BTC Hosting / AI | Development | | Ellen | TX | Wind | 100 | BTC Hosting / AI | Development | | Annie | TX | Solar | 75 | BTC Hosting / AI | Development | - Total data center capacity in operation, construction, or development exceeds **773 MW**[6](index=6&type=chunk) [Financial Performance Overview](index=3&type=section&id=financial-performance-overview) Soluna's Q2 2025 financial performance showed a reduced net loss and improved Adjusted EBITDA sequentially, despite revenue declines attributed to Bitcoin halving and market volatility [Key Financial Metrics](index=3&type=section&id=key-financial-metrics) Soluna reported a net loss of **($7.78 million)** for Q2 2025, an improvement of **$1.4 million** compared to Q2 2024, with Adjusted EBITDA improving QoQ despite a YoY decline - Net loss for Q2 2025 declined by **($1.4 million)** compared to Q2 2024, driven by revenue, gross profit, and SG&A drivers[11](index=11&type=chunk)[36](index=36&type=chunk) - Adjusted EBITDA improved **$0.4 million** from Q1 2025 to Q2 2025, primarily due to a steady **19% gross margin** and controlled expenses[11](index=11&type=chunk)[50](index=50&type=chunk) - Adjusted EBITDA declined **($3.0 million)** from Q2 2024 to Q2 2025, mainly due to Bitcoin halving and Hashprice volatility[12](index=12&type=chunk)[49](index=49&type=chunk) [Revenue Drivers and Trends](index=6&type=section&id=revenue-drivers-and-trends) Total revenue for Q2 2025 was **$6.2 million**, representing a net decline of **$3.5 million** year-over-year, primarily attributed to Bitcoin halving and Hashprice volatility, though future growth is anticipated from new hosting capacity - Revenue for Q2 2025 was **$6.2 million**, a net decline of **$3.5 million** year-over-year[20](index=20&type=chunk)[36](index=36&type=chunk) - Key factors driving the revenue decrease include Bitcoin halving and Hashprice volatility (**$2.0 million**), a change in commercial model mix to more Profit Sharing, lower Prop Mining volume (**$0.6 million**), and lower Demand Response Services (**$0.1 million**)[20](index=20&type=chunk) - Revenue is expected to stabilize and grow with the commissioning of additional MW of Bitcoin Hosting capacity from Dorothy 2 and Kati 1 over the next two years[20](index=20&type=chunk) [Cost Management and Profitability](index=5&type=section&id=cost-management-and-profitability) Gross profit for Soluna Digital's operating sites remained steady compared to Q1 2025, reflecting strong cost discipline and gross margin stability, despite a decline in Demand Response Service gross profit - Gross profit for operating sites in Soluna Digital remained steady compared to Q1 2025, demonstrating strong cost discipline and gross margin stability[17](index=17&type=chunk) - Demand Response Service gross profit declined by **($0.3 million)** from exiting the seasonally higher winter pricing period[17](index=17&type=chunk) - General and administrative expenses were flat year-over-year and improved from the prior quarter, indicating strong cost discipline amidst site development growth[20](index=20&type=chunk) [Cash Position](index=6&type=section&id=cash-position) Soluna reported robust cash reserves at the end of Q2 2025, with unrestricted cash reaching **$9.9 million**, marking a **$2.0 million** increase since December 31, 2024 - Quarter-end unrestricted cash was **$9.9 million**[20](index=20&type=chunk)[33](index=33&type=chunk) - Unrestricted cash increased by **$2.0 million** since December 31, 2024[20](index=20&type=chunk) [Detailed Financial Statements](index=7&type=section&id=detailed-financial-statements) This section provides comprehensive financial data, including gross profit breakdowns by project site, consolidated balance sheets, statements of operations, cash flows, and segment performance [Gross Profit Breakout by Project Site](index=7&type=section&id=gross-profit-breakout-by-project-site) This section provides a detailed breakdown of revenue, cost of revenue, and gross profit by project site for both the three and six months ended June 30, 2025 and 2024 Q2 2025 Revenue & Cost of Revenue by Project Site | (Dollars in thousands) | Project Dorothy 1B | Project Dorothy 1A | Project Dorothy 2 | Project Sophie | Other | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cryptocurrency mining revenue | $2,861 | $- | $- | $- | $- | $2,861 | | Data hosting revenue | $- | $1,653 | $210 | $1,273 | $- | $3,136 | | Demand response services | $- | $- | $- | $- | $161 | $161 | | **Total revenue** | **$2,861** | **$1,653** | **$210** | **$1,273** | **$161** | **$6,158** | | Cost of cryptocurrency mining, exclusive of depreciation | $1,767 | $- | $- | $- | $- | $1,767 | | Cost of data hosting revenue, exclusive of depreciation | $- | $851 | $346 | $420 | $- | $1,617 | | Cost of cryptocurrency mining revenue- depreciation | $1,074 | $- | $- | $- | $- | $1,074 | | Cost of data hosting revenue- depreciation | $- | $274 | $136 | $102 | $- | $512 | | **Total cost of revenue** | **$2,841** | **$1,125** | **$482** | **$522** | **$-** | **$4,970** | | **Gross Profit (Loss)** | **$20** | **$528** | **($272)** | **$751** | **$161** | **$1,188** | | **Gross Profit Margin %** | **0.7%** | **31.9%** | **(129.5%)** | **59.0%** | **100.0%** | **19.3%** | Q2 2024 Revenue & Cost of Revenue by Project Site | (Dollars in thousands) | Project Dorothy 1B | Project Dorothy 1A | Project Sophie | Other | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Cryptocurrency mining revenue | $4,484 | $- | $- | $- | $4,484 | | Data hosting revenue | $- | $3,567 | $1,331 | $- | $4,898 | | Demand response services | $- | $- | $- | $293 | $293 | | **Total revenue** | **$4,484** | **$3,567** | **$1,331** | **$293** | **$9,675** | | Cost of cryptocurrency mining, exclusive of depreciation | $1,883 | $- | $- | $- | $1,883 | | Cost of data hosting revenue, exclusive of depreciation | $- | $1,758 | $418 | $- | $2,176 | | Cost of cryptocurrency mining revenue- depreciation | $1,065 | $- | $- | $- | $1,065 | | Cost of data hosting revenue- depreciation | $- | $290 | $151 | $- | $441 | | **Total cost of revenue** | **$2,948** | **$2,048** | **$569** | **$-** | **$5,565** | | **Gross Profit** | **$1,536** | **$1,519** | **$762** | **$293** | **$4,110** | | **Gross Profit Margin %** | **34.3%** | **42.6%** | **57.3%** | **100.0%** | **42.5%** | Six Months Ended June 30, 2025 Revenue & Gross Profit by Project Site | (Dollars in thousands) | Project Dorothy 1B | Project Dorothy 1A | Project Dorothy 2 | Project Sophie | Other | Soluna Digital Subtotal | Project Ada | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cryptocurrency mining revenue | $5,860 | $- | $- | $- | $- | $5,860 | $- | $5,860 | | Data hosting revenue | $- | $3,024 | $210 | $2,304 | $- | $5,538 | $- | $5,538 | | Demand response services | $- | $- | $- | $- | $668 | $668 | $- | $668 | | High-performance computing services | $- | $- | $- | $- | $- | $- | $28 | $28 | | **Total revenue** | **$5,860** | **$3,024** | **$210** | **$2,304** | **$668** | **$12,066** | **$28** | **$12,094** | | **Gross (loss) profit** | **($8)** | **$719** | **($343)** | **$1,304** | **$668** | **$2,340** | **$21** | **$2,361** | Six Months Ended June 30, 2024 Revenue & Gross Profit by Project Site | (Dollars in thousands) | Project Dorothy 1B | Project Dorothy 1A | Project Sophie | Other | Soluna Digital Subtotal | Project Ada | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cryptocurrency mining revenue | $10,880 | $- | $- | $- | $10,880 | $- | $10,880 | | Data hosting revenue | $- | $7,108 | $3,068 | $- | $10,176 | $- | $10,176 | | Demand response services | $- | $- | $- | $1,168 | $1,168 | $- | $1,168 | | High-performance computing services | $- | $- | $- | $- | $- | $- | $- | | **Total revenue** | **$10,880** | **$7,108** | **$3,068** | **$1,168** | **$22,224** | **$-** | **$22,224** | | **Gross profit** | **$5,004** | **$3,038** | **$1,835** | **$1,167** | **$11,044** | **$-** | **$11,044** | [Condensed Consolidated Balance Sheets](index=10&type=section&id=condensed-consolidated-balance-sheets) As of June 30, 2025, Soluna's total assets increased to **$91.952 million** from **$88.040 million** at December 31, 2024, primarily driven by an increase in property, plant and equipment, and cash Condensed Consolidated Balance Sheets Highlights | (Dollars in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $9,878 | $7,843 | | Total Current Assets | $16,978 | $13,495 | | Property, plant and equipment, net | $56,521 | $47,283 | | Total Assets | $91,952 | $88,040 | | **Liabilities and Stockholders' Equity** | | | | Total Current Liabilities | $47,852 | $47,873 | | Total Liabilities | $62,633 | $60,678 | | Total Stockholders' Equity | $29,319 | $27,362 | [Condensed Consolidated Statements of Operations](index=12&type=section&id=condensed-consolidated-statements-of-operations) For the three months ended June 30, 2025, Soluna reported total revenue of **$6.158 million**, a decrease from **$9.675 million** in the prior year, yet net loss attributable to Soluna Holdings, Inc. improved to **($7.382 million)** Condensed Consolidated Statements of Operations Highlights (Three Months Ended June 30) | (Dollars in thousands, except per share) | 2025 | 2024 | | :--- | :--- | :--- | | Total revenue | $6,158 | $9,675 | | Total costs of revenue | $4,970 | $5,565 | | Operating loss | ($6,624) | ($3,675) | | Net loss attributable to Soluna Holdings, Inc. | ($7,382) | ($10,873) | | Basic & Diluted loss per share | ($0.69) | ($2.97) | | Weighted average shares outstanding | 14,991,125 | 4,563,696 | Condensed Consolidated Statements of Operations Highlights (Six Months Ended June 30) | (Dollars in thousands, except per share) | 2025 | 2024 | | :--- | :--- | :--- | | Total revenue | $12,094 | $22,224 | | Total costs of revenue | $9,733 | $11,180 | | Operating loss | ($13,802) | ($3,269) | | Net loss attributable to Soluna Holdings, Inc. | ($14,938) | ($16,127) | | Basic & Diluted loss per share | ($1.55) | ($5.68) | | Weighted average shares outstanding | 13,473,983 | 3,683,558 | [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=condensed-consolidated-statements-of-cash-flows) For the six months ended June 30, 2025, net cash used in operating activities significantly decreased to **($1.273 million)** from **($3.473 million)** in the prior year, with net cash provided by financing activities increasing substantially to **$14.322 million** Condensed Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30) | (Dollars in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($1,273) | ($3,473) | | Net cash used in investing activities | ($8,349) | ($2,223) | | Net cash provided by financing activities | $14,322 | $7,838 | | Increase in cash & restricted cash | $4,700 | $2,142 | | Cash & restricted cash – end of period | $15,153 | $12,509 | - Net cash provided by financing activities increased significantly in 2025 due to contributions from non-controlling interest (**$11,852 thousand**) and proceeds from common stock sales on SEPA (**$2,005 thousand**) and ATM (**$2,178 thousand**)[38](index=38&type=chunk) [Segment Information](index=15&type=section&id=segment-information) Soluna operates primarily in Cryptocurrency Mining, Data Center Hosting, and High Performance Computing Services segments, with Data Center Hosting being the most profitable in Q2 2025 Q2 2025 Segment Operating Income (Loss) | Segment | Segment Revenue ($ thousands) | Segment Operating Income (Loss) ($ thousands) | | :--- | :--- | :--- | | Cryptocurrency Mining | $2,861 | ($132) | | Data Center Hosting | $3,136 | $631 | | High Performance Computing Services | $- | ($110) | | **Total Segment Operating Income** | **$5,997** | **$389** | Q2 2024 Segment Operating Income (Loss) | Segment | Segment Revenue ($ thousands) | Segment Operating Income (Loss) ($ thousands) | | :--- | :--- | :--- | | Cryptocurrency Mining | $4,484 | $1,338 | | Data Center Hosting | $4,898 | $2,065 | | High Performance Computing Services | $- | ($58) | | **Total Segment Operating Income** | **$9,382** | **$3,345** | Six Months Ended June 30, 2025 Segment Operating Income (Loss) | Segment | Segment Revenue ($ thousands) | Segment Operating Income (Loss) ($ thousands) | | :--- | :--- | :--- | | Cryptocurrency Mining | $5,860 | ($198) | | Data Center Hosting | $5,538 | $1,182 | | High Performance Computing Services | $28 | ($248) | | **Total Segment Operating Income** | **$11,426** | **$736** | Six Months Ended June 30, 2024 Segment Operating Income (Loss) | Segment | Segment Revenue ($ thousands) | Segment Operating Income (Loss) ($ thousands) | | :--- | :--- | :--- | | Cryptocurrency Mining | $10,880 | $4,596 | | Data Center Hosting | $10,176 | $4,568 | | High Performance Computing Services | $- | ($58) | | **Total Segment Operating Income** | **$21,056** | **$9,106** | Reconciliation to Net Loss Before Taxes (Three Months Ended June 30) | Reconciling Items | 2025 ($ thousands) | 2024 ($ thousands) | | :--- | :--- | :--- | | Segment operating income | $389 | $3,345 | | General and administrative, exclusive of depreciation and amortization (corporate and unallocated) | ($5,152) | ($5,072) | | Interest expense | ($1,196) | ($449) | | Loss on debt extinguishment and revaluation, net | $- | ($5,600) | | **Net loss before taxes** | **($8,388)** | **($9,794)** | Reconciliation to Net Loss Before Taxes (Six Months Ended June 30) | Reconciling Items | 2025 ($ thousands) | 2024 ($ thousands) | | :--- | :--- | :--- | | Segment operating income | $736 | $9,106 | | General and administrative, exclusive of depreciation and amortization (corporate and unallocated) | ($10,845) | ($9,060) | | Interest expense | ($2,034) | ($873) | | Gain (loss) on debt extinguishment and revaluation, net | $551 | ($8,698) | | **Net loss before taxes** | **($16,167)** | **($12,886)** | [EBITDA and Adjusted EBITDA Reconciliations](index=20&type=section&id=ebitda-and-adjusted-ebitda-reconciliations) Soluna provides reconciliations for EBITDA and Adjusted EBITDA, which are non-GAAP measures, showing a sequential improvement in Adjusted EBITDA for Q2 2025 but a significant year-over-year decline EBITDA and Adjusted EBITDA (Three Months Ended June 30) | (Dollars in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net loss | ($7,780) | ($9,145) | | EBITDA | ($3,203) | ($5,436) | | Adjusted EBITDA | ($1,227) | $1,797 | EBITDA and Adjusted EBITDA (Six Months Ended June 30) | (Dollars in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net loss | ($15,134) | ($11,689) | | EBITDA | ($6,265) | ($4,179) | | Adjusted EBITDA | ($2,875) | $6,943 | Adjusted EBITDA Quarterly Trend (2025) | (Dollars in thousands) | Q1 2025 | Q2 2025 | | :--- | :--- | :--- | | Adjusted EBITDA | ($1,648) | ($1,227) | Adjusted EBITDA Quarterly Trend (2024) | (Dollars in thousands) | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | | :--- | :--- | :--- | :--- | :--- | | Adjusted EBITDA | $5,147 | $1,797 | ($3,482) | ($2,520) | [Company Information and Disclosures](index=8&type=section&id=company-information-and-disclosures) This section details Soluna's forward-looking statements, non-GAAP financial measures, company mission, and investor contact information [Forward-Looking Statements](index=8&type=section&id=forward-looking-statements) This section outlines Soluna's forward-looking statements, which are identified by specific terminology and include plans for project completion and future economic performance, emphasizing inherent risks and uncertainties - Forward-looking statements are identified by terminology such as 'will,' 'expects,' 'anticipates,' 'future,' 'intends,' 'plans,' 'believes,' 'estimates,' 'confident' and similar statements[28](index=28&type=chunk) - Examples include statements of Company plans and objectives, such as the completion of Projects Kati 1, Dorothy 2, Hedy, Ellen, and Annie, and statements of future economic performance[28](index=28&type=chunk) - Forward-looking statements involve inherent risks and uncertainties, and Soluna undertakes no duty to update such information, except as required under applicable law[28](index=28&type=chunk) [Non-GAAP Measures](index=9&type=section&id=non-gaap-measures) Soluna utilizes non-GAAP financial measures, including EBITDA and Adjusted EBITDA, to assess its performance, which are presented as supplementary to GAAP and not as substitutes - Soluna presents non-GAAP performance measures such as EBITDA, Adjusted EBITDA, adjusted net profit/loss, adjusted earnings per share, and free cash flow[29](index=29&type=chunk) - EBITDA is defined as earnings before interest, taxes, and depreciation and amortization[29](index=29&type=chunk) - Adjusted EBITDA is defined as EBITDA adjusted for stock-based compensation costs, provision for credit losses, loss on sale of fixed assets, impairment on fixed assets, fair value adjustment on Standby Equity Purchase Agreement draws, and loss (gain) on debt extinguishment and revaluation, net[29](index=29&type=chunk) - These measures should be considered in addition to, but not as a substitute for, information prepared in accordance with GAAP[29](index=29&type=chunk) [About Soluna Holdings, Inc.](index=9&type=section&id=about-soluna-holdings-inc) Soluna Holdings, Inc. (NASDAQ: SLNH) is dedicated to making renewable energy a global superpower by using computing as a catalyst, designing and operating digital infrastructure that converts surplus renewable energy into global computing resources - Soluna's mission is to make renewable energy a global superpower using computing as a catalyst[30](index=30&type=chunk) - The company designs, develops, and operates digital infrastructure that transforms surplus renewable energy into global computing resources[30](index=30&type=chunk) - Soluna's data centers support high-performance computing applications, including Bitcoin Mining, Generative AI, and other compute-intensive applications[30](index=30&type=chunk) - Utilizes proprietary software MaestroOS™ to energize a greener grid and deliver cost-effective, sustainable computing solutions[30](index=30&type=chunk) [Contact Information](index=9&type=section&id=contact-information) Contact information for investor relations is provided, with John Tunison, Chief Financial Officer, as the primary contact - Contact for investor relations: John Tunison, Chief Financial Officer[31](index=31&type=chunk) - Email: ir@soluna.io[31](index=31&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR For the transition period from _____to _____ ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-40261 Soluna Holdings, Inc. (Exact name of registrant as specified in its charter) __________________ Nevada 14-1462255 State or ...

Company Developments - Soluna Holdings shares experienced a rise in early trading [1] - The company announced an expansion of its Texas site [1] - The expansion is in partnership with a "top-tier Bitcoin miner" [1]

Company Strategy & Vision - Soluna aims to drive the convergence of renewable energy and advanced computing infrastructure, converting wasted energy into value [13] - The company's business model involves sourcing low-cost curtailed power from IPPs, building and operating modular data centers (MDCs), attracting hosting customers, growing AUM & EBITDA, and expanding the project pipeline [32] - Soluna's approach tackles wasted energy through digital infrastructure, optimizing the grid, serving customers, and fueling growth to make renewable energy a superpower [31] Operational Highlights & Projects - Soluna has a 26 GW pipeline of wasted renewable energy to power its data centers [27] - The company aims to double its assets under management to 150 MW by the end of fiscal year 2024, focusing on constructing and energizing 48 MW of Project Dorothy 2 and breaking ground on Project Kati [26] - Soluna has over 478 MW of data center capacity in operation, construction, or development [63] - Project Kati has signed a PPA for 167 MW [59] - Project Rosa has a signed term sheet for 187 MW [59] Financial Performance - Soluna's revenue increased by 30% to $75 million in Q3 2024 compared to $58 million in Q3 2023 [72] - Year-to-date revenue for 2024 reached $297 million, a 172% increase compared to $109 million in 2023 [73, 77] - Year-to-date adjusted EBITDA for 2024 is $35 million, compared to a loss of $45 million in 2023 [74, 79] - Unrestricted cash increased 38% from the end of 2023, reaching $88 million [75]

Financial Performance - Q1 2025 revenue was reported at $5.9 million, reflecting a decline compared to the same period in 2024 due to market challenges and operational issues[11] - Total revenue for Q1 2025 was $5.936 million, a decrease of 52.7% compared to $12.549 million in Q1 2024[28] - 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, compared to $2.62 in Q1 2024[29] - Adjusted EBITDA for Q1 2025 was a loss of $1.6 million, a decline of $6.8 million compared to Q1 2024[15] - The company reported a significant increase in general and administrative expenses, which rose to $8.350 million in Q1 2025 from $6.397 million in Q1 2024[29] - Net loss from continuing operations for the three months ended March 31, 2025, was $7,354 million, compared to a loss of $2,544 million in the same period of 2024[36] - Adjusted EBITDA for the three months ended March 31, 2025, was $(1,648) million, down from $5,147 million in the same period of 2024[36] Assets and Liabilities - Total current assets increased to $15.758 million as of March 31, 2025, up from $13.495 million at the end of 2024[26] - Total assets rose to $90.049 million as of March 31, 2025, compared to $88.040 million at the end of 2024[26] - Total liabilities increased to $63.056 million as of March 31, 2025, compared to $60.678 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] Project 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] Financial Flexibility - Unrestricted cash increased to $9.2 million, a $1.4 million rise from December 31, 2024, indicating a strong cash position[11] - The company secured a $5 million non-dilutive debt facility with Galaxy Digital, enhancing its financial flexibility[10] Operational Changes - The termination of the HP Enterprises contract is expected to refocus the company on crypto-mining and AI data center development[6] - The company has made significant progress in simplifying its capital structure, including the full conversion of convertible loan notes and restructuring of preferred equity[5] Patent and Technology - A second utility patent was awarded in April 2025, broadening the scope of the company's modular data center technology[10]

[Glossary of Abbreviations and Acronyms](index=4&type=section&id=Glossary%20of%20Abbreviations%20and%20Acronyms) This section defines key abbreviations and acronyms used throughout the report [PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the company's unaudited financial statements and management's discussion and analysis [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the three months ended March 31, 2025, and 2024 [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section details the company's assets, liabilities, and stockholders' equity at the end of the reporting period Condensed Consolidated Balance Sheet Summary | Metric (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------- | :------------- | :---------------- | | Total Assets | $90,049 | $88,040 | | Total Liabilities | $63,056 | $60,678 | | Total Stockholders' Equity | $26,993 | $27,362 | - Total assets increased by **$2.0 million** from December 31, 2024, to March 31, 2025, primarily driven by increases in cash and restricted cash, and property, plant and equipment, net[30](index=30&type=chunk) - Total liabilities increased by **$2.4 million**, mainly due to an increase in long-term debt, partially offset by a decrease in contract liability[30](index=30&type=chunk) - Total stockholders' equity slightly decreased by **$0.4 million**, with an accumulated deficit growing from **$(314,304) thousand** to **$(321,860) thousand**[30](index=30&type=chunk) [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section presents the company's revenues, expenses, and net loss for the reporting period Consolidated Statements of Operations Summary | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Total revenue | $5,936 | $12,549 | | Total cost of revenue | $4,763 | $5,615 | | Operating (loss) income | $(7,177) | $407 | | Net loss | $(7,354) | $(2,544) | | Net loss attributable to Soluna Holdings, Inc. | $(7,556) | $(5,254) | | Basic & Diluted loss per share | $(0.88) | $(2.62) | - Total revenue decreased by **52.7% YoY**, from $12,549 thousand in Q1 2024 to $5,936 thousand in Q1 2025, primarily due to reductions in cryptocurrency mining and data hosting revenue[33](index=33&type=chunk) - The company shifted from an operating income of **$407 thousand** in Q1 2024 to an operating loss of **$(7,177) thousand** in Q1 2025[33](index=33&type=chunk) - Net loss attributable to Soluna Holdings, Inc. increased by **43.8% YoY**, from $(5,254) thousand to $(7,556) thousand[33](index=33&type=chunk) [Condensed Consolidated Statements of Changes in Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) This section details the changes in the company's equity components during the reporting period - The accumulated deficit increased from **$(314,304) thousand** at December 31, 2024, to **$(321,860) thousand** at March 31, 2025, reflecting the net loss for the period[38](index=38&type=chunk) - Common stock shares issued increased from **10,647,761** at December 31, 2024, to **12,548,786** at March 31, 2025, primarily due to SEPA draws and warrant exercises[38](index=38&type=chunk) - Additional paid-in capital increased by **$3,968 thousand**, driven by stock-based compensation and SEPA draws[38](index=38&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the cash inflows and outflows from operating, investing, and financing activities Consolidated Statements of Cash Flows Summary | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Net cash (used in) provided by operating activities | $(177) | $3,850 | | Net cash used in investing activities | $(3,640) | $(827) | | Net cash provided by (used in) financing activities | $7,812 | $(1,996) | | Increase in cash & restricted cash | $3,995 | $1,027 | | Cash & restricted cash – end of period | $14,448 | $11,394 | - Operating activities shifted from providing **$3,850 thousand** in cash in Q1 2024 to using **$(177) thousand** in Q1 2025, primarily due to a higher net loss[41](index=41&type=chunk) - Investing activities used significantly more cash in Q1 2025 (**$(3,640) thousand**) compared to Q1 2024 (**$(827) thousand**), mainly due to increased purchases of property, plant, and equipment[41](index=41&type=chunk) - Financing activities provided **$7,812 thousand** in Q1 2025, a substantial increase from using **$(1,996) thousand** in Q1 2024, driven by proceeds from new debt issuances, SEPA draws, and non-controlling interest contributions[41](index=41&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed explanations of the accounting policies and financial statement items [1. Nature of Operations](index=13&type=section&id=1.%20Nature%20of%20Operations) This note describes the company's business, its focus on renewable computing, and addresses going concern uncertainties - Soluna Holdings, Inc. (SHI) is a digital infrastructure company transforming surplus renewable energy into computing resources, focusing on **Bitcoin mining, generative AI, and high-performance computing (HPC)**[43](index=43&type=chunk) - The company faces **substantial doubt about its ability to continue as a going concern** due to net losses, negative working capital, significant debt, and outstanding commitments, including a **$19.3 million** termination liability for the HPE Agreement[47](index=47&type=chunk) - Management is pursuing various financing strategies, including stock issuances (e.g., SEPA, ATM Offering), project-level equity, debt borrowings, and partnerships, to fund operations and growth[48](index=48&type=chunk)[49](index=49&type=chunk) [2. Basis of Presentation](index=14&type=section&id=2.%20Basis%20of%20Presentation) This note outlines the accounting principles and standards used in preparing the financial statements - The condensed consolidated financial statements are unaudited and prepared in accordance with **U.S. GAAP**, reflecting all normal recurring adjustments[51](index=51&type=chunk) - Restricted cash increased from **$2.6 million** at December 31, 2024, to **$5.3 million** at March 31, 2025, held for specific purposes like debt covenants and customer deposits[56](index=56&type=chunk) - Deposits and credits on equipment totaled **$4.9 million** at March 31, 2025, including a **$780 thousand** credit restricted for future purchases for Project Dorothy 2 and Project Kati until June 1, 2025[58](index=58&type=chunk) [3. Accounts Receivable, net](index=16&type=section&id=3.%20Accounts%20Receivable,%20net) This note provides a breakdown of accounts receivable by type and details the allowance for credit losses Accounts Receivable Breakdown | (Dollars in thousands) | March 31, 2025 | December 31, 2024 | | :--------------------- | :------------- | :---------------- | | Data hosting | $1,602 | $1,385 | | Demand response service receivable | $681 | $1,159 | | Proprietary mining Coinbase receivable | $- | $37 | | Other | $325 | $356 | | Less: Allowance for expected credit losses | $(244) | $(244) | | Total | $2,364 | $2,693 | - Total accounts receivable, net, decreased from **$2,693 thousand** at December 31, 2024, to **$2,364 thousand** at March 31, 2025[62](index=62&type=chunk) - The allowance for expected credit losses remained constant at **$244 thousand** for both periods, with no current period credit provision or write-offs[62](index=62&type=chunk)[63](index=63&type=chunk) [4. Property, Plant and Equipment, net](index=16&type=section&id=4.%20Property,%20Plant%20and%20Equipment,%20net) This note details the components of property, plant, and equipment and related depreciation Property, Plant and Equipment Summary | (Dollars in thousands) | March 31, 2025 | December 31, 2024 | | :--------------------- | :------------- | :---------------- | | Construction in progress | $13,005 | $9,250 | | Total Property, Plant and Equipment, net | $49,585 | $47,283 | - Property, plant and equipment, net, increased by **$2.3 million** from December 31, 2024, to March 31, 2025, primarily due to an increase in construction in progress[65](index=65&type=chunk) - Depreciation expense was approximately **$1.5 million** for the three months ended March 31, 2025, a slight decrease from **$1.6 million** in the prior year period[65](index=65&type=chunk) [5. Intangible Assets, net](index=18&type=section&id=5.%20Intangible%20Assets,%20net) This note presents the composition of intangible assets and their amortization schedule Intangible Assets Summary | (Dollars in thousands) | March 31, 2025 | December 31, 2024 | | :--------------------- | :------------- | :---------------- | | Strategic pipeline contract | $14,847 | $17,191 | | Assembled workforce | $158 | $183 | | Patents | $287 | $246 | | Total | $15,292 | $17,620 | - Intangible assets, net, decreased by **$2.3 million** from December 31, 2024, to March 31, 2025, mainly due to amortization of the strategic pipeline contract[66](index=66&type=chunk) - Amortization expense for intangible assets was approximately **$2.4 million** for both the three months ended March 31, 2025, and 2024[66](index=66&type=chunk) - The company expects to record **$7.1 million** in amortization expense for the remainder of 2025 and **$7.9 million** in 2026[68](index=68&type=chunk) [6. Accrued Liabilities](index=18&type=section&id=6.%20Accrued%20Liabilities) This note provides a breakdown of accrued liabilities and the status of the contract liability Accrued Liabilities and Contract Liability Summary | (Dollars in thousands) | March 31, 2025 | December 31, 2024 | | :--------------------- | :------------- | :---------------- | | Total Accrued Liabilities | $6,482 | $6,785 | | Contract liability | $19,348 | $20,015 | - Total accrued liabilities decreased slightly from **$6,785 thousand** to **$6,482 thousand**, with notable changes in legal, audit, tax, and professional fees (increase) and construction fees (decrease)[69](index=69&type=chunk) - The contract liability related to the terminated HPE Agreement was reduced from **$20.0 million** at December 31, 2024, to **$19.3 million** at March 31, 2025[70](index=70&type=chunk) [7. Income Taxes](index=19&type=section&id=7.%20Income%20Taxes) This note explains the components of the income tax provision and changes in the valuation allowance - The effective income tax rate was **5.54%** for Q1 2025, down from **17.72%** in Q1 2024, primarily due to changes in the valuation allowance and estimated taxable income[71](index=71&type=chunk) - The company recognized an income tax benefit of **$425 thousand** in Q1 2025, compared to **$548 thousand** in Q1 2024[71](index=71&type=chunk) - The valuation allowance for deferred tax assets increased from **$36.8 million** at December 31, 2024, to **$40.5 million** at March 31, 2025, reflecting management's judgment on future tax consequences[74](index=74&type=chunk) [8. Debt](index=19&type=section&id=8.%20Debt) This note details the company's various debt instruments, including new loans and modifications Debt Summary | (Dollars in thousands) | March 31, 2025 | December 31, 2024 | | :--------------------- | :------------- | :---------------- | | NYDIG financing | $9,183 | $9,183 | | June 2024 secured note | $10,055 | $10,983 | | Galaxy loan | $4,550 | $- | | Equipment loan | $250 | $- | | Navitas term loan | $- | $137 | | July 2024 additional secured note | $- | $1,202 | | Total Debt | $24,038 | $21,505 | - Total debt outstanding increased from **$21.5 million** at December 31, 2024, to **$24.0 million** at March 31, 2025, primarily due to new Galaxy and Equipment loans[75](index=75&type=chunk)[76](index=76&type=chunk) - The Navitas term loan was **fully paid off** in Q1 2025, and the July 2024 Additional Secured Note was extinguished, resulting in a **$551 thousand gain on extinguishment**[94](index=94&type=chunk)[108](index=108&type=chunk) - The June 2024 secured note was modified in March 2025, making the Company a direct co-obligor and allowing conversion into common stock at **$5.00 per share**[85](index=85&type=chunk)[90](index=90&type=chunk) [9. Stockholders' Equity](index=29&type=section&id=9.%20Stockholders'%20Equity) This note describes changes in common and preferred stock, dividends in arrears, and per-share data - As of March 31, 2025, there were **12,508,045 shares of common stock outstanding**, up from 10,607,020 at December 31, 2024[134](index=134&type=chunk) - Accumulated dividends in arrears on Series A Preferred Stock totaled **$21.3 million** as of March 31, 2025, with no dividends declared since October 2022[135](index=135&type=chunk) - The Company issued approximately **1.5 million common shares** through the Standby Equity Purchase Agreement (SEPA) for **$2.0 million** in net proceeds as of March 31, 2025[139](index=139&type=chunk) - Basic and diluted loss per common share was **$(0.88)** for Q1 2025, compared to **$(2.62)** for Q1 2024, with weighted average shares outstanding increasing significantly[33](index=33&type=chunk) [10. Commitments and Contingencies](index=34&type=section&id=10.%20Commitments%20and%20Contingencies) This note outlines the company's lease liabilities, capital commitments, and ongoing litigation - The Company has operating lease liabilities totaling **$298 thousand** as of March 31, 2025, with a weighted average remaining lease term of **5.53 years**[148](index=148&type=chunk) - Contractual capital expenditure commitments for Project Dorothy 2 and Project Kati amounted to approximately **$10.4 million** as of March 31, 2025[149](index=149&type=chunk) - The NYDIG litigation continues, with an outstanding principal of **$9.2 million** and **$2.6 million** in interest and penalties as of March 31, 2025. NYDIG intends to pursue the parent company under a piercing of the corporate veil theory[155](index=155&type=chunk)[156](index=156&type=chunk) [11. Related Party Transactions](index=36&type=section&id=11.%20Related%20Party%20Transactions) This note discloses transactions and relationships with affiliated entities and company insiders - The Company has a Senior Demand Promissory Note with MeOH Power, Inc. for **$380 thousand**, fully reserved, with **$389 thousand** in principal and interest available for conversion into MeOH Power, Inc. common stock[157](index=157&type=chunk) - Several directors and officers have affiliations and ownership interests in **Harmattan Energy, Ltd. (HEL)**, a related party involved in the Soluna Callisto acquisition[163](index=163&type=chunk)[164](index=164&type=chunk)[166](index=166&type=chunk) - The Company's equity investment in HEL was **fully impaired** in fiscal year 2023 and valued at **$0** as of March 31, 2025[167](index=167&type=chunk) [12. Stock Based Compensation](index=37&type=section&id=12.%20Stock%20Based%20Compensation) This note describes the company's stock incentive plans and related compensation expense - The 2023 Stock Incentive Plan and the Third Amended and Restated 2021 Stock Incentive Plan govern stock-based awards, with shares reserved for issuance based on a percentage of outstanding common stock[168](index=168&type=chunk)[171](index=171&type=chunk) - Amendments in 2024 increased the percentage of common stock available for awards under both plans and allowed for Series A Preferred Stock awards under the 2021 Plan[173](index=173&type=chunk)[174](index=174&type=chunk) - **No awards were granted** during the three months ended March 31, 2025, or March 31, 2024[175](index=175&type=chunk) [13. Effect of Recent Accounting Updates](index=40&type=section&id=13.%20Effect%20of%20Recent%20Accounting%20Updates) This note discusses recently issued accounting standards and their potential impact on the company - **ASU 2023-09 (Income Tax Disclosures)** is effective for fiscal years beginning after December 15, 2024, requiring expanded income tax information[177](index=177&type=chunk) - **ASU 2024-01 (Stock Compensation)** clarifies the scope application of profits interest awards, effective for fiscal years beginning after December 15, 2024, but had no impact on Q1 2025 financial statements[178](index=178&type=chunk) - **ASU 2024-03 (Expense Disaggregation Disclosures)** and **ASU 2024-04 (Debt with Conversion and Other Options)** are not yet effective but are being evaluated for their potential impact[179](index=179&type=chunk)[180](index=180&type=chunk) [14. Variable Interest Entities and Voting Interest Entities](index=41&type=section&id=14.%20Variable%20Interest%20Entities%20and%20Voting%20Interest%20Entities) This note explains the consolidation of entities based on control and variable interest assessments - DVSL (Project Dorothy 1A) is consolidated as a **Voting Interest Entity (VOE)** where the Company retains control despite reduced ownership (14.6%) due to Class A membership interests and control over significant decisions[186](index=186&type=chunk)[188](index=188&type=chunk) - DVCC (Project Dorothy 1B) is consolidated as a **Variable Interest Entity (VIE)** because the Company's voting rights are not proportional to its obligation to absorb expected losses, and it directs DVCC's activities[191](index=191&type=chunk)[192](index=192&type=chunk)[193](index=193&type=chunk) - ComputeCo (Project Dorothy 2) is classified as a **VOE**, with the Company retaining control through its 100% Class A Membership Interests, despite SLC holding 88% of Class B Membership Interests[200](index=200&type=chunk)[201](index=201&type=chunk) [15. Segment Information](index=45&type=section&id=15.%20Segment%20Information) This note provides a breakdown of revenue and performance by the company's reportable segments - The Company operates three reportable segments: **Cryptocurrency Mining, Data Center Hosting, and High-Performance Computing**, with demand response revenue reported as a reconciling item[203](index=203&type=chunk)[208](index=208&type=chunk) Segment Revenue (in thousands) | Segment | Q1 2025 Revenue | Q1 2024 Revenue | | :-------------------- | :-------------- | :-------------- | | Cryptocurrency Mining | $2,999 | $6,396 | | Data Center Hosting | $2,402 | $5,278 | | High-Performance Computing Services | $28 | $- | | Demand Response Service | $507 | $875 | | **Total Revenue** | **$5,936** | **$12,549** | - Cryptocurrency mining revenue decreased by **53% YoY**, and data hosting revenue decreased by **54% YoY**, largely due to the Bitcoin halving event and a customer exit[287](index=287&type=chunk)[288](index=288&type=chunk) - High-Performance Computing Services generated minimal revenue (**$28 thousand**) in Q1 2025, following the termination of the HPE Agreement[209](index=209&type=chunk)[292](index=292&type=chunk) [16. Subsequent Events](index=49&type=section&id=16.%20Subsequent%20Events) This note discloses significant events that occurred after the balance sheet date but before the report filing - On April 29, 2025, the Company entered into an **At the Market Offering Agreement** to sell up to **$3.75 million** of common stock through H.C. Wainwright & Co., LLC[216](index=216&type=chunk) - On May 8, 2025, Nasdaq issued a **notice of non-compliance** due to the Company's common stock trading below **$1.00** for 30 consecutive business days, requiring compliance by November 4, 2025[217](index=217&type=chunk)[218](index=218&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=50&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations [Overview and Recent Developments](index=50&type=section&id=Overview%20and%20Recent%20Developments) Soluna Holdings, Inc. is a digital infrastructure company converting surplus renewable energy into computing resources - Soluna's mission is to leverage computing as a catalyst to make **renewable energy a global superpower**, bridging the gap between curtailed clean energy and the demand for energy-intensive infrastructure like AI and Bitcoin mining[223](index=223&type=chunk)[224](index=224&type=chunk) - The company's **Renewable Computing™** model involves building, owning, or co-owning data centers co-located with wind, solar, and hydroelectric plants, utilizing MaestroOS™ for operational optimization[225](index=225&type=chunk) - Key strategic initiatives for 2024 focused on **project optimization, pipeline expansion, launching into the AI market, and capital formation** to support growth projects like Dorothy 2 and Kati[236](index=236&type=chunk) [Revenue Sources](index=51&type=section&id=Revenue%20Sources) Soluna generates revenue from Bitcoin Mining, Bitcoin Hosting, HPC services, and Demand Response services - The company's revenue streams include **Bitcoin Mining** (proprietary operations), **Bitcoin Hosting** (third-party colocation), **High-Performance Computing (HPC)** for AI, and **Demand Response** services[229](index=229&type=chunk) Q1 2025 Revenue Contribution by Business Line | Business Line | % of Total Revenue (Q1 2025) | | :-------------- | :--------------------------- | | Bitcoin Mining | ~51% | | Bitcoin Hosting | ~40% | | Demand Response | ~9% | | HPC Business | Minimal | - Bitcoin mining profitability is influenced by Bitcoin price, global network hashrate, mining difficulty, and electricity costs, with a **halving event** impacting future rewards[235](index=235&type=chunk) [Operations and Project Pipeline](index=53&type=section&id=Operations%20and%20Project%20Pipeline) The company operates 75 MW across two sites with 48 MW under construction and a pipeline exceeding 2.6 GW - Soluna operates approximately **75 MW** of capacity across Project Sophie (25 MW, Bitcoin Hosting) and Project Dorothy 1A/1B (25 MW each, Bitcoin Hosting/Mining)[245](index=245&type=chunk)[246](index=246&type=chunk)[251](index=251&type=chunk)[253](index=253&type=chunk)[260](index=260&type=chunk) - **Project Dorothy 2**, a 48 MW expansion, is under construction with initial energization expected by Q2 2025, aiming for full operation by October 2025[246](index=246&type=chunk)[258](index=258&type=chunk) - The company's total project pipeline exceeds **2.6 GW**, including advanced development projects like Kati (166 MW) and Rosa (187 MW) for Bitcoin Hosting and AI/HPC[245](index=245&type=chunk)[246](index=246&type=chunk)[262](index=262&type=chunk)[263](index=263&type=chunk) - Project Dorothy participates in **ERCOT's Demand Response Services**, providing grid flexibility and diversifying revenue streams by committing to curtailment capacity[254](index=254&type=chunk)[255](index=255&type=chunk)[256](index=256&type=chunk) [Our Growth Strategy](index=56&type=section&id=Our%20Growth%20Strategy) The growth strategy focuses on expanding the data center pipeline and accelerating development through partnerships - The growth strategy centers on expanding the renewable energy data center pipeline (over **2.6 GW** potential) and accelerating development through joint ventures and strategic partnerships[264](index=264&type=chunk)[265](index=265&type=chunk) - For 2025, key initiatives include energizing **Project Dorothy 2**, commencing **Project Kati's** Bitcoin Hosting phase, developing AI infrastructure via joint ventures, optimizing existing data centers, and targeted capital formation[272](index=272&type=chunk) - The company aims to increase its operational capacity to over **200 MW** and establish its first portfolio of advanced data centers purpose-built for AI workloads[272](index=272&type=chunk) [Recent Developments](index=57&type=section&id=Recent%20Developments) Recent developments include an ATM offering, termination of the HPE agreement, and new financing arrangements - The Company entered into an **At the Market Offering Agreement** on April 29, 2025, to sell up to **$3.75 million** of common stock[267](index=267&type=chunk) - Soluna Cloud **terminated its HPE Agreement** for GPU-as-a-Service due to a significant shift in the GPU market and CloudCo's material payment breach, resulting in a **$19.3 million** termination liability[270](index=270&type=chunk)[271](index=271&type=chunk)[274](index=274&type=chunk) - The June SPA note was modified, making the Company a direct co-obligor, allowing conversion into **2.5 million common shares at $5.00**, and leading to the issuance of 1 million common shares to the investor on April 29, 2025[276](index=276&type=chunk)[279](index=279&type=chunk) - A new **$5.0 million Term Loan Facility** was secured from Galaxy Digital LLC on March 12, 2025, bearing **15.0%** interest and maturing in March 2030[280](index=280&type=chunk) - The company continues to draw on its Standby Equity Purchase Agreement (SEPA) with YA II PN, LTD., having issued approximately **1.5 million shares** for **$2.0 million** in net proceeds[281](index=281&type=chunk) - Term sheets for power have been signed for **Project Hedy (120 MW)** and **Project Ellen (100 MW)**, both new data centers co-located with wind farms in South Texas[282](index=282&type=chunk)[283](index=283&type=chunk) [Consolidated Results of Operations (unaudited)](index=60&type=section&id=Consolidated%20Results%20of%20Operations%20(unaudited)) Total revenue declined 52.7% YoY to $5.9 million, resulting in an operating loss of $(7.2) million Consolidated Results of Operations (in thousands) | Metric | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :------------------------------------ | :------ | :------ | :--------- | :--------- | | Cryptocurrency mining revenue | $2,999 | $6,396 | $(3,397) | (53)% | | Data hosting revenue | $2,402 | $5,278 | $(2,876) | (54)% | | Demand response service revenue | $507 | $875 | $(368) | (42)% | | Total revenue | $5,936 | $12,549 | $(6,613) | (53)% | | Operating (loss) income | $(7,177)| $407 | $(7,584) | (1,863)% | | Net loss attributable to Soluna Holdings, Inc. | $(7,556)| $(5,254)| $(2,302) | 44% | - Cryptocurrency mining revenue decreased by **53%** due to the Bitcoin halving event in April 2024, reducing block rewards from 119.6 Bitcoins in Q1 2024 to 32.5 Bitcoins in Q1 2025[287](index=287&type=chunk) - Data hosting revenue decreased by **54%** due to the Bitcoin halving's impact on dollar Petahash per day and the exit of a large customer in December 2024, which left 20 MW capacity to be refilled[288](index=288&type=chunk) - General and administrative expenses, exclusive of depreciation and amortization, increased by **49% to $5.9 million**, driven by higher stock-based compensation (**$1.2 million increase**) and professional fees (**$832 thousand increase** for legal and consulting)[285](index=285&type=chunk)[295](index=295&type=chunk) - Interest expense nearly doubled to **$838 thousand** in Q1 2025, primarily due to new loans (June and July SPA, Galaxy Loan, Equipment Loan)[296](index=296&type=chunk)[297](index=297&type=chunk) - A gain of **$551 thousand** on debt extinguishment and revaluation was recorded in Q1 2025, related to the fulfillment of the Assignment and Assumption Agreement for the Additional Notes[297](index=297&type=chunk) [Non-GAAP Measures](index=63&type=section&id=Non-GAAP%20Measures) Adjusted EBITDA decreased significantly to $(1.6) million in Q1 2025 from $5.1 million in Q1 2024 - **EBITDA** is defined as earnings before interest, taxes, depreciation, and amortization. **Adjusted EBITDA** further adjusts for stock-based compensation, loss on sale of fixed assets, debt extinguishment/revaluation, placement agent expense, contract loss, credit loss provision, convertible note inducement, and fixed asset impairment[304](index=304&type=chunk) EBITDA and Adjusted EBITDA (in thousands) | Metric | Q1 2025 | Q1 2024 | | :-------------------------- | :------ | :------ | | Net loss from continuing operations | $(7,354) | $(2,544) | | EBITDA | $(3,062) | $1,258 | | Adjusted EBITDA | $(1,648) | $5,147 | - Adjusted EBITDA decreased by **$6.8 million YoY**, primarily driven by a **$6.3 million decline** in cryptocurrency mining and data hosting revenue due to the Bitcoin halving and a customer ramp-up, partially offset by a **$900 thousand decline** in data hosting costs[307](index=307&type=chunk) [Liquidity and Capital Resources](index=66&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces going concern uncertainty with a working capital deficit of $(31.8) million Liquidity Indicators (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Cash | $9,161 | $7,843 | | Restricted cash | $5,287 | $2,610 | | Working capital (deficit) | $(31,802) | $(34,378) | | Total Debt | $24,038 | $21,505 | - The company had a consolidated accumulated deficit of **$321.9 million** and negative working capital of **$31.8 million** as of March 31, 2025, indicating **substantial doubt about its ability to continue as a going concern**[310](index=310&type=chunk)[313](index=313&type=chunk) - Net cash provided by financing activities was **$7.8 million** in Q1 2025, driven by **$5.0 million** in new debt, **$2.0 million** from SEPA draws, and **$4.3 million** from non-controlling interest contributions[317](index=317&type=chunk) - Capital expenditures for Project Dorothy 2 and Project Kati are committed at approximately **$10.4 million**, and a **$19.3 million** liability exists for the terminated HPE Agreement[310](index=310&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=71&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) No material changes were made to the critical accounting policies disclosed in the 2024 Annual Report - The financial statements are prepared in accordance with **U.S. GAAP**, requiring significant management estimates and judgments, particularly for revenue recognition, income taxes, fair value measurements, and stock-based compensation[325](index=325&type=chunk) - **No material changes** have occurred in the critical accounting policies since the Annual Report on Form 10-K for the year ended December 31, 2024[325](index=325&type=chunk) [Statement Concerning Forward-Looking Statements](index=71&type=section&id=Statement%20Concerning%20Forward-Looking%20Statements) This report contains forward-looking statements that involve risks and uncertainties - The report contains **forward-looking statements**, identified by words like 'anticipate,' 'estimate,' 'plans,' and 'expects,' which are subject to risks and uncertainties[326](index=326&type=chunk) - Readers should **not place undue reliance** on these statements, as actual results may differ materially due to factors such as financing availability, economic conditions, regulatory changes, and project completion risks[326](index=326&type=chunk)[327](index=327&type=chunk) - The company does not intend to update forward-looking statements to reflect actual results or changes in assumptions, except as required by applicable securities laws[327](index=327&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=72&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No quantitative and qualitative disclosures about market risk are applicable for this reporting period - The company has no applicable quantitative and qualitative disclosures about market risk for this reporting period[328](index=328&type=chunk) [Item 4. Controls and Procedures](index=72&type=section&id=Item%204.%20Controls%20and%20Procedures) This section covers management's evaluation of disclosure controls and internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=72&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025 - The CEO and CFO evaluated the effectiveness of disclosure controls and procedures as of March 31, 2025[330](index=330&type=chunk) - They concluded that the disclosure controls and procedures were **effective** at the reasonable assurance level[330](index=330&type=chunk) - Disclosure controls are designed to ensure information for SEC reports is recorded, processed, summarized, and reported timely[330](index=330&type=chunk) [Changes in Internal Control Over Financial Reporting](index=72&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) No material changes occurred in the company's internal control over financial reporting during the quarter - **No material changes** in internal control over financial reporting occurred during the fiscal quarter ended March 31, 2025[331](index=331&type=chunk) [PART II. OTHER INFORMATION](index=73&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part contains other required information, including legal proceedings, risk factors, and exhibits [Item 1. Legal Proceedings](index=73&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ongoing litigation with NYDIG regarding defaulted loans - The company is involved in ongoing legal proceedings, including a significant litigation with **NYDIG** concerning defaulted loans[333](index=333&type=chunk)[334](index=334&type=chunk) - As of March 31, 2025, the NYDIG Defendants have an outstanding principal of approximately **$9.2 million** and **$2.6 million** in interest and penalties[156](index=156&type=chunk) - NYDIG intends to pursue the parent company under a **piercing of the corporate veil theory**, which the Parent Entity denies and intends to vigorously defend[336](index=336&type=chunk) [Item 1A. Risk Factors](index=73&type=section&id=Item%201A.%20Risk%20Factors) The company received a Nasdaq non-compliance notice, risking delisting if the minimum bid price is not regained - **No material changes** have occurred to the risk factors previously disclosed in the Annual Report on Form 10-K[337](index=337&type=chunk) - The company received a **Nasdaq notice for non-compliance** with the **$1.00 minimum bid price requirement**, with a deadline of November 4, 2025, to regain compliance[338](index=338&type=chunk) - Failure to regain Nasdaq compliance could lead to **delisting**, negatively impacting stock liquidity, price, and the ability to raise capital[340](index=340&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=74&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report for the period - There were no unregistered sales of equity securities or use of proceeds to report[341](index=341&type=chunk) [Item 3. Defaults Upon Senior Securities](index=74&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report for the period - There were no defaults upon senior securities to report[341](index=341&type=chunk) [Item 4. Mine Safety Disclosures](index=74&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable to the company[341](index=341&type=chunk) [Item 5. Other Information](index=74&type=section&id=Item%205.%20Other%20Information) No officers or directors adopted or terminated Rule 10b5-1 trading arrangements during the quarter - No officers or directors adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2025[342](index=342&type=chunk) [Item 6. Exhibits](index=75&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including key agreements and certifications - Key exhibits include the At The Market Offering Agreement, Loan Agreement with Galaxy Digital, Security Agreement, Limited Guarantee Agreement, and Modification Agreement[344](index=344&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer, as required by the Sarbanes-Oxley Act of 2002, are included[344](index=344&type=chunk) - The report includes Inline XBRL Instance Document and other XBRL taxonomy extension documents for financial data[344](index=344&type=chunk)[346](index=346&type=chunk) [SIGNATURES](index=76&type=section&id=SIGNATURES) This section contains the signatures of the CEO and CFO, certifying the report filing on May 15, 2025 - The report is signed by **John Belizaire, Chief Executive Officer**, and **John Tunison, Chief Financial Officer**, on behalf of Soluna Holdings, Inc[350](index=350&type=chunk) - The filing date of the report is **May 15, 2025**[350](index=350&type=chunk)

Revenue and Growth - Revenue for FY 2024 reached $38.0 million, an increase of 80.5% compared to $21.1 million in FY 2023[7] - Total revenue in Q4 2024 was $8.3 million, a 9.9% increase from Q3 2024 revenue of $7.5 million[9] - Total revenue for Soluna Holdings, Inc. increased to $38,021,000 in 2024, up 80.5% from $21,066,000 in 2023[21] - Cryptocurrency mining revenue rose to $17,027,000, a 60.5% increase from $10,602,000 in the previous year[21] - Data hosting revenue grew by 84.5% to $18,838,000 compared to $10,196,000 in 2023[21] Financial Performance - Adjusted EBITDA for 2024 was $0.9 million, a significant improvement from a loss of $3.5 million in 2023[9] - The company reported a net loss of $58,300,000 in 2024, which is a significant increase from a net loss of $27,703,000 in 2023[21] - Operating loss for the year was $47,523,000, compared to $20,241,000 in 2023, indicating a worsening operational performance[21] - Soluna Holdings' basic and diluted loss per share was $12.15 in 2024, compared to $27.79 in 2023[21] - EBITDA for 2024 is expected to be $(42.62) million, worsening from $(12.65) million in 2023[25] Cash and Assets - Unrestricted cash grew by 23.2% to $7.8 million at the end of 2024, compared to the end of 2023[9] - Total current assets decreased to $13,495,000 in 2024 from $14,284,000 in 2023, reflecting a decline of 5.5%[19] - Cash and restricted cash at the end of the period totaled $10,453,000, slightly up from $10,367,000 in 2023[23] Liabilities and Expenses - Total liabilities increased to $60,678,000 in 2024, up from $37,917,000 in 2023, marking a 60.1% rise[19] - Selling, General & Administrative expenses increased by $3.3 million in FY 2024 due to expanded hiring and compliance costs[14] - The company reported a stock-based compensation cost of $5.31 million for 2024, up from $4.31 million in 2023[25] - Interest expense for 2024 is projected at $2.53 million, slightly down from $2.75 million in 2023[25] - Depreciation and amortization expenses are expected to rise to $15.64 million in 2024 from $13.38 million in 2023[25] Project Developments - Project Dorothy 2 is expected to increase Bitcoin hosting capacity by 64.0% to a total of 123 MW by Q4 2025[8] - Capital raised exceeded $31.5 million, including $29.2 million from Project Dorothy 2 in debt and equity[7] - The company plans to continue its market expansion efforts, focusing on new product development and technology advancements[25] Losses and Provisions - The company incurred a loss on contract amounting to $28,593,000 in 2024, which was not present in the previous year[21] - The loss on contract for 2024 is estimated at $28.59 million, with no such loss reported in 2023[25] - The company anticipates a provision for credit losses of $0.76 million in 2024, with no provision reported in 2023[25] - The loss on debt extinguishment and revaluation is projected at $7.35 million for 2024, compared to $3.90 million in 2023[25]

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 target of $600 million, contingent on continued growth in cryptocurrency usage and market conditions[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 company plans to expand its data center capacity by 50% over the next year, which is expected to enhance operational efficiency and increase overall production[35] Market Expansion - The company anticipates a 30% growth in hosted customer contracts, driven by the rising demand for data center colocation services[17] - New product offerings in the AI sector are projected to generate an additional $20 million in revenue by the end of the fiscal year, reflecting a growing market demand[30] - A new generative AI product is expected to launch in Q2 2024, with an estimated market impact of $15 million in the first year[20] Strategic Initiatives - The company is exploring strategic partnerships for grid demand response services, which could enhance revenue streams by up to 10%[22] - The company has allocated $50 million for research and development in advanced mining technologies, aiming to maintain a competitive edge in the market[30]

Core Insights - The article discusses the recent developments in the industry and their implications for companies involved [1] Group 1 - The industry is experiencing significant changes due to regulatory updates and market dynamics [1] - Companies are adapting their strategies to align with new consumer preferences and technological advancements [1] - Financial performance metrics indicate a shift in profitability trends across key players in the sector [1] Group 2 - Investment opportunities are emerging as companies innovate and diversify their product offerings [1] - Competitive pressures are increasing, leading to potential mergers and acquisitions among firms [1] - Analysts are closely monitoring the impact of global economic conditions on industry growth [1]

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 As filed with the Securities and Exchange Commission on February 3, 2025 Registration No. 333-282559 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 AMENDMENT NO. 4 TO FORM S-1 SOLUNA HOLDINGS, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Nevada 7374 14-1462255 (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification Num ...