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]
SOLUNA HOLDINGS(SLNHP) - 2024 Q2 - Quarterly Report