Soluna Holdings, Inc. Announces Q3 2022 Earnings

Project Dorothy Moves to Energization Date

November 15, 2022 11:10 AM Eastern Standard Time

ALBANY, N.Y.--(BUSINESS WIRE)--Soluna Holdings, Inc. (“SHI” or the “Company”), (NASDAQ: SLNH), the parent company of Soluna Computing, Inc. (“SCI”), a developer of green data centers for cryptocurrency mining and other intensive computing, reported financial results for the third quarter ended September 30, 2022.

Michael Toporek, CEO of Soluna Holdings, Inc., said, “In the quarter, Soluna continued to execute on our business plan delivering healthy hashrate and cash contribution margins despite low BTC prices and energy market volatility. We continue to focus our resources on energizing Project Dorothy, which we expect to double our existing operating footprint. Our team is working with ERCOT to finalize the details for an energization date. Dorothy is anticipated to be one of the lowest cost facilities of its kind in North America.”

Third Quarter 2022 Financial Results

Key Financial Highlights for the third quarter include

Total revenue of $6.4 million for the three-month period ended September 30, 2022, as compared to $3.1 million for the same year-over-year period. The increase was driven primarily by an additional site operating in 2022.
BTC equivalent mined increased 12.4% from the second quarter ended June 30, 2022. Peak hashrate remained above 1 EH/s during the quarter.
Cryptocurrency mining revenue of $5.4 million for the three-month period ended September 30, 2022, as compared to $2.0 million for the same year-over-year period. Megawatts deployed increased from approximately 2 megawatts at the beginning of 2021 to 20 megawatts for the Calvert City facility and 25 megawatts for the Murray facility in 2022.
Data hosting revenue of $1.0 million for the three-month period ended September 30, 2022, as compared to $1.1 million for the same year-over-year period. Compared to one year ago, hosting revenues now exclude any component related to power costs, which are treated as a pass-through item.
General and administrative (“G&A”) expenses, excluding depreciation and amortization, totaled $5.7 million for the three-month period ended September 30, 2022 compared to $2.3 million for the three-month period ended September 30, 2021. Of the $3.4 million increase, $1.3 million was due to an increase in personnel and $1.1 million due to certain complex transactions including Dorothy and the convertible note amendments.
Net Loss for the quarter of $(55.9) million, or $(3.94) per share, for the three-month period ended September 30, 2022, as compared to a net loss of $(0.6) million, or $(0.06) per share during the same year-over-year period, and compared to a net loss of $(6.6) million, or $(0.57) per share in the second quarter. Net loss for the quarter was materially impacted by the impairment of fixed assets ($28.1 million) and a loss on extinguishment of debt ($12.3 million).
Non-GAAP Adjusted EBITDA for the quarter ended September 30, 2022 was a loss of ($3.6) million during the three-month period ended September 30, 2022.

Revenue & Contribution Margin Summary

*all numbers below exclude legacy hosting

($ in 000s, Unaudited)
		Q1 2022	Q2 2022	Q3 2022
Revenue	$13,010	$9,316	$8,676	$6,372

Cash Contribution Margin	$8,888	$5,206	$4,760	$1,194


Annualized Revenue	$13,010	$37,264	$34,704	$25,490

Annualized Contribution Margin	$8,888	$20,824	$19,042	$4,774

Dorothy Facility Update and Potential Contribution

Once the Company energizes Dorothy, anticipated to be one of the lowest cost facilities of its kind in North America, it will continue to refine the economic model of the first 50MW of this 100MW site. The table below updates a recent illustration of the earnings power of the site for current economic conditions, including current Bitcoin pricing and network hashrate.

Illustrative Monthly Earnings Power of Dorothy (Bitmain XP chips, $ in 000)

Illustrative Summary of Monthly Cash Contribution to Soluna from Dorothy

($ in 000)	100% Hosting	50% / 50%	100% Prop
Dorothy 1A
Dorothy 1B			1,127
Total		769	1,331	1,893

Note: Represents non-GAAP financial metrics and forward looking statements.

Note: Assumes $17k BTC price, 270 EH / s network hash rate, 90% capacity factor, 95% availability factor, and estimated $35 / kWh average annual power costs (including assumed seasonal demand fees and taxes). Hosting contract based on $60 / kWh fixed rate. Assumes that purchased and hosted machines are 140 Th/s Bitmain XPs.

A presentation detailing the Q3 2022 earnings can be found on the company website at www.solunacomputing.com/investors/

About Soluna Holdings, Inc (SLNH)

Soluna Holdings, Inc. is the leading developer of green data centers that convert excess renewable energy into global computing resources. Soluna builds modular, scalable data centers for computing intensive, batchable applications such as cryptocurrency mining, AI and machine learning. Soluna provides a cost-effective alternative to battery storage or transmission lines. Soluna uses technology and intentional design to solve complex, real-world challenges. Up to 30% of the power of renewable energy projects can go to waste. Soluna’s data centers enable clean electricity asset owners to ‘Sell. Every. Megawatt.’

For more information about Soluna, please visit www.solunacomputing.com or follow us on LinkedIn at linkedin.com/solunaholdings and Twitter @SolunaHoldings.

Forward Looking Statements

The statements in this press release with respect to the progress of Soluna’s development pipeline and the ability to scale the Dorothy project to assist partner organizations constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements reflect management’s current expectations, as of the date of this press release, and are subject to certain risks and uncertainties that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Actual results could differ materially from those expressed or implied by such forward-looking statements as a result of various factors, including, but not limited to: (1) those risk factors set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and other reports filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements.

Adjusted EBITDA to Net Income

(Dollars in thousands)		Three Months Ended		Nine Months Ended
	September 30,		September 30,


Net loss from continuing operations			(56,143		(79,379	(2,952
Interest expense			1,671		7,856
Income tax (benefit) expense					(1,344
Depreciation and amortization			8,388		22,999
EBITDA			(46,631		(49,867	(2,568

Adjustments: Non-cash items

Stock-based compensation costs					2,868	1,422
Loss on sale of fixed assets					2,606
Loss on debt extinguishment and revaluation			12,317		12,317
Impairment of equity investment
Impairment on fixed assets			28,086		28,836
Adjustments: Non-recurring items
Exchange registration expenses
Adjusted EBITDA			(3,600		(2,490

Reconciliation of Non-GAAP Results Reconciliation from Operating (Loss) Income to Adjusted EBITDA Contribution (Non-GAAP)

	Q3 2022
	Soluna Computing
	Edith	Marie	Sophie	Dorothy	Corporate	Total	Corporate	Consolidated
Net Income (Loss) (GAAP)		(13,229)	(20,067)	(917)	(4,617)	(38,847)	(17,296)	(56,143)

Interest							1,247	1,671
Income tax (benefit) expense					(547)	(547)		(547)
Depreciation & amortization		2,308	3,605		2,374	8,383		8,388
EBITDA		(10,497)	(16,462)	(917)	(2,790)	(30,587)	(16,044)	(46,631)

Adjustments: Non-cash items

Stock-based compensation costs
Loss on sale of fixed assets					1,012
Loss on debt extinguishment and revaluation							12,317	12,317
Impairment of equity investment
Impairment on fixed assets		10,510	17,474			27,984		28,086

Adjusted EBITDA Contribution (Non-GAAP)			1,019	(914)	(1,457)	(1,275)	(2,325)	(3,600)

Soluna Holdings, Inc. and Subsidiaries Condensed Consolidated Balance Sheets As of September 30, 2022 (Unaudited) and December 31, 2021

(Dollars in thousands, except per share)

	September 30,		December 31,

Assets
Current Assets:
		1,083		10,258
Accounts receivable		2,029
Prepaid expenses and other current assets		1,621
Deposits on equipment		1,175		10,188
Current assets associated with discontinued operations				3,028
Total Current Assets		5,908		24,982
Other assets		1,190		1,121
Equity investment
Property, plant and equipment, net		63,511		44,597
Intangible assets, net		38,842		45,839
Operating lease right-of-use assets
Total Assets		109,733		117,694

Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable		3,843		2,958
Accrued liabilities		2,477		2,859
Line of credit				1,000
Notes payable		13,281		7,121
Current portion of debt		6,462
Deferred revenue
Operating lease liability
Income taxes payable
Current liabilities associated with discontinued operations				1,243
Total Current Liabilities		27,335		15,683

Other liabilities
Long term debt		3,841
Operating lease liability
Deferred tax liability, net		8,929		10,277
Total Liabilities		40,415		26,706

Commitments and Contingencies (Note 10)

Stockholders’ Equity:
9.0% Series A Cumulative Perpetual Preferred Stock, par value $0.001 per share, $25.00 liquidation preference; authorized 6,040,000; 3,061,245 shares issued and outstanding as of September 30, 2022 and 1,252,299 shares issued and outstanding as of December 31, 2021
Series B Preferred Stock, par value $0.0001 per share, authorized 187,500; 62,500 shares issued and outstanding as of September 30, 2022 and 0 shares issued and outstanding as of December 31, 2021
Common stock, par value $0.001 per share, authorized 75,000,000; 16,413,584 shares issued and 15,395,068 shares issued and outstanding as of September 30, 2022 and 14,769,699 shares issued and 13,754,206 shares issued and outstanding as of December 31, 2021
Additional paid-in capital		273,484		227,790
Accumulated deficit		(194,409		(123,054
Common stock in treasury, at cost, 1,018,516 shares at September 30, 2022 and 1,015,493 shares at December 31, 2021		(13,798		(13,764
Total Soluna Holdings, Inc. Stockholders’ Equity		65,296		90,988
Non-Controlling Interest		4,022
Total Stockholders’ Equity		69,318		90,988
Total Liabilities and Stockholders’ Equity		109,733		117,694

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Soluna Holdings, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited) For the Three and Nine Months Ended September 30, 2022 and 2021 (Dollars in thousands, except per share)

	Three Months Ended		Nine Months Ended
	September 30,		September 30,


Cryptocurrency mining revenue		5,387		2,018	20,696	4,670
Data hosting revenue				1,106	3,668	1,106
Total revenue		6,372		3,124	24,364	5,776
Operating costs:
Cost of cryptocurrency mining revenue, exclusive of depreciation		4,100			11,092	1,272
Depreciation costs associated with cryptocurrency mining		6,010			15,872
Total cost of cryptocurrency mining revenue		10,110			26,964	1,652
Cost of data hosting revenue		1,078			3,192
Operating expenses:
General and administrative expenses, exclusive of depreciation and amortization		5,686		2,316	15,441	6,118
Depreciation and amortization associated with general and administrative expenses		2,378			7,127
Total general and administrative expenses		8,064		2,317	22,568	6,119
Impairment on equity investment
Impairment on fixed assets		28,086			28,836
Operating loss		(41,716			(57,946	(2,959
Interest expense		(1,671			(7,856
Loss on debt extinguishment and revaluation		(12,317			(12,317
Loss on sale of fixed assets					(2,606
Other income, net
Loss before income taxes from continuing operations		(56,690			(80,723	(2,949
Income tax benefit (expense) from continuing operations					1,344
Net loss from continuing operations		(56,143			(79,379	(2,952
(Loss) Income before income taxes from discontinued operations (including (loss) gain on sale of MTI Instruments of $(21) and $7,581 for three and nine months ended September 30, 2022)					7,681
Income tax benefit from discontinued operations
Net (loss) income from discontinued operations					7,751
Consolidated net loss		(56,164			(71,628	(2,452
(Less) Net loss attributable to non-controlling interest
Net loss attributable to Soluna Holdings, Inc.		(55,892			(71,356	(2,452

Basic and Diluted (loss) earnings per common share:
Net loss from continuing operations per share (Basic & Diluted)		(3.94		(0.09	(5.74	(0.27
Net income from discontinued operations per share (Basic & Diluted)
Basic & Diluted loss per share		(3.94		(0.06	(5.21	(0.23


Weighted average shares outstanding (Basic and Diluted)		14,698,013		12,702,393	14,494,356	11,413,678

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Soluna Holdings, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) For the Nine Months Ended September 30, 2022 and 2021 (Dollars in thousands)

	Nine Months Ended September 30,

Operating Activities
Net loss		(71,628	(2,452
Net income from discontinued operations (including gain on sale of MTI Instruments of $7,581 for the nine months ended September 30, 2022)		(7,751
Net loss from continuing operations		(79,379	(2,952

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		22,999
Stock-based compensation		2,747	1,373
Consultant stock compensation
Deferred income taxes		(1,344
Impairment on fixed assets		28,836
Amortization of operating lease asset
Impairment on equity investment
Loss on debt extinguishment and revaluation		12,317
Amortization on deferred financing costs and discount on notes		6,630
Loss (gain) on sale of fixed assets		2,606
Changes in operating assets and liabilities:
Accounts receivable		(1,498
Prepaid expenses and other current assets
Other long-term assets
Accounts payable			3,590
Deferred revenue
Operating lease liabilities
Other liabilities
Accrued liabilities
Net cash (used in) provided by operating activities		(5,121	2,381
Net cash provided by operating activities- discontinued operations
Investing Activities
Purchases of equipment		(61,867	(17,632
Purchases of intangible assets
Proceeds from disposal on equipment		2,525
Deposits of equipment, net		6,441	(5,656
Net cash used in investing activities		(53,015	(23,288
Net cash provided by (used in) investing activities- discontinued operations		9,004
Financing Activities
Proceeds from preferred offering		16,658	20,165
Proceeds from common stock offering			17,250
Proceeds from notes and debt issuance		29,736
Costs of preferred offering		(1,910	(1,867
Costs of common stock offering			(1,847
Costs of notes and short term debt issuance		(6,269
Cash dividend distribution on preferred stock		(3,852
Contributions from non-controlling interest		4,293
Proceeds from stock option exercises
Proceeds from common stock warrant exercises
Net cash provided by financing activities		39,588	33,635

(Decrease) increase in cash-continuing operations		(18,548	12,728
Increase in cash- discontinued operations		9,373
Cash – beginning of period		10,258	2,630
Cash – end of period		1,083	15,817

Supplemental Disclosure of Cash Flow Information
Noncash equipment financing		4,620
Interest paid on NYDIG loans		1,148
Proceed receivable from sale of MTI Instruments
Notes converted to common stock		2,441
Warrant consideration in relation to promissory notes and convertible notes		14,602
Promissory note conversion to preferred shares		15,236
Noncash proceed on sale of equipment
Purchase of miner equipment using restricted stock
Registration fees in prepaids and accounts payable

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Soluna Holdings, Inc. Announces Q3 2022 Earnings

Soluna Holdings, Inc. Announces Q3 2022 Earnings

Recommend

北邮人论坛十大_2022_11_11

Let's Prove Leftpad

从年薪80万到失业，如果我早点醒悟就好了

"Important to admit when I’m wrong" Elon Musk brings back fired employ...

一径科技宣布完成C轮融资

国内数字藏品穷途末路，百度转向海外布局NFT

SoftBank is expected to unload $215M worth of Paytm shares as lock-in ends

今天，沈南鹏和这些行业领袖组成了一个全新“零碳联盟”

Israel deploys remote-controlled robotic guns in West Bank

Apple Watch Ultra, M2 MacBook Air make Gear Patrol’s ‘Best New Products of the Y...

About Joyk