Soluna Holdings, Inc 10-Q for FY2026 Q1
Soluna Holdings, Inc (SLNH)
10-Q
2026-05-15
For: 2026-03-31
View Original
Added on
May 17, 2026
About this 10-Q
Soluna Holdings, Inc filed this 10-Q on May 15, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).
Headline figures
Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $9.39M
- up 58.3% from $5.94M a year earlier
- Net loss
- $17.47M
- compared with a net loss of $7.56M a year earlier
- Diluted EPS
- -$0.24
- compared with -$1.21 a year earlier
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 | ||
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from _____to _____
Commission File Number: 001-40261
(Exact name of registrant as specified in its charter)
_______________________________________________________________________
| State or other jurisdiction of incorporation or organization | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices) (Zip Code)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||||||||
The | ||||||||||||||
The | ||||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | ||||||||||||||
| ☒ | Smaller reporting company | ||||||||||||||||
| Emerging growth company | |||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
As of May 12, 2026, the Registrant had 157,747,354 shares of common stock outstanding.
SOLUNA HOLDINGS, INC. AND SUBSIDIARIES
INDEX
1
Glossary of Abbreviations and Acronyms for Selected References
The following list defines various abbreviations and acronyms used throughout this Quarterly report, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, the Condensed Consolidated Financial Statements, the Condensed Notes to Consolidated Financial Statements and the Condensed Financial Statement Schedules.
This glossary covers essential terms related to Bitcoin mining, high-performance computing, Artificial Intelligence (“AI”) and related fields, providing valuable context for readers of the Form 10-Q. A number of cross-references to additional information included throughout this Quarterly Report on Form 10-Q are also utilized throughout this report, to assist readers seeking additional information related to a particular subject.
Artificial Intelligence (“AI”): The simulation of human intelligence processes by machines, especially computer systems. These processes include learning (the acquisition of information and rules for using the information), reasoning (using rules to reach approximate or definite conclusions), and self-correction. AI applications include expert systems, natural language processing, speech recognition, and machine vision.
Bitcoin: A decentralized digital currency created in 2009 by an unknown person or group of people using the name Satoshi Nakamoto. It operates on a peer-to-peer network, allowing direct transactions without intermediaries. Transactions are verified by network nodes through cryptography and recorded on a publicly distributed ledger called a blockchain.
Bitcoin Halving: An event occurring approximately every four years where the reward for mining new Bitcoin blocks is halved. This reduces the number of new Bitcoins generated by miners, impacting their profitability and potentially affecting Bitcoin’s value. Bitcoin Halving is part of Bitcoin’s deflationary monetary policy, designed to control supply.
Bitcoin Mining: The process of adding new transactions to the Bitcoin blockchain. It involves solving complex cryptographic puzzles to discover a new block, rewarding miners with transaction fees and newly created Bitcoins. This process secures and verifies transactions on the network.
Curtailment (“Curtailed” or “Curtailments”): In energy management, the reduction in electrical power supply by power plants to balance the grid or avoid excess generation. In Bitcoin mining or other computing activities, curtailment - pausing computing activities and related energy usage - can occur during peak demand periods or insufficient energy supply.
Data Center Colocation: A service where businesses can be provided with services and infrastructure such as electrical power and network connectivity for servers and other computing hardware at a third-party provider’s data center. This arrangement allows for cost savings, better infrastructure, and enhanced security compared to private data centers.
Electric Reliability Council of Texas (“ERCOT”): An independent system operator that manages the flow of electric power to more than 26 million Texas customers, representing about 90 percent of the state’s electric load. ERCOT schedules power on an electric grid that connects more than 46,500 miles of transmission lines and over 680 generation units.
Exahash (“EH/s”): A unit of computational power equal to one quintillion (10^18) hashes per second. EH/s are used to measure the hashrate of the most powerful cryptocurrency mining equipment and the overall computational power of the Bitcoin network.
Fork: A fork refers to a change or divergence in the protocol of a blockchain network. It occurs when the blockchain’s code is modified, resulting in two separate chains: one that follows the old rules and one that follows the new rules.
Generative AI: AI that can generate new content, such as text, images, or music, based on its training data. It learns from vast amounts of data to create outputs that mimic original human-generated content, often used in creative and analytical applications.
Gigawatt (“GW”): A unit of power equal to one billion watts. Often used to measure the capacity of large power plants or the power usage of large operations like data centers and industrial complexes.
Graphics Processing Unit (“GPU”)- as-a Service: The sale of GPU clusters, ranging from bare metal to turnkey solutions, which may be either owned by the Company, or leased from another company and that are housed within data
2
centers which may be owned by the Company or leased from another company, typically on a “per GPU-hour” basis, either on a reserved or on demand basis.
Grid Demand Response Services: Services provided to support the basic services of generating and delivering electricity to the grid. They help maintain power quality, reliability, and efficiency. In the context of Bitcoin mining, the use of mining facilities to provide grid stabilization services is an emerging concept.
Hashrate: The measure of computational power per second used in cryptocurrency mining. It indicates the number of hash function computations per second by a miner’s hardware, with higher hashrates implying greater efficiency and network security.
High Performance Computing (“HPC”): The use of supercomputers and parallel processing techniques for solving complex computational problems. HPC is used in fields such as scientific research, simulation, and large-scale data analysis.
Joules: A unit of energy in the International System of Units (SI). One joule is the energy transferred when one watt of power is exerted for one second. In Bitcoin mining, energy efficiency is often measured in joules per hash.
Large Language Models (“LLMs”): Advanced AI models designed to understand, generate, and respond to human language in a way that mimics human-like understanding. They are trained on vast datasets and can perform a variety of language-based tasks, such as translation, summarization, and question-answering.
Machine Learning: A subset of AI involving the creation of algorithms that can learn and make decisions or predictions based on data. It enables computers to improve their performance on a specific task with experience and data, without being explicitly programmed.
Megawatts (“MW”): A unit of power measurement equivalent to one million watts used to measure the electrical power consumption of large operations like data centers and Bitcoin mining rigs.
Mining Pool: A group of cryptocurrency miners who combine their computational resources over a network to increase their chances of finding a block and receiving rewards. The rewards are then divided among the pool participants, proportional to the amount of hashing power each contributed.
Petahash (“PH/s”): A unit of computational power equal to one quadrillion (10^15) hashes per second. It is used to measure the hashrate of extremely powerful cryptocurrency mining equipment.
Power Usage Effectiveness (“PUE”): A ratio that describes how efficiently a computer data center uses energy; specifically, how much energy is used by the computing equipment (in contrast to cooling and other overhead that supports the equipment).
3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Soluna Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
As of March 31, 2026 (Unaudited) and December 31, 2025
| (Dollars in thousands, except per share) | March 31, 2026 | December 31, 2025 | |||||||||
| Assets | |||||||||||
| Current Assets: | |||||||||||
| Cash | $ | $ | |||||||||
| Restricted cash | |||||||||||
Accounts receivable, net (allowance for expected credit losses of $ | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Loan commitment assets | |||||||||||
| Total Current Assets | |||||||||||
| Restricted cash, noncurrent | |||||||||||
| Other assets | |||||||||||
| Deposits and credits on equipment | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Intangible assets, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Financing lease right-of-use assets | |||||||||||
| Total Assets | $ | $ | |||||||||
| Liabilities and Equity | |||||||||||
| Current Liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued liabilities | |||||||||||
| Accrued interest payable | |||||||||||
| Contract termination liability | |||||||||||
| Current portion of debt | |||||||||||
| Income tax payable | |||||||||||
| Deferred revenue | |||||||||||
| Customer deposits- current | |||||||||||
| Operating lease liability | |||||||||||
| Financing lease liability | |||||||||||
| Total Current Liabilities | |||||||||||
| Other liabilities | |||||||||||
| Customer deposits- long-term | |||||||||||
| Long-term debt | |||||||||||
| Operating lease liability | |||||||||||
| Financing lease liability | |||||||||||
| Deferred tax liability, net | |||||||||||
| Total Liabilities | |||||||||||
| Commitments and Contingencies (Note 10) | |||||||||||
| Mezzanine Equity: | |||||||||||
| Placement agent warrants | |||||||||||
| Equity: | |||||||||||
Series B Preferred Stock, par value $ | |||||||||||
Common stock, par value $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
Common stock in treasury, at cost, | ( | ( | |||||||||
| Total Soluna Holdings, Inc. Stockholders’ Equity (Deficit) | |||||||||||
| Non-Controlling Interest | |||||||||||
| Total Equity | |||||||||||
| Total Liabilities, Mezzanine Equity, and Equity | $ | $ | |||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
Soluna Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
For the Three Months Ended March 31, 2026 and 2025
| (Dollars in thousands, except per share) | Three Months Ended March 31, | ||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Cryptocurrency mining revenue | $ | $ | |||||||||||||||||||||
| Data hosting revenue | |||||||||||||||||||||||
| Demand response service revenue | |||||||||||||||||||||||
| High-performance computing service revenue | |||||||||||||||||||||||
| Total revenue | |||||||||||||||||||||||
| Operating costs: | |||||||||||||||||||||||
| Cost of cryptocurrency mining revenue, exclusive of depreciation | |||||||||||||||||||||||
| Cost of data hosting revenue, exclusive of depreciation | |||||||||||||||||||||||
| Cost of high-performance computing services | |||||||||||||||||||||||
| Cost of cryptocurrency mining revenue- depreciation | |||||||||||||||||||||||
| Cost of data hosting revenue- depreciation | |||||||||||||||||||||||
| Total costs of revenue | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| General and administrative expenses, exclusive of depreciation and amortization | |||||||||||||||||||||||
| Depreciation and amortization associated with general and administrative expenses | |||||||||||||||||||||||
| Total general and administrative expenses | |||||||||||||||||||||||
| Operating loss | ( | ( | |||||||||||||||||||||
| Interest expense | ( | ( | |||||||||||||||||||||
| Gain on debt extinguishment and revaluation, net | |||||||||||||||||||||||
| Gain on sale of fixed assets | |||||||||||||||||||||||
| Fair value adjustment loss | ( | ||||||||||||||||||||||
| Other financing expense | ( | ( | |||||||||||||||||||||
| Other income, net | |||||||||||||||||||||||
| Loss before income taxes | ( | ( | |||||||||||||||||||||
| Income tax benefit, net | |||||||||||||||||||||||
| Net loss | ( | ( | |||||||||||||||||||||
| (Less) Net loss (income) attributable to non-controlling interest | ( | ||||||||||||||||||||||
| Net loss attributable to Soluna Holdings, Inc. | $ | ( | $ | ( | |||||||||||||||||||
| Basic and Diluted loss per common share: | |||||||||||||||||||||||
| Basic & Diluted loss per share | $ | ( | $ | ( | |||||||||||||||||||
| Weighted average shares outstanding (Basic and Diluted) | |||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
Soluna Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Equity
For the Year Ended December 31, 2025
And the Three Months Ended March 31, 2026 (Unaudited)
(Dollars in thousands, except per share)
| Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock | Non- Controlling Interest | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mezzanine Equity | Series A Shares | Amount | Series B Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| January 1, 2025 | $ | $ | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net (loss) income | — | — | — | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares – warrant exercise | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restricted stock units vested | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares- SEPA draws | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contribution from Non-Controlling interest | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distribution to Non-Controlling interest | — | — | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| March 31, 2025 | $ | $ | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | — | — | ( | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | - | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares – warrant exercise | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restricted stock units vested | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares-Restricted stock awards | — | — | — | — | — | ( | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares- ATM settlements | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares- Green Cloud issuance | — | — | — | — | — | ( | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contribution from Non-Controlling interest | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distribution to Non-Controlling interest | — | — | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| June 30, 2025 | $ | $ | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | — | — | ( | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares-warrant exercise | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares- July equity financing | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares – Restricted stock awards | — | — | — | — | — | ( | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares- ATM settlements | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares- SEPA draws | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Forfeiture of RSA shares | — | ( | — | — | — | ( | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Warrant issuance and revaluation | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Warrant revaluated to liability | — | — | — | — | — | — | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contribution from Non-Controlling interest | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distribution to Non-Controlling interest | — | — | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| September 30, 2025 | $ | $ | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | — | — | ( | —— | — | - | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares –warrants exercise | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restricted stock units vested | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares – Restricted stock awards | — | — | — | — | — | ( | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares- ATM settlements | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Warrant liability revalued to equity | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares- December equity offering | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of merger shares | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Warrant redemption | — | — | — | — | — | — | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Treasury share conversion | — | — | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contribution from Non- Controlling interest | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distribution to Non-Controlling interest | — | — | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| December 31, 2025 | $ | $ | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6
| Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock | Non- Controlling Interest | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mezzanine Equity | Series A Shares | Amount | Series B Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| January 1, 2026 | $ | $ | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | — | — | ( | — | — | - | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares – warrant exercise | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares-Restricted stock awards | — | — | — | — | — | ( | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of shares- Series B conversion | — | — | — | ( | — | ( | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SEPA commitment fee share issuance | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Merger shares | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Forfeiture of Restricted Stock Award shares | — | ( | — | — | — | ( | ( | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Warrant adjustment and other | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contribution from Non-Controlling interest | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distribution to Non-Controlling interest | — | — | — | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| March 31, 2026 | $ | $ | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7
Soluna Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Three Months Ended March 31, 2026 and 2025
| Three Months Ended March 31, | |||||||||||
| (Dollars in thousands) | 2026 | 2025 | |||||||||
| Operating Activities | |||||||||||
| Net loss | $ | ( | $ | ( | |||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
| Depreciation expense | |||||||||||
| Amortization expense | |||||||||||
| Stock-based compensation | |||||||||||
| Deferred income taxes | ( | ( | |||||||||
| Right of first refusal amortization gain | ( | ||||||||||
| Amortization of operating and finance lease asset | |||||||||||
| Gain on debt extinguishment and revaluation, net | ( | ||||||||||
| Amortization of deferred financing costs and discount on notes | |||||||||||
| Fair value adjustments, including SEPA | |||||||||||
| SEPA commitment cost | |||||||||||
| Gain on sale of fixed assets | ( | ||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | |||||||||||
| Prepaid expenses and other current assets | ( | ( | |||||||||
| Other long-term assets | |||||||||||
| Accounts payable | ( | ||||||||||
| Contract termination liability | ( | ||||||||||
| Deferred revenue | |||||||||||
| Operating lease liabilities | ( | ( | |||||||||
| Other liabilities and customer deposits | |||||||||||
| Accrued liabilities and interest payable | ( | ||||||||||
| Net cash used in operating activities | ( | ( | |||||||||
| Investing Activities | |||||||||||
| Purchases of property, plant, and equipment | ( | ( | |||||||||
| Purchases of intangible assets | ( | ( | |||||||||
| Proceeds from sale of property, plant, and equipment | |||||||||||
| Deposits on equipment | ( | ( | |||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Financing Activities | |||||||||||
| Proceeds from common stock warrant exercises | |||||||||||
| Proceeds from sale of common stock on SEPA | |||||||||||
| Proceeds from notes | |||||||||||
| Payments on notes and deferred financing costs | ( | ( | |||||||||
| Payments on financing lease liabilities | ( | ||||||||||
| Contributions from non-controlling interest | |||||||||||
| Distributions to non-controlling interest | ( | ( | |||||||||
| Net cash provided by financing activities | |||||||||||
| (Decrease) increase in cash & restricted cash | ( | ||||||||||
| Cash & restricted cash – beginning of period | |||||||||||
| Cash & restricted cash – end of period | $ | $ | |||||||||
| Supplemental Disclosure of Cash Flow Information | |||||||||||
| Interest paid on debt | |||||||||||
| Construction in progress included in accounts payable and accrued liabilities | |||||||||||
| Noncash deferred financing cost accrual | |||||||||||
| Noncash membership distribution accrual | |||||||||||
| Warrant adjustment | |||||||||||
| Noncash activity right-of-use assets adjustment | |||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
8
Notes to Condensed Consolidated Financial Statements (Unaudited)
1. Nature of Operations
Description of Business
Unless the context requires otherwise in these notes to the consolidated condensed financial statements, the terms “SHI,” “ the “Company,” “we,” “us,” and “our” refer to Soluna Holdings, Inc. together with its consolidated subsidiaries, “SDI” refers to Soluna Digital, Inc., “Soluna Cloud” or “Cloud” refers to Soluna Cloud, Inc., “SEI” refers to Soluna Energy, Inc., and "Soluna Wind" refers to Soluna Wind Holding, Inc.
Soluna Holdings, Inc. (“SHI”) is a digital infrastructure company that specializes in transforming surplus renewable energy into computing resources. The Company’s strategy is to operate data centers co-located with wind, solar, and hydroelectric power plants, supporting compute-intensive applications, including Bitcoin mining, generative AI, and high-performance computing (“HPC”). This approach aims to create a more sustainable grid while providing cost-effective and environmentally friendly computing solutions.
Soluna Holdings, Inc., was originally incorporated in the State of New York in 1961 as Mechanical Technology, Incorporated and reincorporated in the State of Nevada on March 24, 2021. On March 23, 2021, SHI's common stock commenced trading on The Nasdaq Stock Market LLC ("Nasdaq"). Headquartered in Albany, New York, the Company changed its name from “Mechanical Technology, Incorporated” to Soluna Holdings, Inc. on November 2, 2021. On October 29, 2021, Soluna Callisto Holdings, Inc. ("Soluna Callisto") merged into Soluna Computing, Inc. (“SCI”), a private green data center development company and subsidiary of SHI, in which SCI was subsequently sold and transferred all its assets in December 2023 to the Company. SHI currently conducts its business through its wholly owned subsidiary, Soluna Digital, Inc. (“SDI”). Additionally, SHI formed Soluna Cloud, Inc. (“Soluna Cloud”) on March 24, 2024, to operate cloud, colocation, and data hosting services related to high performance computing and AI. On April 2, 2024, SHI formed Soluna Energy, Inc. (“SEI”) to own and manage renewable energy power purchase agreements and land leases through a series of service subsidiaries. In January 2026, SHI formed Soluna Wind Holdings, Inc. to own and operate wind-powered energy generation facilities through its subsidiaries.
As of March 31, 2026, the Company has five operating sites under management. In 2021, the Company constructed a 25 MW data center and commenced operations in its Murray, Kentucky location ("Project Sophie"). The Company’s Texas site (“Project Dorothy”), located at the Briscoe wind farm, holds the potential for up to 100 MW of power generation. By June 2024, SHI had energized 50 MW of the site across two phases, Project Dorothy 1A and 1B. As of March 31, 2026, SHI holds a 14.6 % Class B membership interest in Soluna DVSL ComputeCo, LLC (“DVSL”), owner of Project Dorothy 1A, and a subsidiary of SHI holds a 100 % Class A membership interest in DVSL. Subsequent to March 31, 2026, the Company purchased the remaining 85.4 % Class B Membership Interest in DVSL and the Company now owns 100 % of the issued and outstanding membership interests in DVSL, see Note 16 for details. SHI also holds a 51 % ownership interest in Soluna DV ComputeCo, LLC (“DVCC”), owner of Project Dorothy 1B. On July 22, 2024, the Company closed financing for the 48 MW data center (the “Project Dorothy 2”). Project Dorothy 2 is financed by Soluna2 SLC Fund II Project Holdco LLC, an investment vehicle of Spring Lane Capital (“SLC”) and SDI. As of March 31, 2026, SDI has 100 % Class A membership and 0 % Class B membership interest in Project Dorothy 2. On July 22, 2025, the Company closed financing with SLC for a 35 megawatt (MW) expansion of Project Kati, a data center campus in Willacy County, Texas, with Project Kati 1, which has a capacity of 83 MW. The funds and further contributions are being used for the construction of Project Kati 1 that began in the third quarter of 2025. As of March 31, 2026, SDI has 100 % Class A membership and 13 % Class B membership interest in Project Kati 1.
2. Basis of Presentation
In the opinion of management, the Company’s condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the periods presented in accordance with United States of America’s Generally Accepted Accounting Principles (“U.S. GAAP”). The results of operations for the interim periods presented are not necessarily indicative of results for the full year or for any future period.
9
Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (“the Annual Report”).
The information presented in the accompanying condensed consolidated balance sheet as of December 31, 2025 has been derived from the Company’s audited consolidated financial statements. All other information has been derived from the Company’s unaudited condensed consolidated financial statements for the three months ended March 31, 2026 and March 31, 2025.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Company and its subsidiaries, including the Company’s variable interest entities disclosed in Note 14. All intercompany balances and transactions are eliminated in consolidation.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash and highly liquid short-term investments with original maturities of less than three months.
Restricted Cash
Restricted cash relates to cash that is legally restricted as to withdrawal and usage or is being held for a contractual purpose and thus not available to the Company for immediate or general business use. As of March 31, 2026, the Company had restricted cash of approximately $17.4 million, of which $9.5 million was classified as current and $7.9 million was classified as non-current. As of December 31, 2025, the Company had restricted cash of approximately $12.4 million, of which $4.5 million was classified as current and $7.9 million was classified as non-current. Currently, the balance in restricted cash relates to restricted deposits held with customers that were for less than 12 months, or for debt covenant purposes. The Company has a long-term restricted cash balance in relation to a collateralized deposit.
Concentration of Credit Risk
Financial instruments that subject the Company to concentrations of credit risk principally consist of cash equivalents and trade accounts receivable. The Company’s trade accounts receivable are from data hosting revenue with the Company’s customers throughout the year. The Company does not require collateral and has not historically experienced significant credit losses related to receivables from individual customers or groups of customers in any particular industry or geographic area. The Company requires that hosting customers make a prepayment of the next month’s estimated expenses or make a security deposit to the Company.
The Company has cash deposits in excess of federally insured limits but does not believe them to be at risk. The Company notes that as of March 31, 2026, the cash deposits in excess of federally insured limits was approximately $85.5 million.
Deposits on equipment
Debt Issuance Costs
Debt issuance costs consist of costs incurred in obtaining long-term financing. These costs are classified on the condensed consolidated balance sheet as a direct deduction from the carrying amount of the related debt liability and subsequently amortized as interest expense in the condensed consolidated statement of operations using the effective interest rate method.
The Company evaluates amendments to its debt instruments in accordance with ASC 470-50, Debt - Modifications and Extinguishments (“ASC 470”) to determine whether the amendment should be accounted for as a modification or an
10
extinguishment. An amendment may be considered modified when the terms of the new debt and original instrument are not “substantially different” (as defined in the debt modification guidance in ASC 470). Amendments that are considered modifications are accounted for prospectively as yield adjustments, based on the revised terms, and lender fees and costs directly incurred with third parties, to the extent material, are recorded as debt discount and amortized to interest expense using the effective interest rate method.
Loan Commitment assets
Reclassification
Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations or net assets.
3. Accounts Receivable, net
Accounts receivables consist of the following at:
| (Dollars in thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Data hosting | $ | $ | ||||||||||||
| Demand response service receivable | ||||||||||||||
| Proprietary mining Coinbase receivable | ||||||||||||||
| Other | ||||||||||||||
| Less: Allowance for expected credit losses | ( | |||||||||||||
| $ | $ | |||||||||||||
The Company’s allowance for expected credit loss was $0 at March 31, 2026 and $244 thousand at December 31, 2025, respectively. The Company wrote off approximately $244 thousand against the Company's allowance during the three months ended March 31, 2026 after determining the receivable was uncollectible.
Rollforward of Allowance of Expected Credit Losses:
| (Dollars in thousands) | January 1, 2025- March 31, 2026 | January 1, 2025 – December 31, 2025 | ||||||||||||
| Allowance for expected credit losses, beginning of period | $ | $ | ||||||||||||
| Current period credit provision | ||||||||||||||
| Write offs charged against the allowance | ( | |||||||||||||
| Recoveries collected | ||||||||||||||
| Allowance of expected credit losses, end of period | $ | $ | ||||||||||||
11
4. Property, Plant and Equipment, net
Property, plant and equipment consist of the following at:
| (Dollars in thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Land and land improvements | $ | $ | ||||||||||||
| Buildings and leasehold improvements | ||||||||||||||
| Computers and related software | ||||||||||||||
| Machinery and equipment | ||||||||||||||
| Office furniture and fixtures | ||||||||||||||
| Construction in progress | ||||||||||||||
| Less: Accumulated depreciation | ( | ( | ||||||||||||
| $ | $ | |||||||||||||
5. Intangible Assets, net
Intangible assets consist of the following as of March 31, 2026:
| (Dollars in thousands) | Intangible Assets | Accumulated Amortization | Total | |||||||||||||||||
| Strategic pipeline contract | $ | $ | $ | |||||||||||||||||
| Assembled workforce | ||||||||||||||||||||
| Patents | ||||||||||||||||||||
| Total | $ | $ | $ | |||||||||||||||||
Intangible assets consist of the following as of December 31, 2025:
| (Dollars in thousands) | Intangible Assets | Accumulated Amortization | Total | |||||||||||||||||
| Strategic pipeline contract | $ | $ | $ | |||||||||||||||||
| Assembled workforce | ||||||||||||||||||||
| Patents | ||||||||||||||||||||
| Total | $ | $ | $ | |||||||||||||||||
Amortization expense for each of the three months ended March 31, 2026 and 2025 was approximately $2.4 million and $2.4 million, respectively.
The strategic pipeline contract relates to supply of a critical input to our digital mining and hosting business. The Company has analyzed this strategic pipeline contract similar to a permit for future benefit. The strategic pipeline contract relates to potential renewable energy datacenters that fit in the alignment of the Company structure to expand operations of the Company’s new focus in their business.
12
The Company expects to record amortization expense of intangible assets over the next five years and thereafter as follows:
| (Dollars in thousands) | ||||||||
| Year | 2026 | |||||||
| 2026 (remainder of the year) | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total | $ | |||||||
6. Accrued Liabilities
Accrued liabilities consist of the following at:
| (Dollars in thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Salaries, wages, and related expenses | $ | $ | ||||||||||||
| Liability to shareholders for previous acquisition | ||||||||||||||
| Legal, audit, tax, and professional fees | ||||||||||||||
| Sales tax accrual | ||||||||||||||
| Real estate taxes accrual | ||||||||||||||
| Hosting and utility fees | ||||||||||||||
| Construction fees | ||||||||||||||
| Financing fee accrual | ||||||||||||||
| Membership distribution accrual | ||||||||||||||
| Other | ||||||||||||||
| Total | $ | $ | ||||||||||||
Contract termination liability
In June 2024, Soluna AL Cloudco, LLC (“CloudCo”), a subsidiary of Soluna Cloud, entered into an agreement (the “HPE Agreement”) with Hewlett Packard Enterprise Company (“HPE”), with an initial pre-payment of $10.3 million and a total commitment of $34 million over a 36-month period. On March 24, 2025, CloudCo notified HPE of its termination of the HPE Agreement and, on March 26, 2025, HPE notified CloudCo of its termination of the HPE Agreement for cause, effective immediately, due to CloudCo’s material breach of its payment obligations that remained uncured for more than thirty (30 ) days. The HPE Agreement provided the Company access to datacenter and cloud services for AI and supercomputing applications utilizing NVIDIA H100 GPUs. In accordance with the terms of the HPE Agreement, CloudCo was required to pay all of the unpaid fees that were payable over the entire term of the HPE Agreement. In accordance with the terms of the HPE Agreement, upon a termination for cause by HPE, CloudCo must pay HPE the remaining payment stream under the term of the HPE Agreement, including all upfront payments and monthly charges, plus any fees incurred for the terminated Services (as defined in the HPE Agreement). As of March 31, 2026, the outstanding contract liability is approximately $19.3 million. CloudCo has not made any additional payments under the HPE Agreement since CloudCo notified HPE of its termination of the HPE Agreement.
7. Income Taxes
During the three months ended March 31, 2026 and 2025 , the Company’s effective income tax rate was 3.4 % and 5.5 %, respectively. The projected annual effective tax rate is less than the Federal statutory rate of 21 %, primarily due to the change in the valuation allowance, as well as changes to estimated taxable income for 2026 and permanent differences. For the three months ended March 31, 2026 and 2025, there was a deferred income tax benefit of $632 thousand and $437
13
thousand, respectively, offset with current tax expense for the three months ended March 31, 2026 and 2025 of approximately $8 thousand and $12 thousand, respectively.
In connection with the strategic contract pipeline acquired in the acquisition as further discussed in Note 5, ASC 740-10-25-51 requires the recognition of a deferred tax impact of acquiring an asset in a transaction that is not a business combination when the amount paid exceeds the tax basis on the acquisition date. As such, the Company is required to adjust the value of the strategic contract pipeline by approximately $10.9 million at inception date, which was recorded as a deferred tax liability, and this amount will be amortized over the life of the asset. For the three months ended March 31, 2026 and 2025, the Company amortized $547
The Company provides for recognition of deferred tax assets if the realization of such assets is more likely than not to occur in accordance with accounting standards that address income taxes. Significant management judgment is required in determining the period in which the reversal of a valuation allowance should occur. The Company has considered all available evidence, both positive and negative, such as historical levels of income and future forecasts of taxable income amongst other items, in determining its valuation allowance. In addition, the Company’s assessment requires us to schedule future taxable income in accordance with accounting standards that address income taxes to assess the appropriateness of a valuation allowance which further requires the exercise of significant management judgment.
The Company believes that the accounting estimate for the valuation of deferred tax assets is a critical accounting estimate because judgment is required in assessing the likely future tax consequences of events that have been recognized in our financial statements or tax returns. The Company based the estimate of deferred tax assets and liabilities on current tax laws and rates and, in certain cases, business plans and other expectations about future outcomes. In the event that actual results differ from these estimates, or the Company adjusts these estimates in future periods, the Company may need to adjust the recorded valuation allowance, which could materially impact our financial position and results of operations. The Company has a full valuation allowance for the deferred tax assets of $41.8
8. Debt
The following table represents total debt outstanding by agreement as of March 31, 2026:
| (Dollars in thousands): | Current portion of debt | Long term debt | Total | |||||||||||||||||
| Generate loan | $ | $ | $ | |||||||||||||||||
| Green Cloud secured note | ||||||||||||||||||||
| Galaxy loan | ||||||||||||||||||||
| Equipment/ Land loan | ||||||||||||||||||||
| Total Debt | $ | $ | $ | |||||||||||||||||
The following table represents total debt outstanding by agreement as of December 31, 2025:
| (Dollars in thousands): | Current portion of debt | Long term debt | Total | |||||||||||||||||
| Generate loan | $ | $ | $ | |||||||||||||||||
| Green Cloud secured note | ||||||||||||||||||||
| Galaxy loan | ||||||||||||||||||||
| Equipment/ Land loan | ||||||||||||||||||||
| Total Debt | $ | $ | $ | |||||||||||||||||
14
The Company notes as of March 31, 2026, there is approximately $26.0 million in debt outstanding in which is made up of approximately $28.7 million in principal outstanding less approximately $2.7 million in debt issuance and discounts costs remaining to be amortized over the life of the loans. The following table represents the future minimum principal payments, which excludes potential cash sweeps, due on debt as of March 31, 2026:
| (Dollars in thousands) | ||||||||
| Year | 2026 | |||||||
| 2026 (remainder of the year) | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Total | $ | |||||||
Generate Credit Agreement
| (Dollars in thousands) | Maturity Date | Interest Rate | January 1, 2026- March 31, 2026 | September 12, 2025 – December 31, 2025 | ||||||||||||||||||||||
| Tranche A-1 | September 12, 2030 | % | $ | $ | ||||||||||||||||||||||
| Tranche A-3 | ||||||||||||||||||||||||||
| Total drawn loan | ||||||||||||||||||||||||||
| Less: principal payments | ( | ( | ||||||||||||||||||||||||
| Less: debt discount and issuance costs | ( | ( | ||||||||||||||||||||||||
| Total outstanding note | ||||||||||||||||||||||||||
| (Less) Current note outstanding | ( | ( | ||||||||||||||||||||||||
| Long-term note outstanding | $ | $ | ||||||||||||||||||||||||
On September 12, 2025, the Company caused its subsidiaries Soluna DVSL ComputeCo, LLC (“Dorothy 1A Borrower”), Soluna DVSL II ComputeCo, LLC (“Dorothy 2 Borrower”), and Soluna KK I ComputeCo, LLC (“Tranche B Borrower” and collectively with Dorothy 1A Borrower and Dorothy 2 Borrower, the “Borrowers”) to enter into a Credit and Guaranty Agreement (the “Credit Agreement”) with Generate Lending, LLC, as administrative agent and collateral agent (the “Agent”), and Generate Strategic Credit Master Fund I-A, L.P. (the “Lender”). The Credit Agreement provides for senior secured term loan commitments in an aggregate principal amount of up to $35.5 million, comprised of (i) Tranche A-1 ($5.5 million), (ii) Tranche A-3 ($11.5 million), and (iii) Tranche B ($18.5 million). In addition, the Credit Agreement permits the Borrowers to request one or more Additional Tranche Loan Commitments (as defined in the Credit Agreement), in the aggregate amount of up to $64.5 million, subject to the approval of the Lender and the Agent, for project-level financing of eligible projects. On September 12, 2025, the Borrowers borrowed approximately $12.6 million under the Credit Agreement, comprised of Tranche A-1 loans and Tranche A-3 loans, and on December 22, 2025, an additional $4.4 million was borrowed on the Tranche A-3 loan. The Company can draw upon Tranche B from September 12, 2025 until October 31, 2026, subject to the conditions set forth in the Credit Agreement. The maturity date for the Tranche A and Tranche B loans is the earlier of (i) payment of outstanding principal, interest, and fees and (ii) September 12, 2030. Additional Tranche Loan Commitments will have maturity dates as set forth in their respective amendments to the Credit Agreement. For the three months ended March 31, 2026, interest expense was $824 thousand.
Proceeds from the Credit Agreement will be used to finance, refinance, develop and construct the Company’s Dorothy 1A, Dorothy 2 and Kati data center projects, fund a debt service reserve account, and pay fees and expenses. The loans bear interest at a variable rate based on either ABR or Term SOFR, as set forth in the Credit Agreement. The applicable interest rate for SOFR loans is equal to Term SOFR plus a margin of 10.0 % per annum, and for ABR loans is equal to the ABR plus a margin of 9.0 % per annum. The Credit Agreement provides for a SOFR rate floor of 3.50 % per annum. The
15
Borrowers are required to pay a commitment fee of 1.00 % per annum on undrawn amounts of the Tranche B Loan Commitments and any Additional Tranche Loan Commitments. During the continuance of an event of default, a default rate applies equal to the otherwise applicable rate plus 2.0 % per annum.
The loans are subject to scheduled amortization, fees and prepayment premiums which will be paid through excess cash sweeps. The classification of the outstanding principal balance of the Generate loan balance into current and non-current liabilities is contingent upon management’s estimate of the future application of mandatory debt repayments. The Credit Agreement contains a mandatory prepayment provision, or “cash sweep,” requiring a percentage of free cash flow, as defined in the Credit Agreement, to be applied to principal reduction on a periodic basis. The amount expected to be prepaid via this sweep mechanism during the next twelve months is classified as current debt. This classification relies on management’s internal cash flow forecast, which incorporates assumptions regarding future operating performance, capital expenditures, and working capital needs. Assumptions include market volatility risks, which are inherently unpredictable. Because the classification is dependent upon these management estimates, the actual amount of debt paid down through the cash sweep mechanism may differ materially from the amounts classified as current liabilities. The obligations are guaranteed by certain Company subsidiaries and secured by first-priority liens on substantially all assets of the Borrowers and guarantors, including pledges of equity interests, security interests in deposit and other collateral accounts (subject to control agreements), and mortgages/deeds of trust on the relevant project sites.
The Credit Agreement contains customary representations and warranties, affirmative and negative covenants, and events of default for financings of this type. Events of default under the Credit Agreement include, among other things, non-payment of principal, interest or fees, inaccuracy of representations and warranties, breach of covenants, cross-default to certain material indebtedness, bankruptcy and insolvency, and change of control. Upon the occurrence and during the continuance of an event of default, the lenders may declare all outstanding principal and accrued but unpaid interest under the Credit Agreement immediately due and payable and may exercise the other rights and remedies provided under the Credit Agreement and related loan documents. Negative covenants in the Credit Agreement include, among other things, restrictions on the Borrowers and guarantors with respect to incurring additional indebtedness, creating liens on assets, selling assets or making fundamental changes, making restricted payments, entering into affiliate transactions, and using loan proceeds for unauthorized purposes. The Credit Agreement also restricts investments, capital expenditures, and speculative transactions, and requires that all deposit and securities accounts be subject to control agreements. Financial covenants require (i) a minimum trailing Debt Service Coverage Ratio of 1.60 :1.00 and (ii) a minimum Forward Contracted Debt Service Coverage Ratio of 1.20 :1.00, in each case as further described in the Credit Agreement. The facility also includes customary mandatory prepayment provisions. The Company has obtained a limited waiver in connection with diligence requests. As of the date of these condensed consolidated financial statements, the Company is in compliance with all covenants in relation to the Generate Credit Agreement.
On April 1, 2026, in connection with the Briscoe Project Acquisition (as defined below) as discussed in Note 16, the Company caused the Existing Borrowers and the Tranche C Borrower (collectively, the “Borrowers”) to enter into Consent and Amendment No. 1 to the Credit Agreement and Amendment No. 1 to the Pledge Agreement (the “Amendment”, and the Credit Agreement, as amended by the Amendment, the “Amended Credit Agreement”) with the Agent and the Lender. The Amendment became effective on April 1, 2026 (the “First Amendment Effective Date”).
Under the Amended Credit Agreement: (i) Tranche A-1 and Tranche A-3 loan commitments finance the Dorothy 1A Project and the Dorothy 2 Project, respectively; and (ii) Tranche B loan commitments finance the development and construction of the Kati Project.
Among other changes, the Amendment: (i) adds the Tranche C Borrower as a new borrower and guarantor; (ii) establishes Tranche C loan commitments of $12.5 million to finance the Briscoe Project Acquisition and adjusts the Tranche B loan commitments to be changed from $18.5 million to $6.0 million ; (iii) adds the Briscoe Project Company (as defined below) as a guarantor following the acquisition; and (iv) includes the Briscoe Project (as defined below) as a new project under the Amended Credit Agreement.
The Tranche C loans bear interest at a variable rate based on either ABR or Term SOFR, with margins of 8.0 % per annum for SOFR loans and 7.0 % per annum for ABR loans. They are also subject to scheduled amortization and mandatory cash sweep prepayments.
16
Green Cloud secured note
| (Dollars in thousands) | Maturity Date | Interest Rate | January 1, 2026- March 31, 2026 | January 1, 2025- December 31, 2025 | ||||||||||||||||||||||
| Term Loan and capitalized interest (excludes debt issuance cost) | June 20, 2027 | % | $ | $ | ||||||||||||||||||||||
| Less: principal and capitalized interest payments | ( | ( | ||||||||||||||||||||||||
| Less: debt discount | ( | ( | ||||||||||||||||||||||||
| Less: debt issuance costs | ( | ( | ||||||||||||||||||||||||
| Total outstanding note | ||||||||||||||||||||||||||
| (Less) Current note outstanding | ( | ( | ||||||||||||||||||||||||
| Long-term note outstanding | $ | $ | ||||||||||||||||||||||||
On June 20, 2024, pursuant to the terms and subject to the conditions of a Note Purchase Agreement (the “June SPA”) by and among (i) CloudCo, (ii) Soluna Cloud, a Nevada corporation, indirect wholly owned subsidiary of the Company, and parent of CloudCo, (iii) the Company and (iv) the accredited investor named therein (the “Investor”, and collectively the “Note Parties”), CloudCo issued to the Investor a secured promissory note in a principal amount equal to $12.5 million (the “Note”). The Note accrues interest at a rate 9 % per annum, subject to adjustment upon an event of default. The Note matures on June 20, 2027. CloudCo’s obligations under the Note will be secured by all or substantially all of CloudCo’s assets, including pursuant to a security agreement to be executed and delivered by CloudCo in favor of the Investor (the “CloudCo Security Agreement”, and together with the June SPA and the Note, the “CloudCo Agreements”).
For the three months ended March 31, 2026 and March 31, 2025, the Company incurred approximately $258 thousand and $389 thousand in interest expense in relation to the June SPA, respectively, which includes interest paid on the note and amortization of deferred financing costs.
June SPA Modification
On March 21, 2025, the Note Parties entered into a Modification Agreement (the “Modification Agreement”) to, among other things:
(i)provide for the deposit of 1,000,000 shares (the “Escrow Shares”) of the Company’s common stock, into an escrow account maintained by Northland Securities, Inc., pursuant to an escrow agreement (as further described below),
(ii)provide for the issuance to the Investor of penny warrants to purchase shares of the Company’s common stock. The number of penny warrants (exercise price at $0.01 ) shall equal $1.25 million divided by the 5-day VWAP of the Company’s common stock at time of issuance. The warrants will be issued at the time the Investor removes its lien on the property of the Company. As of November 14, 2025, the lien has not yet been removed and the warrants have not been issued,
(iii)amend the payment schedule of the Note to provide (a) for each of the six scheduled payments occurring after the earlier of the effectiveness of a registration statement for the resale of the Escrow Shares and the Conversion Shares (as defined below) or the date that the Escrow Shares and the Conversion Shares may be sold pursuant to Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), without any information requirements, the amount of principal and interest payable on such date shall be reduced by 50% (the aggregate amount of the six months of such reductions, the “Specified Amount”) and (b) if the aggregate amount of payments on the Amended Note applied from the proceeds of the sale of the Escrow Shares on or prior to the last six scheduled payments is less than the Specified Amount (such difference, the “Make Whole Amount”), than the amount of each of the remaining scheduled payments shall be increased by an amount equal to the Make Whole Amount divided by the number of remaining scheduled payments,
(iv)modify the Note such that the Note is now convertible into up to 2,500,000 shares of the Company’s common stock based (“Conversion Shares”) on a conversion price of $5.00 ,
(v)amend the Note to provide that the Company will be a direct co-obligor with CloudCo under the Note; and
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(vi)amend the SPA to allow the Company to organize or incorporate any subsidiary, over which the Company shall have voting or beneficial control, which is being formed with the intent to engage in a business or line of business substantially similar to that of Soluna Cloud or the Company, without first paying all of the principal and interest due under the Note and without first obtaining Investor’s prior written consent (collectively, the “June SPA Modification”).
The joint-and-several liability arrangement is between the Company and CloudCo. While no written agreement has been created to establish the amount that each entity agrees to pay under the obligation, the nature of the relationship is such that the Company has taken a significant role in the economics of the Notes. The Company expects to make any necessary payments on behalf of CloudCo in order to prevent default on the Notes because the Investor has a lien on all property and assets of the Company in connection with the Notes. Based on quantitative analysis performed by the Company, it was determined that the terms of the debt instrument before and after the June SPA Modification were not substantially different. Accordingly, the June SPA Modification was accounted for as a debt modification.
Subsequently, the Company and the Investor mutually agreed that the 1,000,000 Escrow Shares would instead be issued directly to the Investor and, on April 29, 2025, the Company issued 1,000,000 shares of common stock to the Investor. When the Investor sells the 1,000,000 shares in the open market (after either SEC registration effectiveness or pursuant to SEC Rule 144), the net cash proceeds from the sale of shares will be applied to the outstanding principal balance of the note up to $4.00 per share, and any excess proceeds over $4.00 per share will be retained by the Investor. The Investor had until March 31, 2026 (the “Sales Period”) to sell the 1,000,000 shares to reduce the outstanding principal balance, or would have to return the shares. Prior to March 31, 2026, the Company's Board of Directors approved an extension of the Sales Period in order to renegotiate the application of the 1,000,000 shares. As of the date of these condensed financial statements, no modification of the agreement has been made.
July 2024 Additional Secured Note
On July 12, 2024, the Company, CloudCo, Soluna Cloud, and the Investor entered into a First Amendment to the Note Purchase Agreement (the “June SPA Amendment”). This amendment allows CloudCo to issue additional secured promissory notes totaling $1.25 million (the “Additional Notes”) to new accredited investors (the “Additional Investors”). These Additional Notes are subject to the same terms and conditions as the June SPA financing.
On October 1, 2024, CloudCo, Soluna Cloud and the Company entered into assignment and assumption agreements (the “Assignment Agreements”) with the Additional Investors with respect to an aggregate of $1.25 million of notes issued by CloudCo. Pursuant to the Assignment Agreements, the Company will be able to purchase such notes for a purchase price of $750 thousand, or 60 % of face value. The assignment and assumption will be effective once all conditions of the agreement are met including fulfilling the purchase price. The notes will be paid to the note holders from an escrow that is funded in installments from the SEPA funding. The transfer is not effective until payment from the escrow is made. On March 14, 2025, the Company fulfilled the purchase obligations, and assumed the Additional Notes through payment of $750 thousand through principal and 50 % interest payments and use of 20 % SEPA funds. The Company recorded a gain on extinguishment of the July 2024 Additional Secured Notes of approximately $551 thousand for the three months ended March 31, 2025. For the three months ended March 31, 2025, the Company incurred approximately $33 thousand in interest expense in relation to the July Additional Secured Note.
Galaxy Loan
| (Dollars in thousands) | Maturity Date | Interest Rate | January 1, 2026- March 31, 2026 | March 12, 2025 – December 31, 2025 | ||||||||||||||||||||||
| Term Loan | March 12, 2030 | % | $ | $ | ||||||||||||||||||||||
| Less: principal payments | ( | ( | ||||||||||||||||||||||||
| Less: debt discount and issuance costs | ( | ( | ||||||||||||||||||||||||
| Total outstanding note | ||||||||||||||||||||||||||
| (Less) Current note outstanding | ( | ( | ||||||||||||||||||||||||
| Long-term note outstanding | $ | $ | ||||||||||||||||||||||||
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On March 12, 2025, Soluna SW LLC (the “SW Borrower”), a Delaware limited liability company and subsidiary of Soluna SW Holdings LLC (“SW Holdings”, and together with the SW Borrower, the “SW Loan Parties”), a subsidiary of SDI, a Nevada corporation and wholly owned subsidiary of Company, entered into a Loan Agreement (the “Galaxy Loan Agreement”) with SW Holdings and Galaxy Digital LLC (the “Lender”).
The Galaxy Loan Agreement provides for a term loan facility in the principal amount of $5.0 million (the “Term Loan Facility”). The Term Loan Facility bears interest at a rate of 15.0 % per annum, subject to an increase of 5.0 % (for a total of 20.0 %) in the event an Event of Default as defined within the Galaxy Loan Agreement has occurred and is continuing. The Term Loan Facility matures on March 12, 2030 and includes scheduled payments over a five-year term. For the three months ended March 31, 2026 and March 31, 2025, the Company incurred approximately $207 thousand and $42 thousand in interest expense in relation to the Term Loan Facility, which includes interest paid on the note and amortization of deferred financing costs.
The SW Borrower may voluntarily prepay all or part of the Term Loan Facility at any time together with accrued and unpaid interest on the principal amount to be prepaid up to the date of prepayment. The SW Borrower shall prepay all or part of the Term Loan Facility with 100 % of the Net Cash Proceeds (as defined therein) received upon the occurrence of (i) an Asset Sale or Casualty Event (each as defined therein), (ii) an Equity Issuance (as defined therein), (iii) an issuance or incurrence of Indebtedness (as defined therein), or (iv) an Extraordinary Receipt (as defined therein), each subject to certain exceptions. In addition, certain principal payments are subject to the payment of a premium amount equal to 50 % of the remaining amount of interest payable on such principal amount through the scheduled maturity date, if paid on or prior to the 30-month anniversary of the closing date, and 25 % of the remaining amount of interest payable on such principal amount through the scheduled maturity date, if paid after the 30-month anniversary of the closing date.
The Galaxy Loan Agreement includes certain restrictions (subject to certain exceptions outlined in the Galaxy Loan Agreement) on the ability of the SW Loan Parties and their subsidiaries to undertake certain activities, including to incur indebtedness and liens, enter into sale or lease-back transactions, merge or consolidate with other entities, dispose or transfer their assets, pay dividends or make distributions, make investments, make Restricted Payments (as defined therein), enter into burdensome agreements or transact with affiliates. In addition, the SW Loan Parties are subject to three financial covenants – a minimum debt service coverage ratio, a minimum current ratio, and cash in customer deposit account must equal or be greater than related customer liabilities. As of the date of these condensed consolidated financial statements, the Company is in compliance with all covenants in relation to the Galaxy Loan Agreement.
Equipment Loan Agreement
On May 16, 2024, SDI SL Borrowing – 1, LLC, an affiliate of the Company (the “SDI Borrower”), entered into a loan agreement (the “Equipment Loan Agreement” or the “Loan”) with Soluna2 SLC Fund II Project Holdco LLC (the “Lender”, and collectively, the “Parties”). As further amended on February 28, 2025, the Equipment Loan Agreement provides for the Company to borrow, from time to time, up to $4.0 million, to be used to purchase necessary equipment for the progression of Project Dorothy 2 and Project Kati. Any loans made under the Equipment Loan Agreement have a maturity date of May 16, 2027 and will bear interest at a rate of 15 % per annum. The Equipment Loan Agreement includes customary covenants for loans of this nature including financial reporting, monthly updates, event reporting, as well as conduct of business. In addition, the Equipment Loan Agreement contains a multiple on invested capital (“MOIC”) provision, which requires the Company to pay, in addition to principal and interest, an amount equal to the difference of (i) the greater of (a) the principal amount of the Loan being repaid plus all interest previously paid or simultaneously being paid to Lender in respect of such principal of the Loan, and (b) the principal amount of the Loan being repaid multiplied by three, minus (ii) the sum of the principal amount of the Loan being repaid plus all interest previously paid or simultaneously being paid to Lender in respect of such principal of the Loan.
Land Purchase Loan
On October 1, 2025, Soluna2 Kati Project Holdco LLC ("Kati Lender") provided the Borrower with a loan in the amount of $1.075 million under the Equipment Loan Agreement to fund the purchase of land in support of the Project Kati Phase 2 construction. Pursuant to a letter agreement between SLC and the Company, the land purchase loan bears no interest and is subject to a 1.00x MOIC, together with a right of first refusal granted to SLC. The interest free nature of the loan required the Company to record a discount for approximately $226 thousand at issuance. As of March 31, 2026 approximately $68 thousand has been amortized and recorded within Interest Expense for the three months ended March 31, 2026, resulting in a net carrying value of approximately $917 thousand.
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The Company recorded $63 thousand and $64 thousand within Prepaid expenses and other current assets as of March 31, 2026 and December 31, 2025 and $9 thousand and $25 thousand within Other assets on the consolidated balance sheet as of March 31, 2026 and December 31, 2025, of associated debt issuance costs. Approximately $16 thousand and $14 thousand in relation to the debt issuance costs have been amortized and recorded within Interest Expense for the three months ended March 31, 2026 and March 31, 2025.
9. Stockholders’ Equity
Preferred Stock
The Company has two series of preferred stock outstanding: the Series A Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”), with a $25.00 liquidation preference; and the Series B Convertible Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”). As of March 31, 2026 and December 31, 2025, there were 4,920,045 4,928,545 57,190 62,500
Series A Preferred Stock
The Series A Preferred Stock is not convertible into or exchangeable into common stock of the Company, except upon the occurrence of a delisting event or change of control. Per the Company’s Certificate of Designations, Preferences and Rights of 9.0 25.00 liquidation preference per share of Series A Preferred Stock plus the amount of any accumulated and unpaid dividends divided by the closing price of the common stock on ten consecutive trading days preceding a delisting event, or (b) the share cap of $0.2817 .
Series B Preferred Stock
On July 19, 2022, the Company entered into a Securities Purchase Agreement (the “Series B SPA”) with an accredited investor (the “Series B Investor”) pursuant to which the Company sold to the Series B Investor 62,500 shares of Series B Preferred Stock, for a purchase price of $5,000,000 . The shares of Series B Preferred Stock are initially convertible, subject to certain conditions, into 46,211 shares of common stock, at a price per share of $135.25 per share, a 20 % premium to the closing price of the common stock on July 18, 2022, subject to adjustment as set forth in the Certificate of Designations of Preferences, Rights and Limitations for the Series B Preferred Stock (“Series B Certificate of Designations”). On October 1, 2024, the Company agreed, as a condition of a waiver of the Series B Investor’s’ right of first refusal and participation rights in connection with the SEPA, to reduce the conversion price to $5.00 upon stockholder approval, which was obtained on November 15, 2024. The sale of common stock as a result of conversion of Series B Preferred Stock and exercise of 140,000 warrants that the Series B Investor held was subject to a 12-month lockup, followed by a 12 month leak out where the holder may not sell shares during the lockup period and may sell up to 1/12th of total conversion and warrant exercise shares per month during the leak out.
Effective on February 5, 2026, per the terms of the Series B Certificate of Designations and Lock-Up and Leak-Out Agreement, the conversion price was adjusted to $0.96 , and therefore can result in a conversion of 6,510,416 shares of common stock. It is noted that the conversion of shares is in a leak out period of 12 months from February 6, 2026 to February 6, 2027 in which the holder may sell up to 1/12th of total conversion and warrant exercises during such leak out period. As of March 31, 2026, 5,310 Series B shares had been converted to 553,125 shares of common stock. Subsequent to March 31, 2026, the remaining 57,190 Series B shares had been converted to 5,957,291 shares of common stock through an acceleration agreement of the leak out period.
Common Stock
The Company has one class of common stock, par value $0.001 per share. Each share of the Company’s common stock is entitled to one vote on all matters submitted to stockholders. As of March 31, 2026 and December 31, 2025, there were 111,717,040 and 102,531,089 shares of common stock outstanding, respectively.
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Dividends
Pursuant to the Certificate of Designations, Preferences and Rights of 9.0 % Series A Cumulative Perpetual Preferred Stock of the Company, dividends, when, as and if declared by the Board (or a duly authorized committee of the Board), will be payable monthly in arrears on the final day of each month, beginning August 31, 2021. The Board of Directors had not declared any Series A Preferred Stock dividends beginning October 2022 through March 31, 2026, as such the Company has accumulated approximately $29.6 million of dividends in arrears on the Series A Preferred Stock through December 31, 2025, and an additional $2.8 million of dividends in arrears for the three months ended March 31, 2026, for a total of approximately $32.4 million.
The Company’s Series B Preferred Stock included a 10 % accruing dividend compounded daily for 12 months from the original issue date of July 20, 2022, and annually thereafter, that may be paid in cash or stock at the Company’s option at the earlier of (i) the date the Series B Preferred Stock is converted, or (ii) the Series B Dividend Termination Date.
Effective October 1, 2024, the dividend payment obligation has been modified to be annual. The amendment resulted in annual dividend payments going forward. As a result of the amendment, the Company would be obligated to make annual dividend payments for the period starting from July 2023 as per the Series B Preferred Consent and Waiver, however, the board of directors has not yet declared any dividends for that period. As such, the Company has accumulated approximately $1.6 million dividends in arrears in relation to the Series B Preferred Stock through December 31, 2025 and an additional $180 thousand for the three months ended March 31, 2026, for a total of approximately $1.8 million. The dividends in arrears are included in the calculation of net loss per share as discussed below.
Standby Equity Purchase Agreement
On August 12, 2024, the Company entered into the SEPA with with YA II PN, LTD., a Cayman Islands exempt limited company (“YA”). Pursuant to the terms of the SEPA, the Company agreed to issue and sell to YA, from time to time, and YA agreed to purchase from the Company, up to $25 million of shares of the Company’s common stock (the “SEPA Shares”). On November 12, 2024, the Company filed a registration statement on Form S-1 (File No. 333-282559) with the SEC for the resale by YA of 3,000,000 SEPA Shares, which was declared effective by the SEC on February 5, 2025. During the year ended December 31, 2025, the Company has issued and sold 3.0 million shares of common stock to YA pursuant to the SEPA for aggregate net proceeds to the Company of approximately $6.2 million. No shares were issued or proceeds were received for the three months ended March 31, 2026.
On March 24, 2026, the Company entered into a Standby Equity Purchase Agreement (the “2026 SEPA”) with YA. In accordance with the terms of the 2026 SEPA, YA has agreed to purchase up to an aggregate of $250.0 million of shares of common stock (the “2026 SEPA Shares”) from time to time subject to the limits and the conditions of the 2026 SEPA. Pursuant to the 2026 SEPA, we issued to YA a commitment fee of $250 thousand through issuance of 335,976 shares of common stock (the “Commitment Shares”). The commitment fee will be recorded within Other financing expense on the condensed financial statements.
ATM Agreement
On April 29, 2025, the Company entered into the At the Market Offering Agreement ("ATM Agreement" or "ATM”) with H.C. Wainwright & Co., LLC ("Wainwright"), as sales agent, pursuant to which the Company may offer and sell, from time to time, through Wainwright, up to $87.65 million of shares of common stock. The Company will pay Wainwright a commission of 3.0 % of the aggregate gross proceeds from each sale of shares and has agreed to provide Wainwright with customary indemnification and contribution rights. During the year ended December 31, 2025, the Company sold 23,591,162 shares of common stock pursuant to the ATM Agreement for net proceeds of $34.2 million after deducting sales agent commissions and legal fees. During the three months ended March 31, 2026, no shares were issued or proceeds received under the ATM Agreement.
On March 9, 2026, the Company filed a shelf registration statement on Form S-3 (File No. 333-294152) with the U.S. Securities and Exchange Commission (the “SEC”)which was declared effective by the SEC on March 30, 2026, and the accompanying base prospectus included therein, as supplemented by the prospectus supplement, dated April 1, 2026, filed with the SEC. Based on this prospectus, the Company may offer and sell shares of the Company’s common stock having an aggregate offering price up to $500 million from time to time through Wainwright. Subsequent to March 31, 2026 and
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through the date of the issuance of these condensed financial statements, the Company has issued 36,820,572 shares of common stock pursuant to the ATM Agreement for net proceeds of approximately $52.2 million.
Reservation of Shares
The Company had reserved common shares for future issuance as follows as of March 31, 2026:
| Stock options outstanding | |||||
| Restricted stock units outstanding | |||||
| Warrants outstanding | |||||
| Series B Preferred Stock outstanding | |||||
| Number of common shares reserved | |||||
As noted above in relation to the Series B Preferred Stock, as of March 31, 2026, the Series B Preferred Stock can be converted to 6,510,416 shares of the Company’s common stock at approximately $0.96 per share. As of March 31, 2026, 553,125 shares of the Company's common stock were converted leaving an outstanding balance of 5,957,291 . Subsequent to March 31, 2026, through the date of these condensed financial statements, the remaining Series B Preferred Stock had been converted to common stock.
Loss per Share
The Company computes basic loss per common share by dividing net loss by the weighted average number of common shares outstanding during the reporting period. Diluted loss per share reflects the potential dilution, if any, computed by dividing loss by the combination of dilutive common share equivalents, comprised of shares issuable under outstanding investment rights, warrants and the Company’s share-based compensation plans, and the weighted average number of common shares outstanding during the reporting period. Dilutive common share equivalents include the dilutive effect of in-the-money stock options, which are calculated based on the average share price for each period using the treasury stock method. Under the treasury stock method, the exercise price of a stock option and the amount of compensation cost, if any, for future service that the Company has not yet recognized are assumed to be used to repurchase shares in the current period.
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The following table sets forth the reconciliation of the numerators and denominators of the basic and diluted per share computations for operations for the three months ended March 31, 2026 and March 31, 2025:
| (Dollars in thousands, except shares) | Three Months Ended March 31, | |||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| Numerator: | ||||||||||||||||||||||||||
| Net loss | $ | ( | $ | ( | ||||||||||||||||||||||
| (Less) Net income (loss) attributable to non-controlling interest | ( | |||||||||||||||||||||||||
| Net loss attributable to Soluna Holdings, Inc. | ( | ( | ||||||||||||||||||||||||
| Less: Preferred dividends or deemed dividends | ||||||||||||||||||||||||||
| Less: Cumulative Preferred Dividends in arrears | ( | ( | ||||||||||||||||||||||||
| Balance | $ | ( | $ | ( | ||||||||||||||||||||||
| Denominator: | ||||||||||||||||||||||||||
| Basic and Diluted EPS: | ||||||||||||||||||||||||||
| Common shares outstanding, beginning of period, including penny warrants and excluding restricted stock awards not vested | ||||||||||||||||||||||||||
| Weighted average common shares issued during the period including penny warrants issued and outstanding and excluding restricted stock awards not vested as of quarter-end | ||||||||||||||||||||||||||
| Denominator for basic and diluted earnings per common shares — weighted average common shares | ||||||||||||||||||||||||||
| Basic and diluted loss per share | $ | ( | $ | ( | ||||||||||||||||||||||
The Company notes as continuing operations was in a Net loss for the three months ended March 31, 2026 and 2025, as such basic and diluted EPS is the same balance as continuing operations acts as the control amount in which would cause antidilution. Not included in the computation of earnings per share, assuming dilution, for the three months ended March 31, 2026, were options to purchase 2,565 shares of the Company’s common stock, 2,465,230 nonvested restricted stock units, 26,968,251 nonvested restricted stock awards, and 22,309,840 outstanding warrants not exercised which excludes penny warrants that can be potentially exercised. These potentially dilutive items were excluded because the calculation of incremental shares resulted in an anti-dilutive effect.
Not included in the computation of earnings per share, assuming dilution, for the three months ended March 31, 2025, were options to purchase 2,645 shares of the Company’s common stock, 206,880 nonvested restricted stock units, 3,220,632 nonvested restricted stock awards, and 2,407,134 outstanding warrants not exercised which excludes penny warrants that can be potentially exercised. These potentially dilutive items were excluded because the calculation of incremental shares resulted in an anti-dilutive effect.
10. Commitments and Contingencies
Commitments:
Leases
The Company determines whether an arrangement is a lease at inception. The Company has operating and financing leases for certain land, office facilities and certain equipment. The leases have remaining lease terms of approximately two years to twenty-two years . Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
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Lease expense for these leases is recognized on a straight-line basis over the lease term. For the three months ended March 31, 2026 and March 31, 2025, total lease costs are comprised of the following:
| (Dollars in thousands) | Three Months Ended March 31, | ||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Operating lease cost | $ | $ | |||||||||||||||||||||
| Finance lease costs | |||||||||||||||||||||||
| Amortization of right of use assets | |||||||||||||||||||||||
| Interest on lease liabilities | |||||||||||||||||||||||
| Total finance lease costs | |||||||||||||||||||||||
| Total net lease cost | $ | $ | |||||||||||||||||||||
Short-term leases are leases having a term of twelve months or less. The Company recognizes short-term leases on a straight-line basis and does not record a related asset or liability for such leases.
Other information related to leases was as follows:
| Three Months Ended March 31, 2026 | |||||
| Weighted Average Remaining Lease Term (in years): | |||||
| Operating leases | |||||
| Financing leases | |||||
| Weighted Average Discount Rate: | |||||
| Operating leases | % | ||||
| Financing leases | % | ||||
| (Dollars in thousands) | Three Months Ended March 31, 2026 | Three Months Ended March 31, 2025 | |||||||||
| Supplemental Cash Flows Information: | |||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
| Operating cash flows from operating leases | $ | $ | |||||||||
| Financing cash flows from financing leases | $ | $ | |||||||||
| Non-Cash Activity Right-of-use assets obtained or adjusted in exchange for lease obligations: | |||||||||||
| Operating leases | $ | $ | |||||||||
| Financing leases | $ | ( | $ | ||||||||
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Maturities of noncancellable operating and financing lease liabilities are as follows for the quarter ending March 31:
| (Dollars in thousands) | |||||||||||||||||
| 2026 | 2026 | 2026 | |||||||||||||||
| Operating leases | Financing leases | Total | |||||||||||||||
| 2026 (remainder of year) | $ | $ | $ | ||||||||||||||
| 2027 | |||||||||||||||||
| 2028 | |||||||||||||||||
| 2029 | |||||||||||||||||
| 2030 | |||||||||||||||||
| Thereafter | |||||||||||||||||
| Total lease payments | |||||||||||||||||
| Less: imputed interest | ( | ( | ( | ||||||||||||||
| Total lease obligations | |||||||||||||||||
| Less: current obligations | ( | ( | ( | ||||||||||||||
| Long-term lease obligations | $ | $ | $ | ||||||||||||||
As of March 31, 2026, there were no additional operating or financing lease commitments that had not yet commenced.
Project Kati Commitments:
As of March 31, 2026, the Company was contractually committed for approximately $8.2 million of capital expenditures, primarily related to infrastructure builds, equipment procurement, and labor associated with the Company’s Project Kati datacenters. These capital expenditures are expected to occur over the current year.
Contingencies:
Spring Lane Capital Contingency
The Company has a potential contingency associated with an agreement with SLC of up to $250 thousand which would be reduced by a proportion of funding received from SLC up to the $45.0 million aggregate contribution cap. The Company considers the probability of a payment for the contingency to be remote.
Legal
We are subject to legal proceedings, claims and liabilities which arise in the ordinary course of business. When applicable, we accrue for losses associated with legal claims when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change. Legal fees are charged to expense as they are incurred.
11. Related Party Transactions
HEL Transactions
As discussed in the Company’s 2023 Annual Report and all agreements included as exhibits and defined within the 2023 Annual Report, on October 29, 2021, the Company completed the Soluna Callisto acquisition pursuant to the merger agreement (the “Merger Agreement”). The purpose of the transaction was for SCI to acquire substantially all of the assets (other than those assets physically located in Morocco) formerly held by Harmattan Energy, Ltd. (“HEL”), which assets consisted of SCI’s existing pipeline of certain cryptocurrency mining projects that HEL previously transferred to SCI, which was formed expressly for this purpose, and to provide SCI with the opportunity to directly employ or retain the services of four individuals whose services it had retained through HEL prior to the merger. As a result of the merger, each share of common stock of Soluna Callisto issued and outstanding immediately prior to the effective time of the merger,
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other than shares owned by the Company or any of our subsidiaries, was cancelled and converted into the right to receive a proportionate share of the Merger Consideration.
In connection with the Soluna Callisto acquisition, effective as of October 29, 2021, upon and subject to the terms and conditions of the Termination Agreement, on November 5, 2021: (1) the existing Operating and Management Agreements between HEL and SCI were terminated in all respects; and (2)(A) SCI paid HEL $725 thousand, (B) SHI issued to HEL the Termination Shares, and (C) HEL and SHI entered into an Amended and Restated Contingent Rights Agreement that, among other things, amended the existing Contingent Rights Agreement by and between HEL and SHI, dated January 13, 2020, to provide SHI the right to invest directly in certain cryptocurrency mining opportunities being pursued by HEL. SHI filed a registration statement with the SEC to register the resale of the Termination Shares on February 14, 2022.
Due to conditions being met within the Merger Agreement in relation to energization and retention of employees, the Company has advised SCI US Holdings LLC, a Delaware limited liability company, who is the sole Effective Time Holder (as defined in the Merger Agreement) of the right to receive the Merger Shares and that 19,800 Merger Shares were issued on May 26, 2023, 39,600 Merger Shares were issued on October 10, 2023, and 17,820 Merger Shares were issued on October 8, 2025. On February 6, 2026, the Company issued an additional 10,692 Merger Shares, due to the 18 MW of energization being met. SCI US Holdings LLC has consented to the issuance of such Merger Shares as required under the Merger Agreement and has directed the Company to issue such Merger Shares to its affiliate, HEL. Following the issuance of the 87,912 Merger Shares, a total of 30,888 Merger Shares remains available for possible issuance through October 29, 2026 pursuant to the terms of the Merger Agreement as of March 31, 2026.
Four of the Company’s directors have various affiliations with HEL. The Company notes that the only transaction with HEL for the year ended December 31, 2025 and three months ended March 31, 2026 was in relation to the issuance of Mergers Shares noted above.
12. Stock Based Compensation
The Company currently issues awards under the Soluna Holdings, Inc. Third Amended and Restated 2021 Stock Incentive Plan, as amended (the “2021 Plan”), and the Soluna Holdings, Inc. Amended and Restated 2023 Stock Incentive Plan, as amended (the “2023 Plan”). There were no amendments to the 2021 Plan or the 2023 Plan during the three months ended March 31, 2026. For further details regarding our stock-based compensation plans and the methods and assumptions used in the determination of the fair value of stock-based awards, refer to our Annual Report on Form 10-K filed with the SEC on March 30, 2026.
During the three months ended March 31, 2026, the Company did not grant any awards under the 2021 Plan.
During the three months ended March 31, 2026, the Company awarded the following under the 2023 Plan:
| Award Type | Number of Awards | Fair Value/Closing Market Price at Grant | ||||||||||||
| Restricted Stock Awards – Common Stock | $ | |||||||||||||
| Restricted Stock Units – Common Stock | $ | |||||||||||||
| Restricted Stock Units – Common Stock | $ | |||||||||||||
| Restricted Stock Units – Common Stock | $ | |||||||||||||
| Restricted Stock Units – Common Stock | $ | |||||||||||||
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13. Effect of Recent Accounting Updates
Accounting Updates Effective for fiscal year 2026
Changes to U.S. GAAP are established by the Financial Accounting Standards Board (the “FASB”) in the form of accounting standard updates (“ASUs”) to the FASB’s Accounting Standards Codification (“ASC”). The Company considered the applicability and impact of all ASUs. ASUs not mentioned below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations.
Debt with Conversion and Other Options
In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2024-04, Debt - Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. ASU 2024-04 clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion to improve relevance and consistency. The new standard is effective for the Company for its annual periods beginning after December 15, 2025 and interim periods within those annual reporting periods, with early adoption permitted. The Company notes that the adoption of this guidance did not have an impact on its condensed financial statements, and the Company will review any new debt agreements with conversion options.
Measurement of Credit Losses for Accounts Receivable and Contract Assets
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments provide a practical expedient and, if applicable, an accounting policy election to simplify the measurement of credit losses for certain receivables and contract assets. The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in any interim or annual period in which financial statements have not yet been issued or made available for issuance. The Company has adopted this amendment and did not have impact on its financial position, results of operations, or cash flows.
Accounting Updates Not Yet Effective
Improvements to Comprehensive Income- Expense Disaggregation
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). ASU 2024-03 requires, in the notes to the financial statements, disclosures of specified information about certain costs and expenses specified in the updated guidance. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact the updated guidance will have on its disclosures.
Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity
In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity. The amendments provide guidance on identifying the accounting acquirer in transactions involving a variable interest entity. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual periods. Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company is currently
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evaluating the impact of this amendment and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flows.
14. Variable Interest Entities
On January 26, 2022, DVSL was created in order to construct, own, operate and maintain data centers in order to support the mining of cryptocurrency assets, batch processing and other non-crypto related activities (collectively, the “Project”). On May 3, 2022, the Company entered into a Bilateral Master Contribution Agreement (the “Bilateral Contribution Agreement”) with Spring Lane Capital, pursuant to which Spring Lane agreed, pursuant to the terms and conditions of such agreement, to make one or more capital contributions to, and in exchange for equity in, the Company or one of its subsidiaries up to an aggregate amount of $45 million, as amended in the third quarter of fiscal year 2024 to fund certain projects to develop green data centers co-located with renewable energy assets (the “Spring Lane Commitment”).
On August 5, 2022, the Company entered into a Contribution Agreement (the “Dorothy Contribution Agreement”) with Spring Lane, Soluna DV Devco, LLC (“Devco”), an indirect wholly owned subsidiary of the Company, and DVSL an entity formed in order to further the Company’s development for Project Dorothy, (each, a “Party” and, together, the “Parties”). Pursuant to the Dorothy Contribution Agreement, the Company committed to a capital contribution of up to approximately $26.3 million to DVSL (the “Company Commitment”), and on August 5, 2022, the Company was deemed to have contributed approximately $8.1 million, through payment of capital expenditures and development costs made on behalf of DVSL by the Company prior to August 5, 2022. Further under the Agreement, Spring Lane committed to a capital contribution of up to $12.5 million to DVSL (the “Spring Lane Dorothy Commitment”). Under the Dorothy Contribution Agreement, the Company and Spring Lane have committed to make subsequent contributions, up to their respective Company Commitment and Spring Lane Dorothy Commitment amounts, on a pro rata basis, upon receipt of a contribution request from DVSL, as set forth in the Dorothy Contribution Agreement and subject to the satisfaction of certain conditions described therein. The proceeds of any subsequent commitments will be applied to pay project costs in accordance with the project budget.
In exchange for their contributions, the Company and Spring Lane were issued 67.8 % and 32.2 % of the Class B Membership Interests in DVSL, respectively, and were admitted as Class B members of DVSL. Further pursuant to the Dorothy Contribution Agreement, DVSL issued 100 % of its Class A Membership Interests to Devco.
The Company evaluated this legal entity under ASC 810, Consolidations and determined that DVSL is a variable interest entity (“VIE”) that should be consolidated into the Company, with a non-controlling interest recorded to account for Spring Lane’s equity ownership of the Company. The Company has a variable interest in DVSL. The entity was designed by the Company to create an entity for outside investors to invest in specific projects. The creation of this entity resulted in the Company, through its equity interest in DVSL, absorbing operational risk that the entity was created to create and distribute, resulting in the Company having a variable interest in DVSL.
On March 10, 2023, the Company along with Devco, and DVSL, a Delaware limited liability company (the “Project Company”) entered into a Purchase and Sale Agreement (the “Purchase and Sale Agreement”) with Soluna SLC Fund I Projects Holdco, LLC, a Delaware limited liability company (“Spring Lane”) that is wholly owned indirectly by Spring Lane Management LLC. The Project Company was constructing a data center with a peak demand of 25 MW (the “Dorothy Phase 1A Facility”).
Under a series of transactions in February 2023 and March 2023, culminating in the March 10, 2023 Purchase and Sale Agreement, the Company sold to Spring Lane certain Class B Membership Interests for a purchase price of $7.5 million (the “Sale”). After giving effect to the Sale, the Company owned 6,790,537 Class B Membership Interests (constituting 14.6 % of the Class B Membership Interests) and Spring Lane owns 39,791,988 Class B Membership Interests (constituting 85.4 % of the Class B Membership Interests). The cash portion of the purchase price paid by Spring Lane to the Company was approximately $5.8 million, which represented the purchase price of $7.5 million less the Company’s pro rata share of certain contributions funded entirely by Spring Lane in the earlier portion of this series of transactions occurring during February 2023 and March 2023. As a further part of these transactions, the parties agreed that from January 1, 2023 onwards, the Company would bear only 14.6 % of the costs relating to the construction and operation of the Dorothy Phase 1A Facility, compared to its 67.8 % share until that time, including during the calendar year 2023. After Spring Lane Capital realizes an 16 % Internal Rate of Return hurdle on its investments, the Company retains the right to 50 % of the profits on DVSL. In connection with the Spring Lane transactions and agreements, Soluna DV Services, LLC. will be providing the operations and maintenance services to DVSL.
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Concurrently with the Sale, the Company, Spring Lane, Devco and the Project Company entered into (a) the Fourth Amended and Restated Limited Liability Company Agreement of the Project Company, dated as of March 10, 2023 (the “Fourth A&R LLCA”), an amendment and restatement of the Third Amended and Restated Limited Liability Company Agreement of the Project Company dated as of March 3, 2023, and (b) the Amended and Restated Contribution Agreement, dated as of March 10, 2023 (the “A&R Contribution Agreement”), an amendment and restatement of the Contribution Agreement dated as of August 5, 2022. The Fourth A&R LLCA provides for certain updates in respect of Spring Lane’s majority ownership. The A&R Contribution Agreement reflects updated pro rata member funding percentages as a result of the Sale as well as updated contribution caps for each of the Company and Spring Lane.
As of January 1, 2023, there were no changes in the Limited Liability Agreement of DVSL other than those related to incorporating the new investment and the purpose and design of DVSL has not changed. The Company evaluated this legal entity under ASC 810, Consolidations and determined that this entity is a VIE, as the equity holders as a group do not have the characteristics of a controlling financial interest. Even though SLC has a significant portion of the Class B membership, the Company holds all the Class A membership, which gives them the ability to control the significant decisions made in the ordinary course of business. The Company has the right to receive benefits that could potentially be significant to the VIE through its Class A membership interest, as it is eligible to receive 50.0 % of distributions upon SLC obtaining a specified internal rate of return. The non-controlling shareholders do not hold substantive participating rights, voting rights or liquidation rights. Effective January 1, 2023, the Company’s ownership in DVSL was reduced from 67.8 % to 14.6 %; see above for details.
In September 2025, the Company agreed to terms of a debt facility with Generate under a Credit and Guarantee Agreement, as discussed in Note 8. Several events occurred in connection with the debt facility, [1] the Company completed a restructuring of the subsidiaries that comprise “Project Dorothy 1A” and “Project Dorothy 2” (herein referred to as the “Dorothy Restructuring”), [2] Soluna DVSL ComputeCo LLC, Soluna DVSL II ComputeCo LLC, and Soluna KK I ComputeCo LLC entered into a First Priority Leasehold Deed of Trust (the “Deed of Trust”) with Generate which provides Generate with the power of sale and right of entry and possession of the Trust Property.
Following the Dorothy Restructuring, Project Dorothy 1A consists of Soluna DVSL JVCo, LLC (“DVSL JVCo”), which has Class A units owned by SDI and Class B units owned by SLC (Soluna SLC Fund I). DVSL JVCo is then the sole parent of Soluna DVSL HoldCo, LLC (“DVSL HoldCo”), which holds 100 % of the Class A units in DVSL. The Class B units of DVSL ComputeCo are held by the Company. The total ownership of Project Dorothy 1A remains such that the Developer holds all Class A units and that SLC holds 85.4 % of Class B units with the Company holding the remaining 14.6 % of Class B units.
The Company noted that 1) there is no substantive change to the ascending view of the organizational chart since the Company (through SDI and newly created DVSL JVCo and DVSL ComputeCo) beneficially own the Class A units (i.e., managing units) of DVSL and 2) there are no substantive kick-out rights that exist within Project Dorothy 1A that would cause SDI to not have the ability to direct the activities that most significantly impact the economic performance of DVSL. In addition, the entity’s obligation to absorb losses and right to receive benefits has not changed. As such, Soluna would continue to consolidate the entity since a change in control has not occurred following the execution of Generate Credit Agreement and Deed of Trust.
On April 15, 2026, SDI purchased SLC's 85.4 % Class B membership interests of DVSL JVCo, and as of such date the Company held 100 % of the membership interests of DVSL JVCo. See Note 16 for further details.
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The carrying amount of the assets and liabilities was as follows for DVSL JVCo:
| (Dollars in thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Current assets: | ||||||||||||||
| Cash and restricted cash | $ | $ | ||||||||||||
| Accounts receivable, net | ||||||||||||||
| Other receivable, related party | ||||||||||||||
| Prepaid expenses and other current assets | ||||||||||||||
| Total current assets | ||||||||||||||
| Other assets, related party | ||||||||||||||
| Operating lease right-of-use assets | ||||||||||||||
| Deposits on equipment | ||||||||||||||
| Property, plant and equipment, net | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| Current liabilities: | ||||||||||||||
| Due to intercompany | $ | $ | ||||||||||||
| Accrued liabilities | ||||||||||||||
| Income tax payable | ||||||||||||||
| Current portion of debt | ||||||||||||||
| Customer deposits | ||||||||||||||
| Operating lease liability | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Operating lease liability | ||||||||||||||
| Long term debt | ||||||||||||||
| Customer deposits- long term | ||||||||||||||
| Other liabilities, related party | ||||||||||||||
| Total liabilities | $ | $ | ||||||||||||
On May 9, 2023, the Company’s indirect subsidiary DVCC completed a strategic partnership and financing with a special purpose vehicle, Navitas West Texas Investments SPV, LLC, (“Navitas”) organized by Navitas Global, to complete the second phase of the Dorothy Project (“Dorothy 1B”). Under a Contribution Agreement among the parties, the Company owned a substantially complete 25MW data center under construction, in which the Company had contributed capital expenditures for the data center. Soluna and Navitas amended and restated the Initial LLCA (the “Existing LLCA”) to reflect Navitas’ contribution of $4.5 million and its receipt of 4,500 Membership Interests, constituting 26.5 % of the outstanding Membership Interests of DVCC. On June 2, 2023, Soluna and Navitas amended and restated the Existing LLCA to (a) reflect (i) Navitas’s additional capital contribution of approximately $7.6 million and receipt of an additional 7,597 Membership Interests, for a total of 12,097 Membership Interests and 49 % ownership of DVCC, and (ii) Soluna’s additional capital contribution of $1.34 million and receipt of an additional 1,340 Membership Interests, for a total of 12,590 Membership Interests and 51 % ownership of DVCC, and (b) describe the respective rights and obligations of the Members and the management of DVCC. As of March 31, 2026, Navitas owns 49 % and Soluna owns 51 % of DVCC.
The Company evaluated this legal entity under ASC 810, Consolidations and determined that DVCC is a VIE that should be consolidated into the Company, with a non-controlling interest recorded to account for Navitas’ equity ownership of DVCC. The Company has a variable interest in DVCC. The entity was designed by the Company to create an entity for outside investors to invest in specific projects. The creation of this entity resulted in the Company, through its equity interest in DVCC, absorbing operational risk that the entity was created to create and distribute, resulting in the Company having a variable interest in DVCC.
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DVCC is a VIE of the Company due to DVCC being structured with non-substantive voting rights. This is due to the following two factors being met as outlined in ASC 810-10-15-14 that require the VIE model to be followed.
a.The voting rights of the Company are not proportional to their obligation to absorb the expected losses of the legal entity. The Company gave Navitas veto rights over significant decisions, which resulted in Soluna having fewer voting rights relative to their obligation to absorb the expected losses of the legal entity.
b.Substantially all of DVCC’s activities are conducted on behalf of the Company, which has disproportionally fewer voting rights.
Also, the Company is the primary beneficiary due to having the power to direct the activities of DVCC that most significantly impact the performance of DVCC due to its role as the manager handling the day-to-day activities of DVCC as well as majority ownership and the obligation to absorb losses or gains of DVCC that could be significant to the Company.
Accordingly, the accounts of DVCC are consolidated in the accompanying financial statements.
The carrying amount of the VIE’s assets and liabilities was as follows for DVCC:
| (Dollars in thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Current assets: | ||||||||||||||
| Cash and restricted cash | $ | $ | ||||||||||||
| Accounts receivable | ||||||||||||||
| Prepaid expenses and other current assets | ||||||||||||||
| Other receivable, related party | ||||||||||||||
| Total current assets | ||||||||||||||
| Other assets, related party | ||||||||||||||
| Operating lease right-of-use assets | ||||||||||||||
| Property, plant and equipment, net | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| Current liabilities: | ||||||||||||||
| Due to intercompany | $ | $ | ||||||||||||
| Accounts payable | ||||||||||||||
| Accrued liabilities | ||||||||||||||
| Operating lease liability | ||||||||||||||
| Customer deposits | ||||||||||||||
| Income tax payable | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Operating lease liability | ||||||||||||||
| Total liabilities | $ | $ | ||||||||||||
On July 22, 2024 (the “Effective Date”), SHI closed financing for the Dorothy 2 project. This project involves Soluna Digital, Inc. (the “Developer”) and Soluna DVSL II ComputeCo, LLC (“DVSL II”), a special purpose vehicle initially owned solely by the Developer. They are collaborating on the development, design, procurement, and construction of a 48 MW data center (the “Project Dorothy 2”) in Silverton, Texas. This facility is owned by DVSL II and operated by Soluna US Services, LLC, and may engage in cryptocurrency, batch processing, and other non-crypto related activities. It is adjacent to two other company data center projects at the same site.
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Project Dorothy 2 is financed by Soluna2 SLC Fund II Project Holdco LLC, an investment vehicle of SLC with a capital contribution of up to $29.98 million, and the Developer, as the parent company of DVSL II, with an initial capital contribution of up to $4.6 million. As of the Effective Date, the Company and the Developer became co-owners of DVSL II. In exchange for contributions to DVSL II, the Company and SLC were initially issued 42 % and 58 % of the Class B Membership Interests in DVSL II respectively, and were admitted as Class B members of DVSL II. Further, DVSL II issued 100 % of its Class A Membership Interests to SDI. In relation to distributions, once ERCOT Achievement Date has been met ( date on which SLC and the Company have mutually agreed upon the parameters for power trading or demand response program in the ERCOT market) until the Target Return Date (last day of quarter in which the Class B members achieve an 18 % internal rate of return), the Class A members will obtain 7.5 % of the distributable cash with the remaining 92.5 % being distributed to the Class B members on a pro-rata basis. After the Target Return Date is met, 50 % of distributable cash will be allocated to the Class A members and 50 % allocated to the Class B members in accordance with their membership interests.
Project Dorothy 2 allows the Developer to invest in DVSL II, with the total ownership of the Developer and its affiliates capped at 49 % of the Class B Membership Interests. This investment can occur within 30 days after the Effective Date (treated equally to the initial Investor), from day 31 to 180 days after the Effective Date (subject to a purchase price formula with a 20 % discount rate), or after 180 days with the initial Investor’s approval.
On May 16, 2024, the Company secured $1.0 million in financing from SLC for equipment and machinery for Project Dorothy 2 through an Equipment Loan Agreement (the “ELA”) between SDI SL Borrowing - 1, LLC (the “Borrower”) and SLC. On that date, SLC lent the Borrower $720,000 to purchase medium voltage cables and low voltage switchboards. This debt was later assigned to DVSL II on the Effective Date. Subsequently, the borrowing amount was paid in full by issuing SLC Class B Membership Interests in the Dorothy 2 project valued at three times the borrowing amount (i.e., $2.16 million).
On April 4, 2025, the Company transferred its Class B Membership to SLC, resulting in 0 % Class B Membership Interests held by the Company. SDI still retains 100 % Class A Membership Interests in DVSL II as of March 31, 2026. Based on evaluation, the Company would be able to consolidate this entity.
The Company evaluated this legal entity under ASC 810, Consolidations and determined that this entity is a VIE, as the equity holders as a group do not have the characteristics of a controlling financial interest. Even though SLC has all of the Class B membership, the Company holds all the Class A membership, which gives them the ability to control the significant decisions made in the ordinary course of business. The Company has the right to receive benefits that could potentially be significant to the VIE through its Class A membership interest, as it is eligible to receive 50 % of distributions upon SLC obtaining a specified internal rate of return. The non-controlling shareholders do not hold substantive participating rights, voting rights or liquidation rights.
In September 2025, the Company agreed to terms of a debt facility with Generate under a Credit and Guarantee Agreement, as discussed in Note 8. Several events occurred in connection with the debt facility, [1] the Company completed a restructuring of the subsidiaries that comprise “Project Dorothy 1A” and “Project Dorothy 2” (herein referred to as the “Dorothy Restructuring”), [2] Soluna DVSL ComputeCo LLC, Soluna DVSL II ComputeCo LLC, and Soluna KK I ComputeCo LLC entered into a First Priority Leasehold Deed of Trust (the “Deed of Trust”) with Generate which provides Generate with the power of sale and right of entry and possession of the Trust Property.
Following the Dorothy Restructuring, Project Dorothy 2 consists of Soluna DVSL II JVCo, LLC (“DVSL II JVCo”), which has Class A units owned by the Developer and Class B units owned by SLC. DVSL II JVCo is then the sole parent of Soluna DVSL II HoldCo, LLC (“DVSL II HoldCo”), which is the sole owner of DVSL II ComputeCo. The total ownership of Project Dorothy 2 remains such that the Developer holds all Class A units and that SLC holds all Class B units.
The Company noted that [1] there is no substantive change to the ascending view of the organizational chart since the Company (through the Developer and newly created DVSL II JVCo and DVSL II ComputeCo) beneficially own the Class A units (i.e., managing units) of DVSL II and [2] there are no substantive kick-out rights that exist within Project Dorothy 2 that would cause the Developer to not have the ability to direct the activities that most significantly impact the economic performance of DVSL II. In addition, the entity’s obligation to absorb losses and right to receive benefits has not changed. As such, Soluna would continue to consolidate the entity since a change in control has not occurred following the execution of Credit Agreement and Deed of Trust.
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The carrying amount of the assets and liabilities was as follows for DVSL II JVCo:
| (Dollars in thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Current assets: | ||||||||||||||
| Cash and restricted cash | $ | $ | ||||||||||||
| Accounts receivable, trade | ||||||||||||||
| Accounts receivable, intercompany | ||||||||||||||
| Prepaid expenses and other current assets | ||||||||||||||
| Other receivable, related party | ||||||||||||||
| Total current assets | ||||||||||||||
| Other assets, related party | ||||||||||||||
| Operating lease right-of-use assets | ||||||||||||||
| Property, plant and equipment, net | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable, trade | $ | $ | ||||||||||||
| Accounts payable, related party | ||||||||||||||
| Accrued liabilities | ||||||||||||||
| Income tax payable | ||||||||||||||
| Current portion of debt | ||||||||||||||
| Other current liabilities | ||||||||||||||
| Operating lease liability | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Other liabilities | ||||||||||||||
| Other liabilities-related party | ||||||||||||||
| Long-term debt | ||||||||||||||
| Operating lease liability | ||||||||||||||
| Total liabilities | $ | $ | ||||||||||||
On July 22, 2025 (the “Effective Date”), Soluna Digital, Inc. (“SDI”), a subsidiary of the Company, finalized a contribution agreement and operating agreement for Project Kati, a 166 MW facility located in Willacy County, Texas, in which is expected to be delivered in two phases at 83 MW each. This project involves SDI as the Developer, Soluna KKSL JVCo LLC (the “KKSL JVCo”), a special purpose vehicle initially owned solely by SDI, and Soluna2 Kati Project Holdco LLC (“Spring Lane”). This facility is owned by KKSL JVCo, and operated by Soluna US Services, LLC, and may engage in cryptocurrency, batch processing, and other non-crypto related activities.
Currently, Project Kati 1 is financed by Soluna2 Kati Project Holdco LLC, an investment vehicle of SLC with a capital contribution cap of up to $48.98 million. In exchange for contributions to KKSL JVCo, SDI was issued 100 % of Class A Membership Units and SLC was initially issued 100 % of the Class B Membership Interests in KKSL JVCo, respectively, and were admitted as Class B members of KKSL JVCo. Further, SDI and SLC entered into a Developer Investment Side Letter in which allows SDI to invest into KKSL JVCo up to 49 % of ownership in the Class B Membership Interests for a period of six months after August 1, 2025. SDI has contributed to KKSL JVCo, and as of March 31, 2026, SDI holds 100 % of the Class A membership interests and 13 % of the Class B membership interest in Project Kati 1, while SLC holds the remaining 87 % of the Class B membership interests.
In relation to distributions, until the Target Achievement Date (date at which Class B members achieve 16 % of IRR), the Distributable Cash received by the Company shall be distributed ninety-two and five tenths percent (92.5 %) to the Class B Members on a pro rata basis, and seven and five tenths percent (7.5 %) to the Class A Member, until each of the Class B
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Members has received its Target Return; (ii) second, after the Target Achievement Date, the portion of Distributable Cash received by the Company shall be distributed fifty percent (50 %) to the Class A Member (or its respective assigns), and fifty percent (50 %) to the Class B Members (or their respective assigns), pro rata in accordance with their Membership Interests.
The Company evaluated this legal entity under ASC 810, Consolidations and determined that this entity is a VIE, as the equity holders as a group do not have the characteristics of a controlling financial interest. Even though SLC has all of the Class B membership, SDI holds all the Class A membership, which gives them the ability to control the significant decisions made in the ordinary course of business. The Company has the right to receive benefits that could potentially be significant to the VIE through its Class A membership interest, as it is eligible to receive 50 % of distributions upon SLC obtaining a specified internal rate of return. The non-controlling shareholders do not hold substantive participating rights, voting rights or liquidation rights.
The carrying amount of the assets and liabilities was as follows for KKSL JVCo:
| (Dollars in thousands) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Current assets: | ||||||||||||||
| Cash and restricted cash | $ | $ | ||||||||||||
| Accounts receivable | ||||||||||||||
| Due from intercompany | ||||||||||||||
| Loan commitment assets | ||||||||||||||
| Prepaid expenses and other current assets | ||||||||||||||
| Total current assets | ||||||||||||||
| Other assets, related party | ||||||||||||||
| Finance lease right-of-use assets | ||||||||||||||
| Property, plant and equipment, net | ||||||||||||||
| Deposits on equipment | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable, trade | $ | $ | ||||||||||||
| Accounts payable, related party | ||||||||||||||
| Accrued liabilities | ||||||||||||||
| Finance lease liability | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Other liabilities- related party | ||||||||||||||
| Finance lease liability | ||||||||||||||
| Total liabilities | $ | $ | ||||||||||||
15. Segment Information
The Company applies ASC 280, Segment Reporting, in determining its reportable segments. The Company has adopted ASU) 2023-07, Segment Reporting (Topic 280): Improvement to Reportable Segment Disclosures (ASU 2023-07), which requires disclosure of incremental segment information on an annual and interim basis, primarily through enhanced disclosures of significant segment expenses. Operating segments are aggregated into a reportable segment if the operating segments have similar quantitative economic characteristics and if the operating segments are similar in the following qualitative characteristics: (i) nature of products and services; (ii) nature of production processes; (iii) type or class of customer for their products and services; (iv) methods used to distribute the products or provide services; and (v) if
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applicable, the nature of the regulatory environment. The Company’s reportable segments are identified based on the types of service performed. The Company has three reportable segments: Cryptocurrency Mining, Data Center Hosting, and High-Performance Computing. In the third quarter of 2024, the Company initiated Soluna Cloud Services, a new business line to provide high performance computing services to support generative AI workstreams but decided to exit active provision of these services during the first quarter of 2025 and will focus in the future on provision of colocation services at our datacenters to host customers in the AI generative space.
The guidance requires that segment disclosures present the measure(s) used by the Chief Operating Decision Maker (“CODM”) to decide how to allocate resources and for purposes of assessing such segments’ performance. The Company’s CODM is composed of several members of its senior leadership team directed by the CEO and CFO who use revenue and cost of revenues which formulate gross profit (loss), as well as total general and administrative expenses of the reporting segments to assess the performance of the business of our reportable operating segments and allocate resources. Operating profit (loss) is used to evaluate actual results against expectations, which are based on comparable prior results, current budget, and current forecast. Non-cash items of depreciation and amortization are included within both costs of sales and general and administrative expenses, however only depreciation through the Company’s site levels are evaluated for segment performance.
In the adoption of ASU 2023-07, the most significant provision was for the Company to disclose significant segment expenses (i.e.: costs of revenue) that are regularly provided to the CODM. Utility costs, wages and benefit related costs, facility and equipment costs, and depreciation costs at the site level were determined to be significant segment expenses. The CODM only reviews general and administrative expenses by site level as a whole, and not by significant expenses. No operating segments have been aggregated to form the reportable segments. The Company does not allocate all assets to the reporting segments as these are managed on an entity-wide basis. Therefore, the Company does not separately disclose the total assets of its reportable operating segments.
The Cryptocurrency Mining segment generates revenue from the cryptocurrency the Company earns through its Bitcoin mining activities, which is currently generated from Project Dorothy, and previously from Project Sophie and Marie. The Data Center Hosting segment generated revenue from hosting services provided to third-party Bitcoin mining customers at the Company’s data centers, which were previously at Project Marie and are currently from Project Sophie and Project Dorothy. The High-Performance Computing Services segment may generate revenue from either the sale or lease of HPC assets (such as Project Ada which leased GPUs), or from HPC/AI data centers to be leased to third-party HPC/AI customers. This segment began generating revenue in December 2024, as Project Ada worked to build its customer base. With the termination of the HPE Agreement, revenue was minimal for the three months ended March 31, 2025, and no revenue was generated for the three months ended March 31, 2026.
The Company includes demand response revenue as a reconciling item of revenue and is not included within the three reportable segments. The Company utilizes its data centers to deliver demand response services to grid operators or utilities. Under these arrangements with a grid operator, the Company agrees to be available to ramp down a registered data center’s power consumption to a specific target level. In exchange, the grid pays the company a fee for this dispatch right, provided the Company can perform within certain parameters. The Company can be providing any type of service at the data centers whether it be Cryptocurrency Mining, Data Center Hosting, or AI to generate demand response service revenue.
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The following table details revenue, cost of revenues, and other operating costs for the Company’s reportable segments for three months ended March 31, 2026 and 2025, and reconciles to net loss on the consolidated statements of operations:
For the three months ended March 31, 2026
| Cryptocurrency Mining | Data Center Hosting | High- Performance Computing Services | Total | ||||||||||||||||||||
| Segment Revenue: Revenue from external customers | $ | $ | $ | $ | |||||||||||||||||||
| Reconciliation of revenue | |||||||||||||||||||||||
| Demand response service revenue (a) | |||||||||||||||||||||||
| Total consolidated revenue | |||||||||||||||||||||||
| Less: Segment cost of revenue | |||||||||||||||||||||||
| Utility costs | |||||||||||||||||||||||
| Wages, benefits, and employee related costs | |||||||||||||||||||||||
| Facilities and Equipment costs | |||||||||||||||||||||||
| Cost of revenue- depreciation | |||||||||||||||||||||||
| Other cost of revenue* | |||||||||||||||||||||||
| Total segment cost of revenue | |||||||||||||||||||||||
| General and administrative expenses | |||||||||||||||||||||||
| Segment operating (loss) income | $ | ( | $ | $ | $ | ||||||||||||||||||
For the three months ended March 31, 2025
| Cryptocurrency Mining | Data Center Hosting | High- Performance Computing Services | Total | ||||||||||||||||||||
| Segment Revenue: Revenue from external customers | $ | $ | $ | ||||||||||||||||||||
| Reconciliation of revenue | |||||||||||||||||||||||
| Demand response service revenue (a) | |||||||||||||||||||||||
| Less: Segment cost of revenue | |||||||||||||||||||||||
| Utility costs | |||||||||||||||||||||||
| Wages, benefits, and employee related costs | |||||||||||||||||||||||
| Facilities and Equipment costs | |||||||||||||||||||||||
| Cost of revenue- depreciation | |||||||||||||||||||||||
| Other cost of revenue* | |||||||||||||||||||||||
| Total segment cost of revenue | |||||||||||||||||||||||
| General and administrative expenses | |||||||||||||||||||||||
| Segment operating (loss) income | $ | ( | $ | $ | ( | $ | |||||||||||||||||
(a)Demand response service revenue is included as a reconciling item of total revenue and not included as part of segment gross profit or loss.
*Other cost of revenue includes insurance, outside service costs and margins, and general costs.
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The following table presents the reconciliation of segment operating income to net loss before taxes:
| For the three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Segment operating income (loss) | $ | $ | |||||||||
| Reconciling Items: | |||||||||||
| Elimination of intercompany costs | |||||||||||
| Other revenue (a) | |||||||||||
| General and administrative, exclusive of depreciation and amortization (b) | ( | ( | |||||||||
| General and administrative, depreciation and amortization | ( | ( | |||||||||
| Interest expense | ( | ( | |||||||||
| Gain on debt extinguishment and revaluation, net | |||||||||||
| Other financing expense | ( | ( | |||||||||
| Gain on sale of fixed assets | |||||||||||
| Fair value adjustment loss | ( | ||||||||||
| Other income, net | |||||||||||
| Net loss before taxes | $ | ( | $ | ( | |||||||
(a)Demand response service revenue is included as a reconciling item of total revenue and not included as part of segment gross profit or loss.
(b)The reconciling general and administrative expense, exclusive of depreciation and amortization represent corporate and unallocated general and administrative expenses for the three months ended March 31, 2026 and 2025.
Concentrations
During the three months ended March 31, 2026 and March 31, 2025, aside from the Bitcoin Mining revenue generated as a result of the Company’s participation in a mining pool and the Company’s participation in the demand response program, three customers each contributed more than 10% of the Company’s total consolidated revenue constituting approximately 53 % for the three months ended March 31, 2026 and three customers contributed more than 10% of the Company’s total consolidated revenue constituting approximately 33 % of the Company’s total consolidated revenue for the three months ended March 31, 2025.
For the three months ended March 31, 2026 and 2025, all of the Company’s cryptocurrency mining revenue was generated from Project Dorothy 1B (data center located in Silverton, Texas).
16. Subsequent Events
Briscoe Wind Farm Acquisition
On April 1, 2026, Soluna DV Wind SponsorCo, LLC (the “Tranche C Borrower”), a wholly owned indirect subsidiary of the Company, entered into a Membership Interest Purchase Agreement (the “MIPA”) with Briscoe Wind Project Holdings I, LLC, JPM Capital Corporation, and Morgan Stanley Wind LLC (collectively, the “Sellers”), pursuant to which the Tranche C Borrower acquired one hundred percent (100 %) of the issued and outstanding equity interests in Briscoe Wind Farm, LLC, a Delaware limited liability company (the “Briscoe Project Company”), from the Sellers. The Briscoe Project Company owns an approximately 150 MW nameplate capacity wind generation project located in Briscoe and Floyd
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counties, Texas (the “Briscoe Project”). The closing of the acquisition (the “Briscoe Project Acquisition”) occurred simultaneously with the execution of the MIPA on April 1, 2026.
The aggregate closing payment under the MIPA was approximately $53 million. In connection with the closing, the Sellers’ existing credit facility and subordinated notes encumbering the Briscoe Project Company were repaid in full and all related liens were released. The MIPA contains customary representations and warranties of the Sellers regarding the Sellers and the Briscoe Project Company, and the Tranche C Borrower obtained a buyer-side representations and warranties insurance policy in connection with the transaction.
Credit and Guaranty Agreement and Consent and Amendment No. 1
As previously disclosed in Note 8, on September 12, 2025, the Company caused its subsidiaries Soluna DVSL ComputeCo, LLC (“Dorothy 1A Borrower”), Soluna DVSL II ComputeCo, LLC (“Dorothy 2 Borrower”), and Soluna KK I ComputeCo, LLC (collectively with Dorothy 1A Borrower and Dorothy 2 Borrower, the “Existing Borrowers”) to enter into a Credit and Guaranty Agreement (the “Credit Agreement”) with Generate Lending, LLC, as administrative agent and collateral agent (the “Agent”), and Generate Strategic Credit Master Fund I-A, L.P. (the “Lender”). The Credit Agreement provides for senior secured term loan commitments in an aggregate principal amount of up to $35.5 million, comprised of (i) Tranche A-1 ($5.5 million), (ii) Tranche A-3 ($11.5 million), and (iii) Tranche B ($18.5 million). In addition, the Credit Agreement permits the Existing Borrowers to request one or more Additional Tranche Loan Commitments (as defined in the Credit Agreement), in the aggregate amount of up to $64.5 million, subject to the approval of the Lender and the Agent, for project-level financing of eligible projects.
On April 1, 2026, in connection with the Briscoe Project Acquisition, the Company caused the Existing Borrowers and the Tranche C Borrower (collectively, the “Borrowers”) to enter into Consent and Amendment No. 1 to the Credit Agreement and Amendment No. 1 to the Pledge Agreement (the “Amendment”, and the Credit Agreement, as amended by the Amendment, the “Amended Credit Agreement”) with the Agent and the Lender. The Amendment became effective on April 1, 2026 (the “First Amendment Effective Date”).
Under the Amended Credit Agreement: (i) Tranche A-1 and Tranche A-3 loan commitments finance the Dorothy 1A Project and the Dorothy 2 Project, respectively; and (ii) Tranche B loan commitments finance the development and construction of the Kati Project.
Among other changes, the Amendment: (i) adds the Tranche C Borrower as a new borrower and guarantor; (ii) establishes Tranche C loan commitments of $12.5 million to finance the Briscoe Project Acquisition and adjusts the Tranche B loan commitments to be changed from $18.5 million to $6.0 million ; (iii) adds the Briscoe Project Company as a guarantor following the acquisition; and (iv) includes the Briscoe Project as a new project under the Amended Credit Agreement.
The Tranche C loans bear interest at a variable rate based on either ABR or Term SOFR, with margins of 8.0 % per annum for SOFR loans and 7.0 % per annum for ABR loans. They are also subject to scheduled amortization and mandatory cash sweep prepayments. In connection with the Amendment, the Company issued warrants to purchase shares of common stock to Generate Strategic Credit Master Fund I-B, L.P on the First Amendment Effective Date.
The Amended Credit Agreement contains customary representations and warranties, affirmative and negative covenants, and events of default for financings of this type. Events of default under the Amended Credit Agreement include, among other things, non-payment of principal, interest or fees, inaccuracy of representations and warranties, breach of covenants, cross-default to certain material indebtedness, bankruptcy and insolvency, loss of regulatory status with respect to the Briscoe Project, and change of control. Upon the occurrence and during the continuance of an event of default, the lenders may declare all outstanding principal and accrued but unpaid interest under the Amended Credit Agreement immediately due and payable and may exercise the other rights and remedies provided under the Amended Credit Agreement and related loan documents. Negative covenants in the Amended Credit Agreement include, among other things, restrictions on the Borrowers and guarantors with respect to incurring additional indebtedness, creating liens on assets, selling assets or making fundamental changes, making restricted payments, entering into affiliate transactions, and using loan proceeds for unauthorized purposes. The Amended Credit Agreement also restricts investments, capital expenditures, and speculative transactions, and requires that all deposit and securities accounts be subject to control agreements. Financial covenants require (i) a minimum trailing Debt Service Coverage Ratio of 1.60 : 1.00 (which, solely with respect to the Briscoe Project and the Tranche C Borrower, does not apply until the first quarterly date occurring after June 30, 2026) and (ii) a minimum Forward Contracted Debt Service Coverage Ratio of 1.20 : 1.00 (which does not apply with respect to the Tranche A loans or Tranche B loans for the quarterly date of March 31, 2026 and does not apply to the Briscoe Project), in each case as
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further described in the Amended Credit Agreement. The facility also includes customary mandatory prepayment provisions, including cash sweep prepayments applicable to each tranche.
Private Placement
Pursuant to the Amended Credit Agreement, the Company issued to Generate Strategic Credit Master Fund I-B, L.P., an affiliate of the Lender and the Agent (the “Holder”), in a private placement (the “Private Placement”): (i) a pre-funded warrant (the “Pre-Funded Warrant”) to purchase up to 700,000 shares of common stock of the Company, par value $0.001 per share (the “Common Stock”); (ii) a common warrant to purchase up to 1,350,000 shares of Common Stock (the “Common Warrant 1”); and (iii) a common warrant to purchase up to 650,000 shares of Common Stock (the “Common Warrant 2” and, together with the Common Warrant 1, the “Common Warrants” and, collectively, the “Warrants”).
The Warrants issued to the Holder in the Private Placement were issued and sold without registration under the Securities Act of 1933, as amended (the “Securities Act”), or state securities laws in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act promulgated thereunder and in reliance on similar exemptions under applicable state laws.
Pre-Funded Warrant
The Pre-Funded Warrant is exercisable immediately and expires on the five-year anniversary of the date of issuance. The Pre-Funded Warrant is exercisable at an exercise price of $0.001 per share of Common Stock. The Pre-Funded Warrant is exercisable in whole or in part by delivering to the Company a duly executed exercise notice and by payment in full in immediately available funds for the number of shares of Common Stock purchased upon such exercise or, at the option of each holder, by means of a cashless exercise, in which case the holder would receive upon such exercise the net number of shares of Common Stock determined according to the formula set forth in the Pre-Funded Warrant.
The Holder does not have the right to exercise any portion of the Pre-Funded Warrant if the Holder, together with its affiliates, would beneficially own in excess of 9.99 % of the number of shares of Common Stock outstanding immediately after giving effect to such exercise. The Holder may increase or decrease the beneficial ownership limitation up to 9.99 %, provided, however, that any increase in the beneficial ownership limitation shall not be effective until 61 days following notice of such change to the Company.
Common Warrants
The Common Warrant 1 and Common Warrant 2 are identical except with regard to their exercise price. The Common Warrant 1 has an exercise price of $0.68 per share of Common Stock and the Common Warrant 2 has an exercise price of $0.75 per share of Common Stock.
The Common Warrants are exercisable upon issuance and expire on the five-year anniversary of their date of issuance. The Common Warrants are exercisable, at the option of the Holder, in whole or in part by delivering to the Company a duly executed exercise notice and, at any time a registration statement registering the resale or other disposition of the shares of Common Stock underlying the Common Warrants under the Securities Act is effective and available for such shares, or an exemption from registration under the Securities Act is available for such shares, by payment in full in immediately available funds for the number of shares of Common Stock purchased upon such exercise. If at the time of exercise more than six months after the issuance date there is no effective registration statement registering, or the prospectus contained therein is not available for the resale or other disposition of the shares of Common Stock underlying the Common Warrants, then the Common Warrants may also be exercised, in whole or in part, at such time by means of a cashless exercise, in which case the holder would receive upon such exercise the net number of shares of Common Stock determined according to the formula set forth in the Common Warrants.
The Holder does not have the right to exercise any portion of the Common Warrants if the Holder, together with its affiliates, would beneficially own in excess of 9.99 % of the number of shares of our Common Stock outstanding immediately after giving effect to such exercise. The Holder may increase or decrease the beneficial ownership limitation up to 9.99 %, provided, however, that any increase in the beneficial ownership limitation shall not be effective until 61 days following notice of such change to the Company.
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Membership Interests Purchase Agreement
On April 15, 2026, Soluna Digital Inc. (the “Purchaser”), a wholly owned subsidiary of Soluna Holdings, Inc. (the “Company”), entered into a Membership Interests Purchase Agreement (the “MIPA”), with Soluna SLC Fund I Projects Holdco LLC (the “Seller”) and Soluna DVSL JVCo, LLC, a Delaware limited liability company (the “Dorothy 1A Project Company”), pursuant to which the Purchaser acquired 85.4 % of the issued and outstanding Class B Membership Interests in the Dorothy 1A Project Company from the Seller. The Dorothy 1A Project Company owns a wind-powered data center campus in Silverton, Texas focused on bitcoin hosting. The MIPA contains customary representations and warranties of the Seller and the Purchaser.
The closing of the acquisition (the “Closing”) occurred simultaneously with the execution of the MIPA on April 15, 2026. At the Closing, the Purchaser paid $6.0 million to the Seller and an additional $10.5 million payment is due to the Seller no later than July 1, 2026. Upon the Closing, the Purchaser owns 100 % of the issued and outstanding membership interests of the Dorothy 1A Project Company.
Securities Purchase Agreement and Promissory Note
In connection with the MIPA, on April 15, 2026, the Company entered into a Securities Purchase Agreement (the “SPA”) with YA II PN, LTD. (the “Lender”), pursuant to which the Company issued to the Lender a Promissory Note (the “Note”) payable to the Lender, providing for an unsecured loan in the aggregate principal amount of up to $12.0 million (the “Principal Amount”). The outstanding Principal Amount will mature on May 15, 2027 (the “Maturity Date”) and bears interest at a rate per annum of 5 %, based on a 365-day year, which interest rate shall increase to a rate per annum of 18 % upon the occurrence of an Event of Default (as defined in the Note) for so long as such event remains uncured. Under the Note, the Company is required to make monthly payments (“Amortization Payments”) of $1.2 million per month, beginning sixty (60) days after closing until the Note is repaid in full. Each Amortization Payment shall include a 5 % premium of the principal amount of such payment.
The Company may, upon at least one Business Day’s prior written notice to the Lender, prepay the outstanding Principal Amount and an additional 5 % of such Principal Amount (solely in respect of a redemption in full), and any accrued and unpaid interest, at any time prior to the Maturity Date. If the Company consummates a financing transaction, or series of financing transactions within a thirty (30 ) day period, with aggregate gross proceeds in excess of $20.0 million (excluding any (i) transaction with the Lender or its affiliates, (ii) sales under the At the Market Offering Agreement entered into between the Company and H.C. Wainwright & Co., LLC on April 29, 2025, (iii) issuance under the Standby Equity Purchase Agreement entered into between the Company and the Lender on August 12, 2024 or the Standby Equity Purchase Agreement entered into between the Company and the Lender on March 24, 2026, or (iv) exercises of options, warrants, or convertible securities outstanding as of April 15, 2026), then, unless waived by the Lender, the Company shall be required to redeem the Note in an amount equal to (a) 20 % of the outstanding Principal Amount and (b) all accrued and unpaid interest on the Note.
The Note includes customary representations, warranties and covenants and sets forth certain events of default after which the outstanding Principal Amount may be declared immediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving the Company after which the outstanding Principal Amount becomes automatically due and payable.
Guaranty
Pursuant to the SPA, Soluna Wind Holding, Inc., a wholly owned subsidiary of the Company (the “Guarantor”), entered into a Guaranty, dated April 15, 2026 (the “Guaranty”). Pursuant to the terms of the Guaranty, the Guarantor agreed to guarantee the complete performance and fulfillment of the Company’s obligations under the SPA and the Note.
Private Placement
Pursuant to the SPA, the Company issued to the Lender in a private placement (the “Private Placement”) a common warrant (the “Warrant”) to purchase up to 2,400,000 shares of common stock of the Company, par value $0.001 per share (the “Common Stock”).
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The Warrant issued to the Lender in the Private Placement was issued and sold without registration under the Securities Act of 1933, as amended (the “Securities Act”), or state securities laws in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act promulgated thereunder and in reliance on similar exemptions under applicable state laws.
The Warrant has an exercise price of $1.06 per share of Common Stock, is exercisable upon issuance and expires on the twelve-month anniversary of its date of issuance. The Warrant is exercisable, at the option of the Lender, in whole or in part by delivering to the Company a duly executed exercise notice and, at any time a registration statement registering the resale or other disposition of the shares of Common Stock underlying the Warrant under the Securities Act is effective and available for such shares, or an exemption from registration under the Securities Act is available for such shares, by payment in full in immediately available funds for the number of shares of Common Stock purchased upon such exercise. If at the time of exercise more than six months after the issuance date there is no effective registration statement registering, or the prospectus contained therein is not available for the resale or other disposition of the shares of Common Stock underlying the Warrant, then the Warrant may also be exercised, in whole or in part, at such time by means of a cashless exercise, in which case the Lender would receive upon such exercise the net number of shares of Common Stock determined according to the formula set forth in the Warrant.
The Lender does not have the right to exercise any portion of the Warrant if the Lender, together with its affiliates, would beneficially own in excess of 4.99 % of the number of shares of Common Stock outstanding immediately after giving effect to such exercise. The Lender may increase or decrease the beneficial ownership limitation up to 9.99 %, provided, however, that any increase in the beneficial ownership limitation shall not be effective until 61 days following notice of such change to the Company.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Unless the context requires otherwise in these condensed consolidated financial statements, the terms “SHI,” “Soluna,” the “Company,” “we,” “us,” and “our” refer to Soluna Holdings, Inc. together with its consolidated subsidiaries, “SDI” refers to Soluna Digital, Inc., “Soluna Cloud” or “Cloud” refer to Soluna Cloud, Inc., “SEI” refers to Soluna Energy, Inc., and "Soluna Wind" refers to Soluna Wind Holding, Inc. Other trademarks, trade names, and service marks used in this Quarterly Report on Form 10-Q are the property of their respective owners.
The following discussion of our financial condition and results of operations should be read in conjunction with the Condensed Consolidated Financial Statements and the related notes thereto included in Item 1 of Part I of this Quarterly Report on Form 10-Q and the audited Consolidated Financial Statements and the related notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations for the year ended December 31, 2025 contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as filed with the Securities and Exchange Commission (the “SEC”) on March 30, 2026 (the “Annual Report”).
In addition to historical information, the following discussion contains forward-looking statements, which involve risk and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements. Important factors that could cause actual results to differ include those set forth in Part I Item 1A-Risk Factors in our Annual Report and elsewhere in this Quarterly Report on Form 10-Q. Readers should not place undue reliance on our forward-looking statements. These forward-looking statements speak only as of the date on which the statements were made and are not guarantees of future performance. Except as may be required by applicable law, we do not undertake or intend to update any forward-looking statements after the date of this Quarterly Report on Form 10-Q. Please see “Statement Concerning Forward-Looking Statements” below.
Overview and Recent Developments
Our mission is to make renewable energy a global superpower by using computing as a catalyst.
We develop, own, and operate digital infrastructure for energy-intensive computing applications by colocating data centers with renewable energy power plants. We refer to this model as Renewable Computing™.
Renewable Computing™ is designed to address two converging market conditions: increasing curtailment of renewable energy generation and growing demand for power-intensive computing applications, including artificial intelligence (“AI”), high-performance computing (“HPC”), and Bitcoin mining. By locating our data centers near renewable generation assets, we seek to convert underutilized energy into economically productive computing capacity.
We utilize two distinct data center designs to serve different computing markets. For our Bitcoin mining and hosting business, we deploy a data center design optimized for flexible, large-scale digital asset operations. For AI and HPC workloads, we are developing an AI-ready data center design intended to support higher-density compute environments and customer requirements associated with advanced computing infrastructure.
Our facilities are managed by MaestroOS™ (“MaestroOS”), our proprietary software platform, which analyzes factors such as local power pricing, weather conditions, grid demand, and market signals to optimize operating performance and power consumption across our operating assets.
Our business model is intended to enhance the monetization of renewable generation assets while supporting scalable digital infrastructure growth. We work with renewable energy developers and power partners to access low-cost or otherwise constrained energy resources. Our data centers operate on a behind-the-meter basis, enabling them to draw electricity directly from the co-located renewable power plant and from the grid through the plant’s existing interconnection and substation infrastructure. By accessing both sources of power, our facilities are able to meet their energy needs while maintaining operating flexibility. In certain markets, our facilities also participate in demand response programs that support grid reliability.
A key element of our strategy is the colocation of data centers directly with renewable generation assets. By building behind the meter at renewable generation sites, we are able to access both on-site generation and existing grid interconnection infrastructure, which we believe can improve power economics and accelerate development timelines.
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With a repeatable development approach and an expanding pipeline of projects, we are seeking to scale a differentiated digital infrastructure platform that supports renewable power utilization, flexible computing capacity, and long-term value creation.
We operate across multiple business lines and currently or plan to generate revenue from five primary sources:
•Bitcoin / Data Center Hosting Business – We provide hosting and colocation services to third-party Bitcoin mining customers at our data centers.
•Bitcoin Mining Business – We mine Bitcoin through proprietary operations and joint ventures at our data centers.
•HPC Business – Through Soluna HPC, Inc., we are developing AI-ready data center leasing and hosting capabilities for AI and HPC workloads, beginning with Project Kati 2, which is being engineered for more than 300 MW of capacity in partnership with Metrobloks, LLC ("Metrobloks").
•Demand Response Business – We leverage our data center infrastructure to provide demand response services to grid operators and utilities.
•Wind Energy Generation Business - As of April 1, 2026, with the acquisition of the wind farm in Briscoe, Texas (the "Briscoe Wind Farm"), we sell power generated from owned wind turbines and also sell renewable energy credits.
Revenue Sources
Bitcoin / Data Center Hosting Business
We provide colocation and hosting services to third-party Bitcoin mining customers at our data centers. Customers typically contract for capacity based on their power requirements. Our customer base includes several large-scale Bitcoin mining operators. Contracts generally range from 12 to 24 months in duration.
We offer three primary commercial structures:
•Fixed-Fee Model – Customers pay a fixed fee based on energy consumed.
•Profit-Share Model – Customers pay a share of the profits from their mining activity, with power costs generally passed through.
•Fixed-Fee Service Agreement Model – Customers pay a fixed fee for managed Bitcoin mining capacity and hashrate over the term of the service agreement.
For the three months ended March 31, 2026 and 2025, our Bitcoin Hosting Business accounted for approximately 71% and 40% of total revenue, respectively. Revenue in this business has been concentrated among a limited number of customers. For the three months ended March 31, 2026, three customers accounted for 74% of hosting revenue and 53% of total revenue.
As of March 31, 2026, five of our projects provide Bitcoin hosting services for a total MW capacity of approximately 137 MW.
Bitcoin Mining Business
We engage in proprietary Bitcoin mining, a process that validates transactions and secures the Bitcoin blockchain. This process uses specialized computing equipment to solve complex cryptographic algorithms. Miners compete to solve these algorithms, and the first to do so is awarded a predetermined number of newly issued Bitcoins (the “Block Reward”), together with the transaction fees associated with that block.
We participate in one or more mining pools, which are collaborative networks of miners that combine computing power to improve the probability of earning rewards. Block Rewards earned by the pool are distributed among participants based on
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each participant’s proportional contribution. We believe this model reduces revenue volatility as compared to operating on a solo mining basis.
Mining operations are energy-intensive and require significant computational resources. We operate data centers using both proprietary and third-party hardware and software. MaestroOS is used to optimize performance, manage power consumption, and improve operating efficiency.
Revenue from Bitcoin mining consists of Block Rewards and transaction fees and is recognized upon receipt in accordance with applicable accounting guidance. Upon receipt, digital assets are promptly converted into U.S. dollars through the Coinbase cryptocurrency exchange.
Mining profitability is affected by several factors, including the market price of Bitcoin, global network hash rate, mining difficulty, electricity and infrastructure costs, and mining pool fees. In addition, Bitcoin undergoes a periodic halving event, approximately every four years, that reduces the Block Reward and may adversely affect future revenue. The next Bitcoin halving event is expected in April 2028. For the three months ended March 31, 2026 and 2025, our Bitcoin Mining Business represented approximately 23% and 51% of total revenue, respectively.
As of March 31, 2026, only one of our projects provide Bitcoin self-mining for a total MW capacity of approximately 22 MWs.
High Performance Computing Business
Our HPC business is being developed through Soluna HPC, Inc. and is focused on data center leasing and hosting solutions for AI and other HPC workloads, with an initial target customer base of Hyperscalers and Neoclouds, and enterprise customers over time.
Unlike our Bitcoin mining and hosting operations, which use a data center design, our HPC business is based on an AI-ready data center design intended to support higher-density compute environments and the infrastructure requirements of AI and HPC customers.
We are currently advancing infrastructure projects intended to support AI and HPC workloads. These activities include site and feasibility studies, power and land procurement, engineering and design work, customer engagement, and evaluation of potential financing and partnership structures.
Our first planned large-scale HPC development is Project Kati 2, which is being engineered for more than 300 MW of capacity in partnership with Metrobloks. We expect Project Kati 2 to serve as the initial platform for Soluna HPC, Inc.’s leasing and hosting business. We are also advancing additional projects from our development pipeline that are in various stages of evaluation, engineering, and development.
In March 2025, we terminated our prior agreement with Hewlett Packard Enterprise Company (“HPE”), which had supported our earlier GPU-as-a-Service offering. Following that termination, we refocused our HPC strategy on the development of dedicated data center infrastructure for third-party leasing and hosting.
Demand Response Business
We provide demand response services to grid operators and utilities by using our data centers as dispatchable energy resources. In certain markets in which we operate, our data centers participate in ancillary services and other demand response programs that support grid reliability.
Under these programs, we commit to reduce a facility’s power consumption to a predetermined level when called upon by the grid operator. In return, we receive compensation for maintaining this dispatch capability, provided we satisfy applicable performance requirements. These requirements typically include minimum uptime and availability thresholds during a measurement period, which is often monthly.
For the three months ended March 31, 2026 and 2025, our Demand Response Business represented approximately 6% and 9% of total revenue, respectively.
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Operations and Project Pipeline
As of March 31, 2026, we operate approximately 159 MW of capacity across three active sites located in Murray, Kentucky, Silverton, Texas, and Willacy County, Texas. An additional 47 MW is under construction at our Kati 1 project site and 100+ MW is in development at our Kati 2 project site, and as of March 31, 2026, we had over 900 MW of facilities in advanced development or near shovel-ready status. In total, our project pipeline includes approximately 4.3 gigawatts (GW) of renewable energy-powered data center developments.
A summary of our operations and project pipeline by location, are as follows (as of March 31, 2026):
| Project Name | Location | MW | Status | Line of Business | Power Source | |||||||||||||||||||||||||||
| Sophie | Murray, KY | 25 | Operating | Bitcoin Hosting | Grid / Hydro | |||||||||||||||||||||||||||
| Dorothy 1A | Silverton, TX | 25 | Operating | Bitcoin Hosting | Wind | |||||||||||||||||||||||||||
| Dorothy 1B | Silverton, TX | 25 | Operating | Bitcoin Mining/ Bitcoin Hosting | Wind | |||||||||||||||||||||||||||
| Dorothy 2 | Silverton, TX | 48 | Operating | Bitcoin Hosting | Wind | |||||||||||||||||||||||||||
| Dorothy 3 | Silverton, TX | 100+ | Development | AI or HPC | Wind | |||||||||||||||||||||||||||
| Grace | Silverton, TX | 2 | Development | HPC | Wind | |||||||||||||||||||||||||||
| Kati 1 | Willacy County, TX | 36/47 | Operating/ In Construction | Bitcoin Hosting | Wind | |||||||||||||||||||||||||||
| Kati 2 | Willacy County, TX | 100+ | Development | AI or HPC | Wind | |||||||||||||||||||||||||||
| Rosa | Snyder, TX | 187 | Development | Bitcoin Hosting / AI or HPC | Wind | |||||||||||||||||||||||||||
| Hedy | Cameron County, TX | 120 | Development | Bitcoin Hosting / AI or HPC | Wind | |||||||||||||||||||||||||||
| Ellen | Cameron County, TX | 100 | Development | Bitcoin Hosting / AI or HPC | Wind | |||||||||||||||||||||||||||
| Annie | Lamar, TX | 74 | Development | Bitcoin Hosting / AI or HPC | Solar | |||||||||||||||||||||||||||
| Fei | Childress County, TX | 100 | Development | Bitcoin Hosting / AI or HPC | Solar | |||||||||||||||||||||||||||
| Gladys | Nueces County, TX | 150 | Development | Bitcoin Hosting / AI or HPC | Wind | |||||||||||||||||||||||||||
We manage our data center operations using MaestroOS. MaestroOS continuously monitors and analyzes a variety of real-time signals, including local electricity prices, weather conditions, Bitcoin market metrics, and grid demand signals, to optimize facility performance. In addition, MaestroOS is used to coordinate and execute our participation in demand response programs.
We finance the development and construction of our data centers through a combination of public equity offerings, debt instruments, and partnerships with project-level capital providers. As of March 31, 2026, we had four primary project-level financing partners:
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•Spring Lane Capital (“SLC”) – A private venture capital firm with approximately $450 million in assets under management, focused on sustainability-oriented infrastructure. On May 3, 2022, SLC committed $35 million to finance Soluna’s Project Dorothy 1A (“D1A”). On July 22, 2024, SLC committed an additional $30 million to support the development of Soluna's Project Dorothy 2 ("D2"). On July 22, 2025, SLC committed an initial $20.0 million for the first phase of the construction on Project Kati 1, subject to customary conditions, in which the contribution cap is $48.98 million. Subsequent to March 31, 2026, the Company acquired SLC's membership interest in D1A and currently owns 100% of the issued and outstanding membership interests of D1A. SLC retains its membership interests in D2 and Project Kati 1.
•Navitas West Texas Investments SPV, LLC (“Navitas”) – an investment vehicle organized by Navitas Global, a private equity firm focused on sustainable Bitcoin mining. On May 9, 2023, we entered into a strategic partnership with Navitas to support mining operations at Project Dorothy 1B (“D1B”).
•Galaxy Digital, LLC (“Galaxy”) – a financial services and investment management innovator in the digital asset and blockchain technology sectors. On March 12, 2025, our subsidiaries entered into a five-year term loan facility in the principal amount of $5.0 million.
•Generate Capital (“Generate”) – a leading infrastructure investment firm. On September 12, 2025, we entered into a $100.0 million credit facility with Generate, in which as of March 31, 2026, we have drawn approximately $17.0 million to fund refinancing and construction of active data center projects. On April 1, 2026, an additional $12.5 million was drawn to fund a portion of the Briscoe Wind Farm acquisition as discussed in the recent developments note below.
Project Dorothy
During 2023, we transitioned our flagship data center Project Dorothy from construction to operations. This data center is co-located with Briscoe Wind Farm, a 150 MW wind power generation facility in Silverton, Texas. The project comprises three phases: D1A (25 MW), and D1B (25 MW), and D2 (48 MW).
Project Dorothy is registered in one of the ERCOT’s Demand Response Services (“DRS”) programs. This designation positioned Project Dorothy as a contributor to grid flexibility and resilience in the Texas power market, while also enabling us to diversify our revenue streams.
Under the DRS program, we commit to maintaining a specified level of curtailment capacity—measured as load reduction availability—on a monthly basis. When called upon by ERCOT, we are required to reduce the facility’s power consumption by the committed amount. In exchange, we receive compensation for maintaining this curtailment readiness, regardless of whether an actual dispatch occurs.
Participation in the program allows us to generate incremental revenue and offset power costs at Project Dorothy, enhancing its cost-efficiency. As a result, the facility ranks among the lowest-cost operators in the sector.
Project Dorothy 1A
D1A is focused on Bitcoin Hosting for some of the industry’s hyperscale miners. As of March 31, 2026, D1A has completed all customer deployments and executed fleet upgrades across multiple hosting partners, driving measurable hashrate growth throughout the period.
D1A was constructed in partnership with SLC, a leading venture capital firm focused on sustainability solutions. As of March 31, 2026, SLC owned approximately 85% of the Class B membership interests of D1A, while we owned 15% of the Class B membership interests of D1A and 100% of the Class A membership interests of D1A.
On April 15, 2026, we acquired SLC's equity interest in D1A for $16.5 million and now own 100% of the issued and outstanding membership interests of D1A. The transaction gives us complete equity ownership of D1A, and will allow for the beginning of changing the business plan of our Dorothy projects to support AI workloads.
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Project Dorothy 1B
D1B is focused on proprietary Bitcoin Mining. D1B is co-owned by Navitas, which owns approximately 49% of the membership interests of D1B, while we own the remaining 51% of the membership interests. In 2025, fleet consolidation and reinvestment at D1B resulted in the deployment of 1,000 upgraded S19 XP miners.. In March 2026, we started 3.3 MWs of Bitcoin Hosting at D1B, in addition to the Bitcoin Mining at this project.
Project Dorothy 2
D2 is a 48 MW expansion of the Company’s Dorothy campus, which construction and commissioning were completed in 2025. D2 is fully contracted with a mix of new and existing customers, including Blockware, Compass Mining, and a large-scale mining partner, and generates revenue through Bitcoin hosting and participation in demand response programs. D2 features a superior financial waterfall structure and enhanced management and development fees for Soluna compared to D1A, allowing us to benefit from improved income once the facility is operational.
Project Dorothy 3
Project Dorothy 3 is our next planned renewable-powered AI computing campus, advancing on 300 new acres adjacent to D1 and D2 in West Texas. Built on a foundation of vertically integrated wind generation and behind-the-meter infrastructure, Project Dorothy 3 is designed to support high-performance computing and generative AI workloads at scale.
Project Grace
Project Grace is a 2 MW project located at the D2 focused on an AI pilot. The Company is collaborating with Siemens at Project Grace, a leading technology company in electrification, automation and digitalization, to develop solutions addressing power demand fluctuations associated with AI workloads. In March 2026, we began technical simulations with our Siemens to confirm that the selected technology solution meets ERCOT grid stability and low-voltage ride-through requirements for AI load integration.
Project Sophie
Project Sophie is a 25 MW data center, based in Murray, Kentucky connected to the grid (“Sophie”). The project has a Power Purchase Agreement (“PPA”) that requires the curtailment of the site during certain hours of the day to help balance the Kentucky grid. We own 100% of the facility, which was completed in 2021.
Sophie is focused on Bitcoin Hosting of multiple large customers. The data center generates revenue via a combination of fixed services fees and profit share, while energy cost is passed through. During 2025, Sophie completed three consecutive expansion agreements with long-standing hyperscale mining customers, reflecting sustained demand and high satisfaction with our hosting customers. In addition, Sophie closed a new 3.3 MW partnership with KULR Technology Group in October 2025, diversifying the customer base and expanding the site's renewable-powered computing footprint.
Project Kati 1
Project Kati 1 is the first phase of the Company’s data center campus under development in Willacy County, Texas, co-located with a 272.6 MW wind farm. Project Kati 1 comprises 83 MW dedicated to Bitcoin hosting. Construction began on September 18, 2025, and on July 22, 2025, the Company finalized a contribution agreement with SLC for the initial 35 MW of capacity, with initial energization beginning in the first quarter of 2026. Project Kati 1 started operating in February 2026, and completed 48MWs of construction on April 1, 2026, filled by Galaxy Digital, Inc.
Project Kati 2
Project Kati 2 is the second phase of development at the Company’s Kati site in Willacy County, Texas, and is focused on supporting AI and high-performance computing workloads. The project is being advanced through a joint venture with Metrobloks to develop an initial phase of 100 MW+ CIT (and upwards of 350MW CIT) of AI and HPC capacity, with the potential to expand to a larger multi-hundred-megawatt deployment. The campus is designed to leverage behind-the-meter integration with renewable energy and support customers requiring large-scale, high-density compute infrastructure with accelerated time to power. Discussions began in December 2025 with potential customers for the data center campus. In March and April of 2026 those discussions continue several additional potential customers. The final stages of the design RFP were completed in April 2026 and design work is set to begin in May 2026.
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Project Rosa
We are developing Project Rosa in Snyder, Texas, which is expected to be up to 187 MW of data center capacity for AI and Bitcoin Hosting and other computing-intensive applications. It will be co-located with a 242.5 MW wind farm. We have signed term sheets for both power and land purchase agreements in connection with this project.
Project Hedy
We have signed a term sheet for power for Project Hedy, a new 120 MW data center co-located with a 200 MW wind farm in South Texas. The wind farm is owned by a new power partner–a multinational conglomerate that focuses on developing and managing sustainable infrastructure solutions, with a strong emphasis on renewable energy, water management, and services, aiming to contribute to a low-carbon economy and a better planet.
Project Ellen
We have signed a term sheet for power for Project Ellen, a new 100 MW data center co-located with a 145 MW wind farm in South Texas. The wind farm is owned by a new power partner—a leader in renewable energy and sustainable infrastructure both in the U.S. and internationally. Project Ellen will be developed in two 50MW phases, leveraging wind energy to drive sustainable computing at scale.
Project Annie
We have signed a term sheet for power for Project Annie, a new 74 MW data center which will be co-located with a 114 MW solar farm in Northeast Texas. The solar farm is owned by a new power partner–a leader in renewable energy and sustainable infrastructure both in the U.S. and internationally.
Project Fei
We have signed a term sheet for power for Project Fei, a 100 MW data center in development which will be co-located with a 240 MW utility-scale solar farm, Soluna’s second solar-based project to date. Being developed in partnership with a global leader in energy infrastructure investment, Project Fei will convert underutilized solar energy into clean, high-performance computing power. The project is currently advancing through land acquisition, power contract negotiation, and ERCOT interconnection planning.
Project Gladys
We have signed a term sheet for power for Project Gladys, a 150 MW facility in development which will be co-located with a 226 MW wind farm and developed in partnership with a prominent U.S.-based independent power producer managing over $40 billion in assets and more than 80 energy facilities nationwide. The project is currently advancing through land acquisition, power contract negotiation, and ERCOT interconnection planning.
Our Growth Strategy
In 2026, we are focused on advancing the following key initiatives:
•Grow Pipeline: Expand Soluna’s Renewable Computing(™) pipeline by advancing projects in our 4.3 GW+ power pipeline to shovel-ready status and securing behind-the-meter access to curtailed energy resources. Enable scalable capacity with accelerated speed to power.
•Develop AI: Advance Project Kati 2 with Metrobloks to shovel-ready and tenant-ready, in addition to advancing Project Dorothy 3 to shovel-ready and tenant-ready. Build a pipeline of AI-ready campuses designed for rapid deployment from the 4.3GW+ pipeline through joint ventures.
•Optimize Projects: Energize Project Kati 1. Enhance profitability across operating data centers through higher uptime, operational efficiency, and disciplined cost management, thereby strengthening long-term asset value and improving overall customer satisfaction.
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•Capital Formation: Executing a disciplined capital strategy to fund pipeline growth, AI data center development, and construction. Leveraging project-level financing and strategic capital partnerships to scale data center development while maintaining balance sheet flexibility.
Recent Developments
Briscoe Wind Farm Acquisition
On April 1, 2026, Soluna DV Wind SponsorCo, LLC (the “Tranche C Borrower”), a wholly owned indirect subsidiary of the Company, entered into a Membership Interest Purchase Agreement (the “Briscoe MIPA”) with Briscoe Wind Project Holdings I, LLC, JPM Capital Corporation, and Morgan Stanley Wind LLC (collectively, the “Briscoe Sellers”), pursuant to which the Tranche C Borrower acquired 100% of the issued and outstanding equity interests in Briscoe Wind Farm, LLC, a Delaware limited liability company (the “Briscoe Project Company”), from the Briscoe Sellers. The Briscoe Project Company owns an approximately 150 MW nameplate capacity wind generation project located in Briscoe and Floyd counties, Texas (the “Briscoe Project”). The closing of the acquisition (the “Briscoe Project Acquisition”) occurred simultaneously with the execution of the Briscoe MIPA on April 1, 2026. The aggregate closing payment under the Briscoe MIPA was approximately $53,000,000.
The acquisition is expected to be immediately accretive, with substantial forward looking growth in revenue and Adjusted EBITDA. With this acquisition, Soluna achieves full vertical integration for Project Dorothy, owning both the renewable energy source and the data center infrastructure it powers. The closing positioned the Company to unlock development of Project Dorothy 3, a planned renewable-powered AI campus expansion on 300 new acres adjacent to the existing site with potential capacity of up to 300 MW+.
Credit and Guaranty Agreement and Consent and Amendment No. 1
On September 12, 2025, the Company caused its subsidiaries Soluna DVSL ComputeCo, LLC , Soluna DVSL II ComputeCo, LLC , and Soluna KK I ComputeCo, LLC (collectively, the “Existing Borrowers”) to enter into a Credit and Guaranty Agreement (the “Credit Agreement”) with Generate Lending, LLC, as administrative agent and collateral agent (the “Agent”), and Generate Strategic Credit Master Fund I-A, L.P. (the “Lender”). The Credit Agreement provides for senior secured term loan commitments in an aggregate principal amount of up to $35.5 million, comprised of (i) Tranche A-1 ($5.5 million), (ii) Tranche A-3 ($11.5 million), and (iii) Tranche B ($18.5 million). In addition, the Credit Agreement permits the Existing Borrowers to request one or more Additional Tranche Loan Commitments (as defined in the Credit Agreement), in the aggregate amount of up to $64.5 million, subject to the approval of the Lender and the Agent, for project-level financing of eligible projects.
Also on April 1, 2026, in connection with the Briscoe Project Acquisition, the Company caused the Existing Borrowers and the Tranche C Borrower (collectively, the “Borrowers”) to enter into Consent and Amendment No. 1 to the Credit Agreement and Amendment No. 1 to the Pledge Agreement (the “Amendment”, and the Credit Agreement, as amended by the Amendment, the “Amended Credit Agreement”) with the Agent and the Lender. The Amendment became effective on April 1, 2026 (the “First Amendment Effective Date”).
Under the Amended Credit Agreement: (i) Tranche A-1 and Tranche A-3 loan commitments finance the Dorothy 1A Project and the Dorothy 2 Project, respectively; and (ii) Tranche B loan commitments finance the development and construction of the Kati Project.
Among other changes, the Amendment: (i) adds the Tranche C Borrower as a new borrower and guarantor; (ii) establishes Tranche C loan commitments of $12,500,000 to finance the Briscoe Project Acquisition; (iii) adds the Briscoe Project Company as a guarantor following the acquisition; and (iv) includes the Briscoe Project as a new project under the Amended Credit Agreement.
Pursuant to the Amended Credit Agreement, the Company issued to Generate Strategic Credit Master Fund I-B, L.P., an affiliate of the Lender and the Agent, in a private placement: (i) a pre-funded warrant to purchase up to 700,000 shares of common stock; (ii) a common warrant to purchase up to 1,350,000 shares of common stock; and (iii) a common warrant to purchase up to 650,000 shares of common stock.
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Project Dorothy 1A Acquisition
On April 15, 2026, we acquired SLC's equity interest in D1A for $16.5 million. The transaction gives us complete equity ownership of D1A, and marks the second major step in the Company’s vertical integration of the Dorothy campus, following the $53 million acquisition of the Briscoe Wind Farm earlier in April. With full ownership of D1A and Briscoe providing 150 megawatts of owned renewable power, we are positioning ourselves to convert the Dorothy campus to AI computing as Dorothy 3 development advances and opens the door to bringing new equity partners onto the site on terms aligned with the Company’s AI-first strategy.
The $16.5 million acquisition will be paid in cash in two installments: $6 million at closing, with the balance due in July 2026. To finance a portion of the transaction, we signed an unsecured promissory note with a lender in the principal amount of $12 million, maturing on May 15, 2027, which closed concurrently with the acquisition
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Consolidated Results of Operations (unaudited)
Consolidated Results of Operations (unaudited) for the Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025.
The following table summarizes changes in the various components of our net loss during the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
| (Dollars in thousands) | Three months ended March 31, 2026 | Three months ended March 31, 2025 | $ Change | % Change | ||||||||||||||||||||||
| Cryptocurrency mining revenue | $ | 2,169 | $ | 2,999 | $ | (830) | (28) | % | ||||||||||||||||||
| Data hosting revenue | 6,688 | 2,402 | 4,286 | 178 | % | |||||||||||||||||||||
| Demand response service revenue | 537 | 507 | 30 | 6 | % | |||||||||||||||||||||
| High-performance computing service revenue | — | 28 | (28) | (100) | % | |||||||||||||||||||||
| Operating costs and expenses: | ||||||||||||||||||||||||||
| Cost of cryptocurrency mining revenue, exclusive of depreciation | 1,658 | 1,954 | (296) | (15) | % | |||||||||||||||||||||
| Cost of data hosting revenue, exclusive of depreciation | 3,619 | 1,327 | 2,292 | 173 | % | |||||||||||||||||||||
| Cost of high-performance computing services | — | 7 | (7) | (100) | % | |||||||||||||||||||||
| Cost of cryptocurrency mining revenue- depreciation | 1,011 | 1,074 | (63) | (6) | % | |||||||||||||||||||||
| Cost of data hosting revenue- depreciation | 1,191 | 401 | 790 | 197 | % | |||||||||||||||||||||
| General and administrative expenses, exclusive of depreciation and amortization | 16,140 | 5,946 | 10,194 | 171 | % | |||||||||||||||||||||
| Depreciation and amortization associated with general and administrative expenses | 2,401 | 2,404 | (3) | - | % | |||||||||||||||||||||
| Operating loss | (16,626) | (7,177) | (9,449) | 132 | % | |||||||||||||||||||||
| Other income (expense), net | 113 | 4 | 109 | 2,725 | % | |||||||||||||||||||||
| Interest expense | (1,481) | (838) | (643) | 77 | % | |||||||||||||||||||||
| Other financing expense | (564) | (201) | (363) | 100 | % | |||||||||||||||||||||
| Gain on sale of fixed assets | 32 | - | 32 | 100 | % | |||||||||||||||||||||
| Fair value adjustment (loss) gain | — | (118) | 118 | (100) | % | |||||||||||||||||||||
| Gain on debt extinguishment and revaluation, net | — | 551 | (551) | (100 | %) | |||||||||||||||||||||
| Loss before income taxes | (18,526) | (7,779) | (10,747) | 138 | % | |||||||||||||||||||||
| Income tax benefit, net | 624 | 425 | 199 | 47 | % | |||||||||||||||||||||
| Net loss | (17,902) | (7,354) | (10,548) | 143 | % | |||||||||||||||||||||
| Net loss (income) attributable to non-controlling interest, net | 436 | (202) | 638 | (316 | %) | |||||||||||||||||||||
| Net loss attributable to Soluna Holdings, Inc. | $ | (17,466) | $ | (7,556) | $ | (9,910) | 131 | % | ||||||||||||||||||
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The following table summarizes the balances for the project sites for cryptocurrency mining revenue, data hosting revenue, high-performance computing service revenue, demand response revenue, cost of cryptocurrency mining revenue, exclusive of depreciation, cost of data hosting revenue, exclusive of depreciation, cost of high-performance computing services, and cost of depreciation during the three months ended March 31, 2026:
| Soluna Digital | ||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Project Dorothy 1B | Project Dorothy 1A | Project Dorothy 2 | Project Sophie | Project Kati 1 | Other | Total | |||||||||||||||||||||||||||||||||||||
| Cryptocurrency mining revenue | $ | 2,169 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 2,169 | ||||||||||||||||||||||||||||||
| Data hosting revenue | 11 | 2,044 | 3,171 | 1,237 | 225 | — | 6,688 | |||||||||||||||||||||||||||||||||||||
| Demand response services | 144 | 130 | 263 | — | — | — | 537 | |||||||||||||||||||||||||||||||||||||
| Total revenue | 2,324 | 2,174 | 3,434 | 1,237 | 225 | — | 9,394 | |||||||||||||||||||||||||||||||||||||
| Cost of cryptocurrency mining, exclusive of depreciation | 1,658 | — | — | — | — | — | 1,658 | |||||||||||||||||||||||||||||||||||||
| Cost of data hosting revenue, exclusive of depreciation | 4 | 1,107 | 1,423 | 581 | 394 | 110 | 3,619 | |||||||||||||||||||||||||||||||||||||
| Cost of cryptocurrency mining revenue- depreciation | 1,011 | — | — | — | — | — | 1,011 | |||||||||||||||||||||||||||||||||||||
| Cost of data hosting revenue- depreciation | — | 288 | 606 | 204 | 93 | — | 1,191 | |||||||||||||||||||||||||||||||||||||
| Total cost of revenue | 2,673 | 1,395 | 2,029 | 785 | 487 | 110 | 7,479 | |||||||||||||||||||||||||||||||||||||
| Gross profit | $ | (349) | $ | 779 | $ | 1,405 | $ | 452 | $ | (262) | $ | (110) | $ | 1,915 | ||||||||||||||||||||||||||||||
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The following table summarizes the balances for the project sites for cryptocurrency mining revenue, data hosting revenue, high-performance computing service revenue, demand response revenue, cost of cryptocurrency mining revenue, exclusive of depreciation, cost of data hosting revenue, exclusive of depreciation, cost of high-performance computing services, and cost of depreciation during the three months ended March 31, 2025:
| Soluna Digital | Soluna Cloud | |||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Project Dorothy 1B | Project Dorothy 1A | Project Sophie | Other | Soluna Digital Subtotal | Project Ada | Total | |||||||||||||||||||||||||||||||||||||
| Cryptocurrency mining revenue | $ | 2,999 | $ | — | $ | — | $ | — | $ | 2,999 | $ | — | $ | 2,999 | ||||||||||||||||||||||||||||||
| Data hosting revenue | — | 1,371 | 1,031 | — | 2,402 | — | 2,402 | |||||||||||||||||||||||||||||||||||||
| Demand response services | 269 | 238 | — | — | 507 | — | 507 | |||||||||||||||||||||||||||||||||||||
| High-performance computing services | — | — | — | — | — | 28 | 28 | |||||||||||||||||||||||||||||||||||||
| Total revenue | 3,268 | 1,609 | 1,031 | — | 5,908 | 28 | 5,936 | |||||||||||||||||||||||||||||||||||||
| Cost of cryptocurrency mining, exclusive of depreciation | 1,954 | — | — | — | 1,954 | — | 1,954 | |||||||||||||||||||||||||||||||||||||
| Cost of data hosting revenue, exclusive of depreciation | — | 885 | 372 | 70 | 1,327 | — | 1,327 | |||||||||||||||||||||||||||||||||||||
| Cost of high-performance computing service revenue | — | — | — | — | — | 7 | 7 | |||||||||||||||||||||||||||||||||||||
| Cost of cryptocurrency mining revenue- depreciation | 1,074 | — | — | — | 1,074 | — | 1,074 | |||||||||||||||||||||||||||||||||||||
| Cost of data hosting revenue- depreciation | — | 295 | 106 | — | 401 | — | 401 | |||||||||||||||||||||||||||||||||||||
| Total cost of revenue | 3,028 | 1,180 | 478 | 70 | 4,756 | 7 | 4,763 | |||||||||||||||||||||||||||||||||||||
| Gross (loss) profit | $ | 240 | $ | 429 | $ | 553 | $ | (70) | $ | 1,152 | $ | 21 | $ | 1,173 | ||||||||||||||||||||||||||||||
Cryptocurrency Mining Revenue: Cryptocurrency mining revenue declined for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The decline was due to decrease in average hashprice by 36% quarter over quarter, in addition to a decline in the average price of Bitcoin resulting in lower revenues, as well as the number of Bitcoin mined decreased 12% quarter over quarter.
Data Hosting Revenue: Hosting revenue increased for the three months ended March 31, 2026, compared to the same period in 2025. This increase was primarily driven by the ramped-up energization and resulting revenue contribution from the D2 and Kati facility during the first quarter of 2026, whereas both sites did not generate revenue in the first quarter of 2025.
Demand Response Service: Demand response service revenue increased during the three months ended March 31, 2026, compared to the same period in 2025, which was due to D2 becoming operational in the second quarter of 2025, and as such no revenue was generated from the site during the first quarter of 2025.
Cost of Cryptocurrency Mining Revenue, exclusive of depreciation: Cost of cryptocurrency mining revenue includes direct utility costs, site overhead expenses, and overhead costs attributable to the operations of our cryptocurrency mining facilities in Texas.
The decrease in the cost of cryptocurrency mining revenue for the three months ended March 31, 2026, compared to the same period in 2025, was primarily driven by lower electricity consumption and associated operating expenses, reflecting a reduction in total power utilization during the period.
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Cost of Data Hosting Revenue, exclusive of depreciation: Cost of data hosting revenue includes direct utility costs, site overhead expenses, and overhead costs attributable to the operations of data hosting facilities in Kentucky and Texas.
Cost of data hosting increased for the three months ended March 31, 2026, compared to the same period in 2025. This increase was primarily driven by the initial energization of the D2 facility during the second quarter of 2025 and the subsequent increase in MWs capacity and associated operating costs in the first quarter of 2026, in addition to the initial energization of Project Kati during the first quarter of 2026.
Cost of Data Hosting Revenue- depreciation: Cost of data hosting revenue-depreciation increased mainly due to D2 becoming energized during fiscal year 2025, and Project Kati beginning initial energization in the first quarter of 2026.
General and Administrative Expenses, exclusive of depreciation and amortization: General and administrative expenses, exclusive of depreciation and amortization include cash and non-cash compensation, benefits, and related costs in support of our general corporate operations, including general management, finance and accounting, human resources, marketing, information technology, corporate development, and legal services.
•Stock-based compensation expense was approximately $10.1 million for the three months ended March 31, 2026, compared to $1.8 million for the three months ended March 31, 2025, representing an increase of approximately $8.3 million. Approximately $182 thousand of the increase relates to equity awards issued to board advisors, officers and employees during 2026. Approximately $8.5 million of the increase relates to equity awards issued to directors, officers and employees during 2025 subsequent to March 31, 2025, in which those awards get recognized for a full quarter of expense for the three months ended March 31, 2026 versus not being expensed for the three months ended March 31, 2025. The increase also includes approximately $51 thousand related to changes in the vesting terms of certain grants. These increases were partially offset by approximately $411 thousand related to the cessation of vesting for certain prior-year grants and the forfeiture of grants during the year related to termed individuals.
•Salaries and employee benefits increased by approximately $655 thousand compared to the prior quarter period. The increase was driven by recruitment costs associated with the search and onboarding of a new Chief Financial Officer, accrual for incentive based compensation, increased employee benefits premiums and plan costs, and additional payroll taxes and benefit loadings attributable to cost-of-living adjustments applied to senior executive compensation and incremental headcount added during the period.
•Professional and legal fees increased approximately $994 thousand for the three months ended March 31, 2026, primarily due to legal expenses incurred in connection with the acquisition of the Briscoe wind farm, in addition to consulting expenses incurred due to facilities inspection costs incurred in connection with the Briscoe wind farm acquisition, the addition of financial software administrative consulting engagements, interim Chief Financial Officer services engaged during the current year, and incremental costs associated with business development activities.
•All other fluctuations within general and administrative expenses for the period were not material to the overall results of operations.
Depreciation and Amortization associated with general and administrative expenses: Depreciation and amortization expense was comparable for the three months ended March 31, 2026, and 2025, totaling approximately $2.4 million in each period. The expense primarily relates to amortization of the strategic pipeline contract acquired in October 2021.
Interest expense: Interest expense for the three months ended March 31, 2026 was approximately $1.5 million compared to the $838 thousand for the three months ended March 31, 2025. See table below noting the difference mainly relates to the new loans entered into in fiscal year 2025 (Generate loan and Galaxy loan), which includes amortization of deferred financing costs, offset by the NYDIG ABL LLC ("NYDIG") equipment financing loan that was settled in September 2025.
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| (Dollars in thousands) | Three months ended March 31, | |||||||||||||
| 2026 | 2025 | |||||||||||||
| Generate loan | $ | 824 | $ | — | ||||||||||
| GreenCloud secured loan | 258 | 389 | ||||||||||||
| Galaxy loan | 207 | 42 | ||||||||||||
| Equipment loan | 84 | 15 | ||||||||||||
| Spring Lane financing cost | 43 | — | ||||||||||||
| Finance lease | 28 | — | ||||||||||||
| Other | 37 | — | ||||||||||||
| July SPA additional loan | — | 33 | ||||||||||||
| NYDIG equipment financing | — | 357 | ||||||||||||
| Navitas term loan | — | 2 | ||||||||||||
| Interest expense | $ | 1,481 | $ | 838 | ||||||||||
Gain on Debt Extinguishment and Revaluation, net: We did not recognize a gain on debt extinguishment for the three months ended March 31, 2026. For the three months ended March 31, 2025, we recognized a gain of approximately $551 thousand. The gain was in relation to the fulfillment of the Assignment and Assumption Agreement for the July Securities Purchase Agreement additional loan on March 14, 2025.
Fair value adjustment, net: We did not recognize a fair value adjustment for the three months ended March 31, 2026. For the three months ended March 31, 2025, we recognized a loss of approximately $118 thousand in fair value adjustments in relation to timing of the August 12, 2024 Standby Equity Purchase Agreement ("2024 SEPA")draws to when the shares were issued.
Other financing expense: Other financing expenses totaled approximately $564 thousand for the three months ended March 31, 2026, primarily related to commitment and structuring fees associated with the March 24, 2026 Standby Equity Purchase Agreement ("2026 SEPA") of $275 thousand, as well as SEC and FINRA filing fees of approximately $289 thousand for shelf registration occurred in the first quarter of 2026. For the three months ended March 31, 2025, other financing expense was approximately $201 thousand in relation to consent fees for the 2024 SEPA draws.
Net (loss) income attributable to non-controlling interest: We incurred a net loss attributable to non-controlling interest for the three months ended March 31, 2026 of approximately $436 thousand compared to net income attributable to non-controlling interest for the three months ended March 31, 2025 of $202 thousand a change of approximately $638 thousand increase in net loss attributable to non-controlling interest. The increase in net loss attributable to non-controlling interest was mainly attributable to Project Kati 1 just starting energization in the first quarter of 2026, whereas no costs were associated for the first quarter of 2025, in addition to the decline in cryptocurrency mining as noted above for D2. These declines were offset by Project Dorothy 2 as it was in a full quarter of site energization and generating revenue, whereas in the first quarter of 2025, the project was just generating costs as it was yet energized.
Non-GAAP Measures
To supplement our consolidated condensed financial statements included in this quarterly report presented under U.S. generally accepted accounting principles (“GAAP”), we are presenting certain non-GAAP financial measures. We are providing these non-GAAP financial measures to disclose additional information to facilitate the comparison of past and present operations by providing perspective on results absent one-time or significant non-cash items. We utilize these measures in the business planning process to understand expected operating performance and to evaluate results against those expectations. We believe that these non-GAAP financial measures, when considered together with our GAAP financial results, provide management and investors with an additional understanding of our business operating results regarding factors and trends affecting our business and provide a reasonable basis for comparing our ongoing results of operations.
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These non-GAAP financial measures are provided as supplemental measures to our performance measures calculated in accordance with GAAP and therefore, are not intended to be considered in isolation or as a substitute for comparable GAAP measures. Further, these non-GAAP financial measures have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. Because of the non-standardized definitions of non-GAAP financial measures, we caution investors that the non-GAAP financial measures as used by us in this quarterly report have limits in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. Further, investors should be aware that when evaluating these non-GAAP financial measures, these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. In addition, from time to time in the future there may be items that we may exclude for purposes of our non-GAAP financial measures, and we may in the future cease to exclude items that we have historically excluded for purposes of our non-GAAP financial measures. Likewise, we may determine to modify the nature of the adjustments to arrive at our non-GAAP financial measures. Investors should review the non-GAAP reconciliations provided below and not rely on any single financial measure to evaluate our business.
EBITDA and Adjusted EBITDA
In addition to financial measures calculated in accordance with GAAP, we also use “EBITDA” and “Adjusted EBITDA.” “EBITDA” is defined as earnings before interest, taxes, and depreciation and amortization. “Adjusted EBITDA” is defined as EBITDA adjusted for stock-based compensation costs, gain on sale of fixed assets, gain on debt extinguishment, fair value adjustments, and other non-cash activity. Management believes that EBITDA and Adjusted EBITDA results in a performance measurement that represents a key indicator of our business operations of cryptocurrency mining, hosting customers engaged in cryptocurrency mining, demand service revenue, and high-performance computing services.
We believe EBITDA and Adjusted EBITDA can be important financial measures because they allow management, investors, and the Board to evaluate and compare our operating results, including our return on capital and operating efficiencies, from period-to-period by making such adjustments. Non-GAAP financial measures are subject to material limitations as they are not in accordance with, or a substitute for, measurements prepared in accordance with GAAP. For example, we expect that stock-based compensation costs, which is excluded from the non-GAAP financial measures, will continue to be a significant recurring expense over the coming years and is an important part of the compensation provided to certain employees, officers, and directors. Similarly, we expect that depreciation and amortization of fixed assets will continue to be a recurring expense over the term of the useful life of the assets.
EBITDA and Adjusted EBITDA are provided in addition to and should not be considered to be substitutes for, or superior to net income, the comparable measure calculated in accordance with GAAP. Further, EBITDA and Adjusted EBITDA should not be considered as alternatives to revenue growth, net income, or any other performance measure calculated in accordance with GAAP, or as alternatives to cash flow from operating activities as a measure of our liquidity. EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider such measures either in isolation or as substitutes for analyzing our results as reported under GAAP.
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Reconciliations of EBITDA and Adjusted EBITDA to net loss, the most comparable GAAP financial metric, for historical periods are presented in the table below:
| (Dollars in thousands) | Three Months Ended March 31, | |||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| Net loss | $ | (17,902) | $ | (7,354) | ||||||||||||||||||||||
| Interest expense | 1,481 | 838 | ||||||||||||||||||||||||
| Income tax benefit | (624) | (425) | ||||||||||||||||||||||||
| Depreciation and amortization | 4,603 | 3,879 | ||||||||||||||||||||||||
| EBITDA | (12,442) | (3,062) | ||||||||||||||||||||||||
| Adjustments: Non-cash items | ||||||||||||||||||||||||||
| Stock-based compensation costs | 10,222 | 1,847 | ||||||||||||||||||||||||
| Gain on sale of fixed assets | (32) | — | ||||||||||||||||||||||||
| Right of first refusal amortization gain | (90) | — | ||||||||||||||||||||||||
SEPA commitment fee | 250 | — | ||||||||||||||||||||||||
| Fair value adjustment loss | — | 118 | ||||||||||||||||||||||||
| Gain on debt extinguishment and revaluation, net | — | (551) | ||||||||||||||||||||||||
| Adjusted EBITDA | $ | (2,092) | $ | (1,648) | ||||||||||||||||||||||
Adjusted EBITDA decreased for the three months ended March 31, 2026 compared to March 31, 2025 primarily driven by increases in general and administrative expenses, exclusive of depreciation and amortization, of approximately $1.9 million for the comparable period. The general and administrative expense increase was driven by increases in 2026 legal and consulting expenses incurred in relation to the Briscoe Acquisition and increases in salaries and benefits in relation to headcount and other compensation related matters. In addition, there was increases in other financing expenses due to SEC registration and FINRA fees applied in the first quarter of 2026. The increases in expenses, were offset in part due to increase in gross profit excluding cost of sales- depreciation of approximately $1.5 million. With the energization of D2 and Project Kati 1, the Company saw revenue growth in those project sites, in addition to less costs incurred in relation to energy costs.
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The following table represents the Adjusted EBITDA activity between each three-month period from January 1, 2026 through March 31, 2026.
| (Dollars in thousands) | Three months ended March 31, 2026 | |||||||||||||||||||
| Net loss | $ | (17,902) | ||||||||||||||||||
| Interest expense, net | 1,481 | |||||||||||||||||||
Income tax benefit | (624) | |||||||||||||||||||
| Depreciation and amortization | 4,603 | |||||||||||||||||||
| EBITDA | (12,442) | |||||||||||||||||||
| Adjustments: Non-cash items | ||||||||||||||||||||
| Stock-based compensation costs | 10,222 | |||||||||||||||||||
| Gain on sale of fixed assets | (32) | |||||||||||||||||||
| Right of first refusal amortization gain | (90) | |||||||||||||||||||
SEPA commitment fee | 250 | |||||||||||||||||||
| Adjusted EBITDA | $ | (2,092) | ||||||||||||||||||
The following table represents the Adjusted EBITDA activity between each three-month period from January 1, 2025 through December 31, 2025.
| (Dollars in thousands) | Three months ended March 31, 2025 | Three months ended June 30, 2025 | Three months ended September 30, 2025 | Three months ended December 31, 2025 | ||||||||||||||||||||||
Net loss | $ | (7,354) | $ | (7,780) | $ | (25,787) | $ | (16,070) | ||||||||||||||||||
| Interest expense, net | 838 | 1,196 | 1,212 | 1,589 | ||||||||||||||||||||||
Income tax benefit | (425) | (608) | (666) | (617) | ||||||||||||||||||||||
| Depreciation and amortization | 3,879 | 3,989 | 4,119 | 4,358 | ||||||||||||||||||||||
| EBITDA | (3,062) | (3,203) | (21,122) | (10,740) | ||||||||||||||||||||||
| Adjustments: Non-cash items | ||||||||||||||||||||||||||
| Stock-based compensation costs | 1,847 | 1,942 | 1,882 | 4,895 | ||||||||||||||||||||||
| Loss on sale of fixed assets and credit on equipment deposits | — | 22 | 780 | 349 | ||||||||||||||||||||||
| Fair value on placement agent warrant and financing fees | — | — | 146 | — | ||||||||||||||||||||||
| Fair value adjustment loss | 118 | — | 22,047 | 1,516 | ||||||||||||||||||||||
| Impairment on fixed assets | — | 12 | — | — | ||||||||||||||||||||||
| Gain on debt extinguishment and revaluation, net | (551) | — | (10,107) | — | ||||||||||||||||||||||
| Adjusted EBITDA | $ | (1,648) | $ | (1,227) | $ | (6,374) | $ | (3,980) | ||||||||||||||||||
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Liquidity and Capital Resources
Several key indicators of our liquidity are summarized in the following table:
| (Dollars in thousands) | Three Months Ended or as of March 31, 2026 | Three Months Ended or as of March 31, 2025 | Year Ended or as of December 31, 2025 | ||||||||||||||
| Cash | $ | 68,572 | $ | 9,161 | $ | 76,423 | |||||||||||
| Restricted cash | 17,413 | 5,287 | 12,240 | ||||||||||||||
| Working capital (deficit) | 38,806 | (31,802) | 42,938 | ||||||||||||||
| Net loss | (17,466) | (7,354) | (56,991) | ||||||||||||||
| Net cash used in operating activities | (6,372) | (177) | (9,149) | ||||||||||||||
Purchase of property, plant and equipment and deposits on equipment | (6,211) | (3,595) | (31,719) | ||||||||||||||
As of March 31, 2026, we had a consolidated accumulated deficit of approximately $385.2 million and we had positive working capital of approximately $38.8 million. As of March 31, 2026, we had total debt outstanding of approximately $26.0 million as summarized further below in the Debt table. In addition, we had outstanding commitments related to Soluna Digital Inc. (“SDI”) of approximately $8.2 million in capital expenditures related to Project Kati. In addition, due to CloudCo’s termination of the HPE Agreement on March 24, 2025, and HPE’s termination of the HPE Agreement on March 26, 2025, and the acceleration of the remaining unpaid amounts of the contract in accordance with Section 8(h)(ii) of the HPE Agreement, we have recognized a liability for the remainder of the HPE Agreement on the balance sheet of our subsidiary, CloudCo, of approximately $19.3 million. As of March 31, 2026, we had $68.6 million of cash available to fund our operations.
Based on business developments, including changes in production levels, staffing requirements, and network infrastructure improvements, we will require additional capital equipment in the foreseeable future. We are focused on developing and monetizing green cryptocurrency mining facilities, as well as facilities capable of hosting customers engaged in cryptocurrency mining, and data centers to provide specialized AI Cloud and colocation services.
In 2025 and 2026, we had the following capital raise activities:
•At the Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”), as sales agent, pursuant to which we may offer and sell, from time to time, through Wainwright, up to $87.65 million. As of December 31, 2025, we had drawn approximately $34.2 million in net proceeds pursuant to the ATM Agreement. No draws were done for the three months ended March 31, 2026. On March 9, 2026, the Company filed a shelf registration statement on Form S-3 which was subsequently declared effective in which the Company may offer and sell shares of the Company’s common stock having an aggregate offering price up to $500 million from time to time through Wainwright. Subsequent to March 31, 2026 and through the date of the issuance of these condensed financial statements, the Company has issued 36,820,572 shares of common stock for net proceeds of approximately $52.2 million.
•2024 SEPA with YA II PN, LTD., a Cayman Islands exempt limited company (“YA”). In accordance with the terms of the 2024 SEPA, YA has agreed to purchase up to $25 million in aggregate gross purchase price of newly issued fully paid shares of our common stock from time to time subject to the limits and the conditions of the 2024 SEPA. As of December 31, 2025, approximately $6.2 million has been drawn on the 2024 SEPA. On March 24, 2026, the Company entered into another the 2026 SEPA with YA. In accordance with the terms of the 2026 SEPA, YA has agreed to purchase up to an aggregate of $250.0 million of shares of common stock (the “2026 SEPA Shares”) from time to time subject to the limits and the conditions of the 2026 SEPA. No shares have been drawn as of March 31, 2026 and through the date of the issuance of these condensed financial statements.
•In July 2025, we entered into a securities purchase agreement pursuant to which we received gross proceeds of $5.0 million from a public offering of common stock. In connection with this offering, we issued warrants, and as of December 31, 2025, we received approximately $10.0 million in gross proceeds from the exercise of such warrants.
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•In December 2025, we entered into a securities purchase agreement pursuant to which we received gross proceeds of approximately $32.0 million from a public offering of common stock.
For 2026, we plan to continue funding operations, including operating deficits, from operating cash flows and cash flow debt and equity financings, including the ATM Agreement, 2024 SEPA, additional borrowings from the Generate loan facility for the Briscoe Wind Farm acquisition, the unsecured promissory note with YA for the membership interest purchase of D1A, and others to be closed as needed consistent with management’s plans.
The Company is dependent on generating profitable operations in the future and/or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. In the near term, management is evaluating and implementing different strategies to obtain financing to fund the Company’s expenses and growth to achieve a level of revenue adequate to support the Company’s current cost structure. Financing strategies may include, but are not limited to, stock issuances, project level equity, debt borrowings, partnerships and/or collaborations. If the Company is unable to meet its financial obligations, it could be forced to restructure or refinance, seek additional equity capital or sell its assets. The Company might then be unable to obtain such financing or capital or sell its assets on satisfactory terms. There can be no assurance that additional financing will be available to the Company when needed or, if available, that it can be obtained on commercially reasonable terms. If the Company is not able to obtain the additional financing on a timely basis, if and when it is needed, it will be forced to delay or scale down some or all of its development activities or perhaps even cease the operation of its business.
Operating Activities
Net cash used in operations was approximately $6.4 million during the three months ended March 31, 2026. The Company had a net loss for the three months ended March 31, 2026 of approximately $17.9 million. Non-cash items mainly included approximately $2.2 million of depreciation expense, $2.4 million of amortization expenses, and $10.2 million of stock compensation expenses. The other non-cash items were not material. The change in asset and liabilities of $3.3 million mainly relates to increases in prepaid expenses and other current assets of $1.5 million in relation to prepaid utility expense for Project Kati, and timing of energy deposits, in addition to an increase in accounts payable of $2.1 million related to legal and fixed asset invoices not paid. The other changes in assets and liabilities were not material.
Net cash used by operations was approximately $177 thousand during the three months ended March 31, 2025. The Company had a net loss for the three months ended March 31, 2025 of approximately $7.4 million. Non-cash items included approximately $1.5 million of depreciation expense, and $2.4 million of amortization expenses, and $1.8 million of stock compensation expenses. These non-cash items were offset with a deferred tax benefit of $437 thousand and gain on extinguishment of debt of approximately $551 thousand. The change in asset and liabilities of $1.9 million mainly relates to decrease in other long term assets of $1.6 million in relation to receipt of the Briscoe deposit in January 2025. The other changes in assets and liabilities of approximately $500 thousand mainly related to decrease in accounts receivable due to timing and amounts billed related to March services, an increase in accounts payable related to timing and billing amounts of invoices, including increases in legal fees, an increase in interest payable in relation to NYDIG loan and Galaxy loan, offset with payment made to HPE in January and payment of sales and use tax.
Investing Activities
Net cash used in investing activities during the three months ended March 31, 2026 was approximately $6.2 million consisting mainly of capital expenditures of $2.6 million, which consist of additions to property, plant, and equipment mainly for Project Kati offset with transfers from deposits on equipment, and $3.6 million deposit on equipment purchases.
Net cash used in investing activities during the three months ended March 31, 2025 was approximately $3.6 million consisting mainly of capital expenditures and deposits on equipment for D2.
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Financing Activities
| (Dollars in thousands) | Three months ended March 31, | |||||||||||||
| 2026 | 2025 | |||||||||||||
| Proceeds from debt issuance | $ | — | $ | 5,000 | ||||||||||
| Payments on debt and deferred financing costs | (1,001) | (1,978) | ||||||||||||
| Contributions from non-controlling interest | 10,918 | 4,310 | ||||||||||||
| Distributions to non-controlling interest | (131) | (1,525) | ||||||||||||
| Proceeds from warrant exercises | 8 | — | ||||||||||||
| Payments on financing lease liabilities | (56) | — | ||||||||||||
| Net proceeds from SEPA and ATM | — | 2,005 | ||||||||||||
| Net cash provided by financing activities | $ | 9,738 | $ | 7,812 | ||||||||||
Net cash provided by financing activities was approximately $9.7 million for the three months ended March 31, 2026 consisting mainly of contributions from SLC for non-controlling interest of Project Kati of $10.9 million, offset with payments on debt of approximately $1.0 million to the Green Cloud Secured Note (as defined below), Generate debt, and Galaxy principal debt costs.
Net cash provided by financing activities was approximately $7.8 million for the three months ended March 31, 2025 consisting mainly of $5.0 million of debt issuance proceeds from Galaxy, $2.0 million of net proceeds from 2024 SEPA draws, and $4.3 million of contributions from non-controlling interest, offset with cash distributions to non-controlling interest members of approximately $1.5 million and payments on debt and deferred financing costs of approximately $2.0 million regarding the Green Cloud Secured Note, First Amendment to the Note Purchase Agreement dated July 12, 2024, Navitas term loan, and for deferred financing costs.
Debt
The following balances are presented net of unamortized debt issuance costs of approximately $2.7 million and $2.9 million as of March 31, 2026 and December 31, 2025, respectively.
| March 31, 2026 | December 31, 2025 | |||||||||||||
| (Dollars in thousands) | ||||||||||||||
| Generate loan | $ | 13,765 | $ | 13,926 | ||||||||||
| Green Cloud Secured Loan | 7,074 | 7,473 | ||||||||||||
| Galaxy Loan | 4,195 | 4,283 | ||||||||||||
| Equipment loan | 917 | 1,075 | ||||||||||||
| Total Debt | $ | 25,951 | $ | 26,757 | ||||||||||
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On September 12, 2025, the Company caused its subsidiaries Soluna DVSL ComputeCo, LLC (“Dorothy 1A Borrower”), Soluna DVSL II ComputeCo, LLC (“Dorothy 2 Borrower”), and Soluna KK I ComputeCo, LLC (“Tranche B Borrower” and collectively with Dorothy 1A Borrower and Dorothy 2 Borrower, the “Borrowers”) to enter into a Credit and Guaranty Agreement (the “Credit Agreement”) with Generate Lending, LLC, as administrative agent and collateral agent (the “Agent”), and Generate Strategic Credit Master Fund I-A, L.P. (the “Lender”). The Credit Agreement provides for senior secured term loan commitments in an aggregate principal amount of up to $35.5 million, comprised of (i) Tranche A-1 ($5.5 million), (ii) Tranche A-3 ($11.5 million), and (iii) Tranche B ($18.5 million). In addition, the Credit Agreement permits the Borrowers to request one or more Additional Tranche Loan Commitments (as defined in the Credit Agreement), in the aggregate amount of up to $64.5 million, subject to the approval of the Lender and the Agent, for project-level financing of eligible projects. As of March 31, 2026, the Borrowers borrowed approximately $17 million under the Credit Agreement, comprised of Tranche A-1 loans and Tranche A-3 loans. The Company can draw upon Tranche B from September 12, 2025 until October 31, 2026, subject to the conditions set forth in the Credit Agreement. The maturity date for the Tranche A and Tranche B loans is the earlier of (i) payment of outstanding principal, interest, and fees and (ii) September 12, 2030. Additional Tranche Loan Commitments will have maturity dates as set forth in their respective amendments to the Credit Agreement. As of March 31, 2026, the outstanding principal balance is approximately $15.8 million. The Company has obtained a limited waiver in connection with diligence requests. As of the date of these condensed consolidated financial statements, the Company is in compliance with all covenants in relation to the Generate Credit Agreement.
On March 12, 2025, the SW Borrower, a Delaware limited liability company and subsidiary of SW Holdings, itself a subsidiary of SDI, a Nevada corporation and wholly owned subsidiary of the Company, entered into the Galaxy Loan Agreement with SW Holdings and Galaxy. The Galaxy Loan Agreement provides for a term loan facility in the principal amount of $5.0 million (the “Term Loan Facility”). The Term Loan Facility bears interest at a rate of 15.0% per annum, subject to an increase of 5.0% (for a total of 20.0%) in the event an Event of Default has occurred and is continuing. The Term Loan Facility matures on March 12, 2030 and includes scheduled payments over a five-year term. As of March 31, 2026, the outstanding principal balance is approximately $4.5 million as we were compliant with all debt covenants.
On June 20, 2024, pursuant to the terms and subject to the conditions of a Note Purchase Agreement (the "June SPA") by and among (i) Soluna AL CloudCo, LLC, a Delaware limited liability company ("CloudCo") and indirect wholly owned subsidiary of the Company, (ii) Soluna Cloud, Inc., a Nevada corporation, indirect wholly owned subsidiary of the Company, and parent of CloudCo ("Soluna Cloud"), (iii) the Company and (iv) the accredited investor named therein (the "Investor"), CloudCo issued to the Investor a secured promissory note in a principal amount equal to $12.5 million (the
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“Green Cloud Secured Note”). The Green Cloud Secured Note accrues interest at a rate 9.0% per annum, subject to adjustment upon an event of default. The Green Cloud Secured Note matures on June 20, 2027. In relation to the Green Cloud Secured Note, as of March 31, 2026, the Company had an outstanding principal balance of approximately $7.3 million.
On May 16, 2024, the SL Borrowing – 1, LLC, an affiliate of the Company (the “SDI Borrower"), entered into a loan (the "Equipment Loan Agreement" and the "Loan") with Soluna2 SLC Fund II Project Holdco LLC (the "Lender"). The Equipment Loan Agreement provides for the SDI Borrower to borrow, from time to time, up to $4.0 million, as further amended on February 28, 2025, to be used to purchase necessary equipment for the progression of D2 and Project Kati. Any loans made under the Equipment Loan Agreement have a maturity date of May 16, 2027 and bear interest at a rate of 15% per annum. The Equipment Loan Agreement includes customary covenants for loans of this nature, as well as a multiple on invested capital provision ("MOIC"), which requires us to pay, in addition to principal and interest, an amount equal to the difference of (i) the greater of (a) the principal amount of the Loan being repaid plus all interest previously paid or simultaneously being paid to Lender in respect of such principal of the Loan, and (b) the principal amount of the Loan being repaid multiplied by three, minus (ii) the sum of the principal amount of the Loan being repaid plus all interest previously paid or simultaneously being paid to Lender in respect of such principal of the Loan. On October 1, 2025, the Borrower, and Soluna2 Kati Project Holdco LLC ("Kati Lender"), entered into a borrowing request of $1.1 million to cover the purchase of land to support construction of Project Kati Phase 2 under the terms of the Equipment Loan Agreement. For the land purchase, the MOIC payment was revised to replace 3.00 with 1.00. The $1.1 million remains outstanding as of March 31, 2026.
Critical Accounting Policies and Significant Judgments and Estimates
The above discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. Note 2, Accounting Policies, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025 includes a summary of our most significant accounting policies. There have been no material changes to the critical accounting policies previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025. The preparation of these condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of assets and liabilities. On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, income taxes, fair value measurements, and stock-based compensation. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Periodically, our management reviews our critical accounting estimates with the Audit Committee of our Board of Directors.
Statement Concerning Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act. Any statements contained in this Form 10-Q that are not statements of historical fact may be forward-looking statements. When we use the words “anticipate,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend,” “should,” “could,” “may,” “will” and similar words or phrases, we are identifying forward-looking statements. Such forward-looking statements include, but are not limited to, statements regarding:
•the availability of financing opportunities, risks associated with economic conditions, dependence on management and conflicts of interest;
•the ability to service debt obligations and maintain flexibility in respect of debt covenants;
•economic dependence on regulated terms of service and electricity rates;
•the speculative and competitive nature of the technology sector;
•ability of the Company to attract and retain hosted customers for its hosting operations;
•dependency in continued growth in blockchain and cryptocurrency usage;
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•lawsuits and other legal proceedings and challenges;
•conflict of interests with directors and management;
•government regulations;
•The growth of the Briscoe Wind Farm acquisition that occurred on April 1, 2026;
•The ability of the Company to construct and complete the anticipated expansion of its data centers; and
•other risks and uncertainties discussed under the heading “Risk Factors” in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Forward-looking statements speak only as of the date they are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions, or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
Item 4. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, and the rules and regulations thereunder, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As required by Rule 13a-15(b) under the Exchange Act, our management, under the supervision and with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2026. Based on such evaluation, our principal executive officer and principal financial officer have concluded that, as of March 31, 2026, our disclosure controls and procedures were effective at the reasonable assurance level.
Material Weakness in Internal Control and Plan for Remediation
As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025, management identified a material weakness in our internal control over financial reporting that remained open as of March 31, 2026 related to control activities over balance sheet classification and presentation. Specifically, errors were identified related to (i) the classification of current and long-term debt, (ii) a lease classification and valuation, and (iii) an overstatement in deposits on equipment and current liabilities.
Remediation:
Our Board of Directors and management take internal control over financial reporting and the integrity of our financial statements seriously. Management continues to work to improve its controls related to our material weaknesses. The remediation actions include: (i) enhancing design and documentation related to complex transactions and control activities, and (ii) developing robust review procedures to ensure the proper recording and reporting of the complex transactions. To
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achieve the timely implementation of the above, management has commenced the following actions and will continue to assess additional opportunities for remediation on an ongoing basis:
•Implement more robust internal policies and procedures relating to balance sheet presentations, with a specific focus on establishing reliable controls over lease accounting to ensure the accuracy of financial reporting.
We cannot provide any assurance that these remediation efforts will be successful or that our internal control over financial reporting will be effective as a result of these efforts. In addition, we continue to evaluate and work to improve our internal control over financial reporting related to the identified material weakness, management may determine to take additional measures to address control deficiencies or determine to modify the remediation plan described above. We believe as of March 31, 2026, our condensed financial statements are fairly stated in all material respects in accordance with generally accepted accounting principles in the United States of America.
(b) Changes in Internal Control Over Financial Reporting
Other than the remediation efforts that are in process, there have been no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our fiscal quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
The material weaknesses cannot be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. Therefore, to remediate our existing material weaknesses, we require additional time to complete the implementation and testing of our remediation plans and demonstrate the effectiveness of our remediation efforts.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
At any point in time, we may be involved in various lawsuits or other legal proceedings. Such lawsuits could arise from the sale of products or services or from other matters relating to our regular business activities, compliance with various governmental regulations and requirements, or other transactions or circumstances.
Item 1A. Risk Factors
Part II, Item 1A (Risk Factors) of our most recently filed Annual Report on Form 10-K with the SEC, filed on March 30, 2026, sets forth information relating to important risks and uncertainties that could materially adversely affect our business, financial condition and operating results. There have been no material changes to our risk factors disclosed in our most recently filed Annual Report on Form 10-K. Those risk factors continue to be relevant to an understanding of our business, financial condition and operating results, however, and, accordingly, you should review and consider such risk factors in making any investment decision with respect to our securities.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
In connection with the 2026 SEPA, the Company issued to YA a commitment fee of 335,976 shares of common stock which were made in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended.
Item 3. Defaults Upon Senior Securities
None
Item 4. Mine Safety Disclosures
Not applicable.
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Item 5. Other Information
Rule 10b5-1 Trading Arrangements and Non-Rule 10b5-1 Trading Arrangements
During the fiscal quarter ended March 31, 2026, none of our officers or directors, as those terms are defined in Rule 16a-1(f), adopted terminated
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Item 6. Exhibits
| Exhibit No. | Description | |||||||
| 4.1 | ||||||||
| 4.2 | ||||||||
| 4.3 | ||||||||
| 4.4 | ||||||||
| 4.5 | ||||||||
| 10.1 | ||||||||
10.2 **^ | ||||||||
10.3 **^ | ||||||||
| 10.4 | ||||||||
| 10.5 | ||||||||
| 10.6 | ||||||||
| 10.7 | ||||||||
| 31.1 | ||||||||
| 31.2 | ||||||||
| 32.1 | ||||||||
| 32.2 | ||||||||
| 101.INS* | Inline XBRL Instance Document | |||||||
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF* | Inline XBRL Taxonomy Definition Linkbase Document | |||||||
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
All other exhibits for which no other filing information is given are filed herewith.
* Submitted electronically herewith. Attached as Exhibit 101 are the following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, formatted in eXtensible Business Reporting Language (XBRL) and tagged as blocks of text and including detailed tags: (i) Condensed Consolidated Balance Sheets at March 31,
2026 and December 31, 2025; (ii) Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2026 and 2025; (iii) Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025; and (iv) related notes.
** Annexes, schedules and/or exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish supplementally a copy of any of the omitted schedules and exhibits to the SEC on a confidential basis upon request.
^ The Company has omitted portions of the referenced exhibit pursuant to Item 601(b) of Regulation S-K, because they (a) are not material and (b) are the type that the Company treats as private or confidential.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Soluna Holdings, Inc. | ||||||||
Date May 15, 2026 | By: | /s/ John Belizaire | ||||||
| John Belizaire Chief Executive Officer | ||||||||
| By: | /s/ Michael Picchi | |||||||
| Michael Picchi Chief Financial Officer | ||||||||
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Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, John Belizaire, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Soluna Holdings, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| May 15, 2026 | /s/ John Belizaire | ||||
| John Belizaire Chief Executive Officer (Principal Executive Officer) | |||||
Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael Picchi certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Soluna Holdings, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| May 15, 2026 | /s/ Michael Picchi | ||||
| Michael Picchi Chief Financial Officer (Principal Financial Officer) | |||||
Exhibit 32.1
Soluna Holdings, Inc.
Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(18 U.S.C. Section 1350)
In connection with the Quarterly Report on Form 10-Q of Soluna Holdings, Inc. (the “Company”) for the three month period ended March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John Belizaire, Chief Executive Officer of the Company, certify, pursuant to the requirements of Section 906 of the Sarbanes-Oxley Act of 2002, (18 U.S.C. Sections 1350(a) and (b)), that, to my knowledge:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
May 15, 2026
| /s/ John Belizaire | |||||
| John Belizaire Chief Executive Officer (Principal Executive Officer) | |||||
This certification is made solely for the purpose of 18 U.S.C. Section 1350, and is not being filed as part of the Report or as a separate disclosure document, and may not be disclosed, distributed or used by any person for any reason other than as specifically required by law.
Exhibit 32.2
Soluna Holdings, Inc.
Certification of Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(18 U.S.C. Section 1350)
In connection with the Quarterly Report on Form 10-Q of Soluna Holdings, Inc. (the “Company”) for the three month period ended March 31, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael Picchi Chief Financial Officer of the Company, certify, pursuant to the requirements of Section 906 of the Sarbanes-Oxley Act of 2002, (18 U.S.C. Sections 1350(a) and (b)), that, to my knowledge:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
May 15, 2026
| /s/ Michael Picchi | |||||
| Michael Picchi Chief Financial Officer (Principal Financial Officer) | |||||
This certification is made solely for the purpose of 18 U.S.C. Section 1350, and is not being filed as part of the Report or as a separate disclosure document, and may not be disclosed, distributed or used by any person for any reason other than as specifically required by law.