SLNH 10-Q

Soluna Holdings, Inc (SLNH)

10-Q 2024-11-14 For: 2024-09-30

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Added on April 11, 2026

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Nevada		14-1462255
State or other jurisdiction of incorporation or organization		(I.R.S. Employer Identification No.)

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	SLNH	The Nasdaq Stock Market LLC
9.0% Series A Cumulative Perpetual Preferred Stock, par value $0.001 per share	SLNHP	The Nasdaq Stock Market LLC

	Large accelerated filer ☐	Accelerated filer ☐
	Non-accelerated filer ☒	Smaller reporting company ☒
		Emerging growth company ☐

Glossary of Abbreviations and Acronyms

PART I. FINANCIAL INFORMATION			4

	Item 1.	Financial Statements	4

		Condensed Consolidated Balance Sheets As of September 30, 2024 (Unaudited) and December 31, 2023	4

		Condensed Consolidated Statements of Operations (Unaudited) For the Three and Nine Months Ended September 30, 2024 and 2023	5

		Condensed Consolidated Statements of Changes in Equity For the Year Ended December 31, 2023 and the Three and Nine Months Ended September 30, 2024 (Unaudited)	6

		Condensed Consolidated Statements of Cash Flows (Unaudited) For the Nine Months Ended September 30, 2024 and 2023	8

		Notes to Condensed Consolidated Financial Statements (Unaudited)	9

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	36

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	54

	Item 4.	Controls and Procedures	55

PART II. OTHER INFORMATION			56

	Item 1.	Legal Proceedings	56

	Item 1A.	Risk Factors	57

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	57

	Item 3.	Defaults Upon Senior Securities	57

	Item 4.	Mine Safety Disclosures	57

	Item 5.	Other Information	57

	Item 6.	Exhibits	57

SIGNATURES			58

(Dollars in thousands, except per share)	September 30, 2024			December 31, 2023
Assets
Current Assets:
Cash	$	8,766		$	6,368
Restricted cash		1,981			2,999
Accounts receivable, net (allowance for expected credit losses $611 and $0 as of September 30, 2024 and December 31, 2023)		2,045			2,948
Notes receivable		33			446
Prepaid expenses and other current assets		5,662			1,416
Equipment held for sale		28			107
Total Current Assets		18,515			14,284
Restricted cash, noncurrent		1,460			1,000
Other assets		8,718			2,954
Deposits and credits on equipment		5,019			1,028
Property, plant and equipment, net		43,471			44,572
Intangible assets, net		19,986			27,007
Operating lease right-of-use assets		180			431
Total Assets	$	97,349		$	91,276

Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	3,388		$	2,099
Accrued liabilities		7,666			4,906
Convertible notes payable		3,370			8,474
Current portion of debt		14,529			10,864
Income tax payable		65			24
Customer deposits-current		2,291			1,588
Operating lease liability		26			220
Total Current Liabilities		31,335			28,175

Other liabilities		191			499
Customer deposits- long-term		-			1,248
Long-term debt		8,100			-
Operating lease liability		155			216
Deferred tax liability, net		5,973			7,779
Total Liabilities		45,754			37,917

Commitments and Contingencies (Note 9)		-			-

Stockholders’ Equity:
9.0% Series A Cumulative Perpetual Preferred Stock, par value $0.001 per share, $25.00 liquidation preference; authorized 6,040,000; 4,953,545 and 3,061,245 shares issued and outstanding as of September 30, 2024 and December 31, 2023		5			3
Series B Preferred Stock, par value $0.0001 per share, authorized 187,500; 62,500 shares issued and outstanding as of September 30, 2024 and December 31, 2023		—			—
Preferred stock, value		-			-
Common stock, par value $0.001 per share, authorized 75,000,000; 7,690,219 shares issued and 7,649,478 shares outstanding as of September 30, 2024 and 2,546,361 shares issued and 2,505,620 shares outstanding as of December 31, 2023		8			3
Additional paid-in capital		308,947			291,276
Accumulated deficit		(274,287	)		(250,970	)
Common stock in treasury, at cost, 40,741 shares at September 30, 2024 and December 31, 2023		(13,798	)		(13,798	)
Total Soluna Holdings, Inc. Stockholders’ Equity		20,875			26,514
Non-Controlling Interest		30,720			26,845
Total Stockholders’ Equity		51,595			53,359
Total Liabilities and Stockholders’ Equity	$	97,349		$	91,276

(Dollars in thousands, except per share)	2024			2023			2024			2023
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in thousands, except per share)	2024			2023			2024			2023

Cryptocurrency mining revenue	$	2,811		$	1,786		$	13,691		$	5,497
Data hosting revenue		4,271			4,011			14,446			5,451
High-performance computing service revenue		-			-			-			-
Demand response service revenue		443			-			1,612			-
Total revenue		7,525			5,797			29,749			10,948
Operating costs:
Cost of cryptocurrency mining revenue, exclusive of depreciation		1,963			1,040			5,687			4,451
Cost of data hosting revenue, exclusive of depreciation		2,555			2,150			6,982			3,181
Cost of high-performance computing services		2,859			-			2,859			-
Costs of revenue- depreciation		1,512			1,200			4,540			2,364
Total costs of revenue		1,512			1,200			4,540			2,364
Total costs of revenue		8,889			4,390			20,068			9,996
Operating expenses:
General and administrative expenses, exclusive of depreciation and amortization		5,248			2,723			14,625			11,219
Depreciation and amortization associated with general and administrative expenses		2,404			2,379			7,209			7,134
Total general and administrative expenses		7,652			5,102			21,834			18,353
Impairment on fixed assets		-			41			130			418
Operating loss		(9,016	)		(3,736	)		(12,283	)		(17,819	)
Interest expense		(821	)		(495	)		(1,694	)		(2,355	)
Gain (loss) on debt extinguishment and revaluation, net		1,203			(769	)		(7,495	)		(2,350	)
Loss on sale of fixed assets		-			(373	)		(21	)		(404	)
Other expense, net		(6	)		(74	)		(32	)		(301	)
Loss before income taxes		(8,640	)		(5,447	)		(21,525	)		(23,229	)
Income tax benefit (expense)		547			(569	)		1,743			524
Net loss		(8,093	)		(6,016	)		(19,782	)		(22,705	)
(Less) Net loss (income) attributable to non-controlling interest		903			(646	)		(3,535	)		206
Net loss attributable to Soluna Holdings, Inc.	$	(7,190	)	$	(6,662	)	$	(23,317	)	$	(22,499	)

Basic and Diluted loss per common share:
Basic & Diluted loss per share	$	(1.29	)	$	(5.96	)	$	(6.00	)	$	(24.16	)

Weighted average shares outstanding (Basic and Diluted)		7,738,664			1,412,640			5,147,602			1,162,689

	Series A Shares		Amount		Series B Shares		Amount		Shares (1)		Amount (1)		Capital (1)			Accumulated Deficit			Shares (1)		Amount			Controlling Interest			Stockholders’ Equity
	Preferred Stock								Common Stock				Additional Paid-in						Treasury Stock					Non-			Total
	Series A Shares		Amount		Series B Shares		Amount		Shares (1)		Amount (1)		Capital (1)			Accumulated Deficit			Shares (1)		Amount			Controlling Interest			Stockholders’ Equity
January 1, 2023		3,061,245	$	3		62,500	$	—		788,578	$	1	$	277,429		$	(221,769	)		40,741	$	(13,798	)		4,406		$	46,272

Net loss		—		—		—		—		—		—		—			(7,062	)		—		—			(370	)		(7,432	)

Preferred dividends- Series B		—		—		—		—		—		—		(131	)		—			—		—			—			(131	)

Stock-based compensation		—		—		—		—		—		—		865			—			—		—			—			865

Issuance of shares – securities purchase offering		—		—		—		—		87,144		—		439			—			—		—			—			439

Restricted stock units vested		—		—		—		—		5,769		—		—			—			—		—			—			—

Issuance of shares – restricted stock		—		—		—		—		1,400		—		14			—			—		—			—			14

Issuance of shares- Notes conversion		—		—		—		—		174,505		—		1,394			—			—		—			—			1,394

Contribution from Non-Controlling interest		—		—		—		—		—		—		—			—			—		—			8,758			8,758

March 31, 2023		3,061,245	$	3		62,500	$	—		1,057,396	$	1	$	280,010		$	(228,831	)		40,741	$	(13,798	)	$	12,794		$	50,179

Net loss		—		—		—		—		—		—		—			(8,775	)		—		—			(482	)		(9,257	)

Preferred dividends – Series B		—		—		—		—		—		—		(252	)		—			—		—			—			(252	)

Stock-based compensation		—		—		—		—		—		—		2,232			—			—		—			—			2,232

Issuance of shares – securities purchase offering		—		—		—		—		63,978		—		446			—			—		—			—			446

Restricted stock units vested		—		—		—		—		25,125		—		—			—			—		—			—			—

Issuance of shares-merger shares		—		—		—		—		19,800		—		—			—			—		—			—			—

Issuance of shares- Notes conversion		—		—		—		—		64,351		—		400			—			—		—			—			400

Warrants and valuation issued in relation to debt amendment		—		—		—		—		—		—		1,330			—			—		—			—			1,330

Contribution from Non-Controlling interest		—		—		—		—		—		—		—			—			—		—			13,543			13,543

June 30, 2023		3,061,245	$	3		62,500	$	—		1,230,650	$	1	$	284,166		$	(237,606	)		40,741	$	(13,798	)	$	25,855		$	58,621

Net (loss) income		—		—		—		—		—		—		—			(6,662	)		—		—			646			(6,016	)

Preferred dividends-Series B		—		—		—		—		—		—		(38	)		—			—		—			—			(38	)

Stock-based compensation		—		—		—		—		—		—		595			—			—		—			—			595

Issuance of shares – securities purchase offering		—		—		—		—		113,502		—		770			—			—		—			—			770

Common Shares and Warrants for Series B dividend payment		—		—		—		—		44,000		—		656			—			—		—			—			656

Issuance of shares- notes conversion		—		—		—		—		104,577		—		650			—			—		—			—			650

Contribution from Non-Controlling interest		—		—		—		—		—		—		—			—			—		—			151			151

September 30, 2023		3,061,245	$	3		62,500	$	—		1,492,729	$	1	$	286,799		$	(244,268	)		40,741	$	(13,798	)	$	26,652		$	55,389

Net (loss) income		—		—		—		—		—		—		—			(6,702	)		——		—			1,705			(4,997	)

Stock-based compensation		—		—		—		—		—		—		602			—			—		—			—			602

Issuance of shares-merger shares		—		—		—		—		39,600		—		—			—			—		—			—			—

Issuance of shares –warrants exercise		—		—		—		—		81,726		—		—			—			—		—			—			—

True up shares for reverse split		—		—		—		—		37,762		—		—			—			—		—			—			—

Restricted stock units vested		—		—		—		—		2,299		—		—			—			—		—			—			—

Warrant revaluation		—		—		—		—		—		—		307			—			—		—			—			307

Issuance of shares- notes conversion		—		—		—		—		892,245		2		3,568			—			—		—			—			3,570

Distribution to non-controlling interest		—		—		—		—		—		—		—			—			—		—			(1,520	)		(1,520	)

Contribution from Non-Controlling interest		—		—		—		—		—		—		—			—			—		—			8			8

December 31, 2023		3,061,245	$	3		62,500	$	—		2,546,361	$	3	$	291,276		$	(250,970	)		40,741	$	(13,798	)	$	26,845		$	53,359

(Dollars in thousands)	2024			2023
	Nine Months Ended September 30,
(Dollars in thousands)	2024			2023
Operating Activities
Net loss	$	(19,782	)	$	(22,705	)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense		4,634			2,387
Amortization expense		7,116			7,111
Stock-based compensation		3,286			3,709
Deferred income taxes		(1,806	)		(524	)
Impairment on fixed assets		130			418
Provision for credit losses		611			-
Amortization of operating lease asset		139			177
Loss on debt extinguishment and revaluation, net		7,495			2,350
Amortization on deferred financing costs and discount on notes		179			748
Loss on sale of fixed assets		21			404
Changes in operating assets and liabilities:
Accounts receivable		536			(1,552	)
Prepaid expenses and other current assets		(3,429	)		(484	)
Other long-term assets		(5,771	)		(307	)
Accounts payable		1,159			551
Deferred revenue		-			(453	)
Operating lease liabilities		(141	)		(172	)
Other liabilities and customer deposits		(811	)		1,294
Accrued liabilities		3,022			2,644
Net cash used in operating activities		(3,412	)		(4,404	)
Investing Activities
Purchases of property, plant, and equipment		(3,820	)		(12,534	)
Purchases of intangible assets		(95	)		(49	)
Proceeds from disposal on property, plant, and equipment		215			2,266
Deposits of equipment, net		(3,991	)		200
Net cash used in investing activities		(7,691	)		(10,117	)
Financing Activities
Proceeds from common stock warrant exercises		2,330			-
Proceeds from common stock securities purchase agreement offering		-			817
Proceeds from notes and debt issuance		14,470			3,100
Payments on Navitas loan and notes payable		(2,261	)		(510	)
Costs of common stock securities purchase agreement offering		-			(10	)
Payments on NYDIG loans and line of credit		-			(350	)
Contributions from non-controlling interest		5,098			19,706
Distributions to non-controlling interest		(6,694	)		-
Net cash provided by financing activities		12,943			22,753

Increase in cash & restricted cash		1,840			8,232
Cash & restricted cash – beginning of period		10,367			1,821
Cash & restricted cash – end of period	$	12,207		$	10,053

Supplemental Disclosure of Cash Flow Information
Interest paid on NYDIG loans and line of credit		115			567
Interest paid on Navitas loan		103			-
Warrant consideration in relation to convertible notes and revaluation of warrant liability		5,606			1,330
Notes converted to common stock		5,877			2,444
Noncash membership distribution accrual		741			-
SEPA commitment payment		250			-
Noncash disposal of NYDIG collateralized equipment		-			2,576
Promissory note and interest conversion to common shares		-			845
Noncash non-controlling interest contributions		1,440			2,746
Noncash activity right-of-use assets obtained in exchange for lease obligations		-			403
Series B preferred dividend in accrued expense		-			657
Noncash note receivable from sale of equipment		-			240

	●	Inclusion of the net income/loss from noncontrolling interest in the numerator;
	●	Inclusion of the cumulative undeclared preferred dividends in the numerator;
	●	Exclusion of shares issued for little or no cash consideration (ie: penny warrants) in the denominator.

	For the three months ended September 30, 2023									For the nine months ended September 30, 2023
	As Reported			As Revised			Change			As Reported			As Revised			Change
Basic and Diluted net loss per share	$	(4.40	)	$	(5.96	)	$	(1.56	)	$	(20.11	)	$	(24.16	)	$	(4.05	)

(Dollars in thousands)	September 30, 2024			December 31, 2023
Land and land improvements	$	1,553		$	1,538
Buildings and leasehold improvements		25,384			25,369
Computers and related software		11,459			11,764
Machinery and equipment		9,142			9,054
Office furniture and fixtures		35			28
Construction in progress		4,295			1,111
		51,868			48,864
Less: Accumulated depreciation		(8,397	)		(4,292	)
Property, plant and equipment, net	$	43,471		$	44,572

(Dollars in thousands)	Intangible Assets		Accumulated Amortization		Total

Strategic pipeline contract	$	46,885	$	27,349	$	19,536
Assembled workforce		500		292		208
Patents		259		17		242
Total	$	47,644	$	27,658	$	19,986

(Dollars in thousands)
Year	2024
2024 (remainder of the year)	$	2,372
2025		9,490
2026		7,910
2027		12
2028		12
Thereafter		190
Total	$	19,986

(Dollars in thousands):	Convertible notes payable		Current portion of debt		Long term debt		Total
Convertible Notes	$	3,370	$	-	$	-	$	3,370
NYDIG financing		-		9,183		-		9,183
Navitas term loan		-		292		-		292
June 2024 secured note		-		3,781		8,100		11,881
July 2024 additional secured note		-		1,273		-		1,273
Total Debt	$	3,370	$	14,529	$	8,100	$	25,999

(in thousands)
Balance January 1, 2023	$	12,254
Conversions of debt (January 2023- June 30, 2023)		(1,795	)
Total revaluation losses, net (January 2023- June 30, 2023)		251
Balance June 30, 2023		10,710
Conversions of debt (July 1, 2023- September 30, 2023)		(650	)
Total revaluation losses (July 1, 2023- September 30, 2023)		736
Balance September 30, 2023		10,796
Conversions of debt (October 1, 2023- December 31, 2023)		(3,569	)
Total revaluation losses (October 1, 2023- December 31, 2023)		1,247
Balance December 31, 2023		8,474
Conversions of debt (January 1, 2024- June 30, 2024)		(3,712	)
Extension fee		325
Total revaluation losses, net (January 1, 2024- June 30, 2024)		2,764
Balance June 30, 2024		7,851
Financial liabilities, Balance		7,851
Conversions of debt (July 1, 2024- September 30, 2024)		(2,166	)
Conversions of debt		(2,166	)
Total revaluation gains (July 1, 2024- September 30, 2024)		(2,315	)
Total revaluation gains (losses)		(2,315	)
Balance September 30, 2024	$	3,370
Financial liabilities, Balance	$	3,370

	Nine months ended September 30, 2024
Stock price	$	2.88 – 6.09
Conversion price	$	3.78
Volatility		80.0 – 115	%
Risk-free interest rate		4.73- 5.46	%

	●	No Event of Default shall have occurred and be continuing under the Notes; and

	●	The market price of the shares of common stock shall be at least the At-the-Market (“ATM”) Floor Price. ATM Floor Price means $10 per share initially, which is reduced to $8 per share six months after the ATM is effective and $6 per share 12 months after the after the effective date of the ATM.

	●	Reduced the conversion price of the Notes to $3.78 per share;

	●	The Purchasers received an aggregate of 850,000 three year warrants exercisable at $0.01 per share;

	●	An aggregate of 320,005 warrants held by the Purchasers had the exercise price reduced to $3.78 per share (the “$3.78 Warrants”); and

	●	An aggregate of 478,951 warrants held by the Purchasers had the exercise price reduced to $6.00 per share (the “$6.00 Repriced Warrants”). For every one $6.00 Repriced Warrant exercised by a Purchaser, such Purchaser shall receive 1.36 new five-year warrants with an exercise price of $0.01, 1.6 new five-year warrants with an exercise price of $4.20, and 1.6 new five-year warrants with an exercise price of $5.70.

	Nine months ended September 30, 2024
Stock price	$	2.88- 4.07
Exercise price	$	0.01- 20.00
Expected term in years		2.68 – 8.77
Expected dividend yield		0.00	%
Volatility		110.0 – 137.50	%
Risk-free interest rate		4.28- 4.44	%

(Dollars in thousands)	Maturity Dates	Interest Rate	January 1, 2024 - September 30, 2024		January 1, 2023 - December 31, 2023
NYDIG Loans #1-11	April 25, 2023 thru January 25, 2027*	12% thru 15%	$	9,183	$	10,546

Less: repossession of collateralized assets				—		(1,363	)
Total outstanding debt			$	9,183	$	9,183

(Dollars in thousands)	Maturity Date	Interest Rate			January 1, 2024- September 30, 2024			May 9, 2023- December 31, 2023
Term Loan and capitalized interest (excludes debt issuance cost)	May 9, 2025		15	%	$	1,707		$	2,254
Less: principal and capitalized interest payments						(1,409	)		(547	)
Less: debt issuance costs						(6	)		(26	)
Total outstanding debt					$	292		$	1,681


Stock options outstanding			3,325
Restricted stock units outstanding			5,692
Warrants outstanding			3,222,446
Common stock available for future equity awards or issuance of options			456,707
Number of common shares reserved			3,688,170

	Nine Months Ended September 30, 2024

Weighted Average Remaining Lease Term (in years):
Operating leases		7.84

Weighted Average Discount Rate:
Operating leases		8.22	%

(Dollars in thousands)	2024
2024 (remainder of year)	$	18
2025		29
2026		29
2027		29
2028		29
Thereafter		116
Total lease payments		250
Less: imputed interest		(69	)
Total lease obligations		181
Less: current obligations		26
Long-term lease obligations	$	155

(Dollars in thousands)	September 30, 2024		December 31, 2023

Current assets:
Cash and restricted cash	$	3,693	$	2,275
Accounts receivable, net (allowance for expected credit losses $367 and $0 as of September 30, 2024 and December 31, 2023)		751		1,201
Other receivable, related party		397		185
Prepaids and other current assets		45		-
Total current assets		4,886		3,661

Other assets- long term, related party		2,452		2,172
Operating lease right-of-use assets		85		90
Property, plant, and equipment		12,970		13,712
Total assets	$	20,393	$	19,635

Current liabilities:
Due to intercompany	$	20	$	-
Accrued expense		1,509		677
Customer deposits-current		1,410		-
Operating lease liability		7		7
Total current liabilities		2,946		684
Operating lease liability		78		83
Current portion of debt
Customer deposits- long term		-		1,190
Other liabilities, related party		224		224

Total liabilities	$	3,248	$	2,181

	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 results 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.

	●	consent to the Company’s entry into the SEPA and the Payment Agreements (as described below);
	●	waiver of any rights of first refusal or participation rights in connection with the SEPA;
	●	standstill of the rights to exercise certain $0.01 warrants pursuant to the SPA;
	●	the right to prepay the convertible notes with a 20% premium;
	●	termination of the SPA and related agreements upon the full payoff of the convertible notes; and
	●	mutual limited release of claims between the Purchasers and the Company.

	●	Bitcoin Hosting – we host Bitcoin Mining customers at our data centers.
	●	Proprietary Bitcoin Mining – we mine Bitcoin through joint ventures at our data centers.
	●	AI Cloud and Hosting Services – we provide GPU-as-a-Service and provide colocation services at our data centers for companies seeking to train large language models, tune existing AI models, and deploy advanced AI-powered applications or other HPC workloads.
	●	Demand Responses Services – we utilize our data centers to deliver demand response services to grid operators.

Project Name	Location	MW	Status	Business Model	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	Wind
Ada	Cloud	–	Operating 512 GPU Cluster	AI	Grid / Hydro
Dorothy 2	Silverton, TX	50	In Construction	Bitcoin Hosting	Wind
Grace	Silverton, TX	2	Development	AI	Wind
Kati	Harlington, TX	166	Development	Bitcoin Hosting / AI	Wind
Rosa	Snyder, TX	187	Development	Bitcoin Hosting / AI	Wind

	●	NYDIG, our asset-backed-lender on mining and infrastructure equipment, accelerated their loan and repossessed their collateral.

	●	Our Bitcoin Hosting customer, Atlas Technology Group, LLC (“Atlas”), at the site failed to upgrade and invest in their mining equipment, decreasing the profitability of the site.

	●	Our landlord, CC Metals and Alloys, LLC, (“CCMA”) terminated our lease.

(Dollars in thousands)	Three Months Ended September 30, 2024			Three Months Ended September 30, 2023			$ Change			% Change
Cryptocurrency mining revenue	$	2,811			1,786			1,025			57	%
Data hosting revenue		4,271			4,011			260			6	%
High-performance computing service revenue		-			-			-			-	%
Demand response service revenue		443			-			443			100	%
Operating costs and expenses:
Cost of cryptocurrency mining revenue, exclusive of depreciation		1,963			1,040			923			89	%
Cost of data hosting revenue, exclusive of depreciation		2,555			2,150			405			19	%
Costs of high performance computing services		2,859			-			2,859			100	%
Costs of revenue- depreciation		1,512			1,200			312			26	%
General and administrative expenses, exclusive of depreciation and amortization		5,248			2,723			2,525			93	%
Depreciation and amortization associated with general and administrative expenses		2,404			2,379			25			1	%
Impairment on fixed assets		-			41			(41	)		(100	)%
Operating loss		(9,016	)		(3,736	)		(5,280	)		141	%
Other expense, net		(6	)		(74	)		68			(92	)%
Interest expense		(821	)		(495	)		(326	)		66	%
Loss on sale of fixed assets		-			(373	)		373			(100	)%
Gain (loss) on debt extinguishment and revaluation, net		1,203			(769	)		1,972			(256	)%
Loss before income taxes		(8,640	)		(5,447	)		(3,193	)		59	%
Income tax benefit (expense)		547			(569	)		1,116			(196	)%
Net loss		(8,093	)		(6,016	)		(2,077	)		35	%
Net loss (income) attributable to non-controlling interest		903			(646	)		1,549			(240	)%
Net loss attributable to Soluna Holdings, Inc.	$	(7,190	)		(6,662	)		(528	)		8	%

(Dollars in thousands)	Project Dorothy 1B		Project Dorothy 1A		Project Sophie		Project Ada		Other		Total

Cryptocurrency mining revenue	$	2,811	$	-	$	-	$	-	$	-	$	2,811
Data hosting revenue		-		3,515		756		-		-		4,271
Demand response services		-		-		-		-		443		443
Total revenue	$	2,811	$	3,515	$	756	$	-	$	443	$	7,525

Cost of cryptocurrency mining, exclusive of depreciation	$	1,963	$	-		-		-		-		1,963
Cost of data hosting revenue, exclusive of depreciation		-		2,025		521		-		9		2,555
Cost of high-performance computing services		-		-		-		2,859		-		2,859
Cost of revenue- depreciation		1,076		284		152		-		-		1,512
Total cost of revenue	$	3,039	$	2,309	$	673	$	2,859	$	9	$	8,889

	●	General and administrative expenses, exclusive of depreciation and amortization increased approximately $2.5 million or 93% for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. General and administrative expenses, exclusive of depreciation and amortization were approximately $5.2 million, including approximately $1.2 million of stock compensation expense for the three months ended September 30, 2024, compared to approximately $2.7 million, including $590 thousand of stock compensation for the three months ended September 30, 2023. The increase in general and administrative expenses, exclusive of depreciation and amortization was mainly due to employee related expenses, legal fees, professional fees, related credit loss provision expense, and stock compensation expenses.

	●	The Company had an increase of approximately $838 thousand in employee related expense for the three months ended September 30, 2024 compared to three months ended September 30, 2023 due to an increase in resources and salaries of approximately $435 thousand, and in anticipation of hitting performance-based targets of approximately $403 thousand.

	●	Legal fees increased by approximately $391 thousand for the three months ended September 30, 2024 compared to the three months ended September 30, 2023; the increase is due to the legal work related to Project Dorothy 2, equity plan amendments, and other development projects.

	●	The Company took a provision for expected credit loss for approximately $346 thousand for the three months ended September 30, 2024 in relation an unresolved pricing dispute with a Bitcoin hosting customer, compared to no provision for the three months ended September 30, 2023.

	●	Professional fees associated to audit and tax increased by approximately $77 thousand for the three months ended September 30, 2024 compared to September 30, 2023 due to additional costs review of complex transactions and additional tax work related to subsidiary entities.

	●	Stock compensation increased approximately $659 thousand due multiple grants in April, June and September of 2024 causing an increasing in expense for the three months ended September 30, 2024 compared to the prior comparable period.

(Dollars in thousands)	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023

Net loss	$	(8,093	)	$	(6,016	)	$	(19,782	)	$	(22,705	)
Interest expense		821			495			1,694			2,355
Income tax (benefit) expense		(547	)		569			(1,743	)		(524	)
Depreciation and amortization		3,916			3,579			11,749			9,498
EBITDA		(3,903	)		(1,373	)		(8,082	)		(11,376	)

Adjustments: Non-cash items

Stock-based compensation costs		1,257			595			3,286			3,709
(Gain) loss on sale of fixed assets		-			373			21			404
Provision for credit losses		367			-			611			-
Impairment on fixed assets		-			41			130			418
(Gain) loss on debt extinguishment and revaluation, net		(1,203	)		769			7,495			2,350
Adjusted EBITDA	$	(3,482	)	$	405		$	3,461		$	(4,495	)

(Dollars in thousands)	Three months ended March 31, 2024			Three months ended June 30, 2024			Three months ended September 30, 2024

Net loss	$	(2,544	)	$	(9,145	)	$	(8,093	)
Interest expense, net		424			449			821
Income tax (benefit) expense		(548	)		(649	)		(547	)
Depreciation and amortization		3,926			3,909			3,916
EBITDA		1,258			(5,436	)		(3,903	)

Adjustments: Non-cash items

Stock-based compensation costs		661			1,368			1,257
Loss (gain) on sale of fixed assets		1			21			-
Provision for credit losses		-			244			367
Impairment on fixed assets		130			-			-
Loss (gain) on debt extinguishment and revaluation, net		3,097			5,600			(1,203	)
Adjusted EBITDA	$	5,147		$	1,797		$	(3,482	)