Soluna Holdings, Inc [SLNH] Filings

10-Q 1 form10-q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended June 30, 2023

	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

Soluna Holdings, Inc.

(Exact name of registrant as specified in its charter)

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

325 Washington Avenue Extension, Albany, New York 12205

(Address of principal executive offices) (Zip Code)

(516) 216-9257

(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

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

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 ☐

Non-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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of August 9, 2023, the Registrant had 35,694,430 shares of common stock outstanding.

SOLUNA HOLDINGS, INC. AND SUBSIDIARIES

INDEX

PART I. FINANCIAL INFORMATION	2

Item 1. Financial Statements	2

Condensed Consolidated Balance Sheets As of June 30, 2023 (Unaudited) and December 31, 2022	2

Condensed Consolidated Statements of Operations (Unaudited) For the Three and Six Months Ended June 30, 2023 and 2022	3

Condensed Consolidated Statements of Changes in Equity For the Year Ended December 31, 2022 and the Three and Six Months Ended June 30, 2023 (Unaudited)	4

Condensed Consolidated Statements of Cash Flows (Unaudited) For the Six Months Ended June 30, 2023 and 2022	5

Notes to Condensed Consolidated Financial Statements (Unaudited)	6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	35

Item 3. Quantitative and Qualitative Disclosures About Market Risk	50

Item 4. Controls and Procedures	50

PART II. OTHER INFORMATION	51

Item 1. Legal Proceedings	51

Item 1A. Risk Factors	51

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	51

Item 3. Defaults Upon Senior Securities	52

Item 4. Mine Safety Disclosures	52

Item 5. Other Information	52

Item 6. Exhibits	52

SIGNATURES	53

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Soluna Holdings, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

As of June 30, 2023 (Unaudited) and December 31, 2022

(Dollars in thousands, except per share)

	June 30,			December 31,
	2023			2022
Assets
Current Assets:
Cash	$	7,464		$	1,136
Restricted cash		1,780			685
Accounts receivable		1,537			320
Prepaid expenses and other current assets		1,417			1,326
Deposits and credits on equipment		9,091			1,175
Equipment held for sale		1,379			295
Total Current Assets		22,668			4,937
Restricted cash		1,000			-
Other assets		2,958			1,150
Property, plant and equipment, net		37,760			42,209
Intangible assets, net		31,735			36,432
Operating lease right-of-use assets		526			233
Total Assets	$	96,647		$	84,961

Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	3,150		$	3,548
Accrued liabilities		4,099			2,721
Line of credit		-			350
Convertible notes payable		-			11,737
Current portion of debt		8,087			10,546
Deferred revenue		985			453
Operating lease liability		207			161
Total Current Liabilities		16,528			29,516

Other liabilities		1,497			203
Long-term debt		1,174			-
Convertible notes payable		10,710			-
Operating lease liability		325			84
Deferred tax liability, net		7,792			8,886
Total Liabilities		38,026			38,689

Commitments and Contingencies (Note 10)		-			-

Stockholders’ Equity:
9.0% Series A Cumulative Perpetual Preferred Stock, par value $0.001 per share, $25.00 liquidation preference; authorized 6,040,000; 3,061,245 shares issued and outstanding as of June 30, 2023 and December 31, 2022		3			3
Series B Preferred Stock, par value $0.0001 per share, authorized 187,500; 62,500 shares issued and outstanding as of June 30, 2023 and December 31, 2022		—			—
Preferred Stock, value		—			—
Common stock, par value $0.001 per share, authorized 75,000,000; 30,764,463 shares issued and 29,745,947 shared outstanding as of June 30, 2023 and 19,712,722 shares issued and 18,694,206 shares outstanding as of December 31, 2022		31			20
Additional paid-in capital		284,136			277,410
Accumulated deficit		(237,606	)		(221,769	)
Common stock in treasury, at cost, 1,018,516 shares at June 30, 2023 and December 31, 2022		(13,798	)		(13,798	)
Total Soluna Holdings, Inc. Stockholders’ Equity		32,766			41,866
Non-Controlling Interest		25,855			4,406
Total Stockholders’ Equity		58,621			46,272
Total Liabilities and Stockholders’ Equity	$	96,647		$	84,961

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

Soluna Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations (Unaudited)

For the Three and Six Months Ended June 30, 2023 and 2022

(Dollars in thousands, except per share)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022

Cryptocurrency mining revenue	$	915		$	7,497		$	3,711		$	15,309
Data hosting revenue		1,153			1,179			1,439			2,683
Total revenue		2,068			8,676			5,150			17,992
Operating costs:
Cost of cryptocurrency mining revenue, exclusive of depreciation		1,160			3,596			3,410			6,992
Cost of data hosting revenue, exclusive of depreciation		759			975			1,031			2,114
Costs of revenue- depreciation		539			5,538			1,164			9,862
Total costs of revenue		2,458			10,109			5,605			18,968
Operating expenses:
General and administrative expenses, exclusive of depreciation and amortization		4,136			4,873			8,496			9,755
Depreciation and amortization associated with general and administrative expenses		2,379			2,376			4,756			4,749
Total general and administrative expenses		6,515			7,249			13,252			14,504
Impairment on fixed assets		169			750			377			750
Operating loss		(7,074	)		(9,432	)		(14,084	)		(16,230	)
Interest expense		(439	)		(3,305	)		(1,814	)		(6,185	)
Loss on debt extinguishment and revaluation, net		(2,054	)		-			(1,581	)		-
Gain (loss) on sale of fixed assets		48			(1,618	)		(30	)		(1,618	)
Other expense, net		(285	)		-			(273	)		-
Loss before income taxes from continuing operations		(9,804	)		(14,355	)		(17,782	)		(24,033	)
Income tax benefit from continuing operations		547			251			1,093			797
Net loss from continuing operations		(9,257	)		(14,104	)		(16,689	)		(23,236	)
Income before income taxes from discontinued operations		-			7,477			-			7,702
Income tax benefit from discontinued operations		-			70			-			70
Net income from discontinued operations		-			7,547			-			7,772
Net loss		(9,257	)		(6,557	)		(16,689	)		(15,464	)
(Less) Net loss attributable to non-controlling interest		482			-			852			-
Net loss attributable to Soluna Holdings, Inc.	$	(8,775	)	$	(6,557	)	$	(15,837	)	$	(15,464	)

Basic and Diluted (loss) earnings per common share:
Net loss from continuing operations per share (Basic & Diluted)	$	(0.34	)	$	(1.11	)	$	(0.69	)	$	(1.82	)
Net income from discontinued operations per share (Basic & Diluted)	$	-		$	0.54		$	-		$	0.56
Basic & Diluted loss per share	$	(0.34	)	$	(0.57	)	$	(0.69	)	$	(1.26	)

Weighted average shares outstanding (Basic and Diluted)		28,150,557			14,048,253			24,903,975			13,958,437

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

Soluna Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Equity

For the Year Ended December 31, 2022

And the Three and Six Months Ended June 30, 2023 (Unaudited)

(Dollars in thousands, except per share)

	Series A Shares		Amount		Series B Shares		Amount		Shares		Amount		Additional Paid-in Capital			Accumulated Deficit			Shares		Amount			Non-Controlling Interest		Total Stockholders’ Equity
	Preferred Stock								Common Stock										Treasury Stock
	Series A Shares		Amount		Series B Shares		Amount		Shares		Amount		Additional Paid-in Capital			Accumulated Deficit			Shares		Amount			Non-Controlling Interest		Total Stockholders’ Equity
January 1, 2022		1,252,299	$	1		—		—		14,769,699	$	15	$	227,790		$	(123,054	)		1,015,493	$	(13,764	)		—	$	90,988

Net loss		—		—		—		—		—		—		—			(8,906	)		—		—			—		(8,906	)

Preferred dividends distribution		—		—		—		—		—		—		(749	)		—			—		—			—		(749	)

Stock-based compensation		—		—		—		—		—		—		955			—			—		—			—		955

Issuance of shares – preferred offering		66,857		—		—		—		—		—		957			—			—		—			—		957

Restricted stock units vested		—		—		—		—		14,301		—		—			—			—		—			—		—

Issuance of shares – warrant exercises		—		—		—		—		89,500		—		738			—			—		—			—		738

Issuance of shares- Notes conversion		—		—		—		—		146,165		—		1,342			—			—		—			—		1,342

Warrants issued in relation to debt financing		—		—		—		—		—		—		2,257			—			—		—			—		2,257

March 31, 2022		1,319,156	$	1		—	$	—		15,019,665	$	15	$	233,290		$	(131,960	)		1,015,493	$	(13,764	)	$	—	$	87,582

Net loss		—		—		—		—		—		—		—			(6,557	)		—		—			—		(6,557	)

Preferred dividends distribution		—		—		—		—		—		—		(1,382	)		—			—		—			—		(1,382	)

Stock-based compensation		—		—		—		—		—		—		1,064			—			—		—			—		1,064

Issuance of shares – option exercises		—		—		—		—		91,050		—		77			—			—		—			—		77

Issuance of shares – preferred offering		599,232		1		—		—		—		—		8,796			—			—		—			—		8,797

Issuance of shares-restricted stock		—		—		—		—		3,250		—		23			—			—		—			—		23

Restricted stock units vested		—		—		—		—		3,696		—		—			—			—		—			—		—

Issuance of shares – warrant exercises		—		—		—		—		5,000		—		41			—			—		—			—		41

Promissory note conversion to preferred shares		1,142,857		1		—		—		—		—		13,894			—			—		—			—		13,895

Warrants issued in relation to debt financing		—		—		—		—		—		—		3,060			—			—		—			—		3,060

Treasury Shares conversion		—		—		—		—		—		—		—			—			3,023		(34	)		—		(34	)

June 30, 2022		3,061,245	$	3		—	$	—		15,122,661	$	15	$	258,863		$	(138,517	)		1,018,516	$	(13,798	)	$	—	$	106,566

Soluna Holdings, Inc [SLNH] Filings
Soluna Holdings, Inc [SLNHP] Filings
10-Q	[2023-08-14]
10-Q	[2023-05-15]
10-K	[2023-03-31]
10-Q	[2022-11-14]
10-Q	[2022-08-15]
10-Q	[2022-05-16]
10-K	[2022-03-31]
10-Q	[2021-11-12]
10-Q	[2021-08-10]
S-1	[2021-06-22]
10-Q	[2021-05-17]
10-K	[2021-03-31]
S-1	[2021-03-10]
10-K	[2018-03-29]
10-Q	[2017-11-02]
10-Q	[2017-08-03]
10-Q	[2017-05-04]
S-1	[2017-04-18]
10-K	[2017-03-02]
10-Q	[2016-10-27]
10-Q	[2016-08-04]
10-Q	[2016-05-05]
10-K	[2016-03-30]
10-Q	[2015-11-05]
10-Q	[2015-08-06]
10-Q	[2015-05-07]
10-K	[2015-03-05]
10-Q	[2014-11-07]
10-Q	[2014-08-07]
10-Q	[2014-05-08]
10-K	[2014-03-06]
10-Q	[2013-11-07]
10-Q	[2013-08-08]
10-Q	[2013-05-07]
10-K	[2013-03-21]
10-Q	[2012-11-08]
10-Q	[2012-08-09]
10-Q	[2012-05-10]
10-K	[2012-03-27]

Soluna Holdings, Inc [SLNH] Filings

Soluna Holdings, Inc [SLNHP] Filings