Soluna Holdings, Inc [SLNHP] 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 September 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 November 9, 2023, the Registrant had 1,609,788 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 September 30, 2023 (Unaudited) and December 31, 2022	2

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

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

Condensed Consolidated Statements of Cash Flows (Unaudited) For the Nine Months Ended September 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	53

Item 4. Controls and Procedures	53

PART II. OTHER INFORMATION	54

Item 1. Legal Proceedings	54

Item 1A. Risk Factors	55

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	56

Item 3. Defaults Upon Senior Securities	56

Item 4. Mine Safety Disclosures	56

Item 5. Other Information	56

Item 6. Exhibits	56

SIGNATURES	57

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Soluna Holdings, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

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

(Dollars in thousands, except per share)

	September 30,			December 31,
	2023			2022
Assets
Current Assets:
Cash	$	5,625		$	1,136
Restricted cash		3,428			685
Accounts receivable		2,024			320
Notes receivable		446			219
Prepaid expenses and other current assets		1,593			1,107
Deposits and credits on equipment		975			1,175
Equipment held for sale		248			295
Total Current Assets		14,339			4,937
Restricted cash		1,000			-
Other assets		2,957			1,150
Property, plant and equipment, net		45,938			42,209
Intangible assets, net		29,370			36,432
Operating lease right-of-use assets		483			233
Total Assets	$	94,087		$	84,961

Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	3,005		$	3,548
Accrued liabilities		4,447			2,721
Line of credit		-			350
Convertible notes payable		10,796			11,737
Current portion of debt		9,053			10,546
Deferred revenue		-			453
Operating lease liability		215			161
Total Current Liabilities		27,516			29,516

Other liabilities		1,497			203
Long-term debt		1,050			-
Operating lease liability		273			84
Deferred tax liability, net		8,362			8,886
Total Liabilities		38,698			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 September 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 September 30, 2023 and December 31, 2022		—			—
Preferred Stock Value		—			—
Common stock, par value $0.001 per share, authorized 75,000,000; 1,492,729 shares issued and 1,451,988 shared outstanding as of September 30, 2023 and 788,578 shares issued and 747,837 shares outstanding as of December 31, 2022(1)		1			1
Additional paid-in capital		286,799			277,429
Accumulated deficit		(244,268	)		(221,769	)
Common stock in treasury, at cost, 40,741 shares at September 30, 2023 and December 31, 2022(1)		(13,798	)		(13,798	)
Total Soluna Holdings, Inc. Stockholders’ Equity		28,737			41,866
Non-Controlling Interest		26,652			4,406
Total Stockholders’ Equity		55,389			46,272
Total Liabilities and Stockholders’ Equity	$	94,087		$	84,961

(1)

Prior period results have been adjusted to reflect the Reverse Stock Split of the Common Stock at a ratio of 1-for-25 that became effective October 13, 2023. See Note 2, “Basis of Presentation,” for details.

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

Soluna Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations (Unaudited)

For the Three and Nine Months Ended September 30, 2023 and 2022

(Dollars in thousands, except per share)

	2023			2022			2023			2022
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2023			2022			2023			2022

Cryptocurrency mining revenue	$	1,786		$	5,387		$	5,497		$	20,696
Data hosting revenue		4,011			985			5,451			3,668
Total revenue		5,797			6,372			10,948			24,364
Operating costs:
Cost of cryptocurrency mining revenue, exclusive of depreciation		1,040			4,100			4,451			11,092
Cost of data hosting revenue, exclusive of depreciation		2,150			1,078			3,181			3,192
Costs of revenue- depreciation		1,200			6,010			2,364			15,872
Total costs of revenue		4,390			11,188			9,996			30,156
Operating expenses:
General and administrative expenses, exclusive of depreciation and amortization		2,723			5,686			11,219			15,441
Depreciation and amortization associated with general and administrative expenses		2,379			2,378			7,134			7,127
Total general and administrative expenses		5,102			8,064			18,353			22,568
Impairment on equity investment		-			750			-			750
Impairment on fixed assets		41			28,086			418			28,836
Operating loss		(3,736	)		(41,716	)		(17,819	)		(57,946	)
Interest expense		(495	)		(1,671	)		(2,355	)		(7,856	)
Loss on debt extinguishment and revaluation, net		(769	)		(12,317	)		(2,350	)		(12,317	)
Loss on sale of fixed assets		(373	)		(988	)		(404	)		(2,606	)
Other (expense) income, net		(74	)		2			(301	)		2
Loss before income taxes from continuing operations		(5,447	)		(56,690	)		(23,229	)		(80,723	)
Income tax (expense) benefit from continuing operations		(569	)		547			524			1,344
Net loss from continuing operations		(6,016	)		(56,143	)		(22,705	)		(79,379	)
Income before income taxes from discontinued operations		-			(21	)		-			7,681
Income tax benefit from discontinued operations		-			-			-			70
Net income from discontinued operations		-			(21	)		-			7,751
Net loss		(6,016	)		(56,164	)		(22,705	)		(71,628	)
(Less) Net (income) loss attributable to non-controlling interest		(646	)		272			206			272
Net loss attributable to Soluna Holdings, Inc.	$	(6,662	)	$	(55,892	)	$	(22,499	)	$	(71,356	)

Basic and Diluted (loss) earnings per common share:
Net loss from continuing operations per share (Basic & Diluted) (1)	$	(4.40	)	$	(95.49	)	$	(20.11	)	$	(146.46	)
Net income from discontinued operations per share (Basic & Diluted) (1)	$	-		$	(0.04	)	$	-		$	13.64
Basic & Diluted loss per share (1)	$	(4.40	)	$	(95.53	)	$	(20.11	)	$	(132.82	)

Weighted average shares outstanding (Basic and Diluted) (1)		1,374,364			587,921			1,149,745			568,307

(1)

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 Nine Months Ended September 30, 2023 (Unaudited)

(Dollars in thousands, except per share)

	Series A Shares		Amount		Series B Shares		Amount		Shares (1)		Amount(1)		Additional Paid-in Capital (1)			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 (1)		Amount(1)		Additional Paid-in Capital (1)			Accumulated Deficit			Shares		Amount			Non- Controlling Interest			Total Stockholders’ Equity
January 1, 2022		1,252,299	$	1		—		—		590,851	$	1	$	227,804		$	(123,054	)		40,620	$	(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		—		—		—		—		573		—		—			—			—		—			—			—

Issuance of shares – warrant exercises		—		—		—		—		3,580		—		738			—			—		—			—			738

Issuance of shares- Notes conversion		—		—		—		—		5,847		—		1,342			—			—		—			—			1,342

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

March 31, 2022		1,319,156	$	1		—	$	—		600,851	$	1	$	233,304		$	(131,960	)		40,620	$	(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		—		—		—		—		3,642		—		77			—			—		—			—			77

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

Issuance of shares-restricted stock		—		—		—		—		130		—		23			—			—		—			—			23

Restricted stock units vested		—		—		—		—		148		—		—			—			—		—			—			—

Issuance of shares – warrant exercises		—		—		—		—		200		—		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		—		—		—		—		—		—		—			—			121		(34	)		—			(34	)

June 30, 2022		3,061,245	$	3		—	$	—		604,971	$	1	$	258,877		$	(138,517	)		40,741	$	(13,798	)	$	—		$	106,566

Net loss		—		—		—		—		—		—		—			(55,892	)		—		—			(272	)		(56,164	)

Preferred dividends distribution		—		—		—		—		—		—		(1,722	)		—			—		—			—			(1,722	)

Stock-based compensation		—		—		—		—		—		—		879			—			—		—			—			879

Issuance of shares – option exercises		—		—		—		—		3,455		—		76			—			—		—			—			76

Issuance of shares – preferred offering		—		—		62,500		—		—		—		4,994			—			—		—			—			4,994

Issuance of shares-restricted stock		—		—		—		—		130		—		11			—			—		—

Soluna Holdings, Inc [SLNHP] Filings
Soluna Holdings, Inc [SLNH] Filings
10-Q	[2023-11-14]
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 [SLNHP] Filings

Soluna Holdings, Inc [SLNH] Filings